LEEF and Lifted’s Cannabis Nursery Bet Now Runs on Acres

On Feb. 8, 2024, LEEF Brands and Lifted Organics announced 1PN Nursery, a 50-50 cannabis nursery joint venture in Watsonville, California. The companies said the site would bring plant starts in-house, cut the cost of starts, and feed exclusive strain lists to LEEF’s concentrate buyers and Lifted’s fresh frozen customers.

Public California cannabis license records still list 1PN, LLC as an active nursery through May 1, 2027. LEEF’s Form 10-Q for the quarter ended June 30, 2026 never names the partnership, Lifted, Watsonville, or a nursery. The farms that followed are where the deal actually shows up.

A 50-50 Nursery Next to Lifted’s Watsonville Farm

LEEF Brands, listed on the Canadian Securities Exchange as LEEF and on the OTCQB as LEEEF, described itself in the announcement as a California extraction and manufacturing firm that sells bulk concentrate to large brands. Lifted Organics is a Watsonville grower that sells fresh frozen cannabis, with farm listings at 361 Webb Road. Each side took an equal 50% stake in 1PN Nursery, placed near Lifted’s existing work.

The press release was blunt about the customer problem. Strain menus, it said, decide whether concentrate and fresh frozen buyers stay or leave, and the nursery was how both firms planned to offer cuts that a client could request or lock up as exclusive.

Genetic selection and propagation are some of the toughest challenges facing large scale, outdoor cannabis cultivators. In addition to reducing the cost of plants, we will no longer have to compete with other large-scale growers for strains and delivery dates or plant the same strains as those farms. Bringing nursery operations in house will allow both companies to offer clients a selection of strains that can be requested by or exclusive to those clients. This will set us apart from our competition.

Aziz Nashat, owner and founder, Lifted Organics, Feb. 8, 2024 joint venture announcement

Micah Anderson, chief executive of LEEF Brands, said he wanted the benefits of a more vertical supply chain and a team aligned on the project. Kevin Wilson, LEEF’s chief financial officer, signed the release. The companies did not disclose capital committed, square footage, or a first ship date.

Outdoor Farms Were Bidding Against Each Other for Cuts

Nashat named three bottlenecks that still sit on any large outdoor calendar. Farms fight for the same mother stock. They fight for delivery weeks in spring, when every light-dep and full-term field wants plants at once. And they often end up flowering the same cuts as the farm next door, which makes the wholesale flower and the frozen lots look interchangeable.

A commercial nursery still selling into that market publishes the prices those farms would otherwise pay. Prime Cuts Nursery in Sonoma County, a licensed California supplier, lists rooted clones at $4 each once an order hits 1,500 plants, with higher tickets on smaller lots.

ROOTED CLONE PRICES, JULY TO DECEMBER

Those are not 1PN’s list prices. They are the open-market bill for verified, HLVd-tested starts in the same state, and they are the bill an in-house nursery is built to erase. Teens in one-gallon pots run much higher, from $16 to $20, because someone else already spent the veg weeks. Unrooted snips are cheaper and shift the rooting risk back onto the farm.

On a harvest counted in hundreds of thousands of plants, even the $4 tier becomes a seven-figure line. After June 30, 2026, LEEF said it brought in nearly one million plants at Salisbury Canyon Ranch. Priced at $4 to $8 a start, that many plants would have been a $4 million to $8 million clone invoice if they had been bought outside. That is the arithmetic Nashat was pointing at, even if 1PN never published a rate card.

1PN, LLC Is Still Licensed Through May 2027

The joint venture did not stay a press release. License records associated with Lifted Organics owners Aziz Nashat and Matthew Groves list 1PN, LLC under nursery license CCL24-0000156, issued May 1, 2024, and listed as active through May 1, 2027. The listing was still marked active when those records were refreshed on Sept. 16, 2026.

That is a long walk from a Feb. 8 announcement to a state nursery ticket, then to a 2027 expiry on the public file. It is also the last clean public fact about 1PN as a company. LEEF has not issued a later release on clone volume, exclusive cuts sold, or whether it still holds the 50% stake.

FROM ANNOUNCEMENT TO LICENSE FILE

1. Feb. 8, 2024: LEEF Brands and Lifted Organics announce 1PN Nursery as a 50-50 joint venture near Lifted’s Watsonville work.
2. May 1, 2024: 1PN, LLC receives California nursery license CCL24-0000156.
3. May 23, 2025: San Benito County posts a notice for DNA Organics’ 160-acre outdoor project, with Matt Groves of Lifted Organics as applicant.
4. April 10, 2026: DNA Organics, Inc. is listed with its own active nursery license, CCL25-0000452, through April 10, 2027.
5. May 1, 2027: 1PN, LLC’s nursery license remains listed through this date.

DNA Organics sitting on a second nursery license does not prove 1PN shut down. It does show the Lifted-side operators did not stop at one propagation ticket.

What a California Nursery License Covers

A nursery ticket is not a flower farm. The California Department of Cannabis Control says nursery licenses cover clones and seeds, plus immature plants and other propagation stock, and that holders grow those starts rather than a flowering canopy. Large outdoor licenses, by contrast, cover more than one acre of mature canopy.

