NEW YORK, May 24, 2021 – PRESS RELEASE – MATTIO Communications, one of the longest-running and largest cannabis marketing services firms, announced that it has launched a full-service influencer marketing agency, Confluence Agency. In addition to supporting cannabis clients, this subsidiary will also focus on sectors including fashion, beauty, food, home, tech, lifestyle and travel as influencer marketing becomes an integral aspect of building brand value across all industries.

Over the past 10 years, influencer marketing has become a preferred strategy for brands to engage with target audiences. Increased social media usage throughout 2020 further enabled companies to drive sales and brand awareness through curated content generated by micro and macro influencers. According to Insider Intelligence, the value of the influencer marketing industry is projected to reach $15 billion by 2022 as more brands invest in building authentic long-term consumer relationships.

“Since our inception, MATTIO has developed strategic solutions that exceed our clients’ business goals,” said Rosie Mattio, founder and CEO of MATTIO. “We’ve seen firsthand how influencer marketing drives growth among our own cannabis clients and is the future of brand marketing. Launching an agency dedicated to executing best-in-class influencer campaigns aligns with our core mission of providing novel and effective media services to high-growth industries.”

Victoria Baek, who was head of influencer marketing at MATTIO, will lead Confluence Agency as CEO. Baek has worked with legacy consumer brands including Coca-Cola, Taco Bell, Disney and Forever 21. Prior to working at MATTIO, Baek was head of influencer marketing and brand partnerships at HARMAN International where she spearheaded the JBL Master Class series, a monthly program featuring electronic producers and hip-hop artists that not only brought the HARMAN portfolio to millions of new deals but also generated new brand deals.

“The influencer industry has evolved from one-off transactions to valuable, long-term partnerships. Online communities allow brands to connect authentically with audiences in a way that drives measured performance,” Baek said. “We’re so excited to launch this new agency to help brands understand emerging channels and leverage these relationships to strengthen overall brand loyalty and improve conversion.”

Confluence Agency manages influencer marketing strategies for brands from start to end. From identifying celebrity and/or niche influencers, to creating content guidelines, to handling the logistics of gifting programs, the Confluence team takes a goal-oriented approach to every campaign in order to track progress. For more information on Confluence’s full range of services, please visit https://www.confluenceagency.co.

OLD BETHPAGE, N.Y., May 24, 2021 – PRESS RELEASE – Millennium Investment & Acquisition Co. Inc. (MILC) announced that it has agreed to invest in a newly formed cannabis operator Walsenburg Cannabis LLC (WC). As part of the transaction, MILC has agreed to lend capital to WC for its business operations and MILC is in the process of obtaining regulatory approvals for holding cannabis licenses in Colorado. Upon receiving regulatory approval, it is contemplated that the company would become the majority owner of WC in the form of a preferred equity ownership stake.

Simultaneous with MILC’s investment, WC entered into a long-term lease for real estate purchased by Power REIT. David H. Lesser, MILC’s chairman and CEO is also chairman and CEO of Power REIT. The approximately 22.2-acre site includes existing greenhouse and processing space (the “property”). As part of the lease, Power REIT has agreed to fund the rehabilitation and upgrading of the existing improvements and the construction of additional greenhouse space. Upon completion of this work, the property will have a total of approximately 102,800 square feet of greenhouse and related space. Millennium Investment’s total capital commitment for the project is $750,000.

“This transaction represents a new area of focus for MILC as MILC seeks to transition from an investment company under Securities and Exchange Act of 1940,” Lesser said. “As previously disclosed, MILC is actively selling its sole investment in securities and is converting to an operating business with two areas of focus: sustainable cannabis cultivation in greenhouses and production of activated carbon. MILC is enthusiastic about the prospects for these two focus areas, and I look forward to announcing additional exciting developments in the near future.”

WC is led by President Jared Schrader, an experienced cannabis cultivation operator with a solid track record. Schrader grew revenue at a Colorado cannabis cultivation facility from annual revenue of $150,000 to weekly revenue of over $150,000 (i.e., more than $8 million annually) over the span of two years.

