Three new companies will be entering Delaware’s medical marijuana industry as early as this year after state regulators recently issued additional licenses.
Valor Craft Cannabis Company will be based in New Castle, CannTech Research will be based in Dover and Georgetown, and EzyCure LLC will be based in Harrington. Each of the new licensees, chosen from 10 different applicants, has previous experience in the cannabis industry either in Delaware or elsewhere.
The first five years of Delaware’s medical marijuana industry has seen only three players in the market: First State Compassion, a local company with Wilmington and Lewes locations led by retired state trooper Mark Lally; Fresh Cannabis, which has a single Newark location and is operated by New Jersey-based Compassionate Care Research Institute; and the multi-state, publicly traded industry giant Columbia Care, which has locations in Wilmington, Smyrna and Rehoboth Beach.
Valor Craft Cannabis is a six-partner venture that includes former Kahunaville owner David Tuttleman who founded a successful marijuana grow operation in Las Vegas, former Delaware Division of Corporations Director William Freeborn, who lobbied to include research provisions in the state’s marijuana statute in 2015; and James Brobyn, founder of American Fiber, a Wilmington-headquartered cannabis company that owns a vertically integrated operation in Michigan as well as a CBD oil importer and distributor.
Brobyn told Delaware Business Times that the company is currently building a 15,000-square-foot grow facility and processing center in an industrial park near New Castle. They hope to begin selling their product by early 2022, and expect to employ upward of 40 people when fully built out.
Brobyn has experience in retail sales with his company’s chain of Compassionate Care by Design stores in Michigan while Tuttleman’s Matrix NV company has grown and processed marijuana for years. Together, the partners believe they will be able to get their operation up and running efficiently with room for future growth in the First State. That includes potentially selling their product in other dispensaries, something that occurs often in other states but rarely in Delaware where market participation is small.
“We want to encourage [business-to-business] and wholesale in the state. I think it’d be good for consumers,” Brobyn said. “Frankly, diversity of products will help improve innovation across the whole industry. So, we hope that the other operators will work with us.”
Meanwhile, EzyCure is led by siblings Jennifer Stark and Bill Rohrer, the founders of Ezy Venture, Delaware’s largest hemp-derived processor of the non-narcotic cannabidiol, or CBD. The startup, supported by a $100,000 state grant for emerging businesses in 2019, works with local hemp farmers and cultivates its own fields to process as much as 250 pounds a day to produce wholesale CBD oil.
An oversaturated CBD market after passage of the 2018 federal Farm Bill has led Ezy Venture, like many processors, to be sitting on inventory though, Rohrer said. The partners decided to pursue a medical marijuana license to diversify their operation.
Rohrer, who operates an agronomy lab that supports Delmarva farmers and helped set up the laboratory that conducts the state’s marijuana quality testing, said the team is dedicated to producing a high-quality product that helps Delaware patients.
“CBD was a great foundation to understanding the whole wellness factor of cannabis,” Stark added. “After talking with a lot of patients, hearing their stories about how it’s helped them or their families, we learned a lot about the medicinal benefits of cannabinoids.”
EzyCure has leased a 10,000-square-foot, indoor Sussex County hemp farm to cultivate its first crop of medical marijuana, planting as early as a couple weeks, Rohrer said. Once fully built out, they expect to employ 30 or more people and will open their first dispensary, called The Farm, in the Camden-Felton area. They are eying a second storefront later on in the northern Kent County or southern New Castle County area.
Finally, the third licensee has a growing out-of-state presence. According to state filings, CannTech is led by Raj Mukherji, a New Jersey state assemblyman and lawyer who has been a leading voice and investor in medical marijuana operations.
Last month, CannTech sold its Pennsylvania business to Ayr Strategies, a growing multi-state medical marijuana operator, in a $57 million deal.
Mukherji also has ties to Compassionate Care Research Institute, which operates the Fresh Cannabis store in Newark, although it’s unclear if he still holds a financial stake in the company. Requests for comment to his New Jersey law firm were not returned Tuesday.
According to the state’s Office of Medical Marijuana, CannTech will likely begin sales this fall at locations in Dover and Georgetown.