The new local business ACK NATURAL hit a momentous milestone with little fanfare on St. Patrick’s Day, March 17, 2021. It had nothing to do with Irish heritage, but some would argue it was a very green event, indeed. March 17 was the day Nantucket’s newest cannabis dispensary planted its first marijuana crop. Their first harvest is scheduled for May 20, and Michael “Sully” Sullivan, Chief Operating Officer, is hoping doors will open to medical and recreational cannabis consumers in early June.

The multi-million dollar ACK NATURAL facility is nestled amongst other non-descript warehouses near the airport, at 17 Spearhead Drive. When you enter the building now, it looks like a doctor’s office without the magazines, but chairs have been replaced with empty jewelry cases. The real story begins through the next set of doors. As Sullivan explained, the building is segmented into many different areas, with employee access restricted to only those areas necessary for that employee to do his or her duties. Through locked doors, the real story of ACK NATURAL unfolded.

Everything screamed safety and cleanliness from that point on. As I donned a hazmat suit and continued past yet another set of locked doors, Sullivan explained the purpose served by each separate room. On the first floor we toured the money room, the trimming room, the drying room, the cannabis beverage canning room, and an employee lounge that puts any island business to shame. 

ACK NATURAL will hire a significant number of people. “We are proud to offer full-time employment to 25 local Nantucketers to start, and this number could increase during the high season” said Sullivan. “It’s hard to find year-round employment on this island, and we are happy we can give back right from the start.” 

The facility has been in the works for over four years, and is designed specifically for growing and dispensing marijuana. As you walk the halls, it's obvious they've gone above and beyond the many bureaucratic guidelines for medical marijuana sales. It feels like a hospital without the anti-septic smell as you walk the stark white walls made entirely of PVC, virtually mold resistant. Sullivan points out shiny, impressive pieces of lab equipment as we move along. “That THC extraction machine cost $250,000, this potency testing equipment cost another hundred thousand,” he noted. This facility can do it all – cultivation, manufacturing, retail, testing.

The heart of the operation is over 20 feet underground. The entryway to the grow room holds the organic drips– each plant gets its own. The emphasis again is on cleanliness, safety, and security. There is not a speck of soil in the whole building. Each plant comes to life in its own organic, cotton candy-like mixture. Bugs are flown in every several weeks to live with and preserve the best environment for the plants.

One could see the guarded relief on Sully’s face. He has worked full time for over four years on this project, and is finally see it coming to fruition. Stay tuned for the exact opening date of ACK-NATURAL. Meanwhile, check their progress on Facebook.

www.boston.com

It was 2012, and Douglas Leighton wanted to pour some money into marijuana.

Leighton, the co-founder of a Boston-based hedge fund called Dutchess Capital, had done his homework. He saw public opinion shifting in favor of cannabis. Laws had already begun to follow, including the legalization of medical marijuana in Massachusetts.

And as the legal landscape changed, a $50 billion black market was about to emerge into the sunlight—marking a major investment opportunity.

Plus, he admitted, he just enjoyed smoking pot.

“It’s what got me interested in it, definitely,’’ Leighton said.

Since 2012, recreational marijuana has become legal in Colorado, Washington, Oregon, Alaska, and Washington, D.C. Several other states—including Massachusetts—are likely to vote this fall. Medical marijuana, meanwhile, is now legal in 23 states.

The cascade of legal change has created an industry gold rush. And Leighton has emerged as an archetype of the capitalists chasing green with green.

“He was one of the earliest and one of the largest investors,’’ said Troy Dayton, CEO of the ArcView Group, an organization that connects investors with cannabis-focused businesses and counts Leighton as a member.

ArcView investors have funneled more than $63 million into 101 pot companies since 2010—more than half of which came in 2015, Dayton said. Leighton joined the group in 2013 after struggling for months to find pot-related companies to invest in on his own.

“The industry was being serviced by essentially a cottage industry of drug dealers who really aren’t that good of businessmen,’’ Leighton said. “We searched around and looked for different companies, and essentially we were interviewing drug dealers.’’

Leighton, a 47-year-old Boston resident, co-founded Dutchess more than 20 years ago. Based in an old Back Bay office building, the “industry agnostic’’ fund has made about 400 total investments across various sectors, from technology to mining.

Of late, however, Leighton has focused heavily on cannabis. Since 2013, he has tallied more than 20 deals in the industry.

