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In the Weed Part 3: Seed to Sale

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The well-known proverb of “patience is a virtue” certainly applies in the medical marijuana industry. It took close to a year for legal cumulative sales from dispensaries to reach $100 million after the industry launched. However, by the 14-month mark, sales hit $200 million, as product from cultivation facilities such as Flora Farms LLC began flooding the market.

Officials at the Humansville-based company said the seed-to-sale process is lengthy, taking at least half a year from when cannabis plants are first grown to the time medical marijuana patients can have products in their hands. While Flora Farms began operating its cultivation facility in October 2020, its first harvest of marijuana flower wasn’t available until April 2021.  

There was some early trial and error regarding marijuana strains after launch at Flora Farms, said President Mark Hendren. Initially, it was growing over 100 strains. 

“We just didn’t know how it was going to test, how it was going to perform and how it was going to be perceived,” he said. “Over time, we’ve narrowed that down to about 40. That makes us more efficient.”

In addition to its cultivation facility, Flora Farms runs a trio of dispensaries in Humansville, Neosho and Springfield, and is ramping up a manufacturing operation.

On track
All companies in Missouri’s medical marijuana industry use Lakeland, Florida-based Metrc LLC as the seed-to-sale tracking agency. The state Office of Administration awarded a five-year, $5 million track-and-trace contract to Metrc in 2019 as part of a competitive bidding process. The company serves more than 250,000 users, including dispensaries, growers and testing facilities, and it recently added a contract with North Dakota, its 20th state deal. 

Licensed users upload and report all actions impacting the status of a plant or the creation of cannabis-based products. When plants are harvested and packaged or combined with other plants in the production of concentrates, edibles or oils, the origin, testing results, handling and chain-of-custody information is visible and traceable by regulators.

“It’s all based on understanding every move that happens with any marijuana inside the facility and then transferring it out,” said Matthan Black, director of operations at Flora Farms. “At the very beginning, all of our plants are tagged with a plant tag that has an individual number that allows us to track that plant through the entire process – all the way from cloned batches to the finished product.”

Black said all the plants and their tag numbers are collected into a batch when employees harvest the cannabis flower, which is broken down into 15-pound lots for testing. The tests are to determine, in part, cannabinoid content, terpene profile and the presence of any microbiological contaminants, such as mold or bacteria. After the plants pass testing, the flower is separated into 1-pound bags with their own Metrc numbers. The bag contents are further reduced to various product sizes and types for distribution.  

“Those numbers then allow us to transfer that to other dispensaries or manufacturing facilities all across the state and know exactly what plant went to make what final product,” he said.

Lyndall Fraker, director of medical marijuana at the Missouri Department of Health and Senior Services, said the state was required to implement a seed-to-sale tracking system when voters legalized medical marijuana in 2018. 

“This is to ensure no medical marijuana grown by a cultivation facility or a manufacturing facility is sold or otherwise transferred except through the dispensary,” he said, adding it ensures safety for patients while keeping jurisdiction of marijuana, which remains a controlled substance in Missouri.

Black said utilizing Metrc also ensures testing compliance. Cultivation and infused product manufacturers are unable to put product on a manifest to ship to a dispensary that hasn’t passed all state testing requirements. 

“It’s literally impossible to get noncompliant flower out of our facility,” he said. 

Roughly 95% of Flora Farms products have passed testing since early last year, Hendren said. Most are tested by Kansas City-based Green Precision Analytics.

“There’s usually about a three- to five-day turnaround time for us to get testing results back,” Black said. 

Hendren said Flora Farms typically keeps 70-80 mother plants on-site and clips clones from them to have younger plants to grow to maturity. “Assume you have a grown mom, from the day you clip clones until you actually have something you can ship to a dispensary, it’s about 120 days,” he said. “If it starts as a seed, you can add another 60 to 90 days.”

 Learning curve
While Metrc’s winning bid in 2019 included a $40 monthly charge per licensed cultivation, dispensary and infused product manufacturing site, the company later added a 45-cent fee for each radio frequency identification tag that is placed on plants and 25 cents per each package tag. The Office of Administration said the contract disallowed the added fees and Metrc filed suit in 2019. The Cole County Circuit Court ruled against Metrc, which appealed the decision. The Missouri Court of Appeals Western District upheld the Cole County ruling in January 2021, according to court documents. 

“We support that and we’re happy it’s behind us,” Fraker said of the legal outcome. 

Metrc was charging the fees to companies while the issue was being disputed in the courts. Hendren said Flora Farms paid $19,000 in tag fees in 2020.

DHSS works with Metrc to make sure the track-and-trace system is running smoothly, Fraker said, adding no issues have reached his desk. The state agency has had a weekly call with the company since 2019.

“It’s like anything technology related, just like your cellphones, internet, there’s always going to be little glitches and things like that, especially when we started up,” he said. 

While there were learning curves in the early going using Metrc’s platform, Black said the Florida company’s customer support along with guidance from DHSS has been helpful to navigate challenges. 

“It does one thing, and it does it very well: It tracks the movement of plants in the industry,” Black said. “There are no shortcuts you want to follow there. You have to make sure the tags are right. You have to make sure you’re tracking them properly.”

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