Case Studies

Your Green Contractor

Contractor in on the ground floor of billion dollar marijuana industry

Nate Mendel likes to joke that less than five years ago he knew nothing about marijuana, not even which part of the plant people smoked. Granted, Mendel never had a reason to learn much about marijuana before 2011—he was too busy running a commercial construction firm.

Mendel’s first job for the marijuana industry involved building an addition for a dispensary. “It was basically a retail project, so we didn’t need any marijuana industry experience,” he says. Weeks later, the client was so pleased with the additions, he asked Mendel if his company could build an addition on a grow room.

Your Green Contractor

Mendel remembers visiting the grow room and being surprised by its sophisticated wiring and climate control systems. He was even more surprised when the client paid him in cash.

The job taught Mendel the young marijuana industry was rife with opportunity. So, in 2011, he started a construction firm catering to marijuana growing, extracting and distribution facilities, dubbing it Your Green Contractor.

The company has grown to $10 million dollars in annual revenue in only five years, and Mendel says he and his team made the Inc. 5000 list of Fastest Growing Private Companies in America for the first time in his 20-year career.

Different facilities, different requirements

The Colorado-based company builds dispensaries, grow rooms, greenhouses, testing facilities, extraction facilities (that remove oils from the plant for cooking, vaping and tinctures) and marijuana-infused product kitchens (MIPS) where marijuana edibles are made.

Most of these facilities have special requirements. Grow rooms and greenhouses must be temperature and humidity controlled, requiring complex wiring and mechanical systems, while extraction facilities can house large extractors that use heat, pressure or agitation to turn CO2 or butane into a semi-liquid solvent that can draw oils out of marijuana plants. Each of these facilities requires different construction methods and falls under different sections of the building and fire codes.

“We walked into the project and it looked like an old horse corral. When we left, it looked like Batman’s hideout.”

YGC juggled methods and codes while building a facility in Denver that contained an extraction area, MIPS kitchen and packaging area. Owned by edible and concentrates manufacturer, the Bronnor Corporation, it’s one of the first major marijuana production facilities in the country.

Getting it up to code required renovating and re-flashing the curved, “barrel vault” roof.

Your Green Contractor

“To say this building leaked like a sieve is an understatement,” Mendel says. “It might as well have not had a roof.”

Other modifications included upgrades to the mechanical system and a new, beefed up electrical service to handle the power requirements for special equipment like automated packaging systems and industrial HEPA filters.

“We walked into the project and it looked like an old horse corral,” Mendel says. “When we left, it looked like Batman’s hideout.”

New markets

The firm’s success wouldn’t be possible without relatively new marijuana legislation. YGC’s home turf of Colorado first legalized recreational marijuana in 2012, the same year as Washington state. Since then, 26 states have legalized marijuana, mostly for medical use.

Arguably, the most important—and one of the most recent—of those states is California, which has about eight times as many people as Colorado and as much potential.

Mendel, who was raised in California, says he plans on taking projects there, but that generating profits won’t be a cake walk in such a heavily regulated state.

At the moment, Mendel says YGC has plenty on its plate in Colorado; however, the company is taking on a few out-of-state projects with select clients.

Cold, hard cash

More than most markets, marijuana is high risk, high reward and carries a stigma from its illegal past. The stigma—and federal law—has made it hard for so-called “ganjapreneurs” to open bank accounts and all but impossible for them to take out loans.

As a result, the marijuana industry uses cash. Far from being just inconvenient, the lack of banking opportunities creates a security risk. Dispensaries have been targets for armed robberies because criminals know that the premises contain both marijuana and cash, which share the quality of being lightweight and easy to steal.

At a dispensary in Colorado, a security guard was killed during an armed robbery. In another incident, thieves crashed a car through the wall of a MIP kitchen and tried, unsuccessfully, to steal products.

“What if someone had been standing on the other side of that wall?” Mendel asks.

He says that the banking issue seems to be slowly improving and that he hasn’t been paid in cash for months now; however, the industry will need to find a better way to exchange money if it’s going to make production and distribution facilities less appealing targets.

For its part, YGC has been involved in combating the stigma attached to marijuana. Both Mendel and head of business development and marketing, Michelle Koster, attend conventions in nearby states to speak on marijuana facility construction and its economic benefits.

Mendel says that regardless of personal opinions about marijuana, it’s hard to deny that the industry has been anything but successful in states like Colorado and Washington.

“I’m a free market guy, so I look at it from a business standpoint,” he says. “For me, the number one aspect is safety, for both the people who are ingesting this product, as well as the people working in these facilities that we are building—it needs to be safe for all of them.”

Published on: March 28, 2017


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