Marijuana Business Magazine April 2019

Marijuana Business Magazine | April 2019 86 heavier than it should be, based on Stem’s experiences—she notes that in her system and uses it to negotiate with the producer how much she’ll pay based on weight if she decides to order from that company again. Stem also will log how long the material takes to run through the company’s CO2 extractor. Her machine has finite capacity, so denser material is more efficient and doesn’t take as long to process. Flower can vary in density by up to 30%, Stem said. “We work with a grower who has demonstrated time and time again … that we get high terpenes, really good yields and high cannabinoid levels,” she said. Cannabinoids and Terpenes Garret Nicodemus, chief operating officer of Denver-based Xabis, an operations, design, implementation and management company focused on cannabis extraction, has developed an in-house technolo- gy known as Marijuana Information Management System (MIMS) to track the company’s dealings with growers. The system is a program database that acts like a digital lab notebook to automatically record all raw marijuana and derivative products coming in and out of the facility. Nicodemus said growers have sold him product they said had 10% cannabinoid content. He tested it internally and found it had a 14% CBD content. “We were like, ‘Hey, this is great; keep buying from there,’” he said. According to Nicodemus, a higher CBD content typically means a higher oil yield. But he also tracks how well the product distills and any other materials that show up, such as waxes. “It helps definitely to track the different aspects to make a decision,” he added. At Papa & Barkley in California, Rocourt hired a cannabis procurement director specifically for dealing with farmers and compiling data. The procurement director uses Google Sheets to track how much the company buys as well as the quality and the certificate of analysis, which includes the terpene profile, CBD content and lab test results. Once the extract is made, he sends it out for the same battery of tests and receives another certificate of analysis. The CBD content drives Papa & Barkley’s business decisions, he said, with a higher content considered more desirable. “As we’ve been building data over the past two years, we now look at canna- bis as price per milligram (of THC and CBD),” he said. The Art of the Deal Stem said all this data “absolutely” helps when making a deal. Sometimes the feedback she gives a grower isn’t what that person wants to hear, such as a crop had too many stems. But she can use the information to show how much unusable material a grower has sold her company. For instance, she’s currently uncom- fortable with continuing to purchase from a particular company because its yields are 30% less than other cultiva- tors’. In particular, the CBD content is 20%-30% lower than that of other grow- ers’. What’s more, the cultivator charges 50% more for the crop. “We’re looking at costs, we’re looking at yields and we’re looking at cannabinoids,” Stem said. “When you put all three together, it becomes really obvious to us what the good financial decision is to make.” When evaluating flower for extraction, make sure to log how long the material takes to process and adjust your payments accordingly. Courtesy Photos