By Eric Peterson | Mar 30, 2021
Cannabis manufacturing automation
Co-founder, President, and CTO Jason Dueweke was a consulting engineer working in aerospace, motocross, and other industries, but he followed customers' needs as automation for cannabis companies became his focus.
"The team identified that there was such a massive gap in commercial processing equipment for the industry, and so STM was born, just from that," says Executive VP Jessica Ferranti, who was the fourth employee and longest tenured after Dueweke and co-founder and Chief Digital Officer Erik Blackerby.
The company's first product was a rosin press that came to market in late 2017, but Ferranti says it quickly became clear that other equipment was "far more important and more necessary" for customers in the cannabis industry. "There was a massive lack of solutions in the space," she says.
That led to the development of the RocketBox, STM Canna's market-leading pre-rolled joint machine that debuted in 2018, followed by the RocketBox 2.0. Its capacity -- 453 pre-rolled joints a minute -- is more than enough for the vast majority of the market.
"What it really comes down to is how many people they have on the other part of the process, the closing and packaging of their joints," says Ferranti."If someone can keep up with the machine, the machine can do upwards of 90,000 joints a day."
Now in the hands of customers (largely processors, brands, and dispensaries) in 36 states and Canada, Israel, Australia, and the U.K., the RocketBox line represents "a very large portion" of STM Canna's sales, says Ferranti.
The RocketBox took off due to its utility and price point. Ferranti describes three tiers of joint-rolling automation: "ultra-manual" $200 machines that provide an assist to the human roller; STM Canna's niche of semi-automatic equipment (the RocketBox 2.0 starts at $16,750, and the Mini is $6,000); and fully automatic equipment with a price tag of $100,000 or more.
"There are really few competitors that are viable right now," says Ferranti. "There are only so many companies that are going to spend the money on [automatic] equipment."
The original RocketBox proved a bit too big for dispensaries, leading to the smaller Mini RocketBox. "The Mini allowed us to capture a significantly larger portion of the market because it catered to smaller companies."
Customers include Ascend Wellness Holdings, Trulieve, and Jushi. "Nearly every multi-state operator is using our equipment," says Ferranti.
"We captured so much of the market so quickly . . . we almost were inadvertently the pre-roll company, even though it wasn't our intention," says Ferranti. "We couldn't keep up with business. We couldn't even take the time to develop other machinery because we were so enveloped in production."
By 2019, R&D was back at center stage at STM Canna as the company moved into new and complementary automation. The catalog now includes a commercial grinder, the Revolution 2.0, that can be used in tandem with a RocketBox or an extraction system. New in 2021, the Subzero Revolution handles flash-frozen biomass, and the soon-to-be-released Mini Revolution is a smaller-scale solution.
About 20 employees work in production at a 20,000-square-foot facility the company took over in March. STM Canna has CNC and welding capabilities, and works with local vendors for some fabrication and powder coating. "If you want something done right, do it yourself," says Ferranti. "To ensure quality, we actually design everything in-house, engineer it, manufacture, and assemble in our facility. A lot of engineering companies tend to source machines from overseas, then there's a lot of challenges getting excess parts, and getting support and service, and quality control."
At STM Canna, the vertically integrated strategy is resulting in dynamic growth.
"We're expanding like crazy," says Ferranti. "We've been increasing our production runs by 150 to 200 percent, just to keep up with demand."
Challenges: "Continuing to fuel growth in a startup," says Ferranti. "We've been bootstrapped from day one. Everything we've done has been through friends-and-family funding and things like that. Our big goal now is to start reinvesting heavily into marketing and expanding our brand image in the industry."
Opportunities: New products. "The first thing is demand," says Ferranti. "Everything we've been doing has been based on customer feedback to provide better solutions every time, but also to gear us towards more channel-friendly products."
An automatic sifter is on the horizon for 2021, and other products are in the pipeline. "We like to be light years ahead, not just in front of the competition, but federal legalization," notes Ferranti.
There's also a rapidly expanding geographic market: STM Canna is seeing a sales bump from the East Coast in New Jersey as well as New York, Maryland, and Connecticut. "The more states that come online, the more we have to drastically increase production to keep up with growing demand," says Ferranti.
Needs: More employees and capital, says Ferranti. "To keep up with this market and keep up with demand, we need to expand," she says. "And when you want to expand, funding is always helpful."