Americann CEO Discusses Cannabis Tech Center, COVID-19 Impact

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Vertically integrated operator Bask Inc. recently moved its cultivation operations to the new Massachusetts Cannabis Center (MCC), a high-tech cultivation and processing facility in Freetown, Mass. Bask entered into a 15-year joint venture with MCC’s owner, AmeriCann Inc., to cultivate and process cannabis in a 30,000-square foot building on the 52-acre site. MCC will eventually encompass 987,000 square feet of cannabis cultivation and processing infrastructure for the medical and adult-use cannabis marketplace. Americann, a developer of cannabis cultivation, processing and product manufacturing facilities, hopes to have up to 12 tenants when the project is completed.

tim keough

 
Keough

Cannabis Business Times recently touched base with Americann President and CEO Tim Keogh to discuss how COVID-19 has impacted start-up plans. CBT will feature Americann and Bask in the upcoming May issue.

When did Bask move into the facility?

Bask began operations at the end of February, so their first harvest was Feb. 28.

So, Bask started operations right around the time coronavirus was becoming an issue in the U.S.?

It’s obviously progressed very rapidly. I think at the time we were aware of it, but it wasn’t front of mind the way that it is now, when we’re in the midst of a stay-at-home advisory. Before moving plants in, we went through a deep sterilization with a professional cleaning company. We use integrated pest management, so our people use gloves, hand sanitizer—everything is wiped down with hand sanitizer before it goes into the facility—and we’ve been doing this before the whole coronavirus pandemic as a way to protect the plants.

How have the COVID-19 restrictions impacted business? Did it impact start-up at all?

No. The process and the systems were all laid out, and a lot of the team from Bask moved in from their existing grow to the greenhouse and then just scaled up. It was probably around the week of March 10 that we started looking at our supplies, and we started to have a growing concern about our ability to access PPE (personal protective equipment). So, if you’re a visitor, we have you put on a Tyvek suit. Also, a lot of the team uses face masks. And we use rubber gloves everywhere. We were reading the tea leaves a little bit and realizing that we were going to have some supply chain issues. We’re being pretty conservative. We’re not having any outside visitors come in, so that removes the need for Tyvek suits. I think we were a little ahead of the curve in terms of communicating with staff and making everybody aware that there’s going to potentially be an issue here—just letting them know to be mindful and if you’re sick, don’t come to work. It’s been a progressive process where we’ve been enhancing things either based on direction from the Cannabis Control Commission or the CDC and Gov. [Charlie] Baker has been putting in policies, so we’ve been following that. A lot of the things they’ve been suggesting we’ve already been doing, so we’re feeling pretty well protected, but obviously it’s a little bit of a scary time.

Can you talk a little more about the supply chain issues and how you handled that?

The personal protective equipment, we talked about rubber gloves, which we use throughout the whole facility. Any time you’re touching a plant, you need to have gloves on to protect the plant material. Massachusetts has some of the highest testing standards for microbials, yeast that can be transferred from the skin, so we wear gloves, facemasks and then the Tyvek suits. Those are all supplies that are being put toward the pandemic that are part of our day-to-day operations. More recently, we were fortunate enough to order a trailer of soil, but we were having some issues identifying good soil vendors. I don’t know the real reason behind it. But anecdotally we’ve heard a lot of people are ordering soil in preparation for doing home cultivation, home farming. I haven’t pushed into finding out if that’s a valid reason, but the point is soil has been an issue.

Were there any lessons learned from that in terms of preparation?

I mean, we could have ordered in bulk or eight years’ worth of rubber gloves at a time, but that’s not the most efficient thing for storage space or utilization but also from a cashflow standpoint. For the most part, cannabis companies can’t access traditional lines of credit where you can make those bulk purchases. There’s enough supply on hand to continue. We’re being resourceful with the stuff we have on hand.

How did you manage the shortages in supplies?

We were able to identify vendors who were not our traditional vendors. We had to dig in a little deeper, a lot deeper, to find those resources and get them ordered and get them in. As an example, we are not using the N95 facemasks as the standard; we’ve taken a step back because, one, they’re not available, and, two, the ones we did have we were able to find a home for them through local police and fire departments.

Have you been able to gauge what impact the shelter-in-place and shutdowns will have on your business?

The licenses held in Americann’s project are both medical licenses—medical cultivation, medical processing—so from that standpoint nothing has changed. There has been a bit of a spike in the over-the-counter medical sales at the Bask dispensary in Fairhaven. Over the last two weeks there’s been a little bit of stockpiling, certainly before the stay-at-home advisory was put in place—and there was concern about the dispensaries both medically and recreationally being shut down—but even since the stay-at-home advisory patients are still coming in to access cannabis. It will be interesting to see what happens on the wholesale side of the market in Massachusetts.

As far as the recreational licenses, the directive from the CCC was that they were able to maintain their plants, so the recreational cultivators don’t have to shut their grow down but they’re not able to transfer their product out. But for the most part they’ve seen an increase at the storefront. Bask also does home delivery and they’re looking at picking up a second vehicle and expanding the home-delivery business they run. I think what we’re seeing is everyone has switched over on the storefront side to order ahead—whether it’s through a Leafly pickup or call ahead or through their websites—so that you’re placing an order before you come in. The state does not allow curbside pickup to come in the building. The idea is to minimize the transaction time. Between that and home delivery I think we’re going to see a shift in how patients, and I think if the recreational dispensaries are allowed to open back up, how consumers are going to interact with cannabis purchasing. I think just by being forced to doing it through these venues, I think you’re going to see a lot of adoption more so than what was happening. I think it may change the way consumers and patients are purchasing cannabis for a long time.

Responses were edited for clarity. Read more about Americann’s joint venture with Bask Inc. in the May issue of CBT.

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