Marijuana Business Magazine - April 2018

for people who are like-minded with similar cultures and similar core values.” Being on the Same Page Cathcart said the best way to ensure a successful partnership is to make sure any potential partner shares your company’s vision and integrity. Steep Hill, for example, looks for partners that uphold its manda- tory principle of scientific integrity and share its values to test and label products accurately for safety.They also must be knowledgeable about best practices in medicinal cannabis, food and product testing. “During the process of discussing the licensing agreement structure with prospects, we are able to get a pretty clear sense of the integrity of our potential partner,” Cathcart said. “If we uncover any red flags, we take a pass. We are only interested in working with best-of-breed partners, and we will pass up a relationship that only enables us to plant a flag in a new jurisdiction.” The Berkeley, California-based test- ing lab operator licenses its technol- ogy to partners across the nation and overseas.The licensees often are teams of doctors, laboratory specialists and health care experts. Cathcart noted the company does extensive due diligence when vetting potential partners. “When we’re working with prospec- tive licensees, we conduct interviews and meet everyone on the management team,” Cathcart said. “We make sure we understand their sources of capital, who their investors are and what expe- rience and capabilities they have.” Though Steep Hill doesn’t require a certain set of skills, it does look for proven entrepreneurial success and an appreciation for scientific fields, even if they’re not related to cannabis. At Steep Hill Arkansas, for example, co-owner Brent Whittington is also the owner and CEO of Moots Cycles, a premium bicycle manufacturer based in Steamboat Springs, Colorado. He previously worked at Windstream, a Standard & Poor’s 500 communica- tions and technology company. Co- owner Brandon Thornton is also the vice president of pharmacy operations for Custom Pharmacy Solutions in Birmingham, Alabama. Once they are chosen, licensees form their own third-party entity, which does business as Steep Hill in whatever location they’re in, such as Steep Hill Hawaii, Steep Hill Alaska or Steep Hill Maryland.The company also has licensees in Arkansas and California, as well as several company-owned facili- ties established before Steep Hill opted to pursue the licensing route. “We have a consistent platform across these geographies, and we make sure our parameters are being followed by the licensee in another market,” Cathcart said. “In most cases, a brand is a promise. Your ability to maintain the integrity of a brand is having a consistent delivery of that promise. It’s important to maintain the integrity of a brand as a licensor.” Open Book Policy NanoSphere Health Sciences Inc. – a Denver biotech firm that uses nanotechnology to deliver cannabis medications – also relies on licens- ing to expand its footprint.The firm recently executed an agreement with a California company and is currently in negotiations with potential partners in Florida, Oregon and Canada. NanoSphere’s president and chief operating officer, David Sutton, pays close attention to what other people say about companies he’s considering part- nering with. He also looks for transpar- ency: Potential partners must be willing to open their books and demonstrate Before entering a partnership, Organa Brands President Chris Driessen requires proof of funds equivalent to the capital and operating expenses for at least two years.  Photo courtesy of Organa Brands NanoSphere Health Sciences Chief Operating Officer David Sutton pays close attention to what other people say about the companies he’s considering partnering with. Photo courtesy of NanoSphere Health Sciences A good partnership contract should spell out details of approved product packaging. Photo courtesy of Wana Brands 72 • Marijuana Business Magazine • April 2018