Flow Kana raises $22 million to expand Mendocino County cannabis site

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Flow Kana has raised $22 million in additional funding that will help ramp up its cannabis manufacturing and processing facility in Mendocino County on the former Fetzer Vineyards property in Redwood Valley.

With the latest round of funding, the San Francisco-based company said it has now raised $50 million since its inception in 2015. Gotham Green Partners, a New York-based private equity firm that invests in cannabis, provided $15 million in new funds while the other $7 million came from institutional investors.

The money will be used to expand capacity at its 87,000-square-foot facility in Mendocino County. In April, the facility started processing cannabis — produced by about 100 small growers around Northern California — into packaged buds and flowers that can be bought at licensed retailers. Around 35 people work there, said Cate Powers, company spokeswoman.

“This allows us to take on more farmers,” Powers said. The company has a core group of 25 to 35 farmers that it works with regularly in the Emerald Triangle counties of Mendocino, Humboldt and Trinity.

Co-founder and CEO Michael Steinmetz said he wants to become “the Whole Foods of cannabis” with his company, which already manufactures prerolled joints and cannabis buds for Willie Nelson’s line of products. He has talked of making the Redwood Valley facility a tourism destination akin to the customer outreach of local wineries.

The company is also going through the local and state permitting process so that it can produce bulk cannabis oil that can be used in a whole range of products, including massage oils, edibles, drinks and vape cartridges. Flow Kana would like to have that type of production ready by year’s end, Powers said. It also will house a testing facility that will be operated by a third party, which is crucial now that only lab-tested products can be sold by licensed retailers.

The edible and drink category is a growing segment of the market. Last month, Lagunitas Brewing Co. of Petaluma announced a partnership with Santa Rosa-based CannaCraft to produce a cannabis-infused sparkling water that will be available by the end of the month.

“The industry is changing so fast. We are really working on getting to a place to meet the demands we are seeing,” Powers said.