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Updated: March 6, 2023

Maine Cap N’ Stem is growing mushrooms — and growing a business

Photo / Michael D. Wilson Erik Lomen, founder of Maine Cap N’ Stem, a Gardiner-based business that grows substrates and other supplies for mushroom farms nationwide.

Maine Cap N’ Stem Mushroom Co. started under what co-founder Erik Lomen calls “funny circumstances.”

It all began when Lomen and his wife were working and traveling from mushroom farm to mushroom farm in the U.S. in a “kind of a fake-it-till-you-make-it kind of thing,” he says with a laugh — and a couple asked them to help start a fungi operation in Arizona.

“We built out the entire operation and left them with a fully functioning farm,” Lomen recalls.

Lomen and his wife then made their way back to Maine and got in touch with Christopher Campbell about starting a formal venture. Campbell was a friend and fellow forager who was working at Space Gallery in Portland at the time.

The last sentence may seem random, but it’s not: The company got its start in a small upstairs lab and the downstairs boiler room at the popular Portland arts venue.

“We were all foraging for mushrooms back then,” Lomen says. “We didn’t realize how different product is at scale.”

“Twenty pounds here or 10 pounds there of wild chanterelles or hen-of-the-woods is much different than the cultivation and distribution of 500 pounds of shiitake, king oyster and chestnut mushrooms per week to Portland restaurants,” says Lomen.

“It was no longer collecting mushrooms while venturing into the woods. It was large equipment builds, specialized fruiting room build-outs and everything else that comes with the equipment-heavy side of spore-to-store mushroom production,” he adds.

At the beginning, Cap ‘N Stem sold both foraged wild mushrooms and cultured product they purchased from others.

The business expanded to a 3,000-square-foot space in Westbrook at the end of 2014 after a year beneath Space Gallery.

Photo / Courtesy of Maine Cap N' Stem Mushroom Co.
Blue oyster mushrooms grow in a “block” developed by Maine Cap N' Stem.

Lining up financing

Ground-floor financing “was a few hundred bucks here and there and some maxed-out credit cards,” says Lomen. “We bootstrapped it till we got to Gardiner,” which was the next stop on the company’s expansion tour.

The company took out a $50,000 loan from Camden National Bank — “enough for us to get a line of credit and generally build out equipment,” Lomen says.

The rest of the capital came from selling mushroom blocks.

“At that time we didn’t know how much money we needed,” Lomen says.

He and Campbell then approached Maine Technology Institute, where they eventually procured four matching grants, which were “very interesting to learn about,” according to Lomen.

“In the world of grants, especially matching fund grants, we learned how accessible the finances were to us based on where those matching funds could come from — i.e. expected labor, inputs, etc.,” he says. “We didn’t need $25K of cold, hard cash to get $25K, which was amazingly helpful in our initial application and acquisition of financial support.”

In turn, MTI was “very much interested in technology we were making at the time,” Lomen remembers.

Back then, MTI had only seen one other mushroom farm come through their inbox and it was for the development of in-house software and hardware for mushroom fruiting environmental control systems.

“We were interested in building innovative equipment to produce and sell to other farms to increase the number of businesses in the agriculture sector as a whole,” Lomen says. “That expansion, continuation and growth of an industry was what piqued their interest.”

Brunswick-based MTI offers grants, loans, equity investments, and services to Maine’s innovation economy. “They are still a great source of funding,” Lomen says. “They’ve been the most supportive of what we’ve done from the get-go.”

Maine Cap ‘N Stem also received funding from Brunswick-based Coastal Enterprises Inc., a community development financial institution.

But because product sales were so strong, the company didn’t need equity funds.

“It was very self-propelling,” Lomen said. “There was enough money to support the business.”

Photo / Courtesy of Maine Cap N’ Stem Mushroom Co.
Maine Cap ‘N Stem Mushroom Co. will expand into a 75,600-square-foot building at 21 Fireslate Place in Lewiston.

Need for space

Maine Cap N’ Stem is still growing. It is still housed in a 24,000-square-foot facility in Gardiner, but Maine Cap N’ Stem is planning to expand to a 75,000-square-foot space in Lewiston in about a year. The Gardiner property will be used for storage and production overflow; the rent is too reasonable to give up, Lomen says.

The Lewiston property the company purchased is now undergoing a retrofit, with some equipment and furnishings still in the supply chain.

It’s been about eight years since the foray into what would become Maine Cap N’ Stem was founded.

Still, when Lomen is asked about how the business got its start,there’s still a trace of disbelief

“It’s a weird wave and we seem to be riding it,” he says.

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