Meet the next cannabis entrepreneur

After opening a cannabis cultivation facility late last year, a Humansville-based company is about to debut in the Springfield market.

Flora Farms LLC is targeting a Feb. 13 launch for its dispensary at 2027 N. Glenstone Ave., said President Mark Hendren. He said extensive work was necessary for the 2,500-square-foot building, which has been multiple restaurants in recent years, including Pancho’s Mexican Food.

“We had to remove all the interior,” he said, estimating store startup costs will land between $300,000 and $400,000. “It’s all remodeled from top to bottom inside.”

The Springfield facility will mark the third dispensary to open for the company. It received the green light from the Missouri Department of Health and Senior Services in October 2020 to begin operations of its 55,000-square-foot cultivation facility in Humansville. Its first dispensary opened in Neosho on New Year’s Eve, followed by one in Humansville Jan. 23. Total company investment in the industry is over $15 million, he said.

Hendren said he is among more than 20 investors in BD Health Ventures and ERBA Holdings LLC, which does business as Flora Farms. He declined to name the other investors but noted over 80% of ownership comes from Missouri. The remainder are from Arkansas, Kansas and Oklahoma. BD Health and ERBA Holdings were awarded licenses by the state for three dispensaries as well as a three-license cultivation facility in Humansville.

Hendren said he’s spent nearly 25 years in the automobile dealer industry, including 20 years as owner of Credit Cars of Joplin, which he continues to operate. He maintains a house in Joplin but also spends several nights a week in Humansville managing production of medical marijuana.

“I just started helping with the application process, some of the legal side of that,” he said of his initial involvement with the company. “Then when it came time to put the two groups together that wound up being Flora Farms, they asked me if I would be interested in being the operator. I’ve been helping ever since.”

Growing Flora
Since beginning operations in October, Flora Farms’ employee count has grown to around 70, including 40 at the cultivation facility, Hendren said. He expects that total could reach 100 employees by 2023, if there’s a need to expand cultivation work.

The company owns 70 acres in Humansville with two buildings totaling 115,000 square feet in use. Each has 30,000 square feet of flowering plant canopy space, the maximum allowed by state regulations, he said. The first building constructed has been operational since October and will harvest in early March, he said. Plants in the second building should harvest by April.

“That will give us double the capacity by the end of April,” he said, noting around 2,500 pounds of cannabis flower per month will be produced. “We’d like to go ahead and build that third building, but that’s going to depend on the demand in the state.”

Medical marijuana patient demand is steadily rising, according to DHSS data. There are over 102,000 patients, with more than 8,000 applications received in January. That’s the most of any month since the application process started in June 2019.

Noting it takes several months to grow marijuana plants to peak maturity, Hendren said Flora Farms has yet to distribute any product to dispensaries.

“Our dispensaries are not offering Flora Farms cultivated product yet. We’re offering infused product from one of our customers in Kansas City,” he said of gummies and cannabis-infused soda from Clovr.

As more medical marijuana dispensaries come online in the state, sales are starting to multiply. Cumulative sales through Jan. 29 reached over $9.8 million since dispensaries began selling product in mid-October. Nearly half those sales landed in January alone.

Even more significant growth is projected for the new industry in Missouri. The 2020 Marijuana Business Factbook projects the state’s medical marijuana market will reach roughly $200 million in sales in 2021 and grow to $325 million-$400 million by 2023.

John Lopez, co-owner of Old Route 66 Wellness LLC, said that number is on the low end. During a recent interview in Springfield Business Journal’s 12 People You Need to Know series, he projected the industry would hit the $1 billion mark statewide in its first three years.

“Where most people are putting us around $400 million, I think it’s going to be much larger,” Lopez said, citing continued patient growth as a key factor.

Short supply
Lopez said product should be plentiful by March – enough that Old Route 66 can open full time. It has been unable to do so since November, he said, when it became Springfield’s first dispensary to launch. The company also plans to open a dispensary in April in Ozark.

Old Route 66 and Ozarx Botanicals I LLC are among more than 40 dispensaries that have secured agreements with Flora Farms for flower. Ozarx Botanicals opened Jan. 30 at 3800 W. Sunshine St., Ste. 100, in Springfield Plaza.

Kim Andrews, general manager and investor with Ozarx Botanicals, said the shop has secured flower and edibles, but acknowledged there is currently a shortage of product. She said supply will increase by spring and summer when more cultivators and manufacturers are in production. She said Flora Farms will be one of the dispensary’s primary suppliers.

“Different suppliers grow different strains of flowers, and we want to be sure we’ll have a variety of supplies,” she said.

DHSS has approved three medical marijuana manufacturing licenses to applicants in Springfield – Beta Fusion Extracts LLC, Happy Days LLC and Revival 98 LLC – but none has yet been given the green light to operate. According to the latest Health Department data posted Jan. 29, only four manufacturers in Missouri have received and passed state inspections for production. Additionally, 15 cultivators in the state were approved to operate.

Hendren said Flora Farms is just a few weeks away from having flower to meet its signed supply agreements. He’s hopeful that flower will be leaving the Humansville facility by March but added state testing is required as part of the process, which is out of the company’s control.

“It is still an agricultural product and we’re still living in the world of COVID,” he said. “Delays have become a part of my life.”

Web Editor Geoff Pickle contributed.