Bold Team Provides Peek at Arkansas' First Legal Pot Operation

by Kyle Massey  on Monday, Feb. 11, 2019 12:00 am   5 min read

COTTON PLANT — Bold Team LLC is off to a bold start in Arkansas’ new medical marijuana market, growing the state’s first crop of legal cannabis indoors on the edge of the Grand Prairie.

A skunky odor rides the wind as industrial fans blow out to cool the cultivation company’s groundbreaking marijuana factory in Woodruff County. But don’t expect bongs and blacklight posters at Arkansas’ first commercial cannabis cultivation center.

Instead, a tour reveals a highly secure, controlled and automated agricultural operation, a $6 million-plus investment by business veterans helping to invent a new Arkansas industry.

And Bold Team has a head start in the race to grow, process and even transport medicinal marijuana.

Some 1,600 plants were growing last week in a 45,000-SF hybrid greenhouse/processing complex, plants expected to put the first wave of products on dispensary shelves by April.

Bold Team’s crop is fed, watered and warmed by a computerized Wadsworth Systems “fertigator” that controls moisture, nutrients, temperature, light and humidity. After weeks in the optimum growing environment the six-figure system provides, products will go into a reinforced vault, not unlike a bank’s, to await shipping to the state’s 32 dispensaries.

Full greenhouse capacity is 6,500 plants, and at peak operation electric bills are expected to run about $40,000 a month.

“We started from full-blown scratch with only guidance from other states,” said Cayne Orman, director of inventory and quality control for Bold Team, which paid a $100,000 state licensing fee and posted a $500,000 performance bond. “And as you know, Arkansas is different from any other place you’ll ever go.”

So will Bold Team have a big advantage as the first of five licensed grow sites to get up and running? “You would assume so,” Orman said. “There’s a novelty associated with this, so you would think there might be a rush at the beginning. It’s just a theory, though.”

‘Capitalism at Its Best’
In the untested legal marijuana market, little is certain except that Arkansas cultivators are cleared to sell to any and all dispensaries, which the state certified just last week. Potential revenue is for now an educated guess, as is the number of Arkansans who’ll qualify for medical cannabis.

About 7,500 patients are approved so far, and cards are finally going out. But Bold Team, citing adoption rates in other states, expects 2 to 3 percent of the state’s 3 million people to eventually qualify. That would be 60,000 to 90,000 customers, which industry observers say could translate into sales of $2 million a month for each cultivation site. Bold Team leaders called that figure speculation.

“Capitalism at its best” will sort everything out, Orman said. “It’s just an open-negotiation business transaction between cultivators and dispensaries, so it’s hard to know exactly what the price, product and market will be.”

Most states with medical cannabis also licensed processors as a third category alongside cultivators and dispensers. Arkansas’ cultivation sites and dispensaries all have the legal ability to process medical cannabis. To that end, Bold Team spent north of $80,000 for a basic Extraction Tech Systems machine to distill cannabis oil. Add-ons ran thousands more. “It runs on butane and propane, getting the oil out for use in edibles, vape pens, everything except for the raw flower,” Lercher said.

Product development will occur on the fly. “You don’t know if a dispensary will want bulk wholesale product and process it further or if they’ll want to buy, for example, vape pens that are already finished and packaged,” he said. “Both are allowable, but it’s hard at this stage to know what needs producing.”

RELATED: The Secret Life of Marijuana Plants

Changing Views
One certainty is that attitudes have changed. The open smell of mass-produced marijuana in the buckle of the Bible Belt, as Lercher put it, draws hardly a sniff these days. Instead, many Arkansans clamor to use cannabis for conditions ranging from cancer to seizures to arthritis.

One Bold Team visitor spoke of a 78-year-old great-grandmother who wants medical marijuana for her chronic back pain, hoping to quit her prescribed opioid pills.

“We hear more and more stories like that,” Lercher said. “I thought the backlash from people here would be worse — the thought that, hey, this is dope! I was that person just five or six years ago.

“But for me what started out as a business opportunity for financial gain has, the more I got involved, transformed into sort of doing something good.”

Watchfully leading the tour — all visitors must be escorted at all times — Lercher marveled at the fact that seven months ago, Bold Team’s gabled high-tech greenhouses were just a vision in a soybean field. “The day our license was approved, July 10, 2018, I was out here mowing beans, and dirt work started a day later,” Lercher said. “We always wanted to press ahead, and we like talking to the dispensary folks who feel that same sense of urgency.”

Arkansas patients understandably fret that products remain unavailable nearly two-and-a-half years after voters approved medical cannabis in November 2016, but Lercher says the state is weeks away from new treatments for nearly 20 qualifying conditions. “It’s coming if they can just hold on.”

Beyond ownership and officers, Bold Team had five employees last week, with four more pending state clearance. Up to 25 employees are expected eventually, a welcome boost to Cotton Plant, population 600, in the job-starved Grand Prairie. The town, which leased the land to Bold Team, will by agreement get 1 percent of the cultivator’s gross sales.

Business Experience
The company is Arkansas-owned, with Human Resources Director Misty Drennan and Medical Director Kyndall Lercher, a registered nurse, each owning 25.5 percent. COO Mark Drennan and CEO Danny Brown split the balance, with 24.5 percent each. (Robert Lercher, Kyndall’s husband, noted that the state’s scoring process added points for women-owned businesses.)

Brown, an accountant and owner of Willy D’s Rock & Roll Piano Bar in Little Rock, lists other prominent businesses on his resume, including Altitude Trampoline Parks, RBD Construction Inc., and Mayflower RV Sales & Service. Robert Lercher owns Qwik-Way Dent Technology Inc. of McRae (White County), specializing in auto hail damage repair. Dale Lang is Bold Team’s CFO.

“This is the coolest thing I’ve ever worked on,” said Orman, who founded Statewide Pest Control and Orman Construction, both of Beebe. His mother’s family is from Cotton Plant, which had several other things going for it. It’s agricultural, distressed and there are no schools or churches nearby, a state requirement. “The need for local utilities, a reputable consistent water source and the ability to run three-phase power with Entergy all combined in the decision,” Orman added.

“We did a portion of the contracting for this facility ourselves, and Mulhearn Wilson [of North Little Rock] helped and was a construction manager for us. Danny Brown, one of our partners, is a commercial contractor, but portions of this place were specialized enough we wanted extra help.”

Gabled greenhouses with opaque roofs provide 36,000 SF of grow space, and 9,000 additional SF make room for offices and areas for propagation, drying harvested marijuana and processing it. The vault has 8-inch-thick concrete walls, four times the specifications of safe rooms to withstand tornadoes. A fence topped with razor wire protects the facility, along with armed security led by a former Little Rock police detective, Barry Flannery.

“The security requirements are strict and specific,” Robert Lercher said. “This has to be a tightly controlled product, even down to transport.” While the Arkansas Medical Marijuana Commission will examine transit rules in a meeting this week, Lercher noted that the cultivation companies themselves are allowed to transport product to dispensaries.

“We’ll be doing that in specially equipped but nondescript vehicles,” Lercher said.

 

 

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