Heartland Labs awaits state approval for marijuana-infused products

Article Originally Found At SBJ.

A Buffalo-based company is on the verge of being among the first in Missouri to manufacture cannabis-infused products, as its leadership expects to open later this month.

Heartland Enterprises LLC, dba Heartland Labs, applied Nov. 30 for its commencement inspection with the Missouri Department of Health and Senior Services, said Maddi Pearcy, director of operations.

“They have 30 days from the date we request commencement to come and finish their inspection,” she said.

Upon approval, the family-run venture at 1794 S. Ash St. will follow close on the heels of infused-product manufacturer Clovr. The Kansas City-based company earlier this month became the first company to receive state approval to begin manufacturing products such as marijuana-infused gummies, concentrates, vape pens and edibles.

Heartland Labs employs seven in its 6,000-square-foot metal frame building a mile south of Buffalo. Hayden Pearcy is Maddi’s brother and the facility’s lab director, while their father, Mike Pearcy, is managing partner.

Construction of the production facility by Lebanon-based Helton Metal Buildings LLC stretched a couple months beyond the originally planned September completion, Maddi Pearcy said, citing the pandemic as a contributor. The Pearcys declined to disclose startup costs.

“COVID-19 has thrown several wrenches in those gears, but we have made it,” she said.

The company will start production as soon as the state gives the go-ahead, Maddi Pearcy said, adding they expect to have product on dispensary shelves within a week or two thereafter.

On tap
The line of products at Heartland Labs will include edibles, such as chocolate bars, cookies, cannabis-infused honey in partnership with Everton-based Wild Ozarks Honey LLC and three flavors of gummies: strawberry, orange and black cherry. Vape cartridges and capsules also are on tap, the organizers say.

The company will wait to produce cannabis concentrates, such as tinctures and capsules, until more cultivation facilities are open. As of press time, only 11 cultivation sites in the state have been approved, according to DHSS data.

“Initially, we’re just going to roll out our edible line, which is Sweet Stone. It’s our own creation,” Maddi Pearcy said. “All of our recipes are homemade.”

The edibles will have THC distillate, which is tasteless and odorless cannabis oil, she said.

“Since we’re using distillate, it’s not going to taste like cannabis. Not everybody enjoys the flavor of terpene,” she said, referring to an organic compound that provides aroma and flavor in cannabis.

Hayden Pearcy said the company will use hydrocarbon extraction equipment in the production process. The hydrocarbon unlocks cannabinoid and terpenes within the plant, he said, estimating they will be able to process around 120 pounds of raw material in a day.

With so few companies manufacturing product currently, the siblings anticipate high demand.

“We expect once we have stuff available to sell, it’s going to sell as soon as we make it,” Hayden Pearcy said. “We think it’ll be like that for the first six to eight months.”

The siblings are making a professional shift with the new venture. Maddi, a 2019 Drury University graduate, most recently worked as an administrative assistant at Maxon Fine Jewelry. Hayden graduated in 2019 from Missouri State University and previously worked for American Family Insurance.

The Buffalo company is part of an industry set to financially take off in the next few years, according to industry estimates.

The 2020 Marijuana Business Factbook projects Missouri’s medical marijuana market will reach roughly $200 million in sales in 2021 and grow to $525 million-$650 million by 2024.

Waiting game
Heartland Labs is among nearly three dozen medical marijuana facilities awaiting state inspection. As of press time, 67 facilities had requested an inspection. Of those, 32 were approved to operate and 35 inspections were in progress, according to DHSS data. In total, nearly 370 active licensed or certified dispensary, testing, transportation, cultivation and infused-product manufacturing facilities require a commencement inspection from DHSS.

The deadline set by DHSS for licensed cannabis businesses to be in operation for most facilities is late January. In most cases, that’s 12 months after receiving a license by the state. However, DHSS spokesperson Lisa Cox said a variance procedure is in place that allows extensions for licensees.

“We are expecting to receive a substantial number of these requests, largely due to challenges facilities have encountered in starting their business during the public health emergency,” she said via email.

DHSS notes in a guidance letter provided to medical marijuana licensees that extension requests should include an explanation for exactly what variance the facility is requesting and a new proposed operational deadline. The request also should include a detailed argument for why the facility can’t meet its original deadline.

Maddi Pearcy said she was relieved their construction delays didn’t push them beyond the one-year deadline.

“We’re not open yet, but the fact that we have the opportunity to do this is really something,” she said.

One local medical marijuana facility that has launched is Old Route 66 Wellness LLC. The dispensary at 2823 N. Glenstone Ave. opened to the public Nov. 3 – the first in Springfield – but it has dealt with product shortages ever since, said co-owner John Lopez. As a result, he said the shop has only been open six days in its first month operating. A previous agreement with an unnamed company to provide cannabis flower every 12 days fell through, he said, declining to elaborate. He estimates more flower will be available either right before Christmas or shortly thereafter.

“It’s been extremely frustrating. There’s just nothing available. We’re talking to everyone,” he said. “Either manufacturers have bought it out to start doing the infused products or other companies have gotten it already.”

Heartland Labs struck a supply deal in November with Humansville-based cultivator Flora Farms for undisclosed terms, Hayden Pearcy said, adding plans also are in place with two other unnamed cultivators. The company also has distribution partnerships established with roughly 30 dispensaries across the state, including Old Route 66.

Pearcy said he’s known Lopez for years. His family has volunteered with nonprofit K9s for Camo Inc., owned by Lopez. Additionally, Heartland Labs utilized the services of another Lopez-owned venture, digital marketing agency 420 Marketeers, for a couple of commercials, he said.

Lopez said he and his team at Old Route 66 got to sample Heartland Labs’ noninfused products and they were impressed, which led to the partnership. The operators declined to disclose terms of the agreement.

“We have partnerships with Clovr and Heartland because they’re first to market,” Lopez said.

The current lack of product is keeping Old Route 66 from opening its Ozark dispensary. Lopez said it’s now set to debut by late December or early January.

The Pearcys say they’re eager to open but recognize competition in the budding industry will be fierce. However, helping improve the health of patients is a prime motivator, Hayden Pearcy said.

“Competition is good. It drives us to be our best selves and again, it’s all about the patients,” he said. “As long as they have good access to affordable medicine, that’s what we care about.”