Don Morris and Aaron Yarkoni formed DNA Genetics in 2003, and the cannabis breeding endeavor quickly became a global platform for the duo’s vision—with roots in California and Amsterdam. This was well before cannabis legalization came to the U.S., but the fundamental goals were already intact. And friendship was a pillar in this new business they were creating.

Dave Crockett was a part of that, too. His third-generation family-run farm (Crockett Family Farms) was given the spotlight by his friends at DNA, and he helped develop cannabis cultivars that would change the California landscape forever. Now, fast-forwarding the narrative to 2019, the businesses are consolidating; DNA is acquiring Crockett Family Farms and expanding the reach of these cannabis breeders’ original intent.

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“We became friends over the mutual love of the plant,” Morris tells Cannabis Business Times. “Out of just the simple fact of real recognizing real, so to speak, it was never really competition between us at all. … If Aaron, Dave and I could just sit in a lab somewhere and just crack seeds and make crosses and geek out on the whole ‘mad scientist’ part of it, that’s what we would all love to do more than anything.”

Early on in working together, the trio discovered a cultivar that had been grown when they were younger. It was Tangie, one of Crockett’s strains. He was just getting started, but Tangie proved to be a powerful cross of California Orange and a Skunk hybrid—a sativa-dominant strain that brought out the fruity flavors that hadn’t yet swept across the marketplace. “We released Tangie and Strawberry Banana under DNA for the first few years just to give it a bump and give it the nod, if you will,” Morris says. “It gave [Crockett] a global platform.” The friendship—and business partnership—deepened.

DNA continued to grow: building out greenhouses, consulting on business licenses, producing more cannabis under the California medical program and cutting licensing deals on Don and Aaron’s enticing genetics lineup.

Meanwhile, in the late 2000s and early 2010s, the Tangie effect was in full bloom.

Crockett had been growing cultivars like Tangie and Strawberry Banana (a Banana Kush x Bubble Gum cross) and steering his perspectives on the market away from the OGs and the Kush strains that had been dominating California’s scene at the time. “It was crazy how it just took over,” Morris says. “The whole flavor vibration changed in the cannabis world, from this kush-dominant gas to this fruity, tangerine, orange-y, old-school flavor. It’s nice to be part of that pop culture shift.”

Morris and his friends find themselves at the nexus of another pop culture shift in cannabis now—with more U.S. states legalizing and a more mainstream consumer base finding its way to the plant that they grew up loving.

“With [other cannabis brands] kind of simplifying it down for the industry, it’s not helping anything,” Morris says. “It’s actually kind of taking something out of it, in our opinion. What we want to do is show that it is about brands, it is about authenticity. It’s not as simple as ‘calm’ and ‘relaxation’ and ‘excitement’ or whatever word you want to connect to dumb it down to the simplest form. … It comes down to terpene profiles and strain-specific situations.”

He references the power of sensory details, like how the fruity taste of Tangie came to define a certain era in the cannabis space—and, no doubt, came to define moments and memories in individuals’ lives. It’s that unmeasurable cause-and-effect relationship that he hopes to see DNA continue to hone, even as the maturing industry sprouts its consumer-packaged-goods ambitions. By bringing Crockett’s business into the fold, he sees strength in unity. (Crockett will now serve as vice president of cannabis operations for DNA.)

“We’re consolidating with the best brands and the best companies—and the best licensing deals outside of California,” Morris says. “As far as we’re concerned, with the static that is in the industry right now, it seems really strong for us to unify with other brands that are legit and completely real and authentic.”

As the legal U.S. hemp industry begins to take shape, consolidation is already a factor in the marketplace. With the 2018 Farm Bill at its back, the market is expected to consolidate more rapidly than even the warp-speed movement in the cannabis space; hemp farmers and business owners would do well to watch this trend carefully.

RE Botanicals and Palmetto Harmony have agreed to a merger, creating a vertically integrated, USDA certified-organic business right at the moment that hemp-derived CBD products are intersecting with mainstream (and cannabinoid-curious) consumers in America. For founders John Roulac (RE Botanicals) and Janel Ralph (Palmetto Harmony), the merger accelerates each business’s goals and further develops the supply chain.

Courtesy of RE Botanicals

Roulac and Ralph met at a Victory for Hemp party following the passage of the 2018 Farm Bill. They immediately bonded over their shared perspectives on organic cultivation and the emerging hemp market.

“We have the same views on everything in the industry—and where the industry needs to go,” Ralph says. “I think the two brands really align well together. It gives us the opportunity to bring two high-quality product brands to the market and bring it to the market with a much larger reach, too. … In any industry, if it’s this competitive and this new, the most important thing you can do is bring in a value-add partner.”

