Marijuana Business Magazine August 2019

Marijuana Business Magazine | August 2019 116 HP and Dell laptops are “powered by Intel” hardware. “That’s the model we’re using with our technology,” Rael said. The com- pany sells direct to consumers online as well as making wholesale sales of its infused ingredients to other man- ufacturing companies. The wholesale strategy is called Azuca Inside. Rael estimates Azuca Inside will account for more than half the company’s revenue. Multistate cannabis operator iAnthus Capital Holdings announced in November 2018 that its Boston affiliate, Mayflower Medicinals, partnered with Azuca on an infused edibles line that would be created in Mayflower’s commercial kitchen and sold in Massachusetts. Azuca plans to expand its partner- ship with iAnthus to increase sales in the heavily populated Northeast region. Azuca also has heard interest from other manufacturers, including beverage makers, but it has yet to announce any deals, Rael said. “Expect to see Azuca with regional coffee makers,” she hinted. Relocating Operations Earlier this year, Azuca made a big decision to build out its manufac- turing operations in two subleased facilities in Colorado after deciding not to settle in New Jersey. The company previously did a few pre-production sample runs in the Garden State but wasn’t a fan of the rules for manufacturers producing CBD-infused products in New Jer- sey—mainly because there weren’t any, Rael said. New Jersey has a medical marijuana program and is one of several states that have sought to legalize recreational cannabis. But the state—where adult-use legis- lation stalled earlier this year—has lagged behind Colorado, California, Washington state and other places that have set up a robust regulatory framework for the cannabis industry. Not far from New Jersey, New York state has banned the manufactur- ing of CBD-infused products, and authorities have even seized prod- ucts from some restaurants. Moving its manufacturing to Colorado removes at least some of the uncertainty for Azuca, because the state already has an established regulatory framework for cannabis manufacturers. Under Colorado law, for instance, manufacturers must be able to prove all parts of the hemp plant utilized in a food product were sourced from a state with a legal industrial hemp program—or a country that inspects or regulates hemp under a food- safety program or similar setup. “Regulatory volatility is the biggest challenge in this industry,” Rael said. Business Strategies | Infused Wholesale ingredients such as Azuca Simple Syrup are available to manufacturers through a wholesale program. Courtesy Photo