Keenan Blum would love to scale up his business. It has ample space to expand at its Peterborough location, and he could push out more products like Banana Bluntz flowers and Blueberry Fruit Chews at lower prices.

As one of three companies licensed to grow, make and sell medical marijuana in New Hampshire, however, GraniteLeaf Cannabis must navigate a limited customer base and a smorgasbord of regulatory requirements. It’s part of the state’s Therapeutic Cannabis Program, which is the only way to legally obtain cannabis in New Hampshire and requires people to get certified by a medical provider to receive the plant and derived products as treatment for qualifying conditions.

Industry leaders estimate the state has about 15,000 certified patients in the program. GraniteLeaf serves about 5,000 customers in the southern tier of the state through its dispensaries in Chichester and Merrimack. Five more dispensaries are run by two other alternative treatment centers in other parts of the state.

“It’s kind of just an odd scale to be at, but we want to make everything because we’re, well, the only source in our region,” said Blum, GraniteLeaf’s president and CEO.

Because the market and regulations don’t support mass production, everything is done by hand, as Blum and Matt Simon, GraniteLeaf’s director of government and public relations, demonstrated during a recent walk through of their nondescript Peterborough production facility.

New Hampshire law requires these facilities to have no outdoor signage or other markers for one primary reason: To reduce the chances of a break-in or cannabis getting into the wrong hands. No windows are in their building for the same reason. These guidelines can make it tricky to coordinate with delivery trucks – they’ve had several deliveries of edible ingredients, lab supplies and other equipment go awry.

In fact, there’s no telling what’s inside that building until visitors open the door and suddenly get slapped in the face with the distinct smell of marijuana. Loud machinery and air conditioning whirs throughout the building, and each room glows with varying degrees of light depending on the life cycle of the plants growing there.

All visitors must get approved by the state’s health and human services department, and most are accompanied by a state official. Anyone who enters must surrender their driver’s license for verification and don full-body jumpsuits, shoe covers and a hair net. The facility is kept pristine to prevent bugs or any other contaminants from getting anywhere near the growing cannabis plants.

How it’s done

Each plant begins as a cutting from a “mother” plant, which essentially acts as a clone. That’s how they maintain consistent strains of cannabis that have different medicinal effects – different strains can have different benefits such as relief of nausea or pain – and patient feedback guides which ones they replicate. A mother plant can be cloned thousands of times, and they’re housed in what Blum calls the “mom room.” GraniteLeaf typically keeps about 30-50 strains on hand.

As for the strains that aren’t optimal – whether they don’t grow well, have low flower yield or don’t test well – those get “killed,” Blum said. To kill a cannabis plant, GraniteLeaf grinds it up with sawdust so it becomes unusable, should someone find the scraps. The waste gets taken to the dump.

It takes 10-14 weeks to get from seedling to flower, which is the part of the plant that contains the tetrahydrocannabinol, or THC. During the growth cycle, the plants move around various rooms that mimic separate climates for the two different phases: the vegetative stage and the flowering stage. In the vegetative stage, which takes about two weeks, the plants require about 18 hours of light each day and a warm, humid environment – basically, Blum said, to simulate summer growth.

Next is the flower stage, which takes anywhere from 8-12 weeks. Here, they gradually begin to simulate fall – they make the room a bit colder, and the lights are dimmed and set on a shorter cycle to provide around 12 hours of light, depending on how specific strains respond.

“The plant thinks winter’s coming, so it wants to mature,” Blum said.

Each room holds hundreds of plants. State law limits how many plants and how much inventory GraniteLeaf can have at one time, based on the size of its customer base. Blum said they’re able to work efficiently enough that those limits aren’t an issue. They would, however, like to produce more – should cannabis be more widely legalized – they have another 15,000 square feet in their building where they could fit six or seven more grow rooms and expand their laboratory.

GraniteLeaf is careful not to harvest too early – cultivators let each plant reach full maturity so it gets the maximum medicinal benefits. If harvested too early, the plant can lose some of its pain-relieving and sleep benefits. Each one produces about half a pound of usable “material.”