Ralph formed Palmetto Harmony in 2015. Her daughter, Harmony, had been diagnosed with lissencephaly. This brain disease causes intractable epilepsy. Ralph set out to find a solution. Her research led her to CBD, and she soon learned that a hemp marketplacewas forming separate from the burgeoning cannabis industry in the U.S. But, living in South Carolina, she found that it would be easier to make hemp-derived CBD products instead of trying to find them in any retail shop around her. “I didn’t come into this space looking to create a business,” she says. “I came into this space out of necessity.”

She first worked with Bill Polyniak’s Kentucky Cannabis Company to purchase legal hemp from his licensed pilot program business, and she set to work developing high standards for safe hemp-derived CBD products that would be fit for Harmony.

Eventually, South Carolina got around to passing hemp legislation (for which Ralph played a vocal advocacy role) and Palmetto Harmony began to grow. The brand is now found in 600 storefronts.

At the same time, in Colorado, Roulac had been taking what he’d learned as founder and Chief Visionary Officer of Nutiva and constructing a business founded on organic farming and soil regeneration techniques. “We believe health begins in the soil,” he says. “Healthy soil leads to healthy plants. Healthy plants lead to healthy people. Healthy people means you have a healthy heath care system, and, also, when you have healthy plants and healthy soil, you have a healthy climate. The challenge today is that 99 percent of our agriculture is based on unhealthy soil, on degenerative farming.”

Roulac set out on two decades of work in the hemp industry with that singular goal: to use hemp farming to regenerate soil and lift up the planet’s resources for all. It’s a variation on the same theme—conscious health standards—that led Ralph to build her company.

“My focus is the environment—natural systems and how that impacts people and the environment,” Roulac says. “Her focus is, as a mom, getting organic plant medicine to her family. That, of course, led her to why she wants to do things organically. We share that in common. We’re appalled by what we see out there in the CBD industry and how—do you really want to put something under your tongue that’s been grown in a process with Monsanto Roundup chemicals? We share that. We’re both driven.”

Under the terms of the stock merger, the combined business will use the name RE Botanicals. Ralph will serve as chief operating officers and oversee the company’s hemp cultivation and manufacturing facility in South Carolina.

Roulac’s work at RE Botanicals put the brand in 1,200 stores (a sharp increase from the four storefronts it was working with as recently as November 2018). With this deal inked, RE will be able to take advantage of the supply chain assets that Ralph built with Palmetto Harmony—the agility that’s allowed her to innovate in the product manufacturing segment of the business.

“If you want to be successful in this industry, don’t just take money from anybody that wants to give it to you,” Ralph says. “Make sure that you bring somebody to the table who’s going to advance your business in whatever arena it is.

“This industry is going to become more and more and more competitive,” she says. “I’m almost under the impression that if you’re getting in now, you’re probably getting in too late. I thought we’d have another year so, but I don’t know. It’s going to take some real heavy players to survive in this industry.”

The merger now places both entrepreneurs on the front lines of a fast-tracked market consolidation trend in the hemp industry. This deal checks the classic boxes on the M&A list: personnel, access to capital, technology and innovative intellectual property.

Executives at BIGR Ventures, which contributed seed funding to RE Botanicals, are watching this merger as part of that broader narrative in the hemp market. BIGR managing partner Carole Buyers said in a public statement, “This is truly a meeting of like-minded and purpose-driven companies. One of the reasons that we invested in RE Botanicals so early in their growth phase is that we believe in the work that founder John Roulac is doing in the agriculture space. Uniting with Palmetto Harmony increases their footprint as a brand and opens them up to exciting new opportunities as product manufacturers. We’re excited to see where their continued growth takes both brands.”

While marijuana isn’t fully legalized in the District—recreational sales remain illicit due in large part to congressional interference, and public use is barred under a 2015 law—a new initiative by Mayor Muriel Bowser’s administration is allowing more people to benefit from D.C.’s medical cannabis dispensaries. Under expedited rules that Bowser announced earlier this month, the District now recognizes medical marijuana cards from 27 states where it is legal, up from 19 states before. D.C. officials were also reviewing four other states’ eligibility.

People with medical marijuana cards from the following states may now get cannabis from District dispensaries, per Bowser’s office: Alaska, Arizona, Arkansas, California, Nevada, New Mexico, New York, and Vermont. The four states being considered for inclusion as of August 8 were Louisiana, Minnesota, Oklahoma, and West Virginia.

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