“The property is subdivided into five parcels that each have local approval for the cultivation of cannabis. This allows the property to pursue a rapid growth plan given the nature of Colorado cannabis licensing which is based on a limited plant count initially per property,” Schrader said. “Once performance is demonstrated to the regulators, each property will have the potential to ‘tier-up’ and add more plants. Based on the initial property configuration, WC intends to quickly establish approximately 11,000 cannabis plants which can be harvested approximately five times per year. Based on recent prices for cannabis in Colorado, this would result an annual run rate of revenue in excess of $10 million. Colorado was the first state to legalize cannabis and is currently the second largest cannabis market in the United States which continues to generate significant demand growth.”

Schrader added, “I believe this property can quickly become a large-scale producer of cannabis and cannabis-related products to serve the Colorado market which is the second largest cannabis market in the United States. I am excited to team up with both MILC and Power REIT to get this project growing.”

Deregistration as a 1940 Act Company

On Oct. 14, 2020, shareholders approved a proposal to change the nature of the MILC’s business from a registered investment company under the Investment Company Act of 1940 (the 1940 Act) and to a holding company that focuses primarily on owning and operating businesses that produce activated carbon and acquiring other private businesses (collectively, the “deregistration proposal”). The company is in the process of implementing the deregistration proposal so that it is no longer an “investment company” under the 1940 Act and has applied to the Securities and Exchange Commission (SEC) for an order under the 1940 Act declaring that the company has ceased to be an investment company (the “deregistration order”).

While the company is committed to fully implementing the deregistration proposal, it is still contingent upon regulatory approval and the ability to reconfigure the company’s portfolio to deregister as an investment company. The time required to reconfigure the company’s portfolio could be impacted by, among other things, the COVID-19 pandemic and related market volatility, determinations to preserve capital, the company’s ability to identify and execute on desirable acquisition opportunities, and applicable regulatory, lender and governance requirements. The conversion process could take up to 24 months; and there can be no assurance that the deregistration proposal, even if fully implemented, will improve the company’s performance. Further, the SEC may determine not to grant the company’s request for the deregistration order, which would materially change the company’s plans for its business.

MILC continues to focus on the liquidation of its sole investment in securities—its investment in SMC and plans to invest the proceeds in operating businesses. MILC currently believes it will fully liquidate its position in SMC before the end of the current quarter although there can be no assurance as to when or if such liquidation will occur.

Courtesy of Sol 7 Farms

When Amber Speckman started cultivating cannabis nearly a decade ago in Northern California, it was consistent with her passion to help people.

Speckman’s background includes a master’s degree in marketing and business, but spending two years helping to nurse her mother, who died of cancer, motivated her to go back to school and earn degrees in holistic health and nutrition. Speckman then moved out of the country and opened a holistic health and wellness center, which she ran for seven years.

But when her father’s health began to decline, she moved back home to take care of him and had a son at the time. To meet the financial needs of her family, Speckman put 25 cannabis plants in the ground, which she said was the legal number she could cultivate in 2013 with her medical license. 

“It was consistent with my passion to help people,” she said. “I’ve always loved natural medicine. And it was a way that I could work from home, take care of my family and then also provide natural health and medicine to people who needed it. So, that’s how I started cultivation about a decade ago.”

Courtesy of Sol 7 Farms

The owner of Sol 7 Farms, Speckman’s family operation now has seven team members who cultivate 14,000 square feet of cannabis and produce high-end flower from the Emerald Triangle.

While Speckman doesn’t consider herself a legacy farmer, she’s passionate about keeping smaller farms in business, she said. Working toward that objective, she’s one of seven farm owners in the Emerald Triangle—including Humboldt, Mendocino and Trinity counties—who joined forces to launch Cannavia, a cannabis company that is legally a corporation but aims to function in the spirit of a cooperative.

Founded by co-CEOs Michael Horner and Chris Leonard in 2019, Cannavia is vertically integrated and fully owned by its farmer and producer members. It’s pillared to help smaller farms own their brands, build equity and retain the legacy culture that helped create the cannabis space in the first place, Horner said. Furthermore, Cannavia is designed to help small-scale farmers in California maintain their independence and financial stability, he said.

