Grown Rogue: “If You Start With 100 Pounds a Month and You Can’t Sell It…”

Grown Rogue is expanding its cannabis cultivation operations across the country, but cofounders Obie and Sarah Strickler aren’t interested in building a traditional multistate operator.

The husband-and-wife team got their start growing cannabis in Southern Oregon’s legacy market before transitioning into the state’s regulated medical marijuana industry in 2006 and later into its adult-use market. Today, Obie serves as cofounder and CEO of Grown Rogue, while Sarah is cofounder and chief community officer.

The couple built Grown Rogue around their shared passion for cannabis cultivation, with an emphasis on genetics and high-quality flower. That focus has remained central to the company’s business model as it has expanded beyond Oregon into Michigan, New Jersey, Illinois, Minnesota, and New York. But despite its growing geographic reach, Obie Strickler is reluctant to describe Grown Rogue as a traditional multistate operator.

“While Grown Rogue is now effectively operating in six states, internally, we don’t consider ourselves an MSO,” he said in a recent interview with IgniteIt.

Instead, Grown Rogue approaches each market individually, adapting its genetics, products, and marketing to local consumer preferences while maintaining consistent cultivation standards. The strategy reflects lessons learned in Oregon and Michigan, where challenging market conditions helped establish the operational discipline the company now brings to its expansion into new states.

Consumer Demand Drives Expansion Decisions

Grown Rogue’s current growth strategy emerged after the company spent its early years exploring different opportunities in the cannabis industry. Obie Strickler said they eventually concluded that trying to excel at too many aspects of the business was distracting the company from its principal strength: cultivating cannabis.

The company established its operating procedures and cultivation systems in Oregon and Michigan before testing its ability to manage operations in other states through a consulting arrangement with Vireo in Minnesota and Maryland. That experience helped convince the couple that Grown Rogue could extend its cultivation expertise into additional markets without sacrificing its standards.

The company subsequently entered New Jersey, where the requirement for prepackaged cannabis products required greater attention to packaging, branding, and marketing than in its original markets.

Strickler said Grown Rogue evaluates expansion opportunities based on potential consumer demand, available capital, and the capacity of its management team. Rather than committing to full-scale production immediately, the company generally adds cultivation capacity incrementally as demand develops.

“If you start with 100 pounds a month and you can’t sell it, you’re obviously not going to invest more capital to make 200 pounds,” he explained.

That philosophy also influences how Grown Rogue manages established operations. Strickler said the company has little interest in maximizing market share simply to become a larger producer. Excess inventory can drive down prices, reduce margins, and ultimately undermine product quality.

Grown Rogue also gives considerable decision-making authority to local management teams. While cultivation procedures remain relatively consistent across facilities, individual markets have different regulatory requirements and consumer preferences that can influence strain selection, packaging, and other business decisions.

Minnesota and New York Lead New Market Growth

Grown Rogue’s expansion strategy is taking shape in Minnesota, where the company began cultivation in September at a facility in Fridley.

The building can accommodate approximately 30,000 square feet of flowering canopy, but Grown Rogue is initially developing about 8,000 square feet across five flowering rooms. Strickler said the first phase should eventually produce approximately 500 to 600 pounds of flower per month. 

The company expects to begin harvesting in late November, with initial sales potentially starting in December or early January.

Although the founders believe Minnesota offers substantial opportunities because of limited existing production, Obie Strickler said Grown Rogue will evaluate consumer demand and product quality before committing capital to additional phases.

The company is taking a different approach in New York, where it is pursuing the acquisition of struggling PharmaCann’s cannabis assets through a joint venture with a financial partner. Grown Rogue holds a 51% interest in the venture, while its partner holds 49%.

Obie Strickler said Grown Rogue will control operations, while its partner is supplying capital for the investment. Existing financing arrangements also include a commitment to additional debt financing, which he expects will be sufficient to achieve positive operating cash flow.

“We’re not expecting the need for additional capital, you know, outside of what we’ve already put together for that project,” he said.

The company is currently repopulating the New York cultivation facility, which Strickler said had effectively no plants when the company began work there. The first harvest is expected in December.

