Washington MJ Company Sets Sights on Kroger, Other Mainstream Retailers

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By John Schroyer

A Washington State marijuana entrepreneur may be close to landing her cannabis-based health and beauty product line on the shelves of mainstream retailers such as Kroger-owned groceries and others.

If successful, it would mark a first for todays cannabis industry: conventional retailers selling productscontainingTHC.

Ah Warner, the founder and CEO of Cannabis Basics, said she struck a tentative deal last month with Crown Pacific Fine Foods to distribute her infused product line to retailers.

Crown Pacific is a Kent, Washington-basedimporter and distributor of gourmet specialty foods and confections, including olive oil, pasta, coffee, cookies andother goods.

If things go as planned, Warner said, Crown would distribute her topicals to retailers, starting with health food stores and ultimately expanding to more mainstream outlets.The topicals have a THC content of 0.3% or less. Warners company also carries a hemp-based beauty line that doesnt contain THC.

This is a big deal. This is the first time that anything with THC will be allowed in the mainstream marketplace, Warner said. I could be optimistic, but I expect that this time next year for my sales to have quadrupled.

In 2015, Warner said her firm brought in just under $200,000 in revenue.

Warner said the ball got rolling when state lawmakers began working last year to meld Washingtons medical cannabis system with the same regulatory systemthat oversees the recreational marijuana industry. Previously, about 130 medical dispensaries carried her topicals. But that came to an end when new regulations combining the two marketstook effect July 1.

Some of these new adult-use stores will eventually have a medical endorsement. But Ill not be able to carry my products in those stores, because I was not allowed to apply for a processor license since my products are all less than 0.3% THC, Warner explained.

Because Warner didnt want to register as a 502 processor named after the 2012 initiative that legalized rec, Initiative 502 she had to find a different way to keep her business afloat. Sheknew she had to get out in front of the new regulatory scheme, so last year she began lobbying state lawmakers for an exception.

Warner succeeded in getting an amendment toHouse Bill 2136 through the legislature last year. Gov. Jay Inslee signed the legislation into law.

Among other things, the measure allows for a Cannabis Health and Beauty Aid Exception what Warner calls CHABA. In effect, it allows for virtually any store to sell infused cannabis beauty products, as long as they have 0.3% THC or less.

That legal opening was all Warner needed.

Im not a 502 processor. Im never going to be a 502 processor. Instead of begging them to let me sell in 502 pot shops, I opened up the mainstream, Warner said. In my mind, do I want 200-and-some weed stores? Or do I want every other retailer in the state of Washington? It was an easy choice for me.

Currently, Warner said, she has about 30 stores that carry her topicals, such as independent doctors, herbalists, and small health food stores. Shes hoping that Crown Pacific will be able to broaden that horizon and get her products into more stores across the state.

Were going to go and get all of the small health food stores, so when we go to talk to the big buyers we have much more negotiating power, Warner said.

But so far there havent been any bites, a Crown Pacific spokesman said.

Were kind of still at that point of finding a customer who wants it, said Craig Cayton, a Crown Pacific employee whos been in contact with Warner about potentially distributing her topicals. A customer, who was a Kroger man, wanted to bring the product in, and apparently ...

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