Pubdate: Thu, 25 Aug 2016
Source: Press Democrat, The (Santa Rosa, CA)
Copyright: 2016 The Press Democrat
Contact:  http://www.pressdemocrat.com/
Details: http://www.mapinc.org/media/348
Author: Kevin McCallum

MARLEY NATURAL CANNABIS BRAND GETS APPROVAL AS SANTA ROSA'S FIRST POT PROCESSOR

Santa Rosa has rolled out the welcome mat to the marijuana industry, 
and the first firm through the door is affiliated with none other 
than the godfather of ganja - Bob Marley.

Privateer Holdings, a Seattle investment firm aiming to build a 
global marijuana brand based on the image of the famed Jamaican 
reggae singer, has picked Santa Rosa to be the headquarters for its 
expansion into the lucrative California cannabis market.

City officials Tuesday approved a request by the company to set up a 
medical cannabis-processing, manufacturing and distribution center in 
a nondescript business park in southwest Santa Rosa.

"We really see an opportunity for the legal cannabis industry to make 
a meaningful contribution to the Santa Rosa economy and community," 
said Zack Hutson, a Privateer Holdings spokesman. The private equity 
firm partnered with the estate of the iconic singer to create its 
Marley Natural cannabis brand. It is already sold in state dispensaries.

The zoning approval the firm secured Monday was the first the city 
has granted under recently passed interim rules aimed at making it 
legal for marijuana support services such as laboratories and oil 
extraction facilities to operate in the city.

"This is kind of historic," said David Guhin, director of the Permit 
and Economic Development department.

Privateer Holdings was founded in 2010 by three venture capitalists 
who have raised $82 million to date, according to the company. It has 
three primary investments in the cannabis industry. One is Leafly, a 
popular mobile app that offers information and reviews of marijuana 
strains. Another is Tilray, a British Columbia-based provider of 
medical cannabis products, including raw dry marijuana and oils. The 
third is Marley Natural, a brand the firm created in 2013 in 
conjunction with the estate of the singer, who died in 1981.

The company plans to use the Santa Rosa facility to process Marley 
Natural products, Hutson said.

The city is ideally situated for the venture, located on a major 
transportation corridor between the prized marijuana growing area of 
the Emerald Triangle - spanning Mendocino, Humboldt, Trinity counties 
- - and the major population center in the Bay Area, Hutson said. Its 
educated workforce and clear regulations also made Santa Rosa a 
natural fit, he said.

The Marley Natural brand includes four labels: Marley Green, Marley 
Gold, Marley Red and Marley Black. Each contains different bud 
varieties and potencies. The brand also has a line of hemp seed oil 
body-care products and high-end smoking materials made of black walnut.

Hutson said the parent company has learned a great deal about how to 
effectively grow, process and sell medical marijuana at its Canadian 
facility, a $30 billion, 60,000-square-foot research and processing 
plant in Nanaimo, a small community across the Strait of Georgia from 
Vancouver.

The company hopes to draw on that experience as it sets up shop in 
Santa Rosa, Hutson said.

The move comes as California establishes a regulatory framework for 
the medical marijuana industry and as voters are poised to decide 
whether to legalize recreation pot use, a step experts predict could 
double the size of the cannabis market in the state by 2020.

Hutson indicated Privateer Holdings is not depending on legalization. 
"It will certainly help and we are hopeful it will pass but the 
medical market is quite large and more than big enough to support our 
current business model," he said.

The company applied Aug. 4 for city zoning clearance under a 
subsidiary called Sturdivant Ventures. It proposed to operate in two 
suites totaling 23,000-square-feet in a business park off Sebastopol 
Road, at 975 Corporate Center Parkway.

It proposes to receive deliveries of California-grown marijuana, 
pre-rolled joints and bulk oil. It also will process, label, package 
and distribute those products to dispensaries in the state.

Eventually company officials want to get into the business of 
extracting oils from raw cannabis, but they have not yet decided what 
method to use or any timeline for expansion, Hutson said. The company 
is watching the state and local regulations closely before it decides 
what makes the most business sense, he said.

At full build-out, it expects to employ 10 executive and 
administrative staff and 30 production staff, according to its application.

The company expects to begin operations this fall. It will need 
building permits before it can occupy the spaces, and how long that 
takes will depend on its plans. It also will have to comply with a 
long list of conditions, including obtaining a state license, 
providing the police department with a list of managers, not 
employing anyone under 18, and having plans in place for security and 
odor control.

Hutson said the regulations do not present concerns.

"We would like to open in a highly regulated environment where there 
is clarity about what type of activities are permitted and what are 
not," Hutson said.

The company's future Santa Rosa neighbors were in the dark about the 
new venture.

Maria Angela Guarienti, chief executive officer of Italian winery 
equipment supplier Della Toffola, will be an immediate neighbor of 
the new company. She had no idea Privateer Holdings was moving in and 
expressed concerns about possible odors, traffic and crime.

"I don't know how good it is for our business to have a neighbor who 
is processing and distributing cannabis," Guarienti said. "I'm not 
very happy about this."

Cornerstone Properties, which manages the building, did not return a 
call for comment. The property is just a block away from the 
Circadian Way location where a similar operation, CBD Guild, was shut 
down by local and federal law enforcement authorities in June.

Guhin said unlike the conditional use permit process established for 
commercial cultivation operations that want to locate to Santa Rosa, 
the cannabis support industries are more compatible with an urban 
setting. So while growers will need to have public hearings to get 
their permits, support industries only need an over-the-counter 
approval by a city planner and no public noticing is required, Guhin said.

Most local cannabis growers are likely unaware that Privateer 
Holdings is entering the local market, said Tawnie Logan, executive 
director of the Sonoma County Growers Alliance.

Some might be concerned about such well-financed competition planning 
to locate here, but the reality is that small farmers will need to 
partner with larger operations to survive in the future, she said.

 From all she has seen, Privateer Holdings is focused on sustainable, 
sun-grown cannabis, which could make for a good match with local growers.

"To have a well-funded company come into this community that wants to 
work with the community we already have here could be a hidden 
blessing," Logan said.
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MAP posted-by: Jay Bergstrom