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  • 13/02/2023

Tropizen Finds Success in Puerto Rico’s Cannabis Market

Marni and Jay Meistrell, the couple behind Tropizen, one of Puerto Rico’s 31 licensed cannabis producers, were looking for a change of pace after selling their V2 Cigs e-cigarette company to industry behemoth Juul. Puerto Rico, with its vibrant landscapes, easy-going attitude and bevy of business development opportunities, seemed like an idyllic location for the couple, so they left Miami with their family in 2014 in search of their next business opportunity on the island territory.

What interested Marni the most, at the time, she says, was cultivating produce for the superfoods market, as it would check the boxes of bringing happiness and positivity to customers and the island itself, she says, while still offering an outlet for Marni’s creativity. (She was an oil painter for five years prior to the 2009 market crash, and after 2009, she started a digital marketing business that she moved from Florida to Puerto Rico.) When then-governor Alejandro García Padilla signed the U.S. territory’s medical cannabis bill into law on May 3, 2015, the Meistrells’ agriculture dream “took a turn,” as Marni puts it.

“I was looking at all these agricultural projects that focused on unique superfoods,” she recalls. “And all of a sudden we were like, ‘Oh, cannabis, there you go.’” While not a superfood, cannabis had everything the Meistrells were looking for: a growing agriculture business that offers plenty of health benefits to those in need.

Regulators took roughly a year to complete the medical program’s rules and license application procedures. By June 2016, the Meistrells submitted their application for a cannabis cultivation license. By that September, they had received a provisional license that allowed them to start working on retrofitting an indoor facility, although the couple waited on refurbishing the site until after the November 2016 election in case a leadership change seriously altered the island’s cannabis program.

The facility they chose was a government-owned warehouse. Even today, Tropizen pays its lease to the government, which still owns the property. (One of the island’s quirks is that many properties are government-owned and leased by the local government to business owners. The Puerto Rican government also requires cannabis businesses to have banking services, so the government approved a banking co-op for these and other businesses.)

Among other upgrades, the Meistrells poured a new concrete floor and walls, in part because “it’s a better insulator” in the warm climate, Marni explains. They also set up cultivation rooms with a hydroponic system and HPS lights for a total canopy size of 4,100 square feet.

Marni and Jay were ready for their new cannabis company’s final inspection scheduled for Sept. 22, 2017, a year after they had received their provisional license. They felt confident that they would pass.

Two days before the final inspection, Hurricane Maria made landfall on Puerto Rico.

As former Floridians, Marni and Jay are no strangers to hurricanes—the couple experienced first-hand the devastation from Hurricane Andrew in 1992. But their experience on the island in 2017 was “completely different,” Jay says. Hurricane Maria, a Category 5 storm, also hit the island just two weeks after Hurricane Irma passed through.

“It was a long eight hours,” Marni describes. Wind gusts of up to 155 mph blew windows and doors off hinges at their home. She remembers walking outside her house with her 5-year-old son after the storm passed and being taken aback by how the lush green landscape had turned brown. “All the trees were bare,” she says. “Everything was stripped, defoliated on the whole Island.”

The Meistrells’ home and business’s foundations and roofs are made of poured concrete, preventing significant structural damage. The bigger issue was the island’s already distressed infrastructure: Water service was interrupted, debris-blocked roads prevented food and supplies from easily reaching stores and residents, and powerless cell phone towers made communication across the island and to the mainland exponentially more difficult. It took a week for Marni to be able to send her cell phone with someone to San Juan, the capital, to get a strong enough signal to let her family and friends know that her family was OK. Electricity, which mostly comes from petroleum and liquid natural gas (LNG)-fired generation, was scarce, as Maria destroyed much of the transmission and distribution infrastructure. “Just by the nature that we are on an island where you can’t have electrical supply trucks rolling in from all the states in the Southeast on one highway, it’s more difficult. … It was a hard process for the island to ... recover,” Jay says.

It took parts of the island close to a year just to get power again—for Tropizen and the Meistrells, the wait was about six months. During that half year, “I spent many of the days camped out in the permit office and driving to the electric office and other places to do anything possible to advance my cause,” Jay says. The Puerto Rican government and people were very helpful throughout the process, at least to the extent that “they were able to,” he adds.

Marni, meanwhile, took the downtime to develop Tropizen’s gummy line. With the company unable to bring in plants without completing its final inspection, finding the right flavors and ingredients was one of the few opportunities for her to move the business ahead. She worked with the company’s chef Glen Alamo, a native Puerto Rican who was a recent biology graduate from Rutgers University when he joined Tropizen. The task of making shelf-stable, real fruit gummies that would bind well with cannabis proved more intricate than expected, especially when trying to use some of the island’s native tropical fruits.

