20 Years After Its Founding, Legacy Brand Source Cannabis Is Thinking Globally
Tahoe Brunch No 8 grown by Source Cannabis of Los Angeles, California.
Source Cannabis
Source Cannabis ranks among the most prolific legacy growers in Los Angeles. Founded in 2003, the brand was grandfathered in because of its longstanding tenure in the state’s medical cannabis industry.
The brand preaches the utility of “functional highs” and aims for terpene-rich strains that can offer uplifting effects. Strains offered by the company often sell out on shelves, including most notably Quest: a sativa-dominant hybrid with stunning red hairs densely covering tight trichomes. Source recently launched a Live Rosin product, its first foray into concentrates, alongside its offerings of flower and pre-rolls lovingly called Towers.
Source has been more concerned with its avid consumer base than with press for the majority of its two-decade-long existence. The company also centers connection with its local cannabis community, offering pop-up events, focusing on both normalization and education. Source has plans to open a private event space by the end of this year. The brand’s Hollywood office will soon function as a safe consumption space for private, weed-friendly events.
The company’s 40,000-square-foot growing facility in LA is the culmination of founders Amjad Atari and Ali Kafaii’s life’s work. Atari thinks back to when he began growing in the legacy market of Virginia. His very existence as a man of Arabic-descent made it challenging to enter the cannabis space with a heavy burden of familial expectations.
“Culturally, I’m Muslim Arabic,” says Atari. “I’m not supposed to smoke weed, I was told. Imagine Reefer Madness, but Arab style. It was even scarier. The propaganda I grew up with was intense. Yet there was something about this plant that made me feel better. I needed to share it.”
Now almost twenty years after its founding, Source is thinking globally.
I caught up with the founders, CEO Amjad Atari and Head Grower Ali Kafaii, to find out what differentiates Source from other companies in the competitive weed marketplace, what industry owners need from regulators in order to compete with the unlicensed market, and why cannabis growers are truly artists.
Source cannabis owners Ali Kafaii, left, and Amjad Atari, right.
Lindsey Bartlett
Do you want to take Source international? What do we need to do nationally to get legalization right, in your eyes?
Amjad Atari: Yes. We’re ready. Our company is going to be on the global map. This is what I believe: there should be no one in prison for cannabis. How about we take that money that we’re spending on the War on Drugs and put it towards education?
Ali Kafaii: Some well-collected, peer-reviewed statistics came out recently that say the current younger generation is choosing cannabis over the alternatives, tobacco, and alcohol. And more females are using cannabis than any generation. It’s a new type of consumer. Politically, it’s a purple issue, it’s the one issue I can think of at the forefront that people on both political sides agree on.
How do you think cannabis businesses can survive the strict and high taxes and regulations on the industry?
Atari: Here’s what I think. When alcohol became legal, it took 10 to 15 years to kill the black market. There was still a black market raging for over 15 years. My idea is, I would subsidize taxes for the legal operators, and tell all legal shops, ‘not only do you not have to pay any tax, but you don’t have to pay state tax.’ Right now, as it stands, if you are a person with any common sense, why would you go to the licensed market?
Now once they’ve obliterated the black market, they can tax licensed growers. They can get way more money in the long run. If California wants to be the capital of cannabis, they need to think long-term. The short-term policy cash grab will kill the potential in the future for this industry to thrive. The money generated should be given back to the people who have been hurt by cannabis. Not to go more policing.
Tower pre-rolls from Source Cannabis.
Source Cannabis
What states are you eyeing that you want to enter next?
Atari: Maryland. We’re in a deal with Arizona as well, and looking at a few offers. Planning to go next year to Europe. Through Canada, we can supply Germany. We want to do it gradually because we want to make sure we never compromise our vision. We don’t want to sacrifice quality for scale because then we would become like everyone else in the mids market. This is a creative space.
That would be phenomenal for companies like us because we are a legacy brand. The problem is, the word legacy gets thrown around. If you just joined 3 years ago, you aren’t legacy. I’ve been selling weed for over 20 years. Everywhere it goes, quality competes. Of course, you are going to pay for quality, if it’s a reasonable price.
Do you want to bring Source to New York?
Atari: I want New York so bad. Are you kidding me? How can you even ask me this?
What do the legislators need to know about setting up regulations in new markets? How can we fix the regulations here in California, in your eyes?
Kafaii: If you’re asking purely about the framework or the legislation, is it well intended? Versus when it is implemented, is it going to carry the industry forward? Or hold it back? We don’t know, we will see. One thing about being in the cannabis space, in my personal opinion. It’s been a challenging road. We’ve had well-intentioned legislators trying to help us out, but it’s made our jobs more complex and complicated. I will do 90% of the stuff I have to do to do the 10% I love to do. I am that passionate about the plant, I’m willing to put with all these regulations.
