Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
This week we are joined by Olivier Blechner EVP of Jushi Holdings to discuss:
- Early Jushi Holding Strategy
- How Jushi thinks about Buying vs. Building
- M&A Opportunities and Obstacles
- Going Deeper vs. Wider in States
About Jushi Holding:
In 2018, Jim Cacioppo collaborated with fellow cannabis and finance experts Erich Mauff and Jon Barack and realized that by combining their shared industry know-how, they could make a lasting impact on the lives of individuals across the globe. They quickly gathered an impressive team of experts to create Jushi Holdings Inc., with the ambition to be a leading multi-state owner and operator of cannabis licenses. Today, Jushi’s operations have grown rapidly with new cultivation, manufacturing and retail licenses across the United States. Our team has grown to ~1,550 members and counting.
About Olivier: Olivier brings over 20 years of principal investing and corporate finance experience to his role as Executive Vice President of Business Development. Prior to Jushi, Olivier worked with Jim Cacioppo as the Senior Portfolio Manager at One East Capital Advisors. Olivier has previously held several senior roles at hedge funds including Chief Investment Officer of the Polygon Distressed Opportunities Fund, Research Director at Alden Global Capital, Partner at TPG Credit Management. Initially, Olivier worked for Jim Cacioppo as Head of European Credit Opportunities at Sandell Asset Management. Prior to those positions, Olivier concentrated on leveraged finance and rescue financing transactions at Houlihan Lokey and Credit Suisse First Boston / DLJ. Olivier received a B.S. in Economics from the Wharton School of the University of Pennsylvania in 1998.
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Contact us directly at [email protected] Bryan Fields: @bryanfields24 Kellan Finney: @Kellan_Finney
[00:00:00]Bryan Fields: What’s up guys? Welcome back to the episode of The Dime. I’m Brian Fields and with me as always, as Ke Vinny. And this week we’ve got a very special guest, Oliver Beckner, EVP of Juicy Holdings. Oliver, thanks for taking the time. How you doing today?
[00:00:15]Olivier Blechner: Hey, thanks Brian. Thanks, Tim. Great to see you guys. Good to
[00:00:18]Bryan Fields: see you Ke.
[00:00:18] How are you doing? I’m doing really well, really
[00:00:21]Kellan Finney: excited to talk to Oliver. Really excited to kind of dive into, uh, the inner workings
[00:00:25] of Juicy. How are you, Brian?
[00:00:26]Bryan Fields: I’m excited to dive in. Obviously, m and a is a big part of the cannabis industry and getting Oliver’s perspective is gonna be really exciting.
[00:00:32] But for the record, Oliver, we have a little East coast, west Coast battle. So, uh, your location
[00:00:37]Olivier Blechner: please. Uh, I’m in. I’m in Boca Raton, Florida. I’m not entering that battle. Loved East Coast and love the West coast too. So love here. That’s fair.
[00:00:47]Bryan Fields: We’ll, we’ll put you right. We’ll put you right in the middle with a slight nod to the right
[00:00:54] So Oliver, for our listeners, can you give a little background about yourself?
[00:00:58]Olivier Blechner: Yeah, sure. So, [00:01:00] yeah, my name’s Oliver Blacker. I grew up in Switzerland. Always wanted to live in the States, and finally managed to do so for, for college. Went to, uh, went to school in Philadelphia and then managed to
[00:01:10] live
[00:01:10]Olivier Blechner: in New York for a while in London.
[00:01:13] And now here I spent most of my, I spent most of, really wanted to live in LA too, but I had a, I had a girlfriend in New York, so I didn’t. I spent most of my career as an investor. I did, I did kind of my initial tour of duty, five years at investment banking. Um, learned pretty quickly that I really was much more interested in being part of making decisions and, and, and creating things rather than, uh, rather than just advising on that.
[00:01:41] And then spent most of my career until this in the, in the head fund industry, particularly in distressed debt. So I invested in companies and countries that were in trouble. Really with a, you know, when everyone’s running away, I was running towards it. And really did that with a view, with a view to rebuilding [00:02:00] companies and, uh, and make money that way.
[00:02:03] By the way, there’s a little bit of a view out there that you make money by liquidating companies and tearing them to pieces. That’s not how you make money. You rebuilt them and, you know, did a, did a few, was privileged enough to, to do a big, a few big restructurings that, uh, We restructured Caesars, I was part of the official core committee for, for doing that.
[00:02:21] That was, that was great fun. And I’d actually, beginning of my, my career on the buy side, I worked for the guides. Now the CEO of Jui, Jim Caspo, which stayed in touch over the years. And, you know, by, say beginning of 2018, I’ve been doing the hedge fund thing for a. Distress debt. We were sort of in the middle of a bull market right after a while, financial crisis and after you get some pretty interesting things to work on, then as the bull market continues, the opportunities get worse and worse, and you’re sort of stretching what you’re, what you’re, what you’re doing in order to stay in business.
[00:02:55] And then Jim called said, Hey, been investing in cannabis for a while. [00:03:00] Very successfully. So in, in Canada, I wanna start something in the US or have to start at something in the us You’re not doing anything useful, , why don’t you come and why don’t you come and, and do this. So, you know, after 17 years, stint in London, moved myself, my family here to uh, to South Florida, beautiful South Florida.
[00:03:20] And uh, we got going with. We got going with, with jui and was there any number five or six? Something like that. So yeah, that’s my background. I’ve been an investor all my life and in many ways what I do now is, is similar and in some ways it’s, it’s dissimilar. So the similar part is, you know, Um, what are we here to do?
[00:03:42] We’re, we’re here to try and figure out really good opportunities, um, that we’re buying at the right value. We’re, we’re, we’re doing in depth due diligence to make sure we’re not buying something that turns out to be a huge problem later on for the company, right? You’re, you’re trying to avoid liabilities.
[00:03:56] You’re trying to avoid tax issues, compliance issues you really don’t [00:04:00] wanna deal with, with, uh, with any compliance issues, for example. Um, but I do. What we do here, it’s, it’s a much wider spectrum of people that I get to, to deal with. This is everything from, you know, social equity applicant in LA or Illinois that won one license that represents his or her entire net worth.
[00:04:20] Um, maybe doesn’t have, most likely doesn’t have deal experience. You gotta be able to, to, uh, really, I don’t know if it’s bonding, but you, you, you gotta be able to, to talk on that level, um, in a way that that makes. To them, right? We’re not here to uh, we’re not here to treat anybody. We wanna do good deals and we want people to feel good about the deals they do with us, all the way to kind of big companies, which is probably more what I, what I was used to.