“It’s really important that we’re using natural ingredients and real fruit,” Marni says. “So we’re trying to overcome [questions like,] ‘How do we use pineapple … so it doesn’t disintegrate the gummy?’, ” as pineapple contains bromelain, a digestive enzyme. (The answer: cook the puree to neutralize the bromelain, she says.)

In March 2018, regulators finally inspected Tropizen’s facility and granted the company its final cultivation and manufacturing licenses. After waiting so long, popping seeds felt “a little unreal,” Marni says. “After all that we went through, we were tired. … You have the pressures of a startup, [but with Hurricane Maria] it was tenfold.”

“It was an enormous relief off our chests,” Jay adds. “This business is unique to almost any other business where you have to go apply for the license, get some provisional license, then spend massive amounts of money in the hopes that you’ll even be allowed to open your doors. … Needless to say, you throw a hurricane in there and the potential that you don’t know when you’ll finally be able to get to open after spending all this investment capital, is a very difficult position. So, to finally open, our biggest feeling was surely one of relief.”

Tropizen’s first crop started from seed, allowing the company to pheno-hunt the best yielding and most potent varieties. “We went through 30 strains to get to the six primary strains we have now,” says Mark Ziegler, Tropizen’s master grower who joined the team after meeting Jay at an industry conference in 2016. The focus on yield and potency, Ziegler adds, is directly tied to what Puerto Rico patients appear to be asking for: lower prices and higher THC levels.

Tropizen keeps a rotation of 10 varieties available to patients at any given moment: six are available throughout the year, with the balance made up of seasonal favorites and new offerings. In total, Tropizen maintains roughly 20 different varieties in its bank. Low performers at the point-of-harvest or -sale get swapped out for something more popular. “We kind of look at [those six] as our starting team … and we’ve got a farm league,” Jay says.

Tropizen Finds Success in Puerto Rico’s Cannabis Market

In the indoor grow, Jay explains the cultivation philosophy is a straightforward KISS (Keep It Simple, Stupid)principle. Rolling top tables allow Tropizen to flood-feed the plants, which sit in 5-gallon pots of coco coir and perlite, an inert media mix. The team considered using fertilizer salts for a short time because of the higher cost of shipping pre-mixed nutrients to Puerto Rico, but decided to stick with pre-mixed solutions. “If it’s working, don’t fix it,” Jay says.

In addition to 1,000-watt HPS lights and a centrally controlled CO2system, Tropizen employs a proprietary feeding system that helps flood the tables. While not fully automated, “it makes it a much more efficient process,” Jay says.

The tropical climate is nullified indoors thanks to Tropizen’s HVAC system—but in the company’s new hoop house-style greenhouses, installed in 2019, managing the climate is another story.

The company bought the hoop houses, which cover more than 10,000 square feet of canopy, from a local greenhouse supplier. Choosing open-ended hoop houses that have supplemental lighting and cooling vents instead of closed greenhouses came down to being judicious with resources, namely electricity. Electric costs are almost triple what they are on the mainland. On average, commercial power costs just under 30 cents per kilowatt in Puerto Rico versus just over 10 cents per kilowatt in the rest of the U.S., according to data from the Energy Information Administration. With the island’s year-round 12-hour-average light cycle (roughly 11 hours in the winter and up to 13 hours in the summer), Tropizen has relatively little need for supplemental lights.

“My objective was to make it as much like being outdoors as possible while still covering with the greenhouse,” Ziegler explains. “So, keep the rain off the plants [in Puerto Rico’s tropical climate], but allow for maximum ventilation and do that without using lots of power.” The open ends, side walls, and the ceiling vent allow for better ventilation to prevent humidity buildup under the polycarbonate roof, he adds. “When there’s more space, when there’s more sun, when there’s more air movement, wind—all those things make it harder for both pests and pathogens to multiply.”

The sunlit plants are cultivated in a living soil using organically certified amendments such as oyster shells, dolomite, alfalfa, sulfate of potash and bone meal, among others. The soil base is a proprietary blend of coco fiber, compost, and perlite. Adding coco improves drainage and soil aeration, Ziegler says, because “if you don’t have enough aeration within the soil, because it’s so humid, you could literally water the plant and walk back a week later and it looks like the day you watered it.” Making sure the plants get drenched and dry out is what allows living soil plants to thrive, he adds.