95% of it is the proliferation of the black market. There’s no way anybody is going to dispensaries while it still thrives. When they can go to a farmers market and buy an ounce for 100 bucks. If they could regulate it and streamline it for the licensed operators, it’s the only way we can compete with the unlicensed market.
The eighth jar packaging from Source Cannabis.
Source Cannabis
What are some of the best lessons you’ve learned from selling weed over the past three years, during the pandemic?
Atari: A lot of folks over-expanded in 2020. We had multiple deals on the table that would have put our production capacity at 4x what it is today. I think it’s a good thing we didn’t move forward with those deals, it allowed us to keep what we had and really hone it in.
A lot of those deals would have happened, but we didn’t want to expand until we were ready. We sacrificed immediate gains for long-term goals. During COVID, we could make way more money selling our product white label, but we didn’t. We sacrificed again to reinvest the best of what we had into the brand.
At the same time, you saw a proliferation of new brands, all white labeled, from the same few grows. How can you earn consumer trust? Is it the same weed?
Kafaii: We knew there were going to be extinction events, so we prepared for certain aspects of it, but we didn’t know it would come this severe and this fast. Turn-key grows came online all with the same formula, and everybody with a name or brand came out with the same flower, selling to the same buyers. Brands were getting diluted because of the saturated market. The consumer never repurchased those. A lot of those stores had an inventory of this same type of flower and white label brands, so they sat on a lot of inventory.
So your advice for businesses owners is focusing on the consumer?
Atari: Yes. One time, we didn’t have any product for 3 weeks because we didn’t approve it. We go check out our product every week. All we want to do is get this functional high out there, but we must meet our standards to do so. We didn’t have a plant that we felt was worthy to go in the jars. A lot of people thought we made a mistake because we could have put it out there anyways. If people pay top dollar, you can’t disappoint them. Not once.
I would rather look inconsistent in front of the buyers than let the consumers down. There are changes in buyers, whereas consumers stay constant. I’m the CEO of this company. I was the ‘reluctant CEO’ because I wanted to be free and go sell weed. How can these other guys compete with us when one guy lives in Chicago and his grow is here in California? How can they compete against me? How can they compete with our brand, when they don’t even smoke their own product?
Kafaii: We are farmers. It’s a living organism, it has its own intelligence it has its own mind. By trying to connect with and appeal to budtenders and consumers, we focused on who was using the product. We see buyers come and go, we have had many instances when a new buyer comes into a store we’ve been in for a long time who may not want to buy our product. But then, the budtenders and the consumers come in and request it. The culture has our back. It’s good to be about the culture.
Sugar Cane strain from Source.
Source Cannabis
I’ve seen some cool Source events and community activations over the years, as you mentioned focusing on budtenders. How do you center the weed community in your brand?
Atari: We’re a community. We want to make sure we’re inclusive. We’re two gentlemen of color. I’m an immigrant, Muslim, of Palestinian origin, how much more can you pile on? But I’m really proud to be here in this country and to make a change. One of my passions is cannabis education.
This union recently called my assistant and asked for the demographic of our employees. Turns out we were the most diverse cannabis company in the state. We didn’t do that on purpose. We have more women of color in leadership than any other company. Melanie, in charge of my distro, is highly intelligent and a natural leader. We made sure she got that position, and that she moved up in the company.
She’s going to do well at this company. I don’t care what her ethnicity is. As a businessman, all I care about is, does she add value to our team? She adds a lot of value to our team. Right under ownership, my #2 person, is also a woman. Our second in command. They’ve all been promoted from within.
Kafaii: To make it a safe space, it’s a community. We can’t do it alone. Imagine all the birds flying together in unison— I think it’s called a murmuration. That’s what we want. People can work in a flow state if they feel they’re in a safe space, a non-toxic environment.
Cannabis has a certain history where it was very illegal. Yes, there was one main demographic 2 decades ago. It was the bros, from a certain age, and a certain mindset. We were the early risk-takers. Now as we said, cannabis has become a purple issue. It unites everyone. It’s not hidden, clandestine, or ridiculed. But it’s celebrated.
In your opinion, is it genetics or the cultivation process that makes brands stand out among the competition?
Kafaii: The meta-theme of that is brands are offering products that are not available anywhere else. We are developing genetics that will never be available on the unregulated market. That’s what makes us unique. Then the way you grow it, that’s what makes it special. Our Quest strain, it has to be grown the Source way, using our methodology.