Watching an industry quickly come online is not without its challenges, however.

Regulations in early legalization states have been fickle, causing companies to scramble to keep up, Leighton said. Changes in rules about marijuana packaging, for instance, can cost a company hundreds of thousands of dollars to adjust, he said.

“But that’s investing, you know?’’ he said.

There’s also a more existential risk: Even as states legalize it, marijuana remains illegal under federal law. If Washington ever cracks down, the party could be over.

So Dutchess has looked for pot investments that run the gamut, with companies that, Leighton said, “do and don’t touch the plant.’’

Roll-uh-Bowl sells silicone bongs that can be easily folded and stored for hikers or runners. Dixie Elixirs is a leading producer of edible cannabis. Foria sells THC-infused sexual lubricant. Tamer holdings include an industry consultancy and a grower.

Leighton’s first foray into the sector came in 2013, when he became the first funder for MassRoots, a Colorado-based social network for marijuana users that began trading publicly last year. Its market cap in January was about $40 million.

The company can serve industry ads that can’t be placed on other social networks, Leighton said. But he sees the network’s bigger opportunity as that of a data juggernaut that can collect and utilize troves of information about pot consumers and businesses.

“It knows what people on the West Coast are smoking now,’’ he said. “And most trends begin on the West Coast and go east, so it can tell the dispensaries on the east: Start growing…the popular strain on the West Coast right now.’’

Dutchess has bought a few companies outright and has stakes ranging from 3 percent to 25 percent in the rest, Leighton said. He declined to say how much money he’s invested in the industry overall.

The role of big money in marijuana reflects a broader conflict in cannabis culture over a pot-industrial complex, with some activists arguing whether deep-pocketed groups are destroying the grassroots marijuana lifestyle.

Developing corporate enthusiasm for pot legalization was a big reason for creating the ArcView investor network in the first place, said Dayton, who previously worked at (and now sits on the board of) the Marijuana Policy Project, a powerful national advocacy group.

“We discovered that if you want something done in the world, you’ve got to make it profitable,’’ he said.

Leighton has given $1,000 to the Campaign to Regulate Marijuana Like Alcohol, a Marijuana Policy Project-backed group that has proposed a 2016 Massachusetts ballot question about recreational legalization.

The ballot question would create a new state commission to oversee marijuana sales in licensed establishments, tax retail sales, and give first dibs on retail licenses to existing Massachusetts medical marijuana dispensaries. One dispensary, Coastal Compassion in New Bedford, counts Leighton as a funder.

Mike Crawford, a local pot activist and writer, said the money entering the industry presents both perks and problems.

“When I started [in activism], everybody was in it for social justice,’’ he said. “Now, so many younger kids I see coming up—they still consider themselves activists, but they’re all talking about it as an industry. I think there’s some problems with that. … Big businesses, monopolies, can shut out the little guy.’’

But he said he’s also glad to see investment creating business opportunities for marijuana enthusiasts.

Leighton describes himself as both an investor and an advocate who strongly believes in the plant’s medical properties. He said he doesn’t want pot legalization to benefit powerful corporate interests at the expense of smaller companies just starting out. But down the line, with so much money coming into the industry, that fate may be inevitable, he said.

“Eventually that will happen,’’ he said. “Because that’s what happens.’’

www.boston.com   www.bostonglobe.com

Douglas Leighton Interview 

Profiting as The Black Market Dies with Cannabis Investor Douglas Leighton

Douglas Leighton of Dutchess Capital details why most people don’t understand how the cannabis market is different. Most new businesses have to convince prospective customers to try their product or service. This is not the case with cannabis. There are millions of people that use cannabis illegally right now they just need to be brought over to the new, legal market.

Also learn about Doug’s savvy investment style that includes investments in: MassRoots and Dixie Elixirs.  See Dutchess Capital’s report, The Macro View of the Cannabis Market.

Matthew: Hi, I’m Matthew Kind. Each week I’ll take you behind the scenes to interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That’s www.cannainsider.com/trends. Now here’s your program. Douglas Leighton is a partner at Duchess Capital, and a well-known cannabis investor. Today we’re going to learn why Douglas is excited about the cannabis industry and what he sees is the best investments. Welcome to CannaInsider Douglas.

Douglas: Thanks very much for having me Matt.

Matthew: To give us a sense of geography, can you tell us where you are in the world today?

Douglas: Sure, I’m in rainy and cold Boston today.

