April 13th, 2017 by Stephen Hanley
John-Paul Maxfield has a dream. He wants to be the Tesla of sustainable agriculture, the Elon Musk of farming. In an interview with Forbes, he says he started out to build “an agricultural innovation system. Our goal is to rapidly speed up the adoption of a new food system to feed humanity wherever they live, decrease agriculture’s environmental impact and combat climate change. We need disruption. Gardening is 10 times more productive per acre than industrial agriculture. Small-scale, diverse agriculture is the only way we can feed the population going forward.”
Compost From Food Waste
Bold words for a data analyst who got fired from his job at a Denver private equity firm. “In data analytics, they weren’t looking for someone who was trying to be creative,” he says. Maxfield began by making compost from food waste. His business, Waste Farmers, collected food waste from schools and restaurants and turned it into compost. Then he started producing organic potting soil made from coconut husks and bio char derived from dead trees killed by pine beetles.
Though his goal is to supply rich soil to indoor farmers who will have a minimal impact on the environment, his business, which grossed over $2 million last year, derives most of its income from a sideline that has turned into its main activity — selling organic potting soil to cannabis farmers.
The Entrepreneurial Spirit
Getting started in business is a primer for any entrepreneur — a lot of hard work and a dollop of luck. He began by trading in his wife’s car for pickup truck. Then he arranged for a $14,000 loan from Accion, a microlender that makes loans as small as $500 and focuses on underserved borrowers, from veterans to child care companies, women, and minority owned businesses.
He struck a deal with a local Chipotle restaurant, educating their staff and developing compost bins. Soon, they were working with all the Chipotle stores in the Denver area. It was hard work and not especially remunerative. He says, “One day I ran into a guy I knew from business school. He was on his way to a meeting while I was picking up maggot-filled compost and I said, what am I doing with my life?”
Time to turn the page. His small staff developed the Maxfield’s brand of compost to help people grow food. “We were peat free and organic and targeted toward a small niche called LOHAS, which stands for lifestyles of health and sustainability. It’s in Boulder, San Francisco, Portland. We got into Whole Foods but Maxfield’s wasn’t wildly successful.”
“The mistake [we made] was not listening to our customers.” Maxfield says. “We learned that food gardening is still a very small market. We had to broaden into organic gardening, though that’s something that doesn’t remotely interest us. Still that got us into Lowe’s.” From Lowe’s, something curious happened.
Marijuana To The Rescue
After Colorado legalized the cultivation and sale of cannibis in 2013, Maxfield’s brand of compost became the growing medium of choice for local marijuana farmers. Maxfield was now in the pot business. He says, “Cannabis is enabling innovation because it’s attracting capital, just like pornography enabled technological advancement because it had a user base and demand and the ability to generate value.”
“Colorado is the Silicon Valley of cannabis,” he says. “When Colorado legalized it in 2013, we developed Batch 64, named after Amendment 64, for the ballot initiative. We saw it as an incredible opportunity to grow controlled agriculture. Batch 64 has four product series — Moonshine, Pioneer, Golden Ratio and Back Country. Moonshine has the most built-in fertilizer, like soy bean and alfalfa meal. Those that want to control how they feed their plants buy the other series, which have less and less fertilizer. We also work with people to develop custom blends.”
Is it profitable? Maxfield says his gross margins are between 20% and 40%, numbers that would make any business owner green with envy. Market to marijuana growers is a B to B business he says. “We have a multi-channel strategy, with sales people, referrals, word-of-mouth, and we developed relationships when we were composting cannabis farmers’ old soil. We also started the Organic Cannabis Association to develop standards and, with the city of Denver, we hosted the largest symposium around sustainability and cannabis.”
The Dream Persists
Maxfield hasn’t given up his original dream of developing a new food system for growing food. “The challenge is not finding investors,” he says. “It’s finding the right people who want to invest for the long term. We want partners. Our mission started before cannabis came out. We recognize it has huge growth potential and that we’d be the biggest idiots on the planet not to leverage cannabis. But we’re building a company, not a startup.”
If Elon Musk ever decides to get into agriculture, he will have a formidable and well seasoned competitor in John-Paul Maxfield.
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