"What we do, and what we're really good at, is preserving the terpenes -- [the aromatic and flavor] compounds found in cannabis," says Ferguson.
Jetty distills those essences out of plant trim material -- the "biomass" it acquires from outdoor growers in Northern California -- during the first stage of processing at its 13,000-square-foot production facility in Oakland. Working in its Class 1, Division 1 room -- with explosion-proof housing for everything from light-housing casings to flashlights -- Ferguson and his crew employ hydrocarbon extraction to turn that plant material into oil that's "90 percent plus pure THC," after being refined several times. During the final stage, Ferguson says "we'll formulate the terpenes back in with a homogenizer."
"Between our potency and those original terpenes found in the plant -- those I think are our differentiators [compared with other extraction companies]," says Ferguson.
Jetty has a license to operate as its own distributor, as well. About three quarters of California's licensed cannabis dispensaries carry Jetty's products, which include oil cartridges like the company's flagship Jetty Gold line, its Botanic line (featuring the addition of flavors like vanilla chamomile and chai), and its Session line, which provides a more easygoing experience (its marketing says, "Yes, like a session beer"). There are also pods for PAX vaporizers, as well as the Dablicator -- a patented device which can apply the sticky oil to different ingestion mediums. "You can put [oil from the Dablicator] right on a hot nail, take a dab with it," says Ferguson. "You can put it in tea or you can put it on food. You can put it on [cannabis flower to smoke]. It's just a good, clean, efficient, small, compact way to dispense the oil."
Last year, when the company still employed ethanol extraction, it processed 300 pounds of plant biomass per week. Now, using hydrocarbon extraction, Jetty's processing upwards of 1,500 pounds in that same amount of time. Given a 6 to 7 percent yield of oil from that biomass, Ferguson says, "In a month, we probably produce close to 80 to 100 kilos of oil."
Calling Jetty "one of the most trusted cannabis extract brands" in a press release, Canadian company Cannex took steps in April to acquire Jetty: The reported $30 million deal was at the time the second highest price ever offered for a cannabis company located in the U.S., according to the SF Weekly.
But, in October, Cannex terminated its letter of intent to purchase Jetty.
What happened? "I guess it was not the right fit for us, at this point in time," says Ferguson. "We love the Cannex guys, I think they're going to do great." But Ferguson says there are "certain incentives to stay private for a little while longer."
Still, Ferguson says his company needs financial backing. "We know we have to bring in some funding, we really can't bootstrap it ourselves anymore," he says. Especially given the advent of what Ferguson calls "Big Canna": operators who might be backed by out-of-state hedge funds. "They're essentially driving prices down, because they can, making it really tough on the retail side with all the deals they're offering," says Ferguson. "[They're also] buying up a lot of the biomass material that we use to extract, at a higher rate, just because they can."
For now, Ferguson says Jetty will continue to innovate formulations and products. And it's once again offering free oil to cancer patients via its Shelter Project, after new state regulations at the beginning of the year presented taxation and distribution issues. "We've served well over 1,000 or 2,000 patients," says Ferguson.
Along the way, there have been additional starts and stops: Stone Brewing experimented with using Jetty's non-psychoactive hemp oil in a beer, and Thorn Street Brewery in San Diego offered a beer incorporating Jetty's cannabis terpenes. But regulatory issues arose with the federal Alcohol and Tobacco Tax and Trade Bureau about using cannabis terpenes in beer, causing production to be halted, says Ferguson.
Being from San Diego, Ferguson, 39, knows a bit about beer -- as well as golfing. Before becoming involved in the cannabis business, Ferguson was a golf instructor "living a country club lifestyle."
Since starting in the cannabis industry, Ferguson has run dispensaries, warehouse grows, and delivery services. When cannabis oil extractions started becoming popular at dispensaries, Ferguson became an extractor "essentially by necessity. There wasn't any blueprint on how to do cannabis extractions five, six years ago." He learned how to use various extraction machines -- and he's learned from his mistakes. "Now, we have a PhD chemist on staff," Ferguson says. "I can bounce all my questions off of him."
Ferguson sometimes gets called an "extraction artist" -- which, for him, simply means taking those cannabis terpenes and "expressing [them] the best way possible" within formulations. Ferguson describes Jetty's mission as being able to "express fully what the cannabis plant has to offer, so people can experience it in the best way they can."
Challenges: Ferguson cites "regulation and compliance," noting, "The cost of compliance is a reason why a lot of these small farmers, small manufacturers, and small businesses have gone under...all the hoops you've got to jump through to get a permit."
Opportunities: Transformative growth: "We are obviously in a projected billion dollar industry and hyper growth. If you can survive the regulation and all the hurdles, [there's] an opportunity to have a real legit cannabis business -- which has always been a dream of myself and my partners, to hang our business sign on our building, fully-licensed. . . . Producing hash for a living is a pretty good feeling."
Needs: Being able to access financial services like any other legitimate business: "Banking is by far the number one need of the industry, right now. Once you have proper banking, it's easier to get insurance, it's easier to get lines of credit, stuff like that." Ferguson adds, "It's getting harder -- and more risky -- to carry all this cash and move it all around the state. Not having a banking setup has been a huge hurdle for us, and a lot of other companies."