Matthew: Okay. Can you tell us a little bit about Duchess Capital and its focus?

Douglas: Sure Duchess has been around for about 15 years, almost 20 years. I’m sorry. And we are a hedge fund. We have several offices around the globe, and we are industry agnostic, and we invest in primarily publically traded entities. And about a few years ago we started looking into the legal marijuana market, and we sort of progressed into, you know, still doing our traditional business, but we’ve put about 25 percent of our resources into the legal marijuana space.

Matthew: So you produced a report recently that gives a lot of detail about the cannabis industry and your thoughts about it. Excellent, very well done. Can you give us some high level overview of what’s in that report and what’s important about it?

Douglas: Sure. The first thing I think to mention, which is very important, is that this is a industry that is being served illegally and has been served illegally for thousands of years which today stands at about a $50 billion illegal black market. The current legal market for cannabis is approximately $2 billion. As more states come online, that black market will diminish and it will become a legal market. That gap has to be narrowed. That $48 billion has to be narrowed. That in itself is probably the highlight of the entire report.

The second is the fact that the demand is constant. The demand has been there for years and there’s no real marketing that has to be done on the side of these dispensaries and retailers because the demand is there, and marketing is a very large portion of a business’s budget, and that makes it very easy to sell a product that there’s already a current demand. The other thing that’s very important about that is that there’s only 24 jurisdictions in the United States have allowed either medical or adult use marijuana. There’s still 26 left to go. So that just in itself is a doubling or almost a tripling in the market due to the state sizes, populations in each state. And of those ones that actually have gone full, either recreational or medicinal, they’re still not fully built out. So we estimate about $1.7 billion will be spent in infrastructure, sort of the picks and shovels to miners over the course of the next 18 months. And that’s what gets us excited about the business.

Matthew: That’s an excellent point. So this industry exists. It’s just moving from black to white market, let’s say, and all these customers are lined up. It’s so much different than investments where you’re speculating if a market will… if we can create a market. The market is already there, it’s just transferring it to a, in many cases, less desirable, or most cases less desirable black market to a legal market. So excellent point. It’s enormous. It’s an absolutely enormous market. Can you tell us a little bit about your cannabis related investments so far, who you invested in and why?

Douglas: Sure. We looked at the cannabis space for quite a long time before we actually made an investment. And we started with the widest funnel possible. And our first investment was a company called Mass Roots, which is the only and specifically social media network for the cannabis space. I believe you had Mass Roots on a couple of weeks ago I think.

Matthew: Yeah, Isaac. Isaac, he’s a very smart young man.

Douglas: Yes, yeah. The team, Isaac and the team over there have done a fantastic job at building out this network with very little capital, and there’s a need to have this sharing service where on the terms of service of Twitter, Facebook, Instagram, you’re not allowed to post pictures of cannabis. This allows in states where it’s legal, you can talk and post pictures about cannabis and that is your marijuana profile where you don’t want your coworkers, parents, friends to see that maybe you use cannabis for medicinal purposes or you’re in an adult state that allows it, and you don’t want anyone else to know. This is where that’s your profile semi-anonymous network, and that has been… that’s been a fantastic and fun investment. We invested in that about a year and a half ago. You know, they’re now up to about 215,000 users from 6,500 when we made the investment which is pretty amazing.

Another company that we did sort of fall in that funnel concept was American Cannabis Company, and they are a end-to-end business service company that helps you if you’re looking to get a marijuana dispensary or cultivation license. They’ll help you from the beginning, planning stages of business and perform all the way through the application through standard operating procedures for running a dispensary and for running a commercial cultivation. And that company has been fantastic as well, and they’re growing very rapidly. Those are just two. We’ve made about 14 investments in this space so far to date.

Matthew: Do you see a spark in the eye of some of these entrepreneurs? Is there something at a gut level where you say, you know, I’ve looked at the math, but there’s something I just really like about these entrepreneurs?

Douglas: Absolutely. Without the spark there’s no investment. These are all young, younger-ish people and they are all immature, not as immature as they were two years ago when we first started looking, but they’re immature from a business prospective side, but they all are very hardworking, very energetic. They have the vision. They understand the industry. And they know where the industry is going to be. You know, the standard sort of stereotype of a stoner is, you know, sitting on the couch, you know, eating Doritos, watching TV. From the entrepreneurs we’ve seen, we do not get that image whatsoever. These are all very hard working, smart, young kids that are working 17-18 hour days, 7 days a week, and they’re really the pioneers of a new industry.

