In the Weed Part IV: Making Connections

Article originally found at SBJ.

The Pearcy family remembers the early process of getting name recognition for Heartland Labs in the medical marijuana industry.

It was a lot of cold calls and emails sent last year to the dozens of companies that received licenses by the Missouri Department of Health and Senior Services to operate as a cultivation facility or dispensary.

Maddi Pearcy, director of operations, said she went through the list of licensees months before Heartland Labs or any of the other industry players were operational. It was basically to make introductions and put the Buffalo-based venture into the minds of others in the startup phase.

Connections were built quickly. By the time Heartland Labs began manufacturing its line of cannabis-infused products in March, the Pearcy family had signed a supply contract with a cultivator and agreed to supply around 40 dispensaries.

“We’ve had a lot of people reach out to us, especially now that more dispensaries are coming online,” Maddi Pearcy said. “They obviously have a need for product.”

In the past month, the amount of dispensaries doing business with Heartland Labs has grown by around 50%, she said.

“Now that we have finished fulfilling our pre-purchases, we’re able to start hitting more of the open market … and service some patients in different parts of the state that we previously haven’t been able to,” she said, noting many of the new dispensaries in the 60-client list are from the Kansas City area. “We didn’t have any dispensaries there previously. It was not from a lack of interest up there but from us having enough inventory to send.”

Pearcy said Kansas City was the last of the larger populated areas of the state the company sought to reach. But making additional connections is still in the plans, she said.

“We have pretty much reached all four corners of the state,” she said. “We have a presence in Kansas City, St. Louis, Cape Girardeau area and southwest Missouri. We also have Columbia.”

Generating interest
The first delivery day for Heartland Labs was April 2, which covered a handful of southwest Missouri dispensaries. Since then, deliveries are made pretty much every day, with the exception of Sundays, Pearcy said.

Different parts of the state are targeted on specific dates, with Saturday deliveries made on an as-needed basis.

“We’re still figuring out our delivery process,” she said, declining to disclose the delivery costs incurred. “Initially, we have just been getting our products out the door as we get our lab results back.”

Some dispensaries have approached the Pearcys about contracts for purchases that would commit the company to produce specific order sizes for the dispensaries. The family said they’re not interested at this time.

“Initially, we’re not accepting any purchasing contracts because we want to reach as many patients as we can and hit as many dispensaries as we can,” Maddi Pearcy said. “If we were to lock ourselves in to an allocated amount of inventory to a handful of dispensaries, then that narrows our reach.”

Easy Mountain Cannabis Co. was among the first deliveries. Order sizes to the Republic dispensary vary but are coming in weekly, said co-owner Alex Paulson. Easy Mountain Cannabis opened in late February and carries every product Heartland Lab makes, he said, including gummies, cookies, capsules, vape cartridges and honey.

“They’re doing a great job that as soon as they have availability, they bring it to us,” Paulson said. “They’re not concerned about it being a huge order every time. Once product is available, they’re getting it to us, and the patients really appreciate that.”

He estimated Heartland Labs’ products make up 10%-18% of the shop’s weekly sales, declining to disclose figures or order costs. The number fluctuates based on product availability, he said.

“The cookies are their most popular product at our store,” Paulson said of the lone baked goods currently sold at Easy Mountain. “They tend to go really quickly.”

At Missouri Joint Ventures LLC, co-owner Dana Sullinger estimated 20% of sales at the Nixa dispensary are from the Heartland Labs product line.

“Their honey has been super popular. We get that in, and it’s pretty much gone within a couple of days,” Sullinger said. “It’s just a unique product.”

Dispensary sales are taking off statewide. The total has more than doubled since February to surpass $41 million on May 6, according to DHSS data. The agency has tracked medical marijuana dispensary sales since October 2020. It also reported 92 dispensaries have received the green light to open.

Sullinger said Missouri Joint Ventures gets new product every week from Heartland Labs, but she hasn’t landed on a typical order size.

“It depends on our need and what’s available,” she said. “Usually, Maddi will call and ask at the beginning of the week if we need something. She tailors the order to our needs.”

Building its base
Michael Pearcy, managing partner of Heartland Labs, said Flora Farms is the company’s primary supplier. The Humansville-based cultivator provides around 90% of the marijuana used by Heartland Labs, he said. However, the goal is to eventually expand its source of supplies to three cultivation facilities.

“Flora Farms will most assuredly be our primary partner going forward,” he said, declining to disclose terms of its supply contract. “But you always have to have some backup plans in case something goes wrong.”

As part of a new industry and particularly being a small, family-run operation, building connections with cultivators and dispensaries are vital, the Pearcys say. It helps that Heartland Labs is among only a few manufacturing facilities in operation.

According to DHSS data, the Buffalo company is one of 13 licensed by the state currently approved to open. Nearly 90 manufacturing licenses were awarded.

“We’re trying to take advantage of that, quite frankly,” Michael Pearcy said. “The main thing for us is to have the strong brand recognition, and we’re doing that with top quality products for patients in Missouri.

We’ve really worked hard to have relationships with the dispensaries and the growers. Those are the cornerstones for us: Quality, safety, compliance and customer service.”