Meanwhile, Grown Rogue is completing the remaining cultivation expansion at its New Jersey facility, where product demand has supported additional investment. Strickler said wholesale prices in New Jersey have also remained stronger than management initially anticipated.

Illinois presents a different set of challenges. Strickler described the market as highly competitive, with established operators controlling a substantial portion of the business. The company is proceeding with its operations there while accounting for the state’s more difficult pricing environment.

Price Pressure Reinforces Financial Discipline

Grown Rogue’s experience in Oregon and Michigan has helped shape its approach to investing in newer markets. Both states have experienced substantial wholesale price compression, forcing cultivators to control costs and improve efficiency to remain competitive.

Sarah Strickler recalled Oregon’s sharp decline in wholesale cannabis prices beginning around 2018 as a particularly difficult period for the company. The downturn forced management to reassess spending and concentrate its resources on cultivation.

“We had to put every dollar, every ounce of energy, back to the plant,” she said. “If it wasn’t feeding the plant, why were we doing it?”

Obie Strickler said the company was selling indoor flower for more than $2,000 per pound during its early years in Oregon, before increased competition drove prices substantially lower.

Today, Grown Rogue continues making smaller investments in Oregon and Michigan to improve efficiency and introduce products, including vape cartridges, while directing more substantial expansion capital toward newer markets.

Strickler estimated Oregon’s all-in costs at approximately $500 per pound, compared with reported production costs of roughly $300 to $350 per pound. He said Michigan’s costs are somewhat lower because of higher production volumes. The estimates do not represent a full allocation of corporate overhead, which Grown Rogue reports separately.

The company also expects wholesale prices to decline as developing state markets mature. Strickler said accurately predicting the pace of that compression is one of the cannabis industry’s most difficult challenges.

Rather than relying solely on financial projections, Grown Rogue attempts to limit its exposure by developing facilities in phases and expanding production when demand warrants additional investment.

Strickler said the company’s continued presence in Oregon and Michigan has value beyond immediate profitability. Operating in difficult markets helps reinforce the cost discipline and operational intensity the company wants to bring to new facilities.

Preserving Quality as Operations Scale

As Grown Rogue expands, both founders say maintaining its cultivation standards and company culture will be critical to its continued success.

The company relies on established procedures and experienced employees to transfer its operating practices into new facilities. Team members who have demonstrated success in individual markets are increasingly taking on broader responsibilities across the organization.

Sarah Strickler said developing employees is central to ensuring that Grown Rogue can maintain its standards as its geographic footprint expands.

“Really cultivating people just as much as we’re cultivating the plant, because we ultimately know that at the end of the day is what’s going to carry our product forward,” she said.

That attention to quality can also come at the expense of short-term margins. Obie Strickler cited the company’s commitment to hand-trimming its cannabis flower rather than using machines, even though mechanization could reduce labor costs.

He said the same standards extend to genetic selection, cultivation, drying, curing, and processing. Management evaluates potential changes partly on whether they could compromise the customer experience, even in ways that might initially appear insignificant.

Sarah Strickler pointed to the company’s recently launched Oregon vape cartridges as another example. She said the development process involved repeated trials and product adjustments before the team was satisfied that the cartridges met its standards.

The challenges of managing a growing workforce have also changed the founders’ responsibilities. Obie Strickler recalled launching the company with a handful of employees gathered around the couple’s kitchen table. Today, the organization employs several hundred people across multiple states, requiring the founders to delegate more operational decisions to experienced managers.

Both founders identified preserving the company’s culture as their greatest concern over the next several years, ahead of financing, regulation, and other industry challenges.

“I think for me, it’s maintaining that culture and really where we started from, and carrying that kind of legacy and making sure that the team is well supported,” Sarah Strickler said.

For Grown Rogue, the challenge will be maintaining those standards while bringing its products to more consumers in an increasingly competitive industry.

Capital discipline, production costs and expansion strategies will be central to the conversation at IgniteIt’s Capital & Policy Summit in Washington, D.C., on November 18. Join cannabis executives, investors and policymakers to discuss how operators are navigating price compression, allocating capital and identifying opportunities for sustainable growth across U.S. markets.