Arizona Equipment Retailer Enjoys Booming Business Thanks to Cannabis Cultivation
Sea of Green
Sea of Green – that phrase conjures up images of a peaceful and expansive body of water for most. But in cultivation, it refers to a section of small tightly packed plants. The hydroponic system uses this method because it is much easier. This cultivation technique was popular even prior to medical and recreational marijuana regulation.
Sea of Green wants to position itself in the market to help clients realize their own “Sea of Green”… as in green money. Adam Carr, COO and owner of Sea of Green, is convinced that the company’s combined knowledge of over 100 years, coupled with its growing knowledge and experience, can help clients operationally to improve their bottom line.
The thriving firm is headquartered in Tempe, Arizona, with an additional store in Flagstaff. Sea of Green is a hydroponics wholesaler and retailer with over three decades of grow knowledge and experience. Determining the right lighting systems, HVAC needs, watering systems, nutrient requirements, and greenhouse supplies are just some of the important factors Sea of Green considers for its clients.
While cannabis is not the only crop store clients grow, it is certainly the most popular. “Our main clientele would be commercial cannabis growers. We also service a number of micro-green growers, urban farms, schools, and hydroponic hobbyists alike,” says Carr.
Currently, Sea of Green operates at a national level. However, different states don’t only have different climatic concerns, but also different governing laws and regulations that have to be taken into account. “Our main focus is Arizona, California, New Mexico, Oregon, Massachusetts, Michigan – all the really hot spots,” Carr says, rolling off a list of states that have relaxed laws on medical or recreational cannabis in recent years. “Oklahoma is also taking off. As new markets emerge, we try to attack those markets.”
In addition to its vast inventory of equipment, Sea of Green differentiates itself by how the team works closely with their clients. This company wants to keep client operations going with as little to no downtime whenever possible. “Our goal, when we pick up a client, is to make sure that their operation doesn’t have to stop. They don’t have to stop to come down and pick up their supplies due to Sea of Green’s delivery system. I work closely with clients to make sure their inventory levels are correct. We know our clients can get these products elsewhere, so building high levels of trust is an integral part of our process,” says Carr.
“We really are in the service and knowledge industry,” states Carr. “We bend over backwards to make sure their operations and plants never stop growing.”
Sea of Green’s customer service focus involves two other elements – hands-on experience with commercial agricultural nutrient applications and CAD design capability. “What we really pride ourselves on is the in-depth knowledge we have in plant sciences,” says Carr. The company can offer various growing techniques and grow room design, and also provide invaluable problem-solving skills.
Sea of Green expects the same service-oriented focus from its suppliers. “Price is always the initial concern for our clients, and we expect our suppliers to work with us in that regard. However, having the knowledge of how the logistics works from the suppliers’ end to ours is of utmost importance to Sea of Green. This allows us to forecast issues in the supply chain much faster than most; we ensure that we keep our distribution lines open for all our customers and that if there are any issues, they are being taken care of rapidly. Our suppliers’ sales representatives know they will speak with us on a daily basis,” Carr says.
“This commercial division for Sea of Green is the biggest aspect to this business. Until early 2013, we were only a hobbyist hydroponics retailer,” says owner Justin Cosgrove. However, the industry has morphed, shifted, multiplied, and changed dramatically over these past six years. It has been a fast-paced rollercoaster as the emerging medical marijuana markets began to take hold,” according to Cosgrove.
That rollercoaster saw things continue on pace for a while – and then business exploded. “Our really big increase in sales happened in 2013 when Arizona went medical for cannabis. That’s where our huge boom occurred,” notes Carr.
He is referring to Proposition 203, which was approved by a narrow margin of 50.1 percent to 49.9 percent of Arizona voters in November 2010. The measure legalized medical marijuana in the state, which naturally led to more demand. By having been around for quite some time, Sea of Green was in an excellent position to take advantage of increased interest in medicinal cannabis.
“There were a lot of stores that moved in [after Proposition 203 passed]. In 2013, I believe there were about forty-five stores, and now we’re down to about seven left here in the state,” Carr says.
“Because products were either being drop-shipped or delivered out of the Tempe location, we decided to focus more on opening up more warehouse space. This was to meet our commercial client needs, in addition to our regular retail clientele,” recalls Carr. “The company still retains a large retail front for the inquiring hobbyist. Our philosophy about holistic gardening makes us a unique player in the industry,” Cosgrove says.
Sea of Green offers an online e-commerce store and uses a website and social media profiles for promotion. The company also attends tradeshows to promote its wares and keep pace with the newest developments in the industry.
While the company is already capable of drop-shipping items throughout the United States, usually next day, the team prefers to offer an in-person experience for clients. Thus clients are able to discuss plant, inventory, or operational difficulties face-to-face with an actual person, according to Carr.
The firm’s delivery service also has its own trucks to distribute equipment to customers. “We mainly use it for the commercial side. If we have an order over a certain threshold, we’ll do free delivery in the state. We work with our commercial clients to hit that threshold on their orders, so they’re not getting charged shipping costs very often, which is a great advantage for them,” says Carr.
Sea of Green offers some additional benefits as well. Some cannabis-based businesses have difficulties using the banking system, but this is a problem with which Sea of Green does not have to deal with. “We’re able to use banks; there are no issues there. We used to be a fairly cash-only basis for quite a while, but in the state of Arizona, there are a couple banks that opened up for the medical cannabis growers. So, we’re not doing those large cash transactions anymore. We’re not having any pushback from banks or anything like that, even when we do [large cash transactions] so our customers can pay for goods in any fashion they wish to,” he states. This has made ease of purchase so much better.
The company’s biggest challenge – and biggest opportunity – at the moment is hemp. “Hemp has grown the market rapidly overnight. It has hurt supply chains due to the sheer volume of Cannabis/hemp growers in the market. I see that a lot of the distributors have the same supply issues because the supply was not ready for the demand. However, we utilize over two hundred vendors to ensure that if one of my main vendors doesn’t have [an item], I can get it elsewhere,” he says.
The plan for Sea of Green is expansion. The goal, of course, depends in large part on how marijuana legalization efforts pan out in other states and at a federal level. “What I want to see happen is that we expand into other states. We want to have boots on the ground as clients will be searching for reputable and knowledgeable companies to do business with, although currently we travel to meet with all of our clients,” says Carr.
Expansion efforts might be bolstered by recent developments in Washington D.C. While federal lawmakers are far from legalizing marijuana, the 2018 Farm Bill that was signed into law late last year included provisions allowing farmers to grow commercial hemp. Hemp is a close cousin to the marijuana plant. Both fall under the ‘cannabis’ umbrella, but hemp does not contain THC, the chemical that gives pot its psychoactive kick. Hemp fiber was traditionally used for industrial or manufacturing purposes to make rope, sails, or clothing. Today, hemp can be found in everything from clothes to food products and car dashboards. “We have seen a huge boom in oil and smokable hemp growers due to its positive health effects as a result of existing Cannabidiol [CBD],” shares Carr.
“This year, after the Farm Bill passed, growers were able to start putting plants in the ground or indoors in Arizona, due to the summer temps – I believe on July 1, here in Arizona. Sea of Green is positioned to serve any surge in cannabis cultivation, as farmers plant hemp and Arizona voters contemplate a new marijuana referendum sometime soon. We have seen a huge jump in our hemp clients nationally since the bill passed,” Carr says.