California cannabis mega-factory eyes federal legalization of weed

[April 19, 2022]  By Phil Lavelle

(Reuters) - The company behind a cannabis mega-factory in California is hoping federal legalization of the substance will allow it to expand distribution of joints, oils and edibles beyond the borders of the most populous U.S. state.

California legalized recreational cannabis in 2016, but it remains on the federal list of controlled substances.

The U.S. House of Representatives passed a bill on April 1 to end the federal ban on marijuana, though the measure is seen as unlikely to pass the Senate.

Joshua Krane, vice president of operations for cannabis operator 4Front, said the company's 170,000-square-foot (15,793 square meter) manufacturing and processing space outside of Los Angeles has the capacity to supply the U.S. west coast with cannabis products, if restrictions are lifted

"This facility was designed to really be future-proof for us in terms of being able to service not just the entire California market, but once we have the ability to transport cannabis and sell cannabis across state lines, to be able to really feed the West Coast of the country," he said.

The factory, which opened in November 2021, is operating at 20-25% of capacity, Krane said.

"As we see the natural ramp-up of the industry, that will likely meet an additional demand curve as we get into federal legalization," he added. "And so we would continue to ramp up more and more production from this building as the state and hopefully this side of the country would require."

 An employee of 4Front, a cannabis mega-factory for cultivation and manufacturing, cuts a pre-roll at their 170,000-square-feet (15,793 square meters) manufacturing and processing space, outside of Los Angeles, California, U.S., April 13, 2022. REUTERS/Shannon Stapleton

Krane said the highly automated facility is the largest in California. It manufactures both in-house and partner brands, including oils, tinctures and several types of candies.

Edible items are the most popular, and demand has soared since the coronavirus pandemic began in 2020, Krane said.

"It's been somewhat difficult to keep up with the additional demand in terms of manufacturing enough for those new customers. There's been a tremendous pivot from alcohol and other vices to cannabis."

In March 2020 as lockdowns went into effect, sales of recreational cannabis across key U.S. markets rose almost 50% from a year earlier, according to cannabis point of sale and data platform Flowhub.

With a machine that can roll 2,000 joints per hour and a kitchen capable of producing 400,000 pieces of candy in a single shift, the factory in Commerce, California, is ready for the demand to continue.

(Reporting by Phil Lavelle; Writing By Jane Ross and Richard Chang; editing by Bernard Orr)

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