Under the Cannavia brand, farmers collaborate to grow predetermined cultivars and harvest enough product to not only secure shelf space in retailers but produce consistent yields to keep that shelf space. All the initial fundraising, starting with the seed money, comes from the family farmers, who buy into the company to receive brand equity and shares in the corporation. While the farmers focus on growing, Horner and Leonard, who have entrepreneurial shares in the company, handle corporate structures like branding and distribution.

Through that collaborative membership in Cannavia, Northern California farmers can focus almost all of their efforts into growing quality and consistent products while still maintaining some sense of ownership and control in a vertically integrated marketplace, Speckman said.

Courtesy of Sol 7 Farms

Although Speckman has a background in business—as do other founding members of Cannavia—she said she does not have time to be shopping her product around.

“I think for smaller farms, in order to be effective and functional, they need to really work together,” Speckman said. “We all know the necessity of working together to not just succeed and thrive, but to actually just survive.”

Geared toward operating in the spirt of a cooperative, Cannavia’s farmers have had to concede some of their individual practices and wishes, such as cultivars they grow under the brand name, in order to achieve the same quality product, Speckman said. Consistency in that product, even down to the size of the flower nuggets they package, can be a determining factor in the Cannavia brand success, she added.

Preserving the Fabric of the Industry

Courtesy of Cannavia

Horner found his roots in the cannabis industry in 2008, when he left his corporate job to start a consulting firm to help entrepreneurs and businesspeople create “legitimate” businesses out of what they had been doing for years as a labor of love, he said. 

“I’ve always kind of rooted for the underdog and wanted to help the little guy,” he said. “At the end of the day, a group of small family farms are stronger than they can ever be on their own.”

While an uptick in consolations among multistate operators continue grab headlines as the space matures, the cannabis industry historically has been very much “mom and pop” with a rebellious culture at its core, Leonard said.

“I used to always tell people, ‘Hey, it’s the coolest industry in the world,’ when I was going to the funkiest little pockets of California to meet these shop owners and operators that were servicing the grow community,” he said. “So, just historically, it’s the people, it’s the character, like, the fabric that has held all this together. And somebody said this at one of the shows a long time ago, … ‘Look, none of us are rocket scientists, but it’s our soul, it’s our passion,’ and that’s the glue that stitches this whole fabric together. That’s what’s kept me in the industry for a long time.”

Cannavia co-founder Leonard entered the cannabis space with a friend, manufacturing grow lights in the mid-2000s, but his specialty is on the branding and marketing side of the industry. In 2015, he co-founded Cannaverse Solutions, which is built to arm heritage farmers with the tools they would need to compete in the marketplace, he said.

“What you learn really quick is it’s near impossible for a single farm to go out in the marketplace in California and make a real big impact,” Leonard said. “Unless you’ve got a lot of capital behind you, unless you’ve got a bunch of business-savvy people, you’ve got a legal team—you really need to have a lot to compete in this marketplace just due to the size and because it’s so overregulated.”

RELATED: California’s Cannabis Industry Marred by Limited Supply Chain and Heavy Tax Burden

 

A Collective Stake

As state-by-state markets continue to grow, those already with a footprint in the sector are poised to go bigger while potential major players outside the cannabis industry are looking for a way in, said Jared Schwass, a licensed attorney in California who is an associate in the Fox Rothschild law firm’s Cannabis Law Practice Group.

Courtesy of Sol 7 Farms

In February—three months before Trulieve Cannabis Corp., a licensed operator in California, announced its $2.1-billion definitive arrangement to  acquire  Harvest Health and Recreation Inc.—Schwass told Cannabis Business Times that consolidation in the California market was ripe, partly because of its abundance of independent operators. 

“The small farmers up in Northern California are struggling,” he said about remaining competitive in a maturing market that continues to consolidate. “But I think through struggle comes perseverance. I think there is something to be said about these small farms and these small kind of craft brands that there still is a market for them, and there will continue to be a market for them.”

At first, there were some growing pains associated with seven established farmers developing one standard operating procedure under the Cannavia brand, Speckman said.