Matthew: Do you focus exclusively on equity investments or do you do some loans at all?

Douglas: We’re primarily equity, however we have done some short term debt loans to companies who are already equity invested in, just to sort of help them out over a hump either for factoring reasons or for some different short term financing issues, but generally we’re equity investors not debt investors.

Matthew: Do you have any opinion on whether or not you want to invest in companies that touch the plant or don’t touch the plant, or is that a non-issue for you?

Douglas: It’s a non-issue for us. We will invest either in the plant or not. We don’t invest in either Colorado or Washington State because of the residency requirements which forces you to invest in debt. We’re not debt investors so we’re staying away from those markets that touch the plant.

Matthew: Help us understand the supply and demand dynamics here. Infrastructure nationwide is still being built out. A lot of grow operations are still small, but we’re seeing some larger ones come online. At what point does the price per gram start to really plummet, or do you think that will happen?

Douglas: So that’s one of the interesting things that we wrote about in our report which is this is a very different situation than most other investments that we’ve looked at over our 25 plus year history. In that in some states, for instance Colorado, it was not… it was vertically integrated. You had to grow and sell your own marijuana for many years. As of July 1st, there was a decoupling of that where now you can actually grow your own marijuana and sell it to dispensaries. That is going to lead to a commoditization of the product which in turn will turn, put price pressure, and that is another reason why we’re not investing in Colorado, very similar to Canada and similar to Washington State.

Other states such as Massachusetts for instance, they do not allow that. You have to be vertically integrated. That will keep the price very high and the product will not be commoditized because you have to grow it and sell it in your own retail shop. And as far as interstate commerce, I don’t think I will see interstate commerce at least for ten years. And the reason why, many other people disagree with me, but the reason I believe that is for the simple fact that in the state of Massachusetts, you can’t even ship wine into the state of Massachusetts which has been legal for 80 years. They’re very protective of that, and I don’t see them changing that rule to allow anyone else to ship marijuana across state lines, especially in the state of Massachusetts.

Matthew: That’s a great point there. So the dispensaries in Massachusetts in essence by default have regional monopolies because there’s not enough supply and it’s so strictly regulated. Does that leave room for the black market to still exist then?

Douglas: Well it won’t because there is… as long as the price is similar to the price in the black market, which it should be able to be because it’s easier to grow and less expensive to grow on a commercial scale than it is to grow ten plants in your basement. That will in effect keep the price very similar to the black market.

Matthew: Okay. And how about let’s look at 2015, and are you looking at making any more cannabis related investments in 2015, or are you just keeping an open mind to see what comes to you, or what do you have on the horizon?

Douglas: So we will close two deals probably the end of this year bringing the total to sixteen. And next year, you know, we look to do 12 to 15 investments. If we, you know, we’re shown 30 we would do that, that set the criteria. If you know valuations are still in check, you know, we’ll certainly look at more, but we would… we also would do none if we couldn’t find the right spot for it.

Matthew: Yeah let’s talk about valuations for a little bit. Where do you see them? They’re still reasonable, do you see more becoming unreasonable? What can you tell us?

Douglas: They had a spike along with the public equity markets in January through March. They have become a little bit more reasonable. They need to be considerably more reasonable. They’re not yet, and a lot of these entrepreneurs simply just don’t understand how to value a company, and they believe because they’re in the cannabis space that it’s worth a considerable more. And the issue with that that was just recently in the last week, a company that raised capital at a very high valuation. They launched their product and within a week, they were sued by a major city, the second largest city in the country and they were sued to be shut down. And now they’re fighting. They’re using all the invest money for lawsuits. So as much as I love this space and I think it’s the next great frontier, there’s a tremendous amount of risk in this space, and that’s why valuations need to be adjusted to that.

Matthew: If I’m a entrepreneur listening or an investor listening, what are the big problems that need to be solved in the cannabis industry that someone’s going to be, do really really well if they can solve these big problems?

Douglas: I’m going to… three off the top of my head. One, banking, and that’s merely a safety issue. There’s too much money being carried around by people that should not be carrying around that much money. Number two, they need to reschedule the drug. This is not as risky as heroin or cocaine. And number three, they need to change 50 years of brainwashing and stigmatism that is put on this plant on how evil it is and that needs to be changed. Those three things are the most important things. You’re never going to change number three or make any money from it anyway, but the first two are very very important to change.