Our goal with Source Cannabis is that the effect feels like waves. You keep getting high but you’re functional. With soil grown, it takes longer to hit the peak of the arch, but you come down slower, too. When the high lets you down, it’s a more subtle feeling. There’s no weed hungover. That’s because of our methodology, and because it’s grown in living soil.
Source Cannabis is known for its bright, colorful, and iridescent packaging.
Lindsey Bartlett
Tell me more about your genetics and growing process. What makes Source unique?
Atari: When we look for a strain, it’s not like we grow it once or twice, we grow it seven or eight times to see if it actually works. That takes time and money. If you’re not a boutique brand like us, you can’t pivot easily. We’re very adaptive.
We don’t have layer upon layer of corporate overseeing our R&D process. The lead cultivator is an owner, he is hands-on. Everyone in this office comes to our grow facility. We meet every Tuesday to do quality assurance together. That’s not going to be very common in any industry.
So the cultivation technique itself is key to differentiation?
Kafaii: There are two ways to go about genetics. You can develop in-house, which clearly differentiates you from everyone. A lot of growers buy seeds from seed creators, and they’re known for the genome or gene type, which is their genetic lineage. But each seed, each snowflake, is individual. What we get out of it as growers is our unique phenotypes, which are completely different and individualized.
Oftentimes in today’s market, with all the growing systems behind the scenes begin to look the same, all the big growers are going to the same contractors using the same methods, absolutely nothing differentiates them other than their genetics. To me, the craft of growing is the icing on the cake. The genetics are the cake, but it’s nothing without the icing and the sprinkles on top.
The same can be said for food. There’s a difference in quality, in how the ingredients were sourced, and grown, and how the chef prepared them. It’s the artist, the expression of those genetics, that makes it special. That is what differentiates brands today. We’re not the only growers here, who grow in soil. Growers are artists.
We use potted soil, and it lives in raised beds. The soil keeps it lower in bacteria naturally. We grow in live soil that’s loaded with beneficial microorganisms. Hydroponic systems are not, by definition, alive. With organic-based, the base of the soil is alive, it’s there when you activate the system. Our foundation is living.
Source cannabis founders.
Lindsey Bartlett
Tell me more about this iridescent packaging. What’s your goal with Source’s brand identity?
Atari: With our brand, we wanted to be as inclusive as possible. Source is very broad, that’s what’s what we wanted to do in this design. We wanted to be understated. The packaging says, ‘just try our flower.’ We had a huge following, a very loyal following, but in the dispensary, we were afraid it might get lost because it doesn’t pop. You have to embrace change. I embrace people who are of a different generation than me. So we brought in some people who are experts in design.
We went with the iridescent color scheme because it pops. It’s almost like saying, we’re so confident in our product, we’re willing to put it in this beautiful box. The product is just as good as the packaging. And putting it out there, it’s become very, very popular. Some are exclusive, limited-edition colors, and it’s been a phenomenal hit for our consumers. To tap into my creative spirit, I use cannabis. We take a day for creativity, we focus on our bigger picture goals. We decided to go a little funky, a little psychedelic, and a little trippy in the color scheme because the product is that good.
We’re confident in our product. We’re a small boutique company. We sacrificed in the medical days, we didn’t take advantage of people in the unlicensed market. We see now that is been worth it. When it comes to a preroll line, it’s a Tower. It’s not a preroll, it’s a Tower. Same with the rosin, I only want to release the absolute best. Without sacrifice. The strain of our new rosin currently on shelves is Spritzer.
What does Source mean to you?
Atari: It’s the light source. It’s everything. It’s energy. It’s all creation, if you will. I’m using these terms broadly, it all emanates from one source, and it radiates out. The Source is in the middle. Karma, energy, consciousness, the world. It makes you more compassionate. I used to have a chip on my shoulder. Cannabis really changed that. It’s why I got into it.
Kafaii: For me personally, it’s a metaphysical experience. Cannabis is a holy experience. I thought, ‘Wow, I can step out of my body and have this unlimited experience of consciousness, as Ali, one individual of billions?’
Where do you see the cannabis industry in 5 years?
Atari: In 5 years, the cannabis industry unfortunately could be highly consolidated. The consumer may not be aware of the high-end, small-batch, expensive cannabis. I don’t think the majority of people are going to see that or know about it or they’ll have to seek it out. If the federal government legalizes it and it opens up too fast, you’re going to see a corporate takeover.
That will happen. But it’s my hope that people will appreciate good quality no matter what. There’s always going to be that percentage of high-end consumers. Nimble and craft-focused cannabis brands like us are going to survive, we’re going to be part of that consolidation. There are going to 5 end brands. We plan to be one of them.
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