“It’s like herding cats. It’s not as simple as it sounds,” she said. “We’ve all been individual mavericks for so long, and then all of a sudden we all have to work together. It’s not that it’s been extremely hard; it’s just, you have to be willing to adapt.”

But the payoff could be huge, Horner said.

While Cannavia launched with seven founding farmers, the company is in the process of adding 12 more farms to its controlling membership this year, Horner said. The goal is to expand to 40 acres of production, which would make Cannavia competitive with some of the largest cultivators in the state, he said.

Inspired by cooperatives like the Tillamook County Creamery Association headquartered in Oregon—a 100-plus-year-old company that sells dairy products like cheese and ice cream under the nationwide “Tillamook” brand name—Cannavia is working toward securing more shelf space in top-line retailers, Horner said.

“We want to be that for the cannabis industry,” he said, referencing Tillamook. “So, that sort of brand equity is one of the big reasons to be involved with a corporation like ours. Cannavia will build the brand and give farmers the brand equity piece that they need [in order] to hold value in their product and not be subject to commodity spot-market pricing season after season. You know, it allows the small family farmer to do what he [or she] wants to do—farm.”

Coming from different backgrounds to steer the same ship, Cannavia farmers have also built a community to exchange knowledge from throughout the Emerald Triangle, Leonard said. Each farm owner controls the direction of the company through his or her seat on Cannavia’s board of directors. 

Sometimes corporate interests can overtake the cannabis culture in a company, which in turn could jeopardize the recipe for success, Leonard said.

“We’re trying to blend our skillset with the heritage part that the farms offer and offer the best possible framework for Cannavia to thrive in the marketplace,” he said. “We need to be able to pool resources, pool our collective knowledge, or collective grit so to speak, and offer a way where there’s a clear pathway forward for these small heritage farms to exist in the marketplace where they’re not just a commodity farmer.”

Functioning as the spirit of a cooperative does take a considerable amount of trust and camaraderie that is not always ubiquitous in the cannabis industry, which historically can be guarded with farmers attached to their individual craft, Speckman said.

Having a collective stake in the marketplace has bridged those divides at Cannavia, she said.

“It’s incredibly beneficial because none of us want to sell out and be corporate and be huge,” Speckman said. “We all want to maintain some semblance of integrity in that small-craft feel, but in order to survive, we really need to work together [and] pool resources to pull it off.”

Jill Jasuta/Courtesy of CULTA

Maryland medical cannabis cultivator CULTA has launched the state program’s first tissue culture lab in an effort to further hone its approach to craft cannabis and extracts. Chief Cannabis Officer and co-founder Mackie Barch said that it’s a natural next step in the company’s growth plans and cultivation goals.

The team took their first tissue culture clones on April 8. (The news comes just a few months after CULTA moved its headquarters to a new office in Bethesda to accommodate a long-term growth strategy, which includes plans to add 100 more employees across its farm in Cambridge, retail dispensary in Baltimore and new HQ.) 

CULTA’s current collection of 26 cultured strains includes: Dosido 22-22, Poochie Love and Scooby Snacks #2. New mothers are expected in the coming months. The plan is to bank all of CULTA’s genetics in the lab by the end of the year.

The prime motivation was “to ensure redundancy of our genetics, the ability to create clean new moms and to be able to store genetics for long periods of time,” Barch said. “The long-term implications are to ensure we don’t lose prized genetics to disease and age. Additionally, we can store more genetics in a safer manner and bring them back as needed.”

Cannabis strains can be moved in and out of production without a lot of additional cost. This flexibility translates to a greater engagement with sales trends in Maryland.

Looking ahead, the lab will also allow CULTA to develop an in-house breeding program.

“Plant tissue culture is not a hard process to do, but it takes a lot of knowledge and skill to master,” CULTA Tissue Culture Lab Supervisor Isaac Fisher said. “Lab experience is extremely beneficial, especially if it involves microbiology, mycology, botany or biochemistry. No new employees we're brought on specifically for the Tissue Culture lab. I have past experience working in a molecular genetics lab, but started out at CULTA doing outdoor cultivation and then working in the extraction lab before helping start the tissue culture lab.”