How pot is changing the US agriculture landscape

Blooming business changing the flower industry landscape

Farmgirl Flowers CEO Christina Stembel on how the online flower delivery service got its start, the opportunities for growth, the busy Mother's Day holiday and the impact of the marijuana industry on agriculture costs.

In Silicon Valley, where female CEOs are rare, Farmgirl Flowers founder Christina Stembel is beating the odds by reinventing flower delivery. But it wasn't until she moved to San Francisco and became immersed in its culture that she began believing she could become an entrepreneur.

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“When I came out to San Francisco, I loved the city's startup culture—and I caught the bug,” Christina Stembel, the founder and CEO of Farmgirl Flowers told Fox Business’ Maria Bartiromo on Tuesday.

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The flower industry was dominated by four big players who offered huge selections, mostly made up of flowers shipped from overseas to small shops where about half of the inventory wound up in the trash because it spoiled before it could be sold. But Stembel had something else in mind -- a different idea that sourced flowers locally and slashed waste by selling a very limited number of arrangements direct to consumers from her website.

“I grew up in crop country in Indiana, where farming of corn and soybeans was vital to the community's existence” she said. “Until 2017, we only sourced domestic grown flowers. It was quart of my mission growing up on a farm in Indiana, it was very important to me.”

And now Stembel’s business faces another challenge: Marijuana. Stembel said it has changed the landscape of U.S. agriculture.

“Growers can make more money growing [marijuana] as opposed to flowers. Sometimes you have green houses that you can get $1.50 to $2 a square foot, versus 5-10 cents a square foot growing snapdragons (flower),” said Stembel adding “it definitely drives up costs. It’s more difficult. It’s more challenging with the inbound transportation and all the things you need to learn.”

But no matter how cliché they may be, Mother’s Day flowers are always a good option. The National Retail Federation anticipates shoppers will spend more than $25 billion this Mother’s Day.

“Mother’s Day is definitely the Super Bowl for us. Mother’s Day is the biggest time of year, even more than Valentine’s Day” said Stembel. “Eighty percent of people who are buying flowers are women buying for women.”

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Farmgirl was launched eight years ago with $49,000 of Stembel's own savings. This year, it's expected to log about $23 million in annual revenue and it's turning a profit, she said. Still, Stembel is vigilant about keeping costs under control. The business relies on social media, mostly Facebook and Instagram, for 90% of its marketing efforts. They have a staff of more than one hundred and are based in San Francisco. They ship hundreds of bouquets a day across the U.S.

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