[00:04:45] So that’s, uh, that’s kind of the background. Was there any hesitancy jumping into cannabis? Um, you know, I’m not really, that probably should have been with, with [00:05:00] hindsight. Not really. I’m, I’m one of those, I don’t know. I’ve, I’ve been lucky in my career. I’ve worked for, I’ve worked for good people. I have great mentors and one of the things that I notice is that the, the, the trades or the decisions that I made that turned out to be the best were those that were really.
[00:05:16] Obvious to me very, very quickly. This one, I don’t know, Jim called me in sort of beginning of 2018. I took a look at the, the, the PitchBook they had for Juy. I think maybe two or three weeks later I was on a plane going out to Colorado meeting, meeting the partners, taking a look. Um, a week later I’m calling my ex-wife saying, Hey, I know you like London.
[00:05:41] But let’s move and I wanna bring the kids and I wanna bring you and let’s do it. I, I think the whole thing, you know, I, I kind of totally changed my life within, within two months. And the way I thought about it is, look, this is probably one of the, this probably is the only opportunity I’m gonna get in my lifetime to be part of shaping what is a [00:06:00] huge industry.
[00:06:01] In, in the US and one that I think is already doing will continue to provide great benefits to, to, to people across the country and maybe, maybe globally. I think the fact that it’s, um, now federally legal or was illegal anywhere is, is, is and motivated by a lot of things that just, I. Just silly and so no, I was, investment thesis was very, very clear to me.
[00:06:26] I didn’t hesitate at all. Just jumped in. Now, five years later, okay, one learns a few things. I’m still very excited about it, but one of the things to highlight is, you guys know this as well, nothing is as easy as it looks. Adding cannabis. It’s probably twice as hard as it should be, and that’s because we’re dealing.
[00:06:47] A at a complex web of regulations across every state that’s different. We’re dealing with the federal legal, we’re dealing with two a, d e, we’re dealing with two, two, you know, at some point people are gonna write books about the sort of things [00:07:00] that, uh, we and other state in the industry during this time.
[00:07:02] But at the same time, you know, it’s, I think we’re doing something that really contributes to making, making the world. And if we do it right, we’re gonna make some money doing it, which if you do both at the same time, that sounds pretty good to me. So, yeah, I, I didn’t really hesitate, but it’s, it’s, it’s much harder than I initially thought it would
[00:07:25]Bryan Fields: be.
[00:07:26] I like to usually say that cannabis is full of challenges. And I think for people inside the industry that really resonates. But people outside the industry kind of ask like, what does that really mean? And I think once you kind of step inside the industry, you recognize cannabis is just absolutely full of challenges.
[00:07:39] So I wanna stay with that kind of early days. Uh, jumping in, obviously having the relationship with Jim is massive in making that leap and probably leads to an easier transition from outside industry into in. So talk to us about those early days were like, what was juy like early on? And then what was your early mission when kind of joining?
[00:07:57]Olivier Blechner: Yeah. So, you know, I was in the same role that, that, that I [00:08:00] was in now. Um, you know, Tru had just been formed. It had gone to its initial cap rates. I forget what that was, 28 to 30 million. It was some money around it had it had a couple of, it had a couple of small investments. I mean, it was just a, it was a tiny startup to fit into a very small office space or five, six people.
[00:08:19] And, you know, It start, it actually started when I moved here. We had a, we had a meeting at, at the, at Jim’s home. The entire company could actually fit around the dining table. And we had sessions where we basically discussed, Hey,
[00:08:34] which
[00:08:35] states do we wanna be in? Where do we, where do we wanna focus? Um, what should the strategy be?
[00:08:41] And you know, some of the initial kind of reads were, by the way you make decisions. Then you kind of go along and then you adjust. I think that’s, that’s just the nature of entrepreneurship. It’s, it’s the nature of decision making and you learn more and you adjust, and stuff happens and stuff changes. So one of the things that [00:09:00] we, I think quickly decided early on was that we were gonna try and be retail only, um, in limited license markets because, You know, when you’re, when you’re running a hedge fund, you’re always looking at, you’re looking at the portfolio as a, as a, as a whole.
[00:09:15] So let’s say you have a portfolio that’s pretty concentrated. You have 20 positions. Some are, you express so many percent of your, of your net asset value. So you have like 1% positions, 5% positions, maybe 10% positions. If you fuck up the 10, if you mess up a 10% position, , sorry. Then, uh, yeah. That’s not so good.
[00:09:34] So I’m talking about the benefit of diversification. Um, having a diversified set of retail stores in limited license locations that made sense to us. Ah, limited license. That’s good. Um, diversified. That’s good. It probably costs, I don’t know, somewhere around a million, million and a half to, to build out the store.
[00:09:56] So some of you know. In a world where you have [00:10:00] a portfolio, you’re gonna make some decisions, hopefully that turn out to be really great, in fact, better than you thought they were going to be. Then you have hopefully a lot of stuff that’s kinda in the middle is good as you thought. You’ll have a few things that didn’t work out the way you thought.
[00:10:12] Okay, so if you mess up a store, you so a million, million and a half into it. Not to be gli about that kind of money, but the company survives and you can probably move to store. Um, we did. For a while, um, until we, we had licenses to operate many stores in, in Pennsylvania. We were bringing those online, so we had licenses and then we’re opening, by the way, now we have 18 stores in Pennsylvania.
[00:10:37] I think when we got to five or six, we discovered that’s actually kind at the time, it was tough to get really great products on our shelves, so the producers were putting the great product on their own. So that’s when we started vertically integrating. That happened two years ago or so about, you know, two and a half years into, into Jewish’s existence.
[00:10:54] The other thing we thought in the beginning, um, we really raised money. Thinking we’re [00:11:00] gonna go into New York and Florida and we actually had a, had a, had a 20% stake in a license in, in New York. They found another buyer. We could either match or not match. We actually decided to sell at the time we made four x our money.
[00:11:14] Um, and then we had a, when, an argument with somebody over, over, over Florida. We didn’t have to go into the detail on that. But today we are not in New York, we are not in Florida. Um, we need the corner companies, Pennsylvania. Um, I think we’re tied to sec largest retailer, 18 stores. We bought, um, goodness growth.
