Ray Schiavone, Tahoe Hydroponics co-owner and CEO, stands inside the company’s cannabis cultivation facility in Carson City.
Photo: Tahoe Hydroponics
In 2018, Ray Schiavone was in a hotel elevator in Las Vegas when he bumped into Berner, a Bay Area rapper and entrepreneur active in the cannabis market.
Schiavone, co-owner and CEO of Tahoe Hydroponics, a Carson City-based cannabis cultivator, did not let the opportunity pass him by.
“I invited him to my suite, showed him some flower. He said he had heard about us and was a big fan,” Schiavone recalled in a phone interview with the NNBW.
Two years later, in 2020, that chance encounter cultivated a co-branded packaging partnership between Tahoe Hydro and Berner’s marijuana company, Cookies.
Schiavone said the coronavirus pandemic was “the catalyst” for Tahoe Hydro to finally fire up a partnership with Berner and bring Cookies into the Nevada market.
“When COVID hit, we were looking for alternative offerings,” Schiavone said. “And Cookies was getting a lot of traction — they had a lot of new innovative strains. And I think Nevada was really looking for something new and different. Rather than kind of tiptoe into it, we just dove right in and started selling a ton of Cookies right out of the gate.”
Specifically, the new partnership is producing live resin sauce carts, live resin sugar, live resin badder, and flower strains.
“We’re constantly innovating and having new flower all the time,” said Schiavone, who along with Tahoe Hydro co-owner Mark Bruno have racked up numerous cannabis awards since launching in 2016.
And right now for marijuana consumers, there’s no mistaking that flower is king, Schiavone said.
According to marijuana data platform Headset, Nevada’s flower sales in July 2019 made up roughly 48% of the market. By July 2020, flower sales in the state accounted for nearly 60% of the market.
It’s a trend Schiavone saw coming when COVID rolled in.
“Because they shut down things like concerts and public venues, people aren’t vaping anymore,” he said. “More people are staying home and smoking flower at home. And so, the amount of people that are now smoking flower at home has created this tremendous demand.”
He’s not kidding. Tahoe Hydro was selling its flower for approximately $2,200 a pound before the pandemic. Since COVID hit and consumer habits shifted, coupled with the company’s partnership with thee Cookies brand, Tahoe Hydro is now selling its flower at roughly $3,200 a pound, he said.
“Our revenue has almost doubled (since March),” said Schiavone, whose company has about 60 employees.
In response to the growing demand, Tahoe Hydro, which has a 28,600-square-foot cultivation facility in Carson City, expanded its operations in the middle of the pandemic.
The company acquired a 7,000-square-foot LED and processing facility in Sparks for an undisclosed amount, Schiavone said.
The Sparks facility, he said, enables the company to also produce concentrates, a vertical it didn’t have at its Carson City factory.
“That facility is doing a ton of volume, too, so it really made a huge difference to our business,” said Schiavone, who estimates Tahoe Hydro is producing around 400 to 500 pounds of cannabis flower per month between its two facilities.
Along the way, Tahoe Hydro’s sales reached record highs over the holiday season. In December 2020 alone, the Carson City-based brand generated $1.3 million in revenue, Schiavone said.
“It’s actually incredible that we just had a record-breaking month in December, which has always been the worst month,” said Schiavone, noting cannabis consumers typically pull back due to holiday spending on gifts and vacations. “And it keeps getting better. I’m not really sure what the limit is right now.”
To that end, Schiavone said Tahoe Hydro’s near-term goal is to position itself for an acquisition with a “larger company with the right footprint.”
“With the amount of time and energy that it takes to run this thing, raising capital and trying to expand the business model,” he explained, “it would take us a lot less time to just be inside of someone else’s model that already has the footprint.”
In July 2021, Nevada’s new Cannabis Compliance Board lifted a sweeping moratorium on the transfer of marijuana licenses that took effect in October 2019. Since the restriction was lifted last July, Tahoe Hydro has received “four or five offers,” Schiavone said.
“There are a couple of great companies that we’re looking at and they’re looking at us,” he continued. “I wouldn’t be surprised if there was a Tahoe Hydro acquisition announcement in the near future.”