Matthew: Now a lot of the entrepreneurs out there that understand the investor's point of view really well seem to do well. And I think there’s a perception that that’s not the case. But can you tell us a little bit about how entrepreneurs can be more investor friendly?

Douglas: Sure. The first is to not… to put a pitch deck and PowerPoint together that you understand and that is your gut feel that’s your vision, not that someone wrote for you and you’re reading it to me. I want to hear it from your heart of exactly what your vision is and how you’re going to get there, and what you believe is your, you know, differentiating fact in your value proposition and what this money that we’re going to invest is going to turn into. And the second thing is to have open communication. While the process of the investment is being made, once it’s made, constant reports, monthly reports on financials whether it be contracts, user growth, anything positive and most importantly anything negative. We have 25 years experience in investing. We have a very deep bench of people that can help us out, and we need to know all the good news as well as all the bad news, and if a pivot has to happen, let us know about it. Let’s discuss it and let’s try and fix it together, not just tell me everything’s great every day, because I know that’s not the case.

Matthew: Right, and you don’t want to be the last one to know. Okay. So you mentioned you’re in Boston, and the stigma still exists to some extent, in some places much more than others. How is it changing there? Are attitudes changing a little bit?

Douglas: A little bit. You know, Boston’s always a little slower to change than other places, but it’s slowly changing. And you know the issue is people again have been so, you know, brainwashed by “Reefer Madness” throughout the years and how dangerous the drug is that people really need to be educated to understand that it’s not as dangerous as heroin and cocaine. It’s not addicting. No one ever died from it, and there just needs to be an education process which is taking place, but it just takes a long time.

Matthew: And Doug how can people learn more about Duchess Capital?

Douglas: They can go to www.duchesscapital.com or they can call us on any of the social media outlets. We’re on all of them. And you know, contact us if you have any questions.

Matthew: Thanks so much to Douglas Leighton for being on CannaInsider today. Thanks Doug.

Douglas: Thanks very much. Have a good day.

Douglas Leighton Investing in Cannabis 

Ganjapreneur is excited to present our latest interview with cannabis investor Douglas Leighton. Leighton is a co-founder and principal partner at Dutchess Capital, an investment group which manages world-class investment funds for start-up, pre-IPO, and publicly-traded companies. Dutchess has been advocating for and investing in the legal cannabis industry since 2012.

In this interview, Leighton describes how Dutchess came to see the cannabis industry as an opportunity, and what some of his predictions are for the next several years. He also discusses some of the group’s current investments, including the popular cannabis social network MassRoots, the edibles producer Dixie Brands, and several others.

Ganjapreneur: When did Dutchess Capital first begin to look at the cannabis industry as an investment opportunity?

Douglas Leighton: We began looking when The Commonwealth of Massachusetts was about to pass the medical marijuana bill via voter approval on question 3. It took us about 10 months of due diligence before we were comfortable to make the first investment. We joined ArcView, the angel network for the cannabis industry, in the summer of 2013 and met Isaac Dietrich of MassRoots and subsequently made the first investment.

In a fully-legalized system, which market would you say is the most significant: recreational cannabis, medical marijuana, or industrial hemp?

The largest market will be pharmaceutical marijuana. This will be a genetically modified version of what is used today for medicinal purposes. The power of this plant is not fully understood; once big pharma understands it, they will get involved. I think the second will be recreational, due to the sheer population size and the fact that people will likely come to realize it is better for you than alcohol with far less side effects. Recent studies have shown there are also less side effects on society from cannabis than there are from drinking alcohol, including violence, addiction, drunk driving, etc.

What do you think some of the most promising niche sectors are related to cannabis?

First I’d say consulting. I think the “top-down” approach has the most potential. I will equate it to the concept of selling picks and shovels to miners during the gold rush. In the case of cannabis, it is the consultants providing guidance to all of the marijuana startups in cultivation and retail and then selling the related products to growers on a B to B platform. There will also be a need to create better efficacies in the current markets as the product becomes commoditized. An example of this is one of our portfolio companies, American Cannabis Consulting (AMMJ:OTC). They are at the forefront of this industry with about 12 major clients in the US and Canada. They provide solutions for businesses operating in the industry through consulting and advisory services, as well as supplies business with equipment and products.

