A quick drive through the uniform, endless rows of strip malls and shopping centers that stretch out beyond the urban cores of Dallas and Fort Worth will show you that the newly-legalized cannabidiol (CBD) market is growing in a big way. Neon signs and vinyl banners announce grand openings and free samples.
Patrick Moran has been involved in the legal cannabis market since 2014, when he founded Acquiflow, LLC – which, bills itself as the first “open, legal and transparent Texas-based cannabis company.” However, due to still strict laws regarding the sale of products containing more than 0.3 percent THC, the psychoactive compound that gives users a “high,” Moran is exploring this newly opened CBD market with Acquiflow subsidiary, Pebble Global Holdings (DBA: Pebble).
“What led me to start engaging in the industry or turn towards cannabis originally was it saved my life,” Moran said; while living in California, he had used the plant to help treat PTSD. “Our goal is not to sell CBD; our goal is to service neurological patients with the most effective medicine that we can create.”
Pebble’s approach to CBD is different than what you would find at the local convenience store or head shop. Moran sees the company more as a biopharmaceutical organization than a simple CBD shop. With hemp currently sourced from Colorado, Pebble’s CBD utilizes the whole plant, giving users the full spectrum of compounds, nutrients and proteins found in the plant. In addition, Pebble’s products are free of GMOs, pesticides and solvents that are sometimes used to extract the CBD.
Pebble sells CBD in liquid form, soft-gel capsules and as a topical cream. Since the company views its product as a pharmaceutical, Pebble also makes different formulations of its CBD in order to help treat different disorders, such as Crone’s Disease, Epilepsy and ADHD. According to the Harvard Medical School, CBD has been shown to be effective at treating seizures, as well as other symptoms such as anxiety and inflammation. It is because of this latter effect that Pebble uses ginger and mint to “flavor” its products, though Moran says the decision to use the two plants is due to their anti-inflammatory and anti-nausea properties.
“We have a key tag line that sums it all up: safety, efficacy, consistency; we’re safe, we’re effective, and we’re consistent,” Moran said. “You can consistently rely on us if you are a serious patient trying to deal with an issue and have trust in a company… [the product] is going to be the same thing every time. It’s going to be clean. If we wouldn’t put it in our body, we wouldn’t put it in yours.”
In 2015, the Texas Compassionate Use Act was passed into law, allowing essentially only patients with severe epilepsy to be prescribed CBD with low doses (>.5 percent) of THC. At the time, hemp cultivation was still illegal. However, that program failed to take off in a serious way. According to Moran, whose other company Texas Cannabis (another subsidiary of Acquiflow) is on the list of groups awaiting licensure from the state to grow their own cannabis, less than 750 residents are approved as patients to be treated with the low-THC cannabis allowed under the law. With the recent passage H.B. 1325, hemp production was legalized, and CBD was made officially legal, provided it contains less than .3 percent THC. Anything above that amount is still illegal.
Things are moving forward in the state, though. With the passage of H.B. 3703 in the last legislative session, which expanded the amount of conditions that are able to access medicinal marijuana in the state, residents with conditions such as multiple sclerosis, terminal cancer and autism.
Although, Pebble has plans for marijuana when that market opens, too. Again, starting by approaching things from the medical and wellness side.
“The day that I can legally manufacture THC products in Texas, we’ll do it; there’s no question,” Moran said.
Through capital from an angel investment in 2017, and a few strategic partners, Pebble has been able to grow without any other outside funding. Moran also attributes the company’s bootstrapping ability to key investments made through his subsidiary companies, such investments in lighting and potting technology used in the cultivation of cannabis. However, the company is preparing for a Series A funding round in the near future.
“The innovation for is us we need to now go expand,” Moran said. “We’ve laid out all the base foundation for a long-term stable profitable company, and now we need to take it to the next level.”
Looking to the future, Moran said that once the market stabilizes from the recent influx of CBD sellers, and the state works through some of the issues that come along with new regulation, that the company will be bringing its cultivation and manufacturing to Gunter. Currently, cultivation takes place in Colorado and manufacturing in Utah.
The company has also been doing a lot of R&D. The goal is to be able to quickly roll out a new formulation of their product to assist people suffering from other diseases and disorders that can be treated by CBD. Moran also said that the FDA is expected to release guidelines in the near future regarding what CBD products can be sold over-the-counter and via prescription. Once this happens, Moran says the company will be well placed to quickly expand into the prescription manufacturing side of the business.
“For us the belief was let’s get the profitability and show that we know how to do that and then we’ll raise more money to take it to the next level,” Moran said. “[R&D is] where the innovation continues now and moving into mainstream marketing, mainstream sales channels. These are the growth areas that we’re looking at now.”
