Fayetteville attorney Erik Danielson gives credit to “an excellent support network” for his ability to manage his time effectively.
Danielson is an investor in the medical marijuana company The Source in Rogers. He and some partners recently closed a deal to acquire a 7,270-square-foot cannabis manufacturing facility and lab in Boulder, Colo. Financial terms were not disclosed.
The deal marks his first cannabis industry investment in Colorado. However, it’s one of many industry investments since his first starting with The Source. It opened Aug. 15, 2019, in a 2,600-square-foot building in Bentonville, and after quickly outgrowing the space, relocated last year to a new 20,000-square-foot facility along Interstate 49 in Rogers.
Danielson said he spends most of his time on his ventures in the cannabis industry while also maintaining his work as an attorney. Over the years, he’s worked as an industry consultant, developed relationships and partnerships with others nationwide and helped establish cannabis operations in Missouri and Oklahoma. He’s also consulted on projects in Georgia, Mississippi and New Mexico.
In May 2021, Danielson and partners Chris McElvany and Mike Eckles established the cannabis consulting company EDM Holdings. They connected through Boulder-based cannabis cultivator In The Flow, which has provided flower and cultivation consulting to their respective cannabis businesses.
Recently, EDM Holdings relocated its office from Fayetteville to Boulder after acquiring the manufacturing facility there. The deal included purchasing a manufacturing license and was completed in partnership with Silver Stem, which operates multiple dispensaries in Colorado. The two companies created a subsidiary for the acquisition. He noted his partners at EDM Holdings previously owned the facility, among other cannabis operations they’d started in Colorado.
“It’s a good place … to do product development and R&D so that we can formulate new products and put those new products with our licensed partners in as many new states as are available,” Danielson said. “That’s why this particular Colorado acquisition is so exciting for me.”
The “strategic maneuver with a retail partner” also provides “immediate shelf space,” he said. While Silver Stem has cannabis cultivation and dispensaries, they don’t manufacture in-house.
“By partnering with Silver Stem in Colorado with this acquisition, it helps them round out what we refer to as a vertical stack of all the licenses to grow, make products and then sell at retail. We’re helping them fill the manufacturing void.”
Through the deal, they acquired cannabis brands Bakked and Pressies. The previous includes cannabis-infused items, such as gummies, cotton candy and beef jerky, as well as the Dabaratus, which is a tool that provides consistent doses of cannabis oil with one click. Pressies comprises a cannabis-infused pressed pill. The pill, which is swallowed, allows users an alternative consumption form. The brand offers various pill formulations for energy, focus or sleep.
He noted that the company has a licensing agreement with an Ohio cannabis company to produce the pills there. He said the pill has previously been available in Colorado, but very few companies know how to make cannabis-infused pills. They should soon be available in Ohio. He expects the pills to be available in Arkansas by the end of the first quarter 2024.
EDM Holdings’ flagship brand is Wavelength Extracts, which the company has launched in Missouri, Mississippi and Arkansas. The company plans to offer the brand in Colorado, too. The brand provides e-cigarettes and cannabis-infused products, including cartridges.
Over the next three to five years, he looks to work with cannabis products that provide variable effects and are consumed in non-traditional ways, such as pills, gummies, drinks and topicals.
BY THE NUMBERS
According to a recent Business Insider article, Colorado has more cannabis dispensaries than the combined number of Starbucks and McDonald’s stores in the state. In 2012, Colorado joined Washington as the first two states to legalize recreational cannabis. Colorado’s recreational sales started in January 2014, before any other state. Still illegal federally, recreational cannabis has been legalized in 23 states and Washington, D.C.
A report by TD Cowen shows that Colorado sales are projected to fall to $1.6 billion in 2023 from $1.76 billion in 2022. The sales peaked at $2.22 billion in 2021. By comparison, Missouri’s sales are projected to reach $1.56 billion this year. The state’s recreational sales started in February.
According to the report, U.S. cannabis sales were slightly revised to $28.9 billion in 2023 as price deflation remains a headwind. New recreational-use markets, such as Missouri, are expected to drive sales. The 2026 sales forecast was revised to $36.3 billion from $38.1 billion amid a deflationary market and regulatory delays. Following are the 2023 sales estimates for the four states projected to exceed Colorado’s sales: California ($4.9 billion), Michigan ($2.7 billion), Illinois ($2 billion) and Massachusetts ($1.78 billion).
In November, Arkansas voters declined to legalize recreational use, but in November 2016, they approved the legalization of medical marijuana with 53% of the vote. The state has 38 dispensaries, with the first opening on May 10, 2019.
Between January and July, the state’s medical marijuana sales rose to $164.6 million, up $7.3 million from the same period in 2022. The sales rose to a record $276.3 million in 2022 from $264.9 million in 2021.
“If sales remain consistent for the next several months, we will complete 2023 with total sales reaching more than $280 million,” said Scott Hardin, spokesman for the Arkansas Department of Finance and Administration.
Danielson plans to move to Colorado in the coming months. He said his daughter starts kindergarten next fall and wants to be settled there before the first day of school.
A Booneville native, Danielson started his law practice in 2005 in his hometown. He moved to Fayetteville to open a Northwest Arkansas office about a decade ago. Danielson Law Firm comprises four attorneys: his parents in the Boonville office and he and his uncle in the Fayetteville office.
Danielson owned Walton Boulevard Wine & Spirits in Bentonville before the liquor store building was converted into The Source. Last year, The Source relocated to Rogers in a facility that allowed the dispensary to grow marijuana flower and make medical marijuana products. There’s also an in-house lab. In the Flow is overseeing cultivation. Also, Wavelength Extracts e-cigarette cartridges are available there. Other new products, including gummies, will be released there soon.
Danielson and some Arkansas partners recently merged their Missouri operations with Little Rock-based cannabis company Good Day Farm. He and his partners previously acquired a cultivating and processing facility and three dispensaries in Missouri. The stores have since been rebranded from The Source to Codes and are managed by Good Day Farm.
“No one from the West Coast, Colorado, California thought much of the Arkansas market when it launched,” Danielson said. “And I think everyone is surprised how many people from Arkansas are now major players in the industry around the country … Arkansas has been a very good proving ground for a number of very competent operators.”