Founder and President Nicole Smith is cornering the medical topicals market in Colorado's booming cannabis sector.
A serial entrepreneur, Smith traded marketing for medical marijuana after a challenge from friends in the cannabis business at a New Year's Eve party at the end of 2012.
"They asked, 'What would I do if I was in the industry?’" Smith recalls. Her answer -- "transdermal patches” -- resulted in disbelief. "They said, 'There's no way you can do it.'”
Smith proved them wrong in just a few months by launching the world's first transdermal patch in spring 2013, with an assist from innovation in both cannabinoid extracts and transdermal technology. The old patches would interfere with THC and CBD uptake. "I happened to revisit the technology when there was new adhesives," she says.
Mary's Medicinals is a true medical marijuana manufacturer. "Right now, 80 percent of what we produce is non-psychoactive," says Smith.
CBD is the main ingredient in many of the company's products. Since it is legal in all 50 states, Mary's is currently shipping CBD products coast to coast. Going national was "somewhat hurdle-free," Smith says. "Demand is spread evenly around the country."
The company sources CBD in raw form from Loveland-based Elite Botanicals' legal hemp farms that grow plants with a THC level below 0.3 percent. After a ban was enacted in the 1950s, "Hemp had been illegal until 2014," says Smith on federal legislation that rolled back the longstanding ban last year. "We're setting a new precedent."
Nearly 20 products in all, the Mary's catalog includes transdermal patches and pens, edible capsules, and a topical compound. A pair of sister brands make pet products and nutraceuticals.
"The patch is still our top seller, two to one," Smith notes. The company now makes patches with CBD, THC, and other cannabinoids she calls "very efficient, fast-acting, and long-lasting." Customers are using patches to treat epilepsy, chronic pain, and insomnia.
Employees make the products in a 11,000-square foot facility on the north side of Denver. Quality control is a priority. "One of the most innovative things we do here is we do all of our testing in-house," says Smith, noting that they test incoming flowers, their extract, and the finished product.
The strategy is working. "We've had 100 percent growth, year over year," Smith touts. "We currently have about two percent of the Colorado market in terms of sales. We anticipate having four percent by the end of the year." Mary's has a 25 percent share of Colorado's topical sales, she adds.
Challenges: "Initially, our biggest challenge was convincing the marketplace and retailers to carry and sell a product that didn't make somebody high," says Smith. Now that hurdle is cleared, and the new big challenges are abiding by state regulations and other "restrictions on cannabis companies, including the inability to bank and operate a legitimate company."
Opportunities: National expansion of the nutraceuticals brand. Smith says Mary's is actively selling in California and Washington and has licensees in five other states.
Needs: "We are actively seeking investments," says Smith, naming $20 million as a target number. "We take and solicit three to five calls a week from interested investors." Mary's has been self-funded to date. "We think we're poised to take it national."
With all of the growth, the cannabis industry now needs to take a step forward to ensure consistent and rigorous standards are in place, she adds. "There's a lot of room for error," Smith says. "There's no regulation or quality control in place for testing labs. That's going to be what has to happen."