[00:11:36] Grower processor during, during, uh, during Covid, I think we closed in July or August of 2020. We’ve put another 50 million of CapEx into that facility. We’ve totally redone it. It’s, it’s, I mean, it’s, I just saw it three weeks ago again. Have been not seen it since we first acquired it, and it is 50 million.
[00:11:57] We’ll do a lot when you know what to do with it. We, it’s an [00:12:00] amazing facility and it is ready for expansion when adult use comes in Pennsylvania as well. Um, second key to the company is Virginia. We own the license. Um, for HSA two, which is basically Northern Virginia, Alexandria, Arlington, Tyson’s Corner, Amazon HQ two, it’s suburb of dc.
[00:12:18] Um, we think of that, that’s probably the best license in the us. It’s two and a half million people that we serve. Um, only us at the moment. It’s going out to use in January 1st, 2024. And then we have four monster stores in, in Illinois. They’re talking about 80 million plus of revenue. Um, none of that was in the original business plan.
[00:12:35] You know, we have other businesses that we acquired in Massachusetts, Nevada, Ohio, California. So things, things, uh, things are very different than, uh, than, than we initially thought they were going to be. But that’s not a surprise. I think that’s just, that’s just the nature of, of, of building business. You, you kind of, you bob and weave and you adjust as you learn and you take advantage of opportunities, which I think is a company we’ve done.
[00:12:59] I think we’ve [00:13:00] done, I’m, I’m really proud of the job that we. When you were, uh, when you guys decided to go vertical, um, how was the, the conversation based on buying versus building? Did you guys determine that there were certain sectors of the, the supply chain that you wanted to, to buy and then there was other sectors that you wanted to build?
[00:13:17] Or was it kind of just,
[00:13:18]Bryan Fields: you just crossed the bridge when you
[00:13:19]Olivier Blechner: guys got there? Yeah, I think a lot of that’s driven by, by regulation, so really that was driven for us. If you look at it, when we started, we had no business. First we had no business, and we had no people, and we had no money. Then we had no business, no people, and we had some money, not that much, and we had to figure out what to do with it.
[00:13:37] Then all of a sudden we had a bunch of licenses. Um, in Pennsylvania we had, we had stores in Illinois that we could operationalize. So put yourself back in like March 20th, 2020. April, 2020. Covid starts. Um, our stores thankfully stay open. We’re considered a central business everywhere that we, that we operate, you know, by, by May, June, we are confidence back.[00:14:00]
[00:14:00] In, in our ability to, to continue running the stores. But we knew we needed to get vertically integrated, specifically in Penn, specifically in Pennsylvania. That was gonna be important to us. It’s a limited license market. I mean, even if you’re building, you gotta buy a license. You gotta buy a license.
[00:14:15] That’s valid. There weren’t any spare. Licenses. And so what you’re looking for is, I mean, we basically talked to everyone that wasn’t connected with an, with an mso. Um, all the independents and kind of, you know, this one was owned by, by vio. Now, goodness, growth, they had some pressure to, to generate cash.
[00:14:34] We actually didn’t have the money to buy it, so we, we had to raise money during that period as well to try and get that done. We’re proud that we were able to, uh, to, to, to get it done. I will say we’ve, When it comes to gps buy versus build, we’ve done it all right? We, we, we bought in Pennsylvania, but I can tell you we have, it’s un.
[00:14:57] Compared to what we bought, I mean, what we did with it, [00:15:00] we didn’t just expand. We, we, the fundamentals of this building are, are, are totally changed. When we bought it, it wasn’t designed to produce high quality flour. It had been built by the original owner to basically produce trim for extract. Um, they didn’t believe in smoking, so that’s what they wanted to do.
[00:15:21] We wanna have a full suite of products for our patients and our consumers. That includes having the ability to put out this beautiful ab bod, um, for, for, for our customers. So we have to change everything. Um, you have to change hvac, you have to change, um, it just, all of it. And, and we did that. Um, we also acquired facilities.
[00:15:43] We’ve acquired in Massachusetts, we’ve acquired in Ohio, we’ve acquired in, uh, in Nevada, and then in Virginia we built from the ground up. So in Virginia, we’ve now invested over 70 million into, into, into the facility. [00:16:00] I can tell you this, it’s actually, it is way easier to buy, to build something from scratch and do it the right way.
[00:16:07] I mean, easier. Took two plus years, took 70 million. There’s nothing, there’s, there’s nothing, there’s nothing easy about that. You know, internally we’re calling us the big bets. That is our, that is our, you know, Virginia’s our big bet. Um, And, but you know, what you’re getting, buying an existing facility is, it’s almost like buying kind of a, a big house.
[00:16:30] You, you do all the work, you do all the due diligence, you look everywhere. You get the experts to go through the checklist. But when you’re starting renovations, two years after you own it, you’re gonna discover stuff you didn’t know about before. There’s always. Um, so it’s, it’s, it’s, it’s, it’s, uh, I think we’re back to that theme of it’s not easy, um, but I think we’ve shown that we can do it and we can build, we can buy almost like everything that we look at almost.
[00:16:59] Um, [00:17:00] I think we want to be intellectually flexible and just be open to, we’re not religious in the sense that we say we will only buy or we will only build. I think you’re. Be commonsensical about it. And in any given situation, let’s look at all the options. What are the pros, what are the cons? And then make the right decisions.
[00:17:21] So,
[00:17:22]Bryan Fields: When, when you were building out that facility and investing the 50 million, was that part of the initial understanding when you purchased the facility, was that this was gonna be a complete tear down and build out and then forecasting it out? How do you see an ROI standpoint of understanding that it’s worth investing X amount of money?
[00:17:37] Obviously it needs to be arranged, like you were saying, with the house standpoint. Unfortunately, in my experience, when you’re doing home renovation projects, you’re always going over budgets because the contractors are always finding more problems. So is that something that came about similar to your, to your.
[00:17:50] Yeah.
[00:17:50]Olivier Blechner: And, but by the way, you sort of know that, you know, when you’re looking at your initial estimates, this is probably gonna take longer. It’s gonna cost me more money. So you, you, you sort of built that into, into your [00:18:00] calculation when you’re thinking about it? Absolutely. I mean, we hadn’t, by the time we bought it, we hadn’t yet, yet made, we knew we were gonna put more money in, and I wouldn’t call it a tear that it’s just kind of a massive, massive improvement.