The cash outlay is small next to a field. DCC’s fee table sets a nursery application fee of $520 and an annual nursery license fee of $4,685. A medium outdoor annual fee is $13,990. Large outdoor adds $640 per extra 2,000 square feet on top of a $13,990 base. The nursery is the cheap door into genetics. The acres are where the money and the pesticide risk live.

That split is why a 50-50 nursery can look modest on a public company’s books and still matter to the people planting fields. Clones are genetic copies of a mother, so the THC and terpene profile is supposed to match. Seed pops throw males and extra phenotypes, which a distillate plant can tolerate better than a fresh frozen buyer who sold a named strain.

DNA Organics Took the Outdoor Acres

The Lifted side of the original deal did not stay a Watsonville farm-to-table story. On May 23, 2025, San Benito County posted a CEQA notice of exemption for a 160-acre outdoor cannabis farm off Old Airline Highway. The applicant is DNA Organics, Inc. The contact is Matt Groves, using a Lifted Organics email, at a Watsonville mail drop.

The project sits on four parcels in unincorporated San Benito County and is described as outdoor commercial cultivation plus distribution for transport only, on land already farmed. The notice lists two jobs. License records tied to the same owners also show DNA Organics with two active large outdoor licenses (CCL25-0000175 through July 17, 2027, and CCL25-0000017 through March 31, 2027) and a processor license that dates to June 16, 2021.

Lifted’s own transport-only ticket C13-0000334-LIC expired on Aug. 14, 2026. A second transport license, C13-0000310-LIC, remains listed through Nov. 8, 2026. The farm listing still describes Lifted as a fresh frozen grower offering custom strain work. The outdoor permits, the processor ticket, and the second nursery sit under DNA Organics. The original joint venture name sits under 1PN, LLC.

Salisbury Canyon Ranch Brought In Nearly a Million Plants

LEEF’s public story moved south, to Santa Barbara County. After June 30, 2026, the company said it finished the largest harvest in its history at Salisbury Canyon Ranch, bringing in nearly one million plants. The first several hundred liters of distillate came off in July, with sales slated to start in August. LEEF said that oil passed California’s elevated CAT 4 pesticide screens and tested at about 95% THC and 99% total cannabinoids.

The ranch is a 1,900-acre property with a 180-acre cannabis land-use permit, which LEEF calls the largest in Santa Barbara County. Company posts put that canopy at 7.8 million square feet. LEEF added 14 acres in spring 2026, taking the planted block to about 80 acres, and said it would add another 21 acres in the fall plus 21 more under a farming partner, for about 122 acres, an 88% increase from a year earlier. Full use of the 180 acres is slated for 2027. On May 27, 2025, the company said it could grow material at about half its typical purchase price.

SALISBURY CANYON RANCH, 2026

The ranch is also LEEF’s answer to a problem the 2024 nursery release never named. On Sept. 19, 2026, the company said that over eight years of testing third-party biomass, more than half of the material from other farms failed for pesticides once it was concentrated, often from drift off neighboring vineyards, and that all three harvests from Salisbury had passed the state’s strictest pesticide panels.

Over eight years of testing third-party biomass, we’ve seen more than half of the material brought to us from other farms fail for pesticides once concentrated.

Usually, it isn’t the result of poor cannabis cultivation. It’s pesticide drift from neighboring vineyards and… pic.twitter.com/GvTYzjT6m0

— LEEF Brands (@LeefBrands) September 19, 2026

That is the second half of the 2024 genetics argument. Exclusive cuts only help if the oil they become can clear a CAT 4 panel. Controlling the mother stock is useless if the field next door fogs a vineyard mix onto your canopy.

For the quarter ended June 30, 2026, reported on Aug. 6, LEEF posted gross profit up 62% to $2.4 million from $1.5 million, while net revenue fell 16% to $7.3 million from $8.7 million on a biomass gap between harvests. Gross margin nearly doubled to 33% from 17%. Net loss narrowed to $1.3 million from $2.9 million. Cash ended at $5.0 million, up from $2.2 million at year-end, with an $8.7 million working capital surplus.

Gross margin was 33% without our own biomass from the ranch, compared with approximately 50% during the preceding three quarters when we were running material from the ranch.

Kevin Wilson, Chief Financial Officer, LEEF Brands, Aug. 6, 2026 earnings release

Himalaya, a concentrates brand LEEF bought on April 27, 2026, added about $1.0 million in its first partial quarter, a path for ranch oil into branded goods. The company raised about $9.0 million in the first half of 2026 and another $5.2 million in July, $14.2 million in all, to expand the ranch and buy a drying, curing, freeze, and storage plant meant to roughly double how much of each harvest LEEF can keep. On Sept. 23, 2026, LEEF said the ranch now sits inside talks on export markets and future interstate supply deals. Interstate commerce, the company still warns, is not guaranteed.

