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In the Weed Part 4: Growth Ahead

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Roughly 16 months after launching its cultivation facility in Humansville, Flora Farms LLC became a vertically integrated company with the opening of a manufacturing operation in northeast Springfield.  

Flora Farms President Mark Hendren said $2 million was invested to open the company’s newest facility, which is an intentionally nondescript building on East Dale Street off North Glenstone Avenue. Hendren said the idea is to keep a low profile as staff produce cannabis-infused products for medical marijuana patients. The facility opened Feb. 17, two days after approval from the Missouri Department of Health and Senior Services. Flora Farms also operates three dispensaries in Humansville, Neosho and Springfield.

Product manufacturing in Springfield will continue to ramp up in the coming months as the early focus is on vape cartridges and pre-rolls, Hendren said.

“Then we’ll have the basics for when we get into the kitchen business, which is a whole other line,” he said, adding the company is still considering which infused products to make. “You take that basic oil and that’s essentially your cooking ingredient for all those other recipes. There’re cookies, candy, soda, topicals – anything you can think of. Medically, you can marijuana-infuse anything.”

The kitchen component will likely roll out in the third quarter of this year, he said. Some infused-product manufacturers have different brands for their in-house products. Those include Buffalo-based Heartland Labs, which utilizes Sweet Stone, and Show-Me Organics, which sells Vivid brand items made at Happy Days, its Springfield manufacturing lab. However, Hendren said his company’s products will all remain in the Flora Farms name.

“We’ve spent a lot of time and effort getting that name out in the dispensary world,” he said.

Hendren said Flora Farms signed a three-year lease for an undisclosed rate with Bristol Manufacturing Corp., which is in an adjacent Dale Street building. The leased building is 38,000 square feet, and Flora Farms is using just over 20% of it for manufacturing work. There’s room to grow if the need arises, he said.

Friendly competition
Flora Farms’ parent companies, BD Health and ERBA Holdings, were awarded licenses by the state for three dispensaries as well as a three-license cultivation facility in Humansville. Some companies, such as Chesterfield-based Noah’s Arc Foundation LLC, received multiple manufacturing licenses. Flora Farms approached Noah’s Arc last year, ultimately purchasing one of its three licenses for an undisclosed price.

“We wanted to be in control of our own fate as far as not having to find a supplier for raw material,” he said, noting Flora Farms doesn’t rely on any other companies for its marijuana supply.

The company’s cultivation division delivers roughly 150-250 pounds of marijuana flower per week to dispensaries and manufacturing facilities statewide.

“In a gentle way, we’re going to be competing with them too in the infused product market. We’re trying to be careful how we tiptoe into that because we have a lot of manufacturers who are good partners of ours,” Hendren said.

One of those competitors is Heartland Labs, which began manufacturing cannabis-infused products in March 2021.

Michael Pearcy, managing partner of the family-run business, said Flora Farms initially supplied around 90% of the marijuana used by Heartland Labs. Flora Farms remains a primary supplier, he said, but notes the volume is now 40%-50% per month as more cultivators have launched. Pearcy said he and Hendren recently had lunch together for some industry talk.

“At this point in time, it’s just friendly competition,” Pearcy said. “They’re good folks over there at Flora, and we’ve had a longstanding working relationship with them.”

When production began for Heartland Labs last year, the company had agreements in place to supply roughly 40 dispensaries. Pearcy said it’s now up to 125, including all three dispensaries run by Flora Farms.

“They pretty much carry our entire product line,” Pearcy said, which includes pre-rolls, vape cartridges, capsules and edibles, such as cookies, honey and gummies. “Across the menu, they’ve been a very good customer of ours.”

Lab labor
Flora Farms recently hired Austin Vincent as its processing manager at the manufacturing plant, which employs eight. The new hire previously worked for a year at Show-Me Organics’ Happy Days. Vincent spends much of his time in the back part of the building where he works with cannabis extraction equipment. One of the machines uses a solvent to pull terpenes and THC, the main active ingredient in cannabis, out of the marijuana plant. The machine, which Hendren said cost $160,000, requires constant maintenance.

“I just did a run today, so first thing tomorrow will be to pretty much break down half of it and thoroughly clean it to get ready for the next day,” Vincent said.

Hendren said the goal is to eventually process 100-150 pounds of trim per week. Trim is a mix of sugar leaves, bits of cut- off buds and trichomes that fall off during processing.

“We’re starting slow to try and do it right,” he said.

In the lab, Vincent has several pieces of glass cookware containing THC oil and terpenes with residual butane still in it. He walks into another room to check on other cookware, where he proceeds to stir some cannabis concentrate that looks like gooey butter.

“It can either be packaged as is into a gram of concentrate that people will then vaporize or dab, or it can go into a vape cartridge,” he said.

Plenty of packaging for pre-rolls is in the facility, but Hendren is uncertain if its vape cartridges will be ready for retail before month’s end.

“I don’t know if we’re going to make it. It depends on packaging,” he said, noting supply chain delays.

On the horizon
Some of the building’s warehouse space contains rolls of insulation – a reminder to Hendren of work still to come at the company’s cultivation facility. Flora Farms has 120,000 square feet under roof in Humansville among two buildings. A third structure to accommodate growth is expected to occupy another 80,000 square feet. The pad for the preengineered building is already poured.

Hendren said part of the wait on construction is tied to efforts to bring the legalization of recreational weed before voters.

Legal Missouri 2022 is attempting to collect 170,000 signatures by May 8 to potentially get the issue on election ballots in November. The intent is to legalize the purchase, possession, consumption and cultivation of marijuana for adults 21 and older for personal use.

“We’re watching the patient count and the adult-use initiative to make the decision on going ahead and getting that completed,” he said, adding the state has registered nearly 180,000 medical marijuana patients. “With those two things going like we hope and plan, we’d like to begin that construction this summer.”

As for the manufacturing facility, Flora Farms officials want to see it make up 20% of the company’s business. Last year, the cultivation facility comprised roughly 80% – over $25 million – of its $32 million in annual revenue. Dispensary sales made up the remaining 20%.

“We’re hoping the pie is 20% bigger and not the same size,” Hendren said for 2022 revenue prospects.

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