[00:18:11] And in addition that we did, um, you know, we actually went out and we. Most of the real estate around our financing, like a series of additional deals after that, because we didn’t wanna be landlocked. So one of the things you want with a GP is you want flexibility. So if one day you decide it makes sense to expand, you wanna have the ability to to do that.
[00:18:31] That was a big consideration for us and we looked at a number of different, um, sort of CapEx options. As part of the analysis we did, um, when we decided whether to buy it or not, but we hadn’t yet fully committed to, to one or the other. Then over time, Pennsylvania, um, you know, you’re getting closer and closer to to, to adult use.
[00:18:51] So yes, we knew we were gonna spend substantial amounts of money doing it. Um, Same thing with, with, [00:19:00] uh, you know, Virginia, when we bought the license, I mean, we knew we had to put a lot of money into, into the building. Um, maybe not that amount, maybe not that timing, but over, over time, decisions kind of rise to that result.
[00:19:12]Bryan Fields: I think one of the things that are most fascinating in this experience is like you were saying, that each state is kind of independent and different. So investing 50 million in Pennsylvania might limit your opportunities for an acquisition in another state. So from a decision making standpoint, are those variables also considered saying like, Hey, we need to have funds available for acquisition in in Territory X.
[00:19:32] It’s a really good
[00:19:33]Olivier Blechner: question. Absolutely. So one of the things that’s so fascinating about cannabis now fascinating and and difficult about it is we are in a capital intensive and capital consuming industry. That’s because we’re building the infrastructure, right? And when I say we, I mean the industry as a whole.
[00:19:51] CapEx CapEx caps, you’ve got to build these facilities. They’re going to get bigger, they’re going to get more efficient, they’re going to put better product out over over time. So, you know, [00:20:00] we’re kind of recreating, um, a whole infrastructure. But on the other side, we’re, we’re in, in an industry where capital is either.
[00:20:10] Kind of available or it’s totally not there at all. Uh, I sort of joke with my friends and you know, when they call like, Hey, how are you doing? I’m like, uh, I don’t know Fifth year in cannabis, fifth bear market, it’s maybe off to fifth, but certainly to third or, or the fourth. And we’ve been in a bear market, in this bear market now for, it’s going to be like a year, a year and a half, right?
[00:20:29] Um, before that you could raise equity capital. then, you know, you could raise, that’s after that. And I’d say, I mean, we fortunate, we, we just, we just announced the refinancing of a, of a big debt piece, so we were still able to do that. But capital is hard to combine. So when you’re looking at projects, what you have to do is, um, the projects compete with each other for, for, for, for capital, and that’s, You know, it, things like that’s a bad thing, but that’s actually a really good thing to have.
[00:20:58] You want projects to compete [00:21:00] with each other because that’s also one of the things that keeps you intellectually honest. Um, in, in internally, Hey, you wanna, you know, here’s a proposal you want to go buy, I don’t know, making it up. You wanna go buy licensing Maryland? Great. How much cash is that going to take?
[00:21:14] Great. How does that compare to what we’re doing when we’re putting CapEx into Virginia or Pennsylvania? So one of the things that we looked at is we think when we’re investing a dollar of CapEx into expansions in Virginia and Pennsylvania, we think we’re doing that at a two times eha multiple. Um, it’s another way of saying that’s really, really, really attractive, really cheap.
[00:21:39] It’s hard to buy companies like that. Now, we’ve done some pretty good acquisitions. Um, Along, along the way as well. Super proud of our acquisition track record. But yeah, things compete and we have to make decisions constantly about, does it make sense, you
[00:21:56] know,
[00:21:56]Olivier Blechner: buy versus build new markets versus existing [00:22:00] market.
[00:22:00] And that that informs strategy. So if you ask me today, what are, what are the focus areas? Well, focus areas are when Illinois, we have four stores are open. We want a license in Peor. We’re opening that up to the fifth store. You’re allowed to own 10. Okay, well five licenses and building those out in great locations.
[00:22:20] That makes sense. So that’s strengthening an in-market position. Um, we’re clearly gonna open up right now we’re at four stores in Virginia. Fifth one is opening, um, probably in January. It’s pretty close to being done in Arlington. Great store. Really beautiful location just by Whole Foods sort of thing.
[00:22:38] You know, in cannabis you usually don’t get those kind of locations. It’s just amazing. And, uh, six stores gonna. Um, and then we’re in Ohio. We’re opening in Cincinnati or in the Cincinnati area. In Ohio, you’re allowed to own five. We bought a gp, we have a small gp. We have a small growing, we have a small processor.
[00:22:57] It makes sense to be vertically integrated. [00:23:00] We’d love to have five stores. Ohio had new licenses come out last year, so I’m in market to, to try and buy four Right location, right price. That makes sense to enter like a new state. Particularly if it’s on the GP side, you gotta be able to follow that with, um, there’s typically CapX that happens after, I’d say it would have to be, and we’re looking at a lot of things.
[00:23:24] It has to be just an extraordinarily great opportunity for us to want to do that. So the, the enterprise has to be very attractive. Um, we think salaries, for example, Everyone always wants cash. seems to be the, the the thing to do. There’s any cash in the industry, okay? Like the cash you have, you want for your operations, you want for CapEx, you don’t wanna pay for acquisitions with cash.
[00:23:51] So the next thing you’re looking at is we’re a public company. We think we’re a very attractive stock. The right seller for us is somebody who understands that you’re not really just selling your [00:24:00] company, you’re effectively exchanging your private company stock for publicly traded stock. So it has to be priced very.
[00:24:06] Because we think our stock is priced very cheaply, right? So the exchange has got to make sense for, for, for both. It can’t add any leverage. We don’t want any more debt. Um, it can’t be, uh, these days we wouldn’t do like a distressed asset turnaround where we have to put 30, 40, 50 million to fix it. Don’t wanna do that.
[00:24:26] I wanna. Easy, cheap deals with great people in great locations, and of course life doesn’t work quite work that way. So, you know, we’re working very, very hard. We’ll, we’ll find something that we’ll find things that make sense I can already see on our horizon. Companies are running outta money. There’s opportunities, um, for us to make both our lives and their lives better.
[00:24:45] But the conditions have to be, the conditions have to be
[00:24:47]Bryan Fields: great. Just to clarify, what is
[00:24:49]Olivier Blechner: gp grower processor grow processor? No,
[00:24:53]Bryan Fields: it’s fine. I just wanted to make sure that we were on the same page with that.
