This Tempe pot business named one of fastest growing companies in U.S. | Phoenix New Times


This Tempe cannabis business named one of fastest growing companies in U.S.

‘We’ve focused 100% on Arizona. We all live here, We’re all from here.’: Explosive revenue growth puts Sonoran Roots atop Inc. 5000 rankings.
Sonoran Roots CEO Michael O'Brien in one of the company's facilities in the Valley.
Sonoran Roots CEO Michael O'Brien in one of the company's facilities in the Valley. Courtesy Sonoran Roots
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Inc. magazine recently revealed its annual Inc. 5000, a prestigious ranking of the nation’s fastest-growing private companies, and one local cannabis business made an astounding debut near the top of the list.

Tempe-based Sonoran Roots was ranked No. 10 out of 5,000 companies nationwide. It also is the No. 1 Arizona-based company on the list and the top-ranked business in the Health Products category.

“It's definitely a huge honor” to be included on the list, said Michael O’Brien, CEO and co-founder of Sonoran Roots. “We knew we were growing fast, but we didn't know exactly how fast relative to everyone else.”

According to the magazine, companies on the Inc. 5000 2023 list are ranked on percentage of revenue growth from 2019 to 2022. Sonoran Roots had a staggering three-year sales growth of 24,397%. The average median growth for all companies on the list was 219%.
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Sonoran Roots opened its first cultivation facility in 2020 in Mesa.
Courtesy Sonoran Roots

Locally owned success story

Sonoran Roots, a seed-to-sale craft cannabis operator, was founded in 2018. O’Brien said that at the time, it was a property holding and management company, renting sites that were later developed into its operations facilities. In 2020, the company opened its first cultivation facility in Mesa and began selling its cannabis products to the market. A dispensary division, Ponderosa Dispensary, and an extraction facility and brand, Canamo Concentrates, soon followed.

“Our first year in business, we were only wholesaling product as a grow. That was all of 2020. In 2021, we acquired the dispensary and continued to see an uptick with products,” O’Brien said.

The industry flourished after recreational marijuana was legalized in the state following the passage of Proposition 207 in November 2020. “To go from several hundred thousand medical patients to the entire state of 21 and older folks being eligible to purchase obviously dramatically increases your market,” O’Brien said. “In 2023, we’ve mostly been growing on the retail side.”

Today, the company owns and operates three cultivation facilities in Mesa and Tempe, a state-of-the-art extraction lab in Tempe, and retail dispensaries in Glendale and Florence. A third dispensary opened on Sept. 11 in Chandler, growing the company’s employee ranks to about 200 people, O’Brien estimated.

Despite its rapid growth, Sonoran Roots continues to remain committed to serving its Arizona base.

“We’ve focused 100% for the entire time of our company on Arizona. We all live here, we’re all from here, we understand the market, so we’ve really tried to lean into being an Arizona-centric brand,” O’Brien said. He pointed to the company’s packaging and branding as an example.

Sonoran Roots proudly displays its Southwest origins, from its name, which is a nod to the Sonoran Desert, to its logo that’s a stylized blend of agave plant and cannabis leaf. Even its dispensaries, Ponderosa, take their name from northern Arizona’s ponderosa pine forests, and Canamo is the Spanish word for hemp.

“We lean more into the Arizona market as a way to hopefully differentiate ourselves and let people know that we’re from Arizona, we’re proud to be from Arizona. And Arizona cannabis is just as good as cannabis anywhere else,” O’Brien said.
Both Sonoran Roots and Canamo Concentrate brands are available in about 90% of dispensaries throughout the state, he added.
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Ponderosa, the dispensary division of Sonoran Roots, operates retail stores in Chandler, Glendale and Florence.
Courtesy Sonoran Roots

Normalizing the cannabis industry

To qualify for inclusion in the Inc. 5000, companies must have been founded and generating revenue by March 31, 2019, according to the magazine’s methodology. They must be U.S.-based, privately held, for-profit and not subsidiaries or divisions of other companies, as of Dec. 31, 2022.

In total, 131 companies in Arizona made the 2023 list. Eighty are repeat honorees, and 22 are newly formed businesses. Cumulatively, they created 9,249 jobs, according to Inc. In total, the 5,000 companies in this year’s list generated about $358 billion in 2022 revenues and added 1,187,266 jobs to the economy over the past three years.

The 10 highest-ranking Arizona-based companies in the 2023 Inc. 5000 are:
  • Sonoran Roots, Tempe, 10
  • Kayo Energy, Tempe, 51
  • MO Studio, Scottsdale, 95
  • Epic Golf Club, Scottsdale, 122
  • The Call Gurus, Phoenix, 132
  • TalentWoo, Gilbert, 142
  • Clients & Community, Scottsdale, 216
  • Tite Home, Tempe, 241
  • Encore Landscape Management, Phoenix, 258
  • Qwick, Scottsdale, 270
In addition to being the top Arizona company, Sonoran Roots is one of only eight cannabis-related businesses to make the list. And it was the only cannabis company to even crack even the Top 50. Blazy Susan, a Denver-based maker of cannabis accessories, came in at No. 96, with 4,811% for its 3-year growth.

Other cannabis companies on the list include edibles ingredient company Azuca of Albuquerque, New Mexico (214, 2,628% growth), Minneapolis Cider Co., which makes Minnesota’s first THC-infused beverage (858, 690%) and San Francisco’s cannabis whole platform Nabis (1,340, 434%).

Rounding out the eight are Las Vegas-based distribution company Green Blazer (1497, 388%), Grön, a woman-founded edibles brand in Portland, Oregon (2140, 263%) and Las Vegas manufacturer of smoking accessories Hemper (2372, 232%).

The cannabis businesses are included across a variety of industries, such as Food & Beverage and Consumer Products, since the Inc. list does not offer a pot-specific category. Sonoran Roots is listed under Health Products. “It was the closest category we saw that we would fit into,” O’Brien noted.

“One of the unique things about this list is that no one’s saying, ‘Oh, you’re just a cannabis company.’ We’re on this list with all of these other companies from every industry, many of which don’t deal with the same things we do in terms of regulation. So it’s nice to receive some recognition. We’re a real company. We have benefits and payroll, just like every other company,” he added. “I’m hopeful that something like this, no matter how small, will have some kind of positive impact and help normalize the industry."
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