The Meistrells aren’t just expanding the cultivation operation: Tropizen is in the process of vertically integrating into the industry’s retail sector. The company is awaiting final inspection for its dispensary location in San Juan’s hospital district. However, in response to the COVID-19 pandemic, the Puerto Rican government halted all non-essential functions. As a result, the Meistrells have yet to get power turned on at the location, which is needed prior to the final inspection, leaving the dispensary in a limbo similar to what the cultivation facility faced after Hurricane Maria.

The company also is rebranding its Real Fruit Gummy line with new flavors. Since launching its gummies in December 2018 (the company began flower sales in August 2018), Marni has overseen the development of gummy flavors like quenepa, guanabana, passion fruit and mango, all derived from fruit grown on the island. Now, with the rebranding to Superfruit Gummies, Tropizen has added goldenberry, beets, turmeric, achiote, dragonfruit and hibiscus flower to its ingredients.

“We’re buying straight from the [island’s] farmers,” Marni says. “We’ll get a thousand pounds of fruit ... and process it for gummies when it’s ripe, cause they’re only ripe once a year.” Just like its flower offerings, some of Tropizen’s gummy flavors are seasonal, adding to the products’ appeal to patients and creating a rush to get the newest flavor when it’s “fresh.”

“It’s truly a craft product, and it’s reliant on local farmers. That’s really important to myself and the company: that we’re working with local farmers and not importing everything. I think a lot of patients want to know that what they’re ingesting is not full of sugar and artificial colors,” she says. “When you look at it from a positioning standpoint, I do not have any worry that one of our competitors is going to start processing guanabana.”

Access to specialty ingredients also spawned another one of Tropizen’s hottest products: its cannabis-infused Pique sauce, a traditional Puerto Rican hot sauce. The idea for an infused hot sauce was born from what was available on the island, Marni says. The sauce contains four different kinds of peppers, and “one of our peppers isn’t commercially grown at all. In fact, it’s spread all over the Island by birds in people’s backyards,” she says. The caballero pepper, also known as the “gentleman pepper,” is popular in Puerto Rican cuisine but difficult to come by. “We are going up into the mountains, and some abuela [grandmother] has them growing them in her backyard,” Marni continues, noting that each bottle of Tropizen’s Pique contains one caballero pepper.

This attention to local flavors helped Tropizen find a partner on the U.S. mainland to sell its products. MariMed, a multi-state cannabis operator with cultivation facilities in Massachusetts and Nevada, dispensaries in Massachusetts and Illinois, and distribution licenses in a handful of other states, struck a licensing deal for Pique and Superfruit Gummies with Tropizen in March.

Tropizen manufactures the non-infused hot sauce in its Puerto Rico facility and ships it to Massachusetts where MariMed then infuses it with cannabis oil. In addition to a revenue split, the deal also grants Tropizen the exclusive rights to manufacture and sell MariMed’s Betty’s Eddies and Kalm Fusion Tablets in Puerto Rico.

Due to the success of Pique, Tropizen is expanding its hot sauce offerings thanks to the island’s streamlined process to launch new products with no additional vetting as long as products pass compliance and potency testing. For example, Marni says, “we just put out a super-hot version using Carolina Reapers. It’s a fun product.”

Operating in Puerto Rico has its benefits: access to unique ingredients, a faster process to launch new products than some other markets, and government-approved banking through a co-op, just to name a few. It also has its drawbacks, including increased utility costs, an already-aging infrastructure that was decimated further by hurricanes Irma and Maria, and a lack of “variety and quality” to some of the products and services that can be found on the island compared to the mainland, Marni says, from grocery store staples to specialized services.

But there was one challenge for which the co-founders weren’t quite prepared: the disengagement the rest of the country has about the territory. “We’re not a ‘united state,’” Marni explains. “We’re a territory, and it creates this gray area. I think for a lot of people, it’s difficult to understand.”

For example, when materials need to be purchased from an off-island vendor, shipping to Puerto Rico can be challenging. “We might deal with a lab that ships internationally, but when you go to process your cart online, there’s no Puerto Rico listed at all,” Marni says. “And if you go to the international list, we’re not listed as a country, either.” These issues force her to call the company directly and let them know that the United States Postal Service can ship to Puerto Rico without the package having to go through customs.

This minor business struggle is a reflection of the bigger problems that come with island territory living: the lack of power to elect the country’s president despite contributing taxes, the lack of resources offered by the federal government made flagrant in the island’s post-Maria recovery efforts, and the general belief that “Puerto Rico isn’t part of America,” as Marni puts it.

But, ever-ready to educate, Marni continues to fight and dispel those misconceptions and attitudes, and she’ll keep advocating for Tropizen and Puerto Rico as a whole—one phone call, one gummy pack, and one Pique bottle at a time.

Brian MacIver is senior editor for Cannabis Business Times and Cannabis Dispensary magazines.