Two notable Oregon craft cannabis companies have merged under one umbrella to compete in a market that has been facing existential economic headwinds and rapid consolidation.
East Fork Cultivars, a grower and manufacturer, and Peak Extracts, a CO2 extractor and product maker, will combine as East Fork Group. The two have had a partnership since 2017, according to a statement.
Over the years, the two have made ethically sourced products with diverse cannabinoid ratios to provide different therapeutic effects, with a particular focus on CBD-rich and low-THC options.
Under the new umbrella, Peak’s products secure in-house sourcing, including the ability to grow specifically for particular products, while East Fork gains access to in-house manufacturing capacities on the state-licensed cannabis side of operations.
“This perfectly matched union boosts East Fork’s cannabis braintrust and greatly expands the range of our in-house product-making capabilities,” said East Fork CEO Mason Walker. “While East Fork will continue to work closely with other product makers, and values those partnerships, it’s exciting to diversify the types of product experiences that we can offer the communities we serve.”
Peak Extract’s founder Katie Stem will join the board of directors and become president of the new company.
“It’s an exciting moment for both companies. Our values and capabilities are just so synergistic that I see only great things ahead for us as a collective,” she added.
Stem said that the partnership allows the two parties to “offer a craft alternative to the multistate corporate domination that is happening in cannabis.”
Walker’s East Fork grows its products in Josephine County and owns offices and a hemp bar in Portland, according to Portland Business Journal.
East Fork brings in around $2 million annually and has about two dozen permanent employees. Peak generates around $1 million in annual sales and employs around about a half-dozen workers.
Walker and Stem, who described themselves as “close friends and peer mentors,” told the outlet that the merger had been born out of summer conversations about being “a bit burned out and dissatisfied with the direction of the industry and our place in it.”
High administrative costs for smaller businesses and a cramped Oregon market caused by a stuffed supply side drove the owners to solidify their relationship and make their businesses more profitable. The state is also known to have high taxes and regulatory burdens for cannabis players.
The terms of the deal were not disclosed.