[00:24:57]Olivier Blechner: Yeah, sorry about that. It’s the, it’s [00:25:00] the, the cultivation business and the processing business. I just call it a gp.
[00:25:04] It’s, of course it has a different name in every state because every regulator has a different name for it than I just say gp.
[00:25:09]Bryan Fields: So I guess expanding on that, I mean, is there, is there a deal flow that comes through? Do you have to do the outbound to start reaching out to people in Maryland and Florida and California?
[00:25:18] Like, obviously there’s a small industry, but the people that are. Or doing these sort of negotiations, how, how does that information kind of consume and how are you kind of being privy to the information that says like, this person might be interested in selling their business at a later time? Yeah, there’s, there’s,
[00:25:34]Olivier Blechner: there’s a bit of false and it’s changed over time.
[00:25:36] So when we started it, nobody was talking to us because nobody knew anything about us and we didn’t have anything. And, you know, we kind of had to do. You get on the phone, you get on the plane, you, you sort of decide, these are the markets I wanna look at. And you do, you do what I used to do in distress debt.
[00:25:54] So one of the things that’s interesting about distress is you never know what you’re gonna look at any given year, right? You don’t know which [00:26:00] country is gonna have issues. You don’t know which industry is gonna have issues. One year it’s telcos in the US the next year it’s merchant energy plants in the uk.
[00:26:08] Then it’s, I don’t know, banks in Greece and Portugal. Then it’s, I don’t know, Dubai real estate companies. It’s like new. You don’t know anybody and you don’t know really what to do, but what you do know is, huh, I probably just need to get in there and talk to everyone and meet everyone. People like to talk.
[00:26:24] You can pretty, you know, you can figure out who you can do a deal with, right? You can figure out the conversation. Reasonable, not reasonable. Interesting asset, difficult to own.
[00:26:36] I
[00:26:36]Olivier Blechner: mean, you can kind of, you can kind of piece it together and after you spend enough time in a state talking, I think if you talked to like the four, five top players in every state and you talk enough and you go back, you kind of figure out what’s going on.
[00:26:50] Um, so that’s, that’s what we did and that’s what we continue doing by now. It’s a. The sourcing side is maybe a little bit easier because we have a track record, [00:27:00] right? I can, I can show any, anyone that’s not sure about doing business with us or with anyone in the industry, we can show is our track record.
[00:27:07] They can talk to sellers. That’ve done deals with us. They’re very satisfied with, with the transactions they, they did with us. Um, bank. The bankers know that we’re reliable, but we say something, we’re gonna, we’re gonna, we’re gonna do it. Um, they know they can probably get a feed out of us. We’re real. So yeah, we have bankers calling us, we’ve got brokers calling us.
[00:27:26] Um, but a lot of it is, It’s just outreach, right? Um, Illinois licenses. There isn’t an investment banker that wants to sell those. You gotta just get on the phone and call everyone and see which calls you get returned. You gotta go on location. So it’s, it’s just, it’s, it’s old school origination work. So, with the industry consolidating, which you say this is a, a buyer’s.
[00:27:52] It’s actually a buyer’s market because there’s a lot of salaries and not, not a lot of, not a lot of buyers. I’d say that’s true in, in every state that I, [00:28:00] that I look at. Um, yeah, I mean look at, look at Illinois. They gave out 190 licenses. We think for all the MSOs, if they wanted to get to their maximum, it was maybe demand for 20 or 30 of them.
[00:28:13] You know, the others, you’re either building ’em yourself or reselling, but there’s not a lot of. Um, when we were looking at Massachusetts, by the time we started looking four years ago, um, maybe by now it’s like four and a half years ago. For years, we thought that people’s sellers price expectations just stood in no relation to, to, to reality.
[00:28:33] I’m saying this in a, in an undated way, just didn’t make any sense at all. And then almost every MSO over time acquired a position in Massachusetts. And so by the time we kept looking, by the time we actually found an asset that we, that we, that we liked, um, I mean, I don’t wanna say we’re the only game in town.
[00:28:52] You, you’re hardly ever the only game in town, but one of the only, one of the only games. Games in town. So [00:29:00] definitively a buyer market, but also one where. You know, buying sellers market, it’s tough when there’s a lot of pricing uncertainty and things have gone down. Um, particularly when you’re dealing with, um, inexperienced sellers that are private individuals, you know, it’s, it’s, it’s tough to adjust, right?
[00:29:17] They, they look at it and say, yeah, but hold on. Chicago license traded for 5 million. You know, that may have been a year ago. There hasn’t been a single deal since, and that value doesn’t make any sense whatsoever. And all the stocks in the index are down 70%, but they still think 5 million. Because one of the last things you want to do is, let’s say turn around and sell yours for three.
[00:29:39] And then some other sales, some other guys sell it for five. And it was the only asset you had at life. I mean, I, I understand the uncertainty, but prices are sticky. Um, I think what we’re seeing now is. Um, now more time is passing. I’m seeing this in Illinois. I’m seeing this in Ohio. I’m seeing this in other markets.
[00:29:54] Um, people are coming to the table, they get it, right. 18 months of a bear market is enough to convince somebody, [00:30:00] um, that, uh, that, that things aren’t, aren’t, aren’t as good. But on the other hand, If you’re getting stock, you’re getting my stock at today’s value. Not at, I mean, we traded as high as almost nine bucks.
[00:30:11] So it’s, it’s, it’s off. It’s awful lot. So I get this question a lot. What would you do if you were me? I get this from sellers, and I always say, well, don’t concentrate on the headline number. Like, you know the number that’s gonna be in the press release. Focus on how you’re getting it. If you’re getting it in stock and that stock can go, you know, two times, three times, four times, five x over the next few years, right?
[00:30:35] Think five, six years. That’s how you get really, I mean, that’s
[00:30:38]Bryan Fields: how you make money. Yeah. Also, uh, kind of getting outta the industry for those people who are fatigued, I mean, it, it makes sense for an alignment with a bigger partner like yourself, especially if you’re looking to exit. Unfortunately, uh, during turbulent times, uh, the prices have changed pretty drastically.
[00:30:52] So the valuation you thought you were gonna get three years ago is likely very different. So kind of continuing on that path. Are you taking it, are you
[00:30:58]Olivier Blechner: taking it in stock? That’s [00:31:00] a logic. Makes sense. You’re doing, you’re changing it and you wanna do it with a group, a company that you believe in, where. I think focus on management team and the quality management team is very important.
