Marley Natural cannabis brand gets approval as Santa Rosa’s first pot processor

Santa Rosa has rolled out the welcome mat to the marijuana industry, and the first firm through the door is affiliated with none other than the godfather of ganja - Bob Marley.

Privateer Holdings, a Seattle investment firm aiming to build a global marijuana brand based on the image of the famed Jamaican reggae singer, has picked Santa Rosa to be the headquarters for its expansion into the lucrative California cannabis market.

City officials Tuesday approved a request by the company to set up a medical cannabis- processing, manufacturing and distribution center in a nondescript business park in southwest Santa Rosa.

“We really see an opportunity for the legal cannabis industry to make a meaningful contribution to the Santa Rosa economy and community,” said Zack Hutson, a Privateer Holdings spokesman. The private equity firm partnered with the estate of the iconic singer to create its Marley Natural cannabis brand. It is already sold in state dispensaries.

The zoning approval the firm secured Monday was the first the city has granted under recently passed interim rules aimed at making it legal for marijuana support services such as laboratories and oil extraction facilities to operate in the city.

“This is kind of historic,” said David Guhin, director of the Permit and Economic Development department.

Privateer Holdings was founded in 2010 by three venture capitalists who have raised $82 million to date, according to the company. It has three primary investments in the cannabis industry. One is Leafly, a popular mobile app that offers information and reviews of marijuana strains. Another is Tilray, a British Columbia-based provider of medical cannabis products, including raw dry marijuana and oils. The third is Marley Natural, a brand the firm created in 2013 in conjunction with the estate of the singer, who died in 1981.

The company plans to use the Santa Rosa facility to process Marley Natural products, Hutson said.

The city is ideally situated for the venture, located on a major transportation corridor between the prized marijuana growing area of the Emerald Triangle - spanning Mendocino, Humboldt, Trinity counties - and the major population center in the Bay Area, Hutson said. Its educated workforce and clear regulations also made Santa Rosa a natural fit, he said.

The Marley Natural brand includes four labels: Marley Green, Marley Gold, Marley Red and Marley Black. Each contains different bud varieties and potencies. The brand also has a line of hemp seed oil body-care products and high-end smoking materials made of black walnut.

Hutson said the parent company has learned a great deal about how to effectively grow, process and sell medical marijuana at its Canadian facility, a $30 million, 60,000-square-foot research and processing plant in Nanaimo, a small community across the Strait of Georgia from Vancouver.

The company hopes to draw on that experience as it sets up shop in Santa Rosa, Hutson said.

The move comes as California establishes a regulatory framework for the medical marijuana industry and as voters are poised to decide whether to legalize recreation pot use, a step experts predict could double the size of the cannabis market in the state by 2020.

Hutson indicated Privateer Holdings is not depending on legalization. “It will certainly help and we are hopeful it will pass but the medical market is quite large and more than big enough to support our current business model,” he said.

The company applied Aug. 4 for city zoning clearance under a subsidiary called Sturdivant Ventures. It proposed to operate in two suites totaling 23,000-square-feet in a business park off Sebastopol Road, at 975 Corporate Center Parkway.

It proposes to receive deliveries of California-grown marijuana, pre-rolled joints and bulk oil. It also will process, label, package and distribute those products to dispensaries in the state.

Eventually company officials want to get into the business of extracting oils from raw cannabis, but they have not yet decided what method to use or any timeline for expansion, Hutson said. The company is watching the state and local regulations closely before it decides what makes the most business sense, he said.

At full build-out, it expects to employ 10 executive and administrative staff and 30 production staff, according to its application.

The company expects to begin operations this fall. It will need building permits before it can occupy the spaces, and how long that takes will depend on its plans. It also will have to comply with a long list of conditions, including obtaining a state license, providing the police department with a list of managers, not employing anyone under 18, and having plans in place for security and odor control.

Hutson said the regulations do not present concerns.

“We would like to open in a highly regulated environment where there is clarity about what type of activities are permitted and what are not,” Hutson said.

The company's future Santa Rosa neighbors were in the dark about the new venture.

Maria Angela Guarienti, chief executive officer of Italian winery equipment supplier Della Toffola, will be an immediate neighbor of the new company. She had no idea Privateer Holdings was moving in and expressed concerns about possible odors, traffic and crime.

“I don't know how good it is for our business to have a neighbor who is processing and distributing cannabis,” Guarienti said. “I'm not very happy about this.”

Cornerstone Properties, which manages the building, did not return a call for comment. The property is just a block away from the Circadian Way location where a similar operation, CBD Guild, was shut down by local and federal law enforcement authorities in June.

Guhin said unlike the conditional use permit process established for commercial cultivation operations that want to locate to Santa Rosa, the cannabis support industries are more compatible with an urban setting. So while growers will need to have public hearings to get their permits, support industries only need an over-the-counter approval by a city planner and no public noticing is required, Guhin said.

Most local cannabis growers are likely unaware that Privateer Holdings is entering the local market, said Tawnie Logan, executive director of the Sonoma County Growers Alliance.

Some might be concerned about such well-financed competition planning to locate here, but the reality is that small farmers will need to partner with larger operations to survive in the future, she said.

From all she has seen, Privateer Holdings is focused on sustainable, sun-grown cannabis, which could make for a good match with local growers.

“To have a well-funded company come into this community that wants to work with the community we already have here could be a hidden blessing,” Logan said.

You can reach Staff Writer Kevin McCallum at 707-521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @srcitybeat.

Editor's note: An earlier version of this story included an inaccurate figure for the value of the Canadian research and processing facility controlled by Privateer Holdings.