The Joint Venture Is Missing From the 10-Q

Search LEEF’s June 30, 2026 Form 10-Q for nursery, Lifted, 1PN, Watsonville, or clone, and the hits are boilerplate uses of the words joint venture in subscription agreements. There is no line for a Watsonville nursery, no equity-method note naming 1PN, LLC, and no related-party disclosure that flags Lifted Organics. Property and equipment sat at $25.6 million. Goodwill of $6.1 million arrived with Himalaya. Uncertain tax positions were $22.8 million. That is not a nursery in Santa Cruz County.

Absence from a 10-Q is not a winding-up. A 50-50 venture can sit off the consolidation line if it is small next to a $7.3 million revenue quarter and a 1,900-acre ranch. It can also have been reassigned, allowed to idle, or left with Lifted’s operators while LEEF poured cash into Santa Barbara. The public file does not say which.

The conversation around LEEF has followed the 10-Q. Ranch margins, CAT 4 passes, and interstate talk fill the company’s own posts. Flower farms still argue about cost per pound of bud. LEEF is playing a different game: biomass cheap enough and clean enough to survive extraction. The 2024 nursery language about exclusive strain menus has dropped out of that argument, even as 1PN, LLC remains on the license roll.

WHAT WE KNOW

• The deal: LEEF and Lifted announced a 50-50 nursery, 1PN Nursery, on Feb. 8, 2024, near Lifted’s Watsonville operations.
• The license: 1PN, LLC holds nursery license CCL24-0000156, listed active from May 1, 2024, through May 1, 2027.
• The 10-Q: LEEF’s filing for the quarter ended June 30, 2026, does not name 1PN, Lifted, Watsonville, or a nursery joint venture.
• The acres: DNA Organics, tied to Lifted’s owners, holds large outdoor and nursery licenses; LEEF harvested nearly one million plants at Salisbury Canyon Ranch.

WHAT IS UNCONFIRMED

• Ownership now: Whether LEEF still holds 50% of 1PN, LLC.
• Clone volume: How many starts 1PN has shipped, and to whom.
• The ranch’s mothers: Whether Salisbury Canyon plants came from 1PN, from DNA Organics, or from another nursery.
• The P and L: Any revenue, cost save, or impairment tied to the joint venture.

The license file and the harvest count can both be true. 1PN, LLC is still listed as a California nursery through May 1, 2027. LEEF’s concentrate business is now measured in 80 planted acres, a 180-acre permit, and nearly one million plants. The Feb. 2024 release promised cheaper plants and exclusive cuts. The years after it produced a nursery ticket that remains on the roll, a San Benito outdoor file under DNA Organics, and a Santa Barbara ranch that LEEF now treats as the core of the company.

Frequently Asked Questions

Why Do Large Outdoor Cannabis Farms Buy Clones Instead of Seeds?

Clones are cuttings from a known mother, so the plant is a genetic copy and the cannabinoid and terpene profile is supposed to match the cut the buyer sold last year. Seed lots introduce males that must be culled and phenotypes that wander off the menu, which is a problem for a fresh frozen buyer selling a named strain and less of one for a distillate plant that only needs clean biomass. Outdoor calendars also compress into a few spring weeks, so farms want rooted plants that can go in the ground on a delivery date rather than a germination gamble.

Who Can Buy Plants From a Licensed California Cannabis Nursery?

Licensed cultivators only. Commercial nurseries that publish wholesale terms often set a 100-plant floor and a 50-plant minimum per strain, and they do not sell to home growers. Delivery is batched by region, and some yards throw in about 10% extra plants on a clone order. A Type 12 microbusiness can include nursery activity up to 10,000 square feet if it stacks that work with at least two other licensed activities at the same site.

What Is Fresh Frozen Cannabis Used For?

Fresh frozen is flower harvested and frozen at once, before a dry and cure, so live resin and live rosin makers can pull terpenes that would cook off in a hang-dry. Lifted Organics pitched 1PN as a feed for those fresh frozen customers, while LEEF pitched the same nursery as a feed for concentrate buyers who often run dried biomass into distillate. The two products want different plants: a named, terpene-heavy cut for the freezer, and a clean, high-yielding field for the still.

How Much Does California Charge for a Nursery License?

The Department of Cannabis Control charges $520 to apply for a nursery license and $4,685 for the annual license, both nonrefundable, which is far below indoor canopy fees that run into the tens of thousands of dollars. Those are state tickets only. A site still needs local land-use approval, water and power disclosures, and a premises diagram in the Cultivation Licensing System before DCC will issue the card.

Disclaimer: This article is news reporting and analysis of a cannabis business joint venture, public company filings, and state license records. It is informational only and is not investment advice, legal advice, or a recommendation to buy, sell, or hold LEEF Brands shares or any other security, and it is not medical advice about cannabis products. Readers considering an investment, a cultivation license, or a commercial supply contract should consult a licensed financial adviser, a cannabis-licensed attorney, and, where health claims are at issue, a qualified clinician. License statuses, harvest figures, and financial results are taken from the cited company releases, the June 30, 2026 Form 10-Q, and California Department of Cannabis Control records as those sources stood on their publication or refresh dates, and they can change with renewals, restatements, and new harvests.