[00:31:11] What track records do they have of making good decisions and building things and, and, and exiting things and then seeing, and then I think you really have to think about, you know, keeping your money. You don’t wanna take your chips off the table now, there’s a horrible time to be doing it. Right. Keep them in there.
[00:31:26] Have other people, you know, have us doing the hard work. Take the stock, we’ll do the work and. You know, we’re, we’re certainly
[00:31:34] all
[00:31:34]Olivier Blechner: extremely incentivized to, uh, to, to, to find good things to do with this over, over the next few years.
[00:31:41]Bryan Fields: So kind of continue on the strategy standpoint, like in states like Arizona, where there was kind of like a land grab to pick up some of those assets, do those decisions of what your competitors do influence kind of accelerating positions in certain areas?
[00:31:52] If you wanna get, let’s say, into a certain region, but your competitors are hopping in, does that make your team feel more comfortable with overspending or kind of [00:32:00] competition? Doesn’t lead to, you know, irrational emotional.
[00:32:04]Olivier Blechner: Never comfortable with overspending. Okay. That’s, that’s, that’s, that’s one thing. I don’t know.
[00:32:11] I. Not really. I’d say the most wonderful thing is when you’re the first to do something and then you see your competitors come in and do the same thing and maybe at higher prices. That was our experience in Pennsylvania, for example. So we put our, our store portfolio together for, for, for much less. Than any of our competitors then have to buy them.
[00:32:31] We bought our GP for a much lower price than our competitors did after us. That feels pretty good. Um, you know, it’s nice to have other smart companies in the space validate your, validate your, your, your thesis when it came to Arizona. So maybe this is a distress thing. You know, Jim has that, Jim has that John Barrack, our president, came, came out of that industry.
[00:32:54] You sort of, you pay attention to what the crowd. does Because you have [00:33:00] to, and you could be wrong with your thoughts. You have to be open to, to that idea, but you don’t do something just because everybody else is, is doing it. You, you analyze things on, on their own merit. Arizona’s actually really good example, so for years I was getting calls about Arizona.
[00:33:16] And every time an Arizona business was shown to us, it was, I don’t know. I’m making it up. I’m gonna be directly correct. Let’s say the industry deals were getting done at five and a half, six times. This is like before the spare market. Arizona was eight and that’s it. Quite Arizona assets, so, so, uh, so, so expensive.
[00:33:35] I remember one specific conversation with a broker up that I, that I really like. He said, cause it’s Arizona and I’m thinking, You know, deals for banks in Portugal and real estate companies in Dubai and I dunno, telco companies in Argentina. Things really are that different. Just cause it’s Arizona. I dunno why, why would be, why it would be any different.
[00:33:55] I think if you looked at it, it’s okay. You had a couple of MSOs that were really determined to get [00:34:00] big in that market and you know, Can you pay up a multiple for your marginal sixth or seventh dispensary to build out your position and finish it up? Of course you can. It makes sense for them. Does it make sense for me to buy my first one at a, at a, at a, at a, at a huge price?
[00:34:17] No. And by the way, we look at Arizona, it’s a, I’d say it’s a, it’s a blood bath. Everyone, everyone came in. I think everyone paid a lot of money, and that’s super, super competitive. So almost like everyone doing it is, is maybe. Anything. It’s, it’s more of a turnoff than it is a, a turn on. We’re just, we’re very data driven.
[00:34:38] We’re very analysis driven. We do not want to overpay. Um, we do not want to take on risk that are, you know, where the payoff just doesn’t make sense by comparison to the risk. I think that’s why shareholders and debtholders have entrusted us with, with capital in the first place. So, yeah, you luck, but you don’t let it inform your strategy and, uh, [00:35:00] I’ve never once lost even 30 seconds of sleep over not being in Arizona, no daylight savings.
[00:35:09] Nothing against Arizona or Arizona. By the way, if a, if a great thing came along in Arizona, would totally look at it.
[00:35:16]Bryan Fields: I feel like the headline, tomorrow’s gonna be Juy, Juy acquires a company in Arizona, . This is just like piece out. So Oliver, one of the things that fascinates me most about m and a is that people get so excited about bringing two organizations together.
[00:35:30] And sure, from a behind the scenes standpoint, that’s one of the biggest challenges. But the real work seems to happen after developing the synergies of the organizations and letting the organizations kind of blend together, and then kind of having that true roi. Do you think sometimes, let’s say retail investors or our everyday individuals kind of forget that the real synergy takes time post acquisition?
[00:35:52]Olivier Blechner: Yeah. I, I don’t know if they forget or not. Maybe it’s not as appreciated. Um, but it’s part, it’s part of what we do. We have, you know, we have, [00:36:00] we actually have a whole team that’s dedicated to working on. There’s always beautiful corporate speak for these sort of things. Post-integration or post-loss integration, I think is the, is is the way to put that.
[00:36:14] But what it means is, okay, how do we all work together now? You know, what can we learn from you? What can you learn from us? And it’s really about bringing best practices to bear. And it’s also about finding more efficient ways of, of, of working. So over time, let’s say, you know, you acquire business. Um, in a, in a new state, and it’s got retail and it’s got a, it’s got a gp.
[00:36:38] I can tell you, for example, Nevada, you wanna, when, when we’re quite, you wanna integrate your POS systems, you wanna integrate the accounting systems. So they, they, they, they talked to each other. Um, there were some things they were doing on a growing side that actually was very interesting and we managed to learn from that and do it in some of our other locations.
[00:36:57] You want to bring people onto [00:37:00] your benefit scale, for example, right? You can’t have, um, worse or better benefits in one part of your organization versus versus, versus another. And when you acquire business, But by the way, we’ve done it all. We’ve acquired licenses. That’s very easy. You don’t have to deal with anybody.
[00:37:17] You have zero employees and you know, you build an app and you hire everyone. Um, but we’ve done two acquisitions, um, that had, you know, Massachusetts had over a hundred people and I forget what the number was in New Leafs in Nevada, but somewhere around that. And you have to do the work up front. Firstly, you know, we identify kind of the key people that we want to.
[00:37:38] So typically there’s a seller group and then there’s, you know, some of them are just, bye bye made my money. I’m gonna go off and do something else. They may actually have kind of checked that for a year or two that were part of the founding story, but maybe not their day to day. Then there’s key people are kind of there every day and they’re part of the fabric of the company.
