Oil Application Products Set to Skyrocket

Hosted by David Mantey.

This week, Mike McDonald, president of Ammonite, discusses his fascinating path to the cannabis industry following careers in cycling and outdoor adventuring, as well as stint in Taiwan, where he moved after college just to learn Mandarin.

Ammonite was spun out of Jetty Extracts, one of the largest concentrates and vapes companies in California. Jetty’s product development department had created a new device they called the “Dablicator,” an oil application product designed to replace syringes and other messier, unreliable alternatives on the market. 

While it was conceived as an in-house product offering, Jetty received interest from Surterra Wellness. The large multi-state operator (MSO) wanted to white label the Dablicator, and the initial order called for more units than Jetty have ever sold. As a result, McDonald established Ammonite to focus on Jetty’s hardware and intellectual property inside the cannabis and CBD markets. 

The Dablicator was initially invented for a specific cancer patient who was unable to smoke or consume edibles for treatment. While its roots are in the medical side, it is an emerging category in the adult-use/recreational space. McDonald says that the oil application category is still developing, and its trajectory could lead to disruption similar to the emergence of vapes in the industry. 

Instead of simply white labeling the Dablicator, Ammonite offers a turnkey program that provides filling, packaging, manufacturing, assembly and marketing advice as well. The hardware is manufactured at the company's factory in China, and the packaging is made of recycled materials by All Packaging in Colorado.

The devices can be filled through various methods: manually with a syringe, semi-automatically with a device such as Fisnar's dispensing equipment, or with automatic cartridge fillers, like those manufactured by Thompson Duke Industrial and ATG. 

Basically, if you have the equipment to fill a vape cartridge, you can fill a Dablicator, which is enticing to clients who don’t want to invest in new capital equipment to manufacture a new premium product. Typically, the products are filled with cannabis concentrate (RSO) and broad-spectrum CBD. 

While interest in new markets is difficult because operators usually have trouble keeping any products on the shelves, companies in mature markets are looking for innovation and new products as a differentiator. 

The company started in August 2020 and has already partnered with established brands, including 710 Labs, Neptune Wellness and Ancient Roots.

Right now, McDonald only wants to deal with established brands. The partners don’t have to be big, but he wants to deal with good people with a good reputation who are focused on scaling up the business. He’s not afraid to turn down business. 

The company is about six months old now and McDonald is predicting hockey stick growth. He also believes that federal legalization is possible within the next eight years, and remains hopeful that other measures, including the Secure and Fair Enforcement (SAFE) Banking Act are passed in the very near future.