Q&A: Culta’s Mackie Barch Talks Homegrow, Industry Consolidation, and Legalization

Culta Co-founder Mackie Barch runs the largest medical cannabis company founded in Maryland, and he doesn’t shy away from engaging with the complicated, often fraught politics of legalization.

In 2017, his company became one of the first in Maryland to obtain a license for medical weed cultivation. Today, it stands as one of the state’s few remaining vertically-integrated firms that aren’t owned — whether in part or in whole — by a larger multi-state operator. Barch is also the chairman of the Maryland Wholesale Medical Cannabis Trade Association, also known as CANMD, a powerful cannabis lobbying group whose members have donated tens of thousands of dollars to state legislators over the last few years.

But his success hasn’t come without controversy. Earlier this year, advocates called for a boycott of Culta products to protest Barch’s stated opposition to legalizing at-home cultivation. In this exclusive interview with The Outlaw Report, Barch cleared up his stance on home cultivation, reflected on the rapid consolidation of Maryland’s cannabis industry, and backed a referendum on adult-use legalization in 2022.

Note: This interview has been edited for length and clarity.

In 2019, you told the Baltimore Business Journal that you didn’t support legalizing home cultivation. Do you stand by that, or has your position changed?

At that time, the cannabis industry was getting blamed for developing bad cannabis cartridges and synthetic marijuana. But that had nothing to do with us. We were under an inordinate amount of national political pressure. Remember when they took vape cartridges off the market? People were calling me every day to ask why I was making people sick. Out of that frustration, during an interview I reacted and said no because I was tired of being blamed for making everyone sick. I said it in passing, but at no time ever have we lobbied against homegrow. Homegrow is something that was in both the Senate and House bills. In fact, the Senate version, which we more actively participated in, had a larger home grow program than the House version.

The General Assembly says it won’t try to reform cannabis laws until 2023. If and when that happens, what provisions would you like to see in a legalization bill?

We’re going to have heartburn over legalization if we don’t see major criminal justice reform. Nonviolent cannabis offenders need to have their records expunged automatically. We have to deal with the issues of cannabis discrimination in public housing and all the peripheral issues around criminal justice before we get excited about an adult-use market, because it has to be equitable.

We also want to see a limited license market that’s not going to upset the industry’s regulatory framework. What I mean by that is that this compliance-based business is difficult and the rules are written for the biggest offenders. We have to make sure that applicants who get into the market are adequately capitalized and have adequate resources. From a compliance perspective, what we don’t want is this turning into the wild west where it becomes this devolving, unwieldy regulatory thing with all sorts of fines. We just want to see a controlled, regulated market and we want it to be equitable.

Does that include limited licensing for micro-growers (farms smaller than 5,000 square feet)?

We think there should be a large number of micro-growers because they are approachable and easier to start off, and there’s less capital required. But you have to understand there’s a cost reality of how many dollars the industry can put up to fund the social equity licenses. What I want is to make sure that whoever we end up standing up is getting adequate dollars and licenses to help those businesses. We’re not helping anybody by throwing people five or 10 grand here or there. So I would rather see a program that is smaller, well-funded, well-supported and makes sure that the first people to get into the market are highly successful. Then, as they transition into higher levels of licenses, they can pay back into that fund to support more people coming in.

It’s very easy to take a political victory lap and say ‘we issued 100 micro-grow licenses,’ but if we don’t support the licenses and they ultimately fail, what have we accomplished? So, I think it’s better to support a smaller number of social equity applicants across all cultivation sizes, and to ensure that they can become more successful.

Maryland House of Delegates Speaker Adrienne Jones is pushing for a referendum on legalization in 2022, but some say lawmakers shouldn’t wait to pass cannabis reforms. Any thoughts on that?

I think there are still a lot of people who are uncomfortable with the idea of adult-use cannabis, and they want to be absolutely sure it’s what Maryland voters want. Speaker Jones is relatively new. She’s filling the shoes of the previous Speaker Mike Busch who was in office for 30 years. She’s in year two, and it’s a lot to take on. From her perspective, she just wants to be absolutely sure that legalization is what voters want, and I do believe you will see the Senate and the House get it done. Ultimately, it will be the decision of Maryland voters whether or not they want it. And I have no reason to believe legalization will not be adopted in November.

How involved were you in crafting the two legalization bills that were introduced last year?

We were actively involved with both bills. We have CANMD, which is our trade association, and we provide comments on everything from state legislation to proposed regulatory changes because there’s always comment periods, and we take those comment periods very seriously.

Some argue that efforts to legalize cannabis in Maryland failed this year because lawmakers couldn’t agree on whether to cap the number of micro-growing licenses. Do you agree?

No, not at all. Remember, the House Speaker was against taking up the bill, and so was the Senate president. They are the ones who ultimately prevented it from going forward. Nobody in the legislature was comfortable passing any sort of major legislation in a COVID year. They just weren’t prepared to do it. And I think that when you look at who now comprises the House workgroup, you can see what the Speaker wanted and who she wanted to be handling those matters, and that’s Del. Luke Clippinger.*

*In July, Del. Luke Clippinger (D-Baltimore City) was appointed as chair of the House’s new workgroup on cannabis legalization.

Does Culta intend on participating in the adult-use market if and when voters approve legalization?

The easy answer is yes. I think you have to remember that the existing medical market is not generating any tax revenue and the state is hurting right now. Because of all of the COVID relief, people not working, the state has to get going with generating tax revenue from this program. The only way to do that would be allowing the existing operators to get started in the adult-use market so we can start generating tax revenue. We hope that tax money will go to supporting the next round of license applicants, and that 100% of those will be social equity candidates.*

*Social equity applicants are members of minority communities that have been disproportionately harmed by the criminalization of cannabis.

How has the landscape of Maryland’s medical cannabis industry changed since sales kicked off in December 2017? Where does Culta go from here?

Well, it’s changed a lot in that there’s not many independent Maryland operators left. If you look at the number of independent Maryland companies, there’s only a few of us left.

Culta has no aspirations to be a multistate operator. We want to be the best little cannabis company in Maryland. We don’t have desires to be the largest cannabis company, but we sure as hell want to be the best craft cannabis company in Maryland. We’re happy with that direction, and I don’t see that changing any time in the future.

How has Culta grown over the last few years?

There’s this amazing thing happening in the United States right now, which is that we are trying to migrate an illicit market to a legalized marketplace. A lot of men and women that have been operating in the periphery up until now and have been looking for an opportunity to get into the legalized market, and we wanted to embrace that shift. So we actively seek out cannabis enthusiasts to be members of our team. And I think that carries through to our products.

You cannot top-down manage a cannabis company. All the love starts in the grow room and in the lab, and I can’t teach passion. And so with that, I’ve been really working hard in order to try to find men and women that can help me grow this business.

Now, we’re close to 200 employees. When we started out, I was living in a house with five members of our grow team over on Oakley Street in Cambridge, where it was just us in the grow room every day. To watch our impact, especially on Cambridge, has been awesome. Cambridge is a small town, and to be a bright spot in that economy, to give that community a really cool company that has every intention of not leaving Cambridge, and stay there and build something special — it’s just been an awesome ride so far.