[00:37:55] You wanna retain them. So part of the deal making is you do a deal with them to retain them, [00:38:00] um, and. We will send way before closing, we will send HR team and kind of senior leaders from, from each one of our teams for what I will call, it’s like town halls and q and a sessions, right? There’s a, particularly for the company that’s getting sold, there’s a lot of uncertainty for, for the employees.
[00:38:20] Am I still gonna have a job? Who am I reporting to? Um, what will my benefits be? I mean, there’s question upon question upon question. I think a lot of, a lot of the. It’s predicated not just on picking the right assets, but you gotta get the soft side, the people side of it. Right. So we were, we’re actually really proud our, our, our now Chief Talent officer, our chief people officer and Nicole Upshaw, uh, recently got promoted to that role.
[00:38:47] Before that she was our EVP of human resources. We made HR an executive VP position very early on here. Cause it really is a people business and we recognize that. So yeah, a [00:39:00] lot of the. Closing planning actually revolves around people and revolves around, you know, some improvements that we typically make to the facility.
[00:39:09] So, um, we like auto cures, we like wet, we’ll bring that, but we’ll also learn from others. So it’s, uh, there’s a tremendous lift that happens once you actually, once you close something. Have you guys made any acquisitions where the strongest asset for the business was
[00:39:25]Bryan Fields: the people?
[00:39:28]Olivier Blechner: No. But it was part of, but it was part of, you know, if you had to No, because in in chemistry you still, when we’re making acquisition, we’re still, but Massachusetts was to enter the Massachusetts market.
[00:39:41] We got a GP and we got two great stores. Um, one really fantastic store and one good store. Um, in, in New Leaf, we. Um, two stores in Vegas, a store in Tahoe and a and a and a and a and a gp. Um, [00:40:00] you don’t do those. Hmm. I gotta think about how I say this. The people are, because the people are very important.
[00:40:09] You don’t do it just because of the people. Okay. But you wouldn’t wanna have done either one of these deals if you stopped the leadership sock or the people socked, or you’d have to make a, it’s just, it’s just too much. It’s just too much change, um, to, to wanna do that. Right? You wanna basically come into something that is well run, unless it’s totally run down and the asset is great and you’re just buying it for, for that run down.
[00:40:34] Kind of, kind of price, but um, I’d say if there’s somebody that’s so great, you’d probably just want to try and hire them. . Yeah. It’s, it’s,
[00:40:42]Bryan Fields: it’s probably way more affordable to buy an individual than it is to buy multiple stores in a limited license state. I mean,
[00:40:48]Olivier Blechner: in 10, it’s one of the first deals we did was, uh, was basically a consulting business.
[00:40:53] Um, And, you know, we didn’t pay a lot for the, for the consulting part of it. Yeah, we paid some, but [00:41:00] really what we wanted is that became the core of our, of our operations group early on. So yes, we have paid money effectively to, to, to get great people. Um, that was, that was very, very early on. And there’s still, you know, that core team is still with us.
[00:41:16] Um, they’re like the, uh, they’re like the Navy Seals. We deploy them in every facility. Whenever we make an acquisition, they bring best, best practices from, um, they really are kind of our chief competency center and chief knowledge of, of anything cannabis. We have to do that right in the beginning. We’re a bunch of, when we started, I mean, we’re, we’re entrepreneurs, we’re investors, um, but we weren’t cannabis people.
[00:41:42] We had to get that, but not since.
[00:41:45]Bryan Fields: What’s the most misunderstood thing about JU holidays? I don’t know.
[00:41:54]Olivier Blechner: Good question. Hold on. What’s the most misunderstood thing? I [00:42:00] think the thing to keep in mind with us is a lot of what we’ve done is we’re very, very medium and long term focused. So Virginia, we’ve been, we’ve been investing for two years.
[00:42:14] And if you’re looking for kinda, if this year you were looking for immediate um, kind of results, we didn’t put that kind of money into Virginia because it’s just a medical market that’s very, very small. We did that cause we’re looking at January 1st, 2024. Um, we’re gonna be the only operator in an area of two and a half million people.
[00:42:35] By the way, great median household income skew, millennials, skews, can’t afford the product. It, it’s kind, it’s almost your ideal kind of customer, customer base. We did that in anticipation of that. So I’d say it’s, it’s understanding how much investment we’ve made into our core businesses, Virginia and Pennsylvania, into the gps and at 20.
[00:42:57] Is a huge transformative [00:43:00] year for us where, um, those investments should, should pay off. That comes in a number of ways. One is, um, when we didn’t have any gps, we weren’t selling any of our own products in our stores cause we didn’t have any of our own products. I think now we’re somewhere around 20% of retail sales are from our own brand of product.
[00:43:18] And that number has huge upside, right? I mean, there’s, there’s no reason why, why shouldn’t be, you know, 50% of what we sell. In, in our Pennsylvania and Virginia store, it shouldn’t be our own product. Maybe even. Maybe even more. When you do that, the margins get so much better, right? Growing it. It should be much better.
[00:43:36] We’ve put that much CapEx into it. Otherwise, if you could just buy it as cheap as you could grow it, you would just buy it. You wouldn’t put the CapEx into it. So it’s really understanding how much investment we’ve made in that 23, 24 goes out to big years for us. So I’d say a lot of investors isn’t just isn’t.
[00:43:52] Specifically a comment about TRU investors or cannabis investors? I think that’s true overall for markets. Um, investors are very, very short term focus. And you [00:44:00] look at the quarterly number and it’s, you know, you read a report that says, well, expectation was 7.9 million revenue. It’s got 7.7, it’s ais. And I’d say, you know, 7.9, 7.7, the same thing.
[00:44:13] But really what matters is, is a 40 in three years time. I’m making up these numbers, but you, you understand the point. I’m, I’m, I’m, I’m, I’m trying to make, it’s, it’s trying to get away. We understand it’s important for investors to get quarterly updates and of course we, we do it and we have to do it.
[00:44:27] We’re a public company. We chose to, to, to do so. Um, but it’s, you know, don’t look at 22, don’t look at 23. Look at 24. Look at what 25 could be. I think that. That’s really what’s important. That’s why we’re all in this. That’s when
[00:44:43]Bryan Fields: you start to see the ROI on those investments that you made. Long term.
[00:44:49]Olivier Blechner: That’s exactly right. Pennsylvania. Here’s what you need to look for. Virginia, opening up adult use, Pennsylvania, opening up adult use. That’s gonna be, that’s the [00:45:00] trigger for us.
