00:00Today on Forbes, meet the ex-NASA engineer training robots to make pre-roll joints.
00:08Inside the Los Angeles headquarters of STEEZY, America's largest cannabis brand by sales,
00:14a robotic machine takes 10 pre-rolled joints in its arm, dips them into a vessel of THC
00:20concentrate, and then into another bucket filled with KEAF, a potent dust-like form
00:24of cannabis.
00:26In a few seconds, the Stardust machine, made by Van Nuys-based sorting robotics, will have
00:32coated 30 pre-rolls with an extra punch of THC, the compound in marijuana known for getting
00:37people high.
00:39In an hour, Stardust, and its one human operator, will have produced about 1,000 joints ready
00:46for consumption.
00:48James Kim, the CEO and co-founder of STEEZY, while standing next to the Stardust in early
00:53April, says, quote, this machine's output could be more than 10 people.
00:59In another room down the hall, about 140 employees sit at 14 tables, manually dipping joints into
01:06a terpene-infused adhesive and rolling them into a pile of KEAF.
01:10STEEZY isn't ready to replace its humans just yet.
01:13But Kim does envision a day when all of its joints will be made entirely by machines.
01:19Kim says, quote, robotics is the future, but the future isn't today.
01:23It might take a lot more time.
01:26That future is being pioneered by Sorting Robotics, founded by Notal Partansky, its CEO, Casio Santos,
01:34who was the CTO before leaving this year, and Sean Lawlor, who was the COO before leaving
01:39in 2021.
01:41The three founded Sorting Robotics in 2019.
01:45The company has sold about 30 Stardust machines, which go for a hefty $250,000 each, as well as
01:51hundreds of lower-priced marijuana machines to cannabis brands since its founding.
01:57Sorting Robotics also makes the GICO, which injects joints with THC concentrate, making
02:02what's called a so-called donut in pothead lingo.
02:05When the joint is lit, the ember resembles an O, as the concentrate vaporizes in the middle
02:10as the plant material burns.
02:12And the OmniFiller, a vape cartridge filling machine.
02:16The company, which has 20 employees, is still tiny, that will reach $11 million
02:21in revenue this year, up from $7 million last year.
02:25But Partansky, like many cannabis entrepreneurs, is playing the long game, hoping the drug will
02:31eventually be legal at the federal level.
02:34The company does have something going for it — profitability.
02:39Sorting Robotics has been in the black since 2021.
02:42While STEEZY, with $800 million in 2024 sales, is America's largest weed brand, Sorting Robotics's
02:49client list also boasts bigger companies by global footprint.
02:53Including Canada-based Tilray, with $788 million in 2024 revenue.
02:59And smaller regional outfits in the US, such as Blue Fox Brands, with sales of $80 million.
03:05Sorting Robotics' CEO, the 35-year-old Partansky, says, quote,
03:09In the complex world of the state-regulated cannabis market, which generated $32 billion
03:25in sales last year in 40 U.S. states that allow medical, recreational, or both, better
03:30margins can be life or death.
03:32Only 27% of marijuana businesses are profitable.
03:36Most companies fail.
03:38Pre-rolled joints are the third biggest product segment in terms of market share, after-flour
03:43and vape pens, accounting for 16% of all cannabis sales, according to a report by Headset, a Seattle-based
03:50cannabis data firm.
03:51It is also the fastest-growing category in the industry.
03:55In total, 394 million individual joints were sold last year, for $4.1 billion, a 12% jump
04:03over 2023.
04:05More than 43% of all pre-rolled joints are infused with extra THC, which explains Sorting Robotics'
04:11focus on the subcategory.
04:14But questions remain about how much the market can expand in the short term.
04:18Currently, there are only a handful of cannabis companies that produce enough THC-infused pre-rolled
04:23joints to make a $250,000 investment like the Stardust make sense financially.
04:31For full coverage, check out Will Yakowitz's piece on Forbes.com.
04:36This is Kieran Meadows from Forbes.
04:38Thanks for tuning in.
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