Nearly all forms of cannabis are illegal in Texas. And by illegal, I mean very illegal. Possession of a small amount of cannabis concentrate—what we in the legal states know as a $30 vape cartridge—is a felony in the Lone Star State.
I recently had the chance to tour one of those companies. The home offices and grow facility of Compassionate Cultivation are tucked away in Manchaca, a little farm town on the outskirts of Austin. It’s not encased in barbed wire, but it’s not exactly advertised, either. A small vinyl sign bearing a vague sprouting-seed logo—not the typical marijuana fan leaf—stands in a lonely field of live oaks.
John Volkmann, the company’s chief marketing officer, greeted Leafly News Editor Ben Adlin and me in the front office of a light industrial warehouse facility. “Welcome to our dispensary,” he said. Ben and I looked around, confused. We saw a waiting room and a receptionist. And… that’s it, Volkmann explained. There are no products in retail display cabinets, no budtenders, no jars or chopsticks. Most patients order their medicine online and receive it via delivery, Volkmann told us. Those who visit in person receive one-on-one consults there in the waiting room in Manchaca.
Delivery Via a Prius Fleet
Texas is an enormous state. You could fit all of France and Switzerland inside its borders. How does Compassionate Cultivation deliver? “We run a fleet of Priuses,” said Volkmann. “We need to be able to deliver medicine to Laredo, El Paso, Houston,” wherever their patients reside.
And those hybrids are customized for the job. “Our vehicles are built out with GPS tracking and safes that are mounted to the frames of the vehicles,” explained Taylor Kirk, the company’s vice president of operations. “It’s a very controlled process.”
A Very Strict Program
The state’s Compassionate Use Act, implemented in early 2016, is a very controlled program. In fact, it’s not overseen by the state health department, as most medical marijuana programs are. It’s run by the Texas Department of Public Safety—the police agency that also manages the Texas Rangers and the Texas Highway Patrol.
The strict law allows patients with intractable epilepsy—the only qualifying condition—to consult with a state-registered specialist who may recommend low-THC cannabis oil. There aren’t a lot of these physicians. In all of Travis County, which includes Austin, the state registry lists only four. (Patients can search for those registered physicians here.) The physician then enters the patient’s name into the Compassionate Use Registry of Texas (CURT), an online portal that the state’s three dispensaries can use to verify that a patient qualifies.
Smokeable flower is not allowed. All flower and leaf must be converted to cannabis oil products.
“We have a pretty constrained cannabis opportunity here,” John Volkmann acknowledged.
More Hemp Oil Than MMJ, For Now
It’s so constrained that Leafly doesn’t technically consider Texas a legal medical marijuana state under our definition of the term.
Here’s the problem: The medicine produced by Compassionate Cultivation and its two competitors, Knox Medical and Surterra Wellness isn’t much different in potency than the mail-order CBD products proliferating across the United States. When Congress passed the farm bill late last year, it included language that offered more legal wiggle room for hemp-based CBD producers. By law, hemp is cannabis that contains less than 0.3% THC. Licensed medical cannabis in Texas contains less than 0.5% THC.
Those unlicensed CBD oils, which typically contain double-digit percentages of CBD and minute traces of THC, are commonly ordered online and shipped through the US Postal Service. Unlicensed CBD remains illegal in Texas, farm bill notwithstanding. That doesn’t mean people here don’t purchase it online, but most law enforcement agencies see proactive enforcement as a waste of tax dollars.
Why Spent the Money?
So why invest millions of dollars in a CBD oil startup that’s so restricted by state law? Compassionate Cultivation and its two competitors seem to be playing the long game: stay strictly compliant with state law now and be ready when legislators open the system to more patients and qualifying conditions.
Indeed, even as we ended our tour, legislators in Austin were considering a number of bills that would do exactly that.
And Volkmann pointed out something else his company was delivering to patients: safety and reliability. Unlicensed hemp-based CBD oil is completely unregulated. Past studies have found that some products deliver far less CBD than they promise. Other products may contain contaminants such as mold or heavy metals, because no product testing is required.
At Compassionate Cultivation, the company grows its own low-THC strains of cannabis onsite. It’s also in the process of breeding new strains, such as the high-CBD cultivar called Waterloo. Experienced technicians extract cannabinoids and terpenes. A state-of-the-art lab tests the products to make sure they’re delivering what patients expect. It’s a multimillion-dollar operation just waiting for its patient base to expand.
“We can’t go beyond what the current law allows,” Volkmann said. “But when the law changes and allows more qualifying conditions, we’ll be ready.”
Hear more from John Volkmann and others at Compassionate Cultivation in a bonus episode of The Roll-Up podcast, Cannabis in Texas.