I also like the technology sector. One of our first investments in the industry is the semi-anonymous social network MassRoots. They are largest social networking site for the cannabis community and have grown over 2,000% year over year. They are anonymously collecting a tremendous amount of data from their user base such as a user’s strain preference, time of day they consume, consumption method among other key data collection points. They will be able to monetize this data via sponsored posts of either localized merchants and/or national brands.

Dutchess also likes companies in various sectors with that are building a brand of consumer products and goods. Tripp Keber has done a remarkable job with his branding efforts of Dixie Elixirs. I also think a brand such as Foria, the world’s first THC infused personal lubricant for women, has done a stellar job with its branding, and it shows; they were recently featured in British GQ.

Is there a particular niche that Dutchess Capital has focused on, or are you casting a wide net on the industry?

The industry is so new that we are casting a wide net. In saying that, we like businesses that have long-term contracts or high barriers to entry. We put particular focus on the people behind the products and services; are they hard working, passionate and driven to succeed?

What is the most important thing for an aspiring ganjapreneur to do if they are looking for an investor to help fund their business?

Know your business inside and out. Know every number and statistic off the top of your head. You need to live and breathe your work. Be able to explain it in 2-3 sentences what it is you do, or what you are looking to do. Have your proforma and deck ready at all times. Be able to show how you are going to scale your business with investment. Have a reasonable valuation and realistic expectations of growth. You are not going to sell your business to a fortune 500 company; please don’t tell me that.

Can you discuss any of the cannabis industry projects that Dutchess Capital has invested in to date?

Sure. We have invested in Dixie Brands, the industry leader in edibles and consumables; Mile High Entertainment, a license play with celebrities; Kandy Pens, a vaporizer company; Foria, a marijuana-infused personal lubricant company; American Cannabis Company, a consulting and B to B supplier; MassRoots, a social media company, as well as several grows around the country to name a few.

Have you noticed any common traits among the entrepreneurs you see in this industry, which set them apart from the people in more well-established industries?

I would say the passion for the industry as an entirety, and the desire to propel the movement forward. They also want to educate people who are ignorant to the cannabis plant. People have been lied to for years about the cannabis plant, and the people in this space want to educate that section of the population on why this plant can help so many people.

What do you think the next five years has in store for the industry?

Growth. There will be many bumps in the road, and more growth. Investing in this industry is like playing chess without being able to see the board. Eventually ignorance will abate, the banking issue will be fixed and the drug will be rescheduled.

How about the next fifteen years?

Industrial hemp will be everywhere; pharmaceutical grade cannabis will be prescribed by a doctor and covered under insurance. It will be legal in all 50 states and people will talk about the multi- generational wealth that had been created from the people brave enough to invest at the dawn of this industry.

Thank you for taking the time to answer our questions, Douglas! Ganjapreneurs from every niche and sector in the industry would be wise to heed your suggestions while seeking investors.

Douglas Leighton of Boston oversees array of marijuana investments

It was 2012, and Douglas Leighton wanted to pour some money into marijuana, reports Boston.com.

Public opinion was shifting in favor of cannabis. Laws had already begun to follow, including the legalization of medical marijuana in Massachusetts

Leighton co-founded Boston-based Dutchess Capital, using it to acquire a range of cannabis investments. Some are involved in processing marijuana, while others, like the social network site MassRoots, operate on the periphery.

Roll-uh-Bowl sells silicone bongs that can be easily folded and stored for hikers or runners. Dixie Elixirs is a leading producer of edible cannabis. Foria sells THC-infused sexual lubricant. Tamer holdings include an industry consultancy and a grower.

Leighton’s first foray into the sector came in 2013, when he became the first funder for MassRoots, a Colorado-based social network for marijuana users that began trading publicly last year. Its market cap in January was about $40 million.

The company can serve industry ads that can’t be placed on other social networks, Leighton said. But he sees the network’s bigger opportunity as that of a data juggernaut that can collect and utilize troves of information about pot consumers and businesses.

“It knows what people on the West Coast are smoking now,” he said. “And most trends begin on the West Coast and go east, so it can tell the dispensaries on the east: Start growing…the popular strain on the West Coast right now.”

In a high-tech, subterranean nursery hidden 24 feet beneath the ground of a small lot near the airport, hundreds of marijuana plants are growing under the glare of LED grow lights, aided by a complex water and nutrient delivery system. 

In less than a month, the flowers from those plants will be the first crop harvested by Nantucket’s second licensed cannabis dispensary, ACK Natural.