After harvest, the flowers are draped over clothes hangers to dry. It takes a week or two for them to dry out enough to be shelf-stable. Then, strains that are sold as flowers are trimmed by hand. Someone plucks the leaves off the buds one by one, and depending on the strain, size and shape of the bud, it can take several hours to a full day to produce one pound.

Some products are ground up and pre-rolled, and others are sent to the rosin press to extract the cannabinoids and terpenes. Those buds are flash-frozen right after they’re harvested, mixed with ice and water by a large paddle, then squeezed through a tiny silk screen. After that, it gets freeze-dried and pressed to get the most potent active ingredient. This method of extraction maintains the best flavor and effects, said Austin Kolden, the lab manager.

That extract goes into things like baked goods and capsules, which are also made by hand – if GraniteLeaf could scale up, they’d use a capsule-making machine, but those are expensive. So, someone like Kolden micropipettes the finished product into rows of just a few capsules at a time. About 45 people work in the production facility and dispensaries.

Running a cannabis production facility takes no small amount of electricity – maintaining the light and temperature needed for optimum growth costs a pretty penny. GraniteLeaf is in the process of switching to LED lights in its growing rooms, which produce more light and less heat. This means the air conditioning doesn’t have to work as hard to reduce heat from the lights, and combined, it shaves the amount of electricity used by about 30%.

Energy prices are high, so GraniteLeaf looks for ways to cut down energy consumption to save money and perpetrate less harm to the environment. Blum and Simon said they were disappointed when Gov. Chris Sununu vetoed a bill in July that would’ve allowed them to grow in outdoor greenhouses using natural light and less electricity. They’ve talked with state lawmakers in hopes of overriding the veto or reintroducing the bill in future legislative sessions. Sununu had cited a lack of safety specifications in the bill.

“There wasn’t really any reason we could make sense of for it,” Blum said. The way the bill was written, “all of the regulations that apply to this automatically apply to that.”

Clearing the smoke

If it is reintroduced next year, the upcoming election could change the bill’s fate – New Hampshire will have a new governor, and a full slate of newly elected representatives come January. The Marijuana Policy Project just released a voter guide for Granite Staters that rates candidates based on their support for marijuana legislation.

Unless recreational marijuana is legalized or the number of therapeutic patients grows astronomically, GraniteLeaf’s customer base will stay limited, keeping it stuck in the in-between.

GraniteLeaf makes a couple hundred variations of its products and continues to manufacture things like suppositories and capsules – even though they don’t sell well – because a few patients need them and GraniteLeaf is the only supplier in the area. A broader market would allow them to specialize more.

“It’s trying to be everything to everyone,” Blum said. “When you’re trying to offer a variety of concentrates, a variety of edibles, a variety of all of those things … the amount of infrastructure required, and just thought and effort that goes into each one of them, is spread out over all of them, spread out over a small group of people. We’re just spread a little thin, so it’s just not beneficial.”

Michael Holt, who heads the therapeutic program of the Department of Health and Human Service, said the state’s medical oversight board and all the suppliers like GraniteLeaf favor legislation that would allow certified patients and caregivers to grow their own cannabis to produce their own specific strains that don’t have widespread demand, which would ease the burden on the growing centers to create strains that aren’t widely used.

Cultivation, manufacturing, packaging and dispensing are all done largely by hand at GraniteLeaf, largely due to their limited customer base. They can’t outsource much, though – New Hampshire law requires them to operate under a model of vertical integration, meaning everything must be produced in-house. Despite the challenges that come with it, company leaders say this level of human supervision, rather than mass production by machines, improves their product.

“This really is one holistic, big process,” Blum said. “As much as we have trouble with economies of scale, in a sense, it also lets us have a lot more passion for it and a lot more control over it.”

Charlotte Matherly is the statehouse reporter for the Concord Monitor and Monadnock Ledger-Transcript in partnership with Report for America. Follow her on X at @charmatherly, or send her an email at cmatherly@cmonitor.com.