6 Cannabis Execs On The Strengths Of Their Businesses
Multiple private and public cannabis companies presented their business and outlook to a crowded room during the Benzinga Cannabis Capital Conference April 17-18 in Toronto.
Vertical Companies: Everything But Retail
Vertical Companies is among the largest vertically integrated businesses within the legal medical cannabis industry. The company is focused on “doing all things with the plant” except for operating a retail presence, said CEO Smoke Wallin.
Vertical recognized a large opportunity in CBD and started aggressively investing in hemp through a unique strategy of securing contracts with farmers, the CEO said. This helps mitigate costs, as the company can avoid buying supplies on the open market, he said.
The future potential of CBD was made apparent after CVS Health Corp
CVS 0.04% and Walgreens Boots Alliance Inc WBA 0.37% introduced CBD products to their shelves. This groundbreaking development at pharmacies will eventually be followed by similar launches at larger retailers like Walmart Inc
WMT 0.12%, Wallin said.
Backed with dozens of CBD brands, Vertical can play a unique role in the cannabis space, as smaller companies may lack the necessary scale to satisfy a large industry, the CEO said.
“I have my facilities up and running, I have my licenses,” he said. “Come and see it.”
Avicanna Focuses On Pharma
Cannabis companies looking to stand out in a growing competitive landscape need to focus and execute well in one niche. Avicanna follows this strategy by looking to establish itself as a “strictly biopharma” entity, said CEO Aras Azadian.
Avicanna is the first cannabis company to be accepted to Johnson & Johnson
‘s JLABS Toronto, a life science incubator tasked with helping companies deliver life-enhancing health and wellness solutions. The company is also among the few in existence that has federal licenses to conduct cannabis clinical trials with animals.
Backed by more than 30 scientists, medical experts and close relationships with leading institutions of learning, the company also needs to be run properly to thrive. One of the ways Avicanna is better managing costs is by cultivating in Colombia — something that “made practical sense” despite Avicanna’s deep roots in Canada, Azadian said.
SLANG Worldwide focuses on high quality branded cannabis products that are distributed across the world, CEO Peter Miller said during his Cannabis Capital Conference presentation. The company’s products are backed by a strong focus on brand promotions, as each branded product has to “stand for something” to give consumers an enjoyable experience, he said.
“Chains don’t typically carry other chains’ stuff,” Miller said. “Ultimately, retailers’ success is our success.”
Grassroots Cannabis: Management, Scale Matter Most
Grassroots Cannabis owns licenses to cultivate, process and dispense medical cannabis across several states.
The path to become one of the largest private multistate operators centers on the ability to successfully navigate through banking, regulatory and other challenges that are characteristic of an unclear regulatory environment, said CEO Mitchell Kahn.
“Team over everything else,” the CEO said during his presentation.
A strong management team has been instrumental in establishing footprints in states with limited licenses that have high barriers to entry, Kahn said. For example, the company controls four of North Dakota’s eight dispensary licenses in addition to one of only two grow licenses in the state.
“Scale is the single most important factor beyond team,” Kahn said.
Urban-Gro: Success Through ‘Respect And Confidence’
Urban-Gro is a leading systems integrator and agriculture technology company that grew its business by building “respect and confidence” with customers, CEO Brad Nattrass said during his presentation.
The businesses the company operates include ag tech services that help clients make real-time decisions and allow cultivators to operate at the most efficient level, he said. The company’s expertise is backed by its strong purchasing power and in-house knowledge, the CEO said.
This allows clients to save time, money and resources by helping solve their problems, Nattrass said. For example, OrganiGram Holdings Inc
OGRMF 1.08% faced some known issues with its first facility and tasked Urban-Gro with finding a solution, he said.
A successful outcome in the situation led to repeat business opportunities, the CEO said.
Starbuds: Older People Like Cannabis Too
Starbuds boasts a unique profile that few other cannabis companies with exposure to the U.S. market can claim, said CEO Dave Martyn: operating at a profit.
The key to Starbuds’ success is offering products backed by a “sticky name,” he said. This hasd contributed to older stores “eating up” market share, while new stores are quick to see success, the CEO said.
In what may be a surprise to some, Starbuds attracts older clients, such as 40-year-old customers who bring their 70-year-old parents to stores, Martyn said.
Seniors represent an attractive market and stand in contrast to the stereotypical cannabis consumer, the CEO said.
The company has a global vision and is targeting the Australian market ahead of “inevitable” legalization there on the recreational side, he said. Other regions of focus include Jamaica, which is often dubbed the birthplace of cannabis.
Avicanna CEO Aras Azadian speaks at the Benzinga Cannabis Capital Conference in Toronto on April 18. Photo by Juil Yoon.