Partners Mike Sullivan, Doug Leighton and Zach Harvey are entering their fourth year of navigating the state’s licensing and regulatory gauntlet for cannabis dispensaries, but are now on the verge of seeing their vision become a reality. If all goes according to plan, they will open the doors of ACK Natural to the public in June.

“There was a million ups and downs and setbacks, it’s an incredible process,” said Sullivan, sitting in the sleek retail space that customers will see first when they enter the dispensary at 17 Spearhead Drive, located among the industrial lots north of Nantucket Memorial Airport off Old South Road.

Two years ago, Sullivan and his partners secured one of the two cannabis dispensary licenses the Nantucket Select Board was willing to grant for the island after fending off a competing bid from Mass Medi-Spa, a non-profit backed by the cannabis conglomerate Acreage Holdings. “There’s a lot of big players in the industry – giant, multi-state operators that are involved in a lot of places – and to go up against them, it was challenging to get to this point,” Sullivan added. “We’ve had a great working relationship with the town but it took time for this stuff to play out.”

ACK Natural will have 25 year-round employees in various roles within the dispensary, and Sullivan emphasized that he and his partners have made it a priority to hire local island residents for those jobs. The dispensary’s head cultivator Jamie Briard, for example, is a fifth-generation Nantucketer.

“We wanted people who have roots here,” Sullivan said. “We’re really proud to be bringing local jobs to the island.”

Nantucket’s first cannabis dispensary, The Green Lady, opened nearly two years ago on Amelia Drive. With ACK Natural poised to open its doors in little more than a month, does the island have enough demand for cannabis to support two dispensaries on a year-round basis?

“We think we have crunched the numbers really well,” Sullivan said. “We used the numbers from the Nantucket Data Platform, the amount of people who come and go each year, and budget our projections monthly based on the number of people as well as statistics the state gives us on the number of people who actually consume cannabis. So we believe we have a solid business, but we’ll find out when we open the doors. It’s nerve-wracking a little bit to have this much invested and not really know the end market, but I think ultimately people who know they can get medical-grade quality cannabis that was grown and produced in an environment like this will give them a lot of confidence.”

Sullivan added that in the nearly five years since Massachusetts legalized recreational marijuana in 2016, much of the stigma around cannabis consumption has ebbed. Recreational marijuana is now legal in 17 states.

“The boogie man is out of the room,” he said. “From when we started this four years ago, there’s a big jump in the amount of people who either use cannabis or admit they use cannabis, because I think even admitting it is a little bit more publicly acceptable now. I think a lot less people are smoking and are consuming cannabis in other ways, whether it’s chocolates, lozenges, tinctures, creams, a lot of people are using it for medicine, and CBD has become widespread and THC on the medical side of things. People are finding relief with that and it’s helping with the acceptance.”

The 13,000 square-foot ACK Natural building is quite simply something to behold. The multi-million dollar facility packs all of the dispensary’s operations into three floors, with the grow rooms below grade, retail operations on the first floor, and the second floor designed for the laboratory and testing, along with hanging, curing, trimming, and packaging.

Security is tight throughout the building, with access cards to allow only the necessary staff into certain areas, and 75 cameras mounted strategically inside and out. “It’s more (secure) than a nuclear power plant,” Sullivan joked.

All of the cannabis is grown hydroponically with no soil. The plants are based in rock wool – which is a combination of basalt and limestone that creates a cotton-candy-like substance. The entire environment is controlled – everything from temperature and humidity to the nutrients and water delivered to each plant – to ensure quality and prevent contamination. The walls are made of PVC material rather than drywall to prevent any mold from forming. Sullivan said the grow team is even purchasing microbial bugs delivered to the island in cornmeal to protect the plants from rot “and other bad bags.”

ACK Natural will be producing 16 different strains of indica, sativa and hybrid cannabis, which will be sold on a recreational and medical basis. Sullivan said once the growing operation gets into a rhythm, he expects the dispensary will be able to harvest as much as 150 pounds of flower per month.

That volume will allow ACK Natural to offer a variety of products, including traditional flower and vape products to smoke, as well as a range of edibles including chocolates, gummies, lozenges, and tinctures, even a line of cannabis infused cocktails offered in cans.

Stay tuned for more on ACK Natural in the June issue of N Magazine and look for updates on the company’s Facebook and Instagram pages.