Salt Lake City, Utah
Cannabis and cannabis products
Describing his company's standing within Utah's medical cannabis industry, Panh says, "We are a relatively small company in comparison to some of the multi-state operators out there, so we're pretty proud of what we've been able to accomplish in the short period time that Utah's medical cannabis program came online."
After citizens passed an initiative to legalize medical cannabis in 2018 (subsequently altered by the state's legislature), it paved the way for licensed sales beginning in March 2020. Here's what Utah-based Dragonfly Wellness has been able to accomplish, leading up to that momentous March 2020 date: the company has obtained all three types of licenses being issued by the Utah Medical Marijuana Program -- the ability to cultivate cannabis; to further refine that cannabis into products (vape cartridges, sublingual tinctures, topicals, and the state's only approved edible -- a "gelatinous cube" gummy design); and, also, to sell that cannabis flower and those cannabis derivatives at its own dispensary. Dragonfly is "one of three vertically integrated [cannabis] companies in Utah," Panh says.
As one of only eight licensed cultivation operations in Utah, Dragonfly has produced the majority of medical cannabis grown in Utah. "We produce . . . almost 70 percent of the biomass of the entire state of Utah," says Panh. That cultivation is done indoors and outdoors at its facility in Moroni. A chart accompanying a Salt Lake Tribune article indicates that Dragonfly has far out-produced any other cultivator, harvesting close to 7,000 pounds. Still, despite Dragonfly's success, Panh says there's a shortage of cannabis in Utah -- and higher prices when compared with other states -- due to other cultivators not meeting their production goals.
In Salt Lake City, Dragonfly's cannabis dispensary (called a "pharmacy" in Utah) is one of only 14 licensed in the state, and it was the first to open on March 2, 2020. "We dealt with being the only pharmacy open in the entire state for almost an entire month," says Panh, adding that, to date, "We've served over 10,000 patients in the state of Utah." Strong demand during the COVID-19 crisis has been helpfully managed by having one of the first drive-thrus in the state, as well.
At its extraction facility (which is attached to its cultivation operation in Sanpete County), the company employs a "proprietary technique and process," involving "super-cold cryo [ethanol] extraction." Cannabinoids are removed from cannabis biomass at negative 80 degrees (Panh says that's twice as cold as most other systems), and the system's closed-loop cycle can be run all day long (Panh says other ethanol systems can't run that cold for that long). It "allows us to churn out product at an incredible rate," says Panh. Dragonfly has opened a second processing facility in South Salt Lake City, where it's begun "packaging and labeling and producing product," such as its gummy, topicals, and tinctures.
Noting how "well over 80 percent of the licenses were awarded to out-of-state operators" -- who are not headquartered in Utah -- Panh emphasizes Dragonfly's local ties. And he calls Dragonfly one of the few minority-owned, vertically-integrated cannabis businesses in the nation.
While Panh says Dragonfly is "its own independently-operated company and business," members of its management team -- including Panh -- are also employed by Sapa Investment Group, which "consults and advises" for Dragonfly.
Sapa originated in Utah as a "family business," says Panh, with "[Vietnamese] refugees chasing after the American Dream." The family owns eight restaurant establishments, as well as all the property that houses them. After Dragonfly Wellness' application to run a cannabis pharmacy was accepted, Sapa was able to lease Dragonfly a former bank building -- which allowed Dragonfly to open six weeks after being approved for its license. (Some businesses, which were granted pharmacy licenses in 2020, still haven't even opened shop yet.)
Furthermore, Sapa Investment Group oversees a construction business. It built Dragonfly's "multi-million-dollar facility" in 2019, soon after Dragonfly was awarded its cultivation license. Panh suggests that a construction boom in the state hampered the ability of other, non-local businesses to come online as quickly, since local construction businesses were already so busy. "Despite being one of the last ones to be awarded our cultivation license," Panh says Dragonfly was the "first to break ground, first to complete construction."
The cost of doing business doesn't come cheap, either: "Our cultivation license alone is $100,000 a year. Our pharmacy license alone is $67,000 a year. Our processing license is another $100,000 a year."
Asked why he thinks the state awarded Dragonfly all three types of cannabis licenses, Panh says, "It comes down to the strength of our business and our engagement in the community."
After Panh's family fled Cambodia, he was raised in Utah, growing up there in the LDS faith. When it comes to cannabis, he says his background allows him to better understand the local people, culture, and market. Panh has also been outspoken in the press about his own medicinal cannabis use for chronic pain -- as well as his brother's, who, as a pedestrian, was severely injured by an automobile.
It follows that Panh actively promotes the use of cannabis as an alternative to opiates. Referring to his own employment background, he points out how a "cannabis user can be a highly effective businessperson who understands how to run and operate businesses, and understands marketing and digital strategies."
Panh says he's "blessed" to work for a company providing "legal, medical cannabis products to people who need it the most."
And describing the community outreach the company engages in -- assisting a job placement program aimed at the homeless, community cleanups, food and blanket drives -- he adds, "As business leaders, we have a moral obligation to take care of our communities -- and we truly believe that, here."
Challenges: Panh says it's erasing the stigma that patients in Utah experience as a result using cannabis medicinally -- often in place of opiates -- for pain management. "How do we get people to talk about something that they don't want to talk about?" he asks. "That's hard to do when people are afraid to talk to their neighbors, to talk to their family, to talk to their bishops about their cannabis use."
Opportunities: Panh stresses Dragonfly's local commitment and community outreach. Panh says, "If you take care of your patients -- and you take care of your community -- they will take care of you."
Needs: For other licensed cultivators to step up their game, so that -- collectively -- there's enough cannabis being grown to "meet the demand of the entire state." Panh says, "If we had more product, not only could we provide more product choices to our patients, but we could reduce the price to our patients, as well." (Presently, an eighth of an ounce of cannabis retails for $55 at Dragonfly Wellness, which Panh acknowledges is more expensive than in neighboring states like Nevada or Colorado.)
Dragonfly sells not only its own products at its pharmacy, but a host of other business', as well. It also sells products to vaporize cannabis -- since patients are not legally permitted under Utah law to smoke the cannabis flower which Dragonfly grows and sells, such as its popular Sundae Driver strain.