Already an active cannabis-producing property, the company is turning Estrella Ranch into multiple revenue-stream properties while preserving its natural splendor and prioritizing environmentally conscious cultivation and business practices every step of the way, leaving behind the smallest possible carbon footprint possible.
Handcrafted Organic Cannabis Specialty Products May Help Keep Profit Margins High
With its initial pilot
harvest completed last October, Livewire took the first step toward establishing the Estrella Weedery brand. The harvest was carried out by Livewire’s affiliate company, Estrella River Farms, which operates the cultivation on the Estrella property.
ERF uses state-of-the-art techniques to develop a sustainable, organic farm for growing various premium cannabis specialty products. The tractorless cultivation process uses less water, less fertilizer, and no toxic pesticides. The result is high-potency, premium cannabis that takes considerably less water than similar cultivation processes to produce.
To stay competitive with bigger California producers like Lowell Farms Inc. (OTCQX: LOWLF) or Glass House Brands (OTCQX: GLASF), LiveWire’s Estrella River Farms is focused on cultivating organic-style specialty products with higher profit margins. By focusing on quality instead of quantity (grow by the pound – sell by the gram), the company hopes to avoid the high cost and low return of mass-produced cannabis.
As the trend toward widespread legalization continues, with 52% of Americans living in areas with marijuana legalized in some form, the cost of cannabis has dropped in the United States, sinking to its
lowest price in over three years in June. In Canada, nationwide legalization was followed by a
13% drop in price in the first year. Since then, retail prices across categories have
continued to dip as more producers entered the space, still having to compete with larger illicit sales for market share. While that drop will likely level out, companies with tight margins must differentiate their products in distinctive ways to stay competitive.
For Livewire, that differentiation comes from quality specialty products, environmentally conscious production, and operating with significantly lower production costs to keep profit margins high. In addition to its business-to-business sales, the company intends to get its premium Estrella Weedery branded product onto every dispensary shelf in California — either as a specialty product under its own brand or as a licensed private-label product under third-party brands. Livewire has also partnered with home-delivery services Kushagram and Green Eagle to deliver its cannabis products directly to consumers.
Applying The Tried And True Vineyard Model To Cannabis Cultivation Is Expected to Generate Additional Revenue
The ultimate vision at Estrella Ranch is simple: Sell its high-quality specialty products B to B and Direct to Consumers. Ultimately, create an idyllic wellness retreat complete with scenic vistas and currently over 130,000 square feet of sustainably cultivated cannabis, multiple offices, secure storage buildings, and large living quarters. When the project is finished, Livewire hopes to have roughly six (6) acres of outdoor growing area and 22,000 square feet of indoor cultivation, all while carefully preserving the natural, open landscape of rolling hills and well-watered ranchland.
Livewire’s Plan Is to Generate Multiple Revenue Streams From One Low-Cost Operation
In part, Livewire chose the Estrella Ranch location for the ideal micro-climate that makes organic, sun-grown outdoor cannabis cultivation possible. In less ideal climates, cultivators typically opt for indoor production to increase yield and compensate for poor weather or lack of sun.
But growing indoors means spending more on energy, facility maintenance, and other expenses that bring median average production costs up to
$472 per pound. At Estrella, Livewire says production costs average under $100 per pound for its organic-style outdoor cultivation.
The company states that the lower production cost, paired with its plan to eventually generate revenue from the property via a first-of-its-kind cannabis wellness retreat and both direct-to-consumer and business-to-business sales of the cannabis it grows, creates the potential for a wide margin and substantial growth potential.
This post contains sponsored advertising content. This content is meant for informational purposes only and is not meant to be investment advice.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
