Good Titrations: Exclusive Interview with Mile High Labs CEO Jason Roth

Mile High Labs LLC is the world's leading cannabidiol (CBD) isolate extractor aimed at the wholesale market.

The company is based in Loveland, Colorado, and provides extraction, refining and co-packaging services to all sectors of the market, including cultivators, retailers, manufacturers, and consumer packaged goods companies. Its' business model is primarily focused on the extraction of CBD and production of crude hemp oil, hemp oil distillates and CBD isolates.

Mile High Labs have already been making waves in 2019, and drew considerable attention in March when the company unveiled its latest innovation in industrial-scale CBD extraction technology, aptly dubbed the "Mile High Monster".

This was followed in April by the announcement that it had established an international beachhead in Northern Ireland—as part of a global expansion strategy—and recently launched sales in the UK and Europe. The move cemented the company's position as a market leader in the supply of CBD ingredients globally.

As part of our coverage of US Markets Month, The Green Fund spoke with the CEO of Mile High Labs, Jason Roth, in an exclusive interview.

Mile High Labs was originally founded by Roth's partner, Steve Mueller, who initially began researching the CBD market as a more legally stable alternative to working directly with the cannabis plant itself.

Roth himself has a background in packaged consumer goods sector, having previously worked in "private label skincare and topical analgesics, from vitamins to medical devices". Over the course of his career he has been involved with the rollout of at least six different medical devices for worldwide pharmaceutical chains.

However, what really motivated Mile High to move into CBD extraction was the chance to do something on a global scale "which you couldn't do in America".

"From an American perspective, you're pigeonholed into just dealing with your own state. But the more research we did around CBD, the more exciting it got," Roth said.

"The premise was to be an extraction company on a global scale. So that's where this whole Mile High Monster idea came from."

 

 

Market Leading Monster

According to Roth, the Mile High Monster is an industrial-sized CBD extractor which makes use of large scale continuous feed technology that's "modular, but not mobile".

The patent-pending extraction facility has already shown a 500 percent increase in production capacity since installation, which translates to the processing of 50 acres of hemp per day into full spectrum CBD oil.

Once first pass crude oil is produced the company then transports it to their refinery, before submitting it to the distillation and isolation process.

While Mile High Labs made its name off the back of its capacity to produce large scale quantities of CBD isolate, the company has since begun expanding into other areas. They can now also produce water-soluble distillates, THC-free distillates and water-soluble isolates.

"We've gone above and beyond—not just producing an ingredient, but also producing finished consumer goods for our customers. As the market matures, you'll begin to see regulatory compliance come into place. We've spent a lot of money making sure that we're ready for that day, while still being able to produce large-scale [CBD isolates] for companies."

– Mile High Labs CEO, Jason Roth

"A lot of the CBD brands start out very small. They start out and buy one kilo, then the next thing you know, they're buying five kilos."

"Then they're buying ten kilos, and then they're trying to figure out where they're going to make the stuff because they don't have a big, industrial-sized production facility that can produce 50,000-100,000 tinctures or even 10,000 tinctures at once," he said.

This led Mile High Labs to expand its' offering even further by moving into the consumer packaged goods space, where it helps to produce branded products by assisting with packaging, quality control and process management.

The addition has allowed the company to offer a private label turnkey solution to its clients, which can handle all aspects of a product's rollout, from processing to labelling and distribution.

Mile High even has an in-house ad agency—so they can help with the creative side too— along with a shipping and distribution network that can move product worldwide.

Roth says that this gives early stage market entrants an opportunity to grow their brand and fine-tune their marketing, without being bogged down with the "QAQC, inbound inspections and labelling".

"We can do as much or as little for the process as a potential client asks for," he said.

Although Mile High Labs is the current leader of the pack when it comes to the CBD isolate extraction market, other players have begun to enter the game, such as the Sicily-based extractor CanapaR, and Isolera Extracts, which operates out of North Carolina.

However, Roth says he has little concern for the company's rivals, as Mile High's well-established distribution network and first mover advantage will allow it to remain firmly ahead of the competition for some time.

"Everybody in the cannabis space seems to be constantly looking over their shoulder and worrying about what everybody else is doing. Personally, I feel that it's a waste of time. Rather than looking behind me, I want to look forward, ensure we're making all the right moves and focus on what we do best."

– Mile High Labs CEO, Jason Roth

Mile High is confident that its unique offering will continue to insulate the company from any attempt to overtake its position as market leader. As Roth himself put it, although the company is "traditional in our business practices, we're non-traditional in the cannabis space".

"We spend an awful lot of money dedicated towards compliance. I would say our compliance team and analytical lab rivals some of the biggest pharmaceutical companies in the world—and that's where most of our team has come from."

"We can offer a very high level R&D project to any of the big multinational companies, or even a small local CBD company. I think that's something we do better than anybody," Roth said.

 

 

Rocky Mountain High

On June 19, Mile High Labs closed a transaction to acquire a 400,000 square foot production facility in Broomfield, Colorado.

The facility is fully operational, with the transaction also confirmed to include the land, labs, building, and ready-to-use finished products manufacturing equipment associated with the site.

The deal will allow the company to begin production of a variety of different private label products in the near term, including tinctures, capsules, tablets, topicals, and gummies.

"In light of recent legislative developments, the demand for our products has increased considerably. And it's not just a domestic phenomenon. CBD is a global product and we serve a global customer base. This large-scale production facility will ensure we have the capacity to provide high quality, consistent CBD to every customer, large or small."

– Mile High Labs Founder and CTO, Stephen Mueller

Mile High's shift to the Broomfield campus is its' third move since the company's 2016 founding in Longmont, Colorado, after production was subsequently relocated to a larger facility in Loveland in 2017.

The company made the decision to upsize again in late 2018 following the passage of the US Farm Bill, which legalised hemp and created a powerful surge in demand for CBD.

According to the company's founder and Chief Technology Officer, Stephen Mueller, Mile High wants the region to eventually become synonymous with the CBD production.

"Many analysts have been openly wondering when pharma would take over the CBD industry, but what if the opposite were true? This transaction is the largest infrastructure purchase in the history of the CBD market and it's only the beginning for Mile High Labs," Mueller said.

"Over the coming quarters, we plan to leverage this tremendous infrastructure to build the global centre for CBD products manufacturing."

"CBD is an amazing molecule that we're only beginning to understand. Just as Silicon Valley in California has fostered innovation and collaboration in the tech industry, Mile High Labs will create a CBD Centre for our industry to learn, innovate, grow and succeed."

As part of the transaction, the facility will come equipped with additional technology and infrastructure for research and development, quality assurance, bottling, filling, packing, warehousing, labelling, shipping and compliance monitoring purposes.

 

 

Oceanic Expansion

While the company has long-term plans to expand further into the Oceanic region—having already penetrated the European market—for now it will focus exclusively on establishing itself in the Australian and New Zealand CBD space.

Although the cannabis market in both countries still remains entirely medical, Roth says that he is unsure of how long that will last, as it's "likely that'll become OTC [over the counter] at some point".

As a result, the company wants to ensure that it's forging relationships, doing R&D work and taking care of the heavy lifting today, in preparation for when this eventual onslaught of business arrives.

"I'm 100% sure it'll [CBD] be super successful in this region—which seems to be more open to non-prescription drug treatments—and I think that's really important."

– Mile High Labs CEO, Jason Roth

"Even though there's not a lot of clinical validity around everything we do today, there's a lot of anecdotal information that seems to match up around the world, and I think it's a great place to start," Roth said.

Mile High believes that with the direction the market is currently taking, the medicinal CBD space will eventually subdivide into the separate high and low dosage spheres. Although high dosage pharmaceutical grade products have already attracted plenty of attention from investors and media outlets, Roth claims that the low dosage market could prove to be equally as lucrative.

This is because low dosage market will encompass a wide range of different products, from CBD-infused water, to "tinctures, gel capsules or even pressed pills".

 

 

King of the Hill

Although the extraction market will eventually become more crowded over time, Mile High already has a considerable advantage over any potential competitors.

The "Mile High Labs Compliant CBD" seal found on every Mile High product is seen as a worldwide symbol of high industry standards, and manufacturers have confirmed that the company's isolates are high in potency, consistency and quality.

Mile High has also managed to secure bulk delivery and co-packaging services with some of the world's leading brands, and will further expand its market share with additional rollouts of its end-to-end GMP certified extraction facilities in future.

This will become increasingly important as time goes on—and the global demand for CBD continues to rise—as it seems unlikely that competing extraction companies will be capable of producing high-quality, high volume CBD at such a comparatively low cost.

The only question now is just how big this CBD surge is going to get.

Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.

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