[00:45:03]Bryan Fields: When you started your journey into cannabis space, what did you get? Right, and most importantly, what did you get? Oh,
[00:45:10]Olivier Blechner: um, well, me personally or ju either , I knew you’d say that. Um, so I’d say . Um, what did we get right or what did I get right? I mean, being in the space in the first place, I’d say that’s a decision that was right.
[00:45:30] Okay. Being there, being part of the game, being, being, being part of the group of people that gets to build both this company and the industry. I think that was, it’s a big decision to make for all of us when we, when we made it and feel really, really great about, about that decision. Um, I’d say, you know, one of the things that, that I, that I learned from Jim when I started in the hedge fund space is you wanna arrange your kind of investments in such a way.
[00:45:59] Hopefully you [00:46:00] have, like, you make a whole bunch of bats and then hopefully a few of those turn out to be way better than you thought. And you kind of let those, you let those ride, that’s what gives you the upside. And then when you, when you, wh. With small, recognize it quickly. You know, by the way, speed and agility and raising your hand saying, oops, there’s a problem.
[00:46:21] Very, very important. That’s how you avoid turning something small into, into a catastrophe. So we have a few investments that we’ve made that. That aren’t great. We, we want him processing license in New York. We did a couple, we bought some biomass. We tested it out to see if that would work. Okay. We probably sunk i’ll a.
[00:46:46] We didn’t build a facility that would’ve cost us 40 or 50 million to do so. We’ve made mistakes. Everyone makes mistakes. It just has to be part of your, of your, of your thinking. In the hedge fund days, I used to track that and [00:47:00] like a really good year, really good year was the year in which I’d get maybe two thirds of my decisions, right?
[00:47:05] That’s a really good year. So you have to arrange your life in, in a, in a way where you just know about a third of what I do, or 25% of what I do is wrong. But you don’t turn it into catastrophe. So yeah, we have a, we have a, we have a list of decisions where you’d look at it. Now, would you do it again? No, you wouldn’t?
[00:47:23] Did it make a difference to the company? Nah, not really. So I’d say we’ve gotten a few big things really, right. Our Illinois stores, our Pennsylvania positioning, our Virginia license, um, our, our acquisitions. And then, yeah, we’ve, you know, we pooped a few times, relatively small. So moon shots
[00:47:43]Bryan Fields: co. Shots. So before we do predictions, we ask all of our guests, if you could sum up your experience in a main takeaway or lesson, learn to pass onto the next generation, what would it
[00:47:52]Olivier Blechner: be?
[00:47:55] Spend more time listening than talking.[00:48:00]
[00:48:00] All right. Prediction. I say as I’m talking for 45 minutes. Hey, hey. That’s what we’re
[00:48:05]Bryan Fields: looking for, Oliver. Prediction time. With endless variables and challenges in cannabis, are we moving towards a major consolidation in the cannabis industry? If so, where? If not why?
[00:48:20]Olivier Blechner: I think it’s a question of of of what period, period in time. I think consolidation in, in the industry is unavoidable and, and makes a lot of sense, you know. Ask yourself this question, how many public companies does this one industry really need? Um, there’s a lot of duplication that comes with that, particularly in our industry.
[00:48:41] So, do you know, um, director and officer insurance Man, that’s expensive being public. It costs millions every year just to be public. Um, every company has compliance departments, accounting, um, legal BD teams. You know, how many of these do you [00:49:00] need duplicated across, across, across the industry. I think there’s a lot of smaller players that have, where the underly, the underlying assets in many cases, have a reason to exist, but the corporate.
[00:49:13] But why do you need like a single state operator? Why does that need to be, you know, it’s like the number 28 cannabis company in, in, in, in the us. Why does that need to be public with a stock that nobody looks at and, and it’s not, um, and it’s, it, it doesn’t trade in the first place. So yeah, consolidation I think makes a lot of sense.
[00:49:33] You need size, um, in order to be able to pay for all these extra costs. We look at two 80. You need to be able to raise money to, to afford that. I mean, what smaller players do is they just don’t pay it. I mean, guess how many, guess how many dispensaries I come across, particularly in California where we start looking at the balance sheet and we ask the question, have you paid your taxes?
[00:49:54] And then it’s like, well, what’s that? We don’t wanna , we don’t want, we don’t, we don’t wanna tell you. And it’s like, okay, [00:50:00] thank you. That’s, you know, that’s the, that’s the end of that conversation. Um, Consolidation has to happen. Um, I don’t know how many players are gonna be left. Um, it’s more than two or 3, 5, 6, 7 maybe, maybe something, something like that.
[00:50:17] I think that’s probably the amount that makes sense. There’s al there’s also gonna be continuing kind of ecosystem of, of private players. Um, but over time I, I think it massively consolidates. Um, was there was, it was a two part question. There was something about if I said yes, then you had a follow up.
[00:50:33] What was the follow up?
[00:50:36]Bryan Fields: Like, um, everywhere,
[00:50:37]Olivier Blechner: which, which, yeah. I mean, where, as in which state? All of it. Yeah. I’d, I’d say I’d, I’d, I’d say, I’d say all of it. He’s gonna get fairly consolidated, by the way, but there’s, there’s always gonna be opportunity for, for innovation and change. I mean, look at alcohol.
[00:50:55] People are starting alcohol brands now. There’s new tequilas every year. I mean, how many [00:51:00] tequilas do we need? I have no idea. But people are starting successful businesses, so, you know, consolidation happening. That doesn’t mean the world becomes corporate and it’s all corporate weed and you can’t have innovation.
[00:51:12] You know, if you come up with a great idea for a product or form factor or brand, there’s always gonna be, there’s, there’s gonna be space for that. But, you know, how many big companies or medium sized companies do we need? Maybe not as many as we have now. Um, I’m, I’m pretty sure about that. Callen.
[00:51:28]Bryan Fields: I just wanna quickly just
[00:51:30]Olivier Blechner: highlight the industry we’re working in, where you are
[00:51:33]Bryan Fields: looking for acquisitions and one of the questions.
[00:51:36] Did you pay your taxes? Right, ? Like what other industry is like
[00:51:41]Olivier Blechner: part of your checklist? Like, okay, do you pay your taxes? Like what? Well, it’s, it’s always part of the checklist by the way. But rarely, if the answer is openly, I don’t Right. ? Um, as far as consolidation goes, I think it
[00:51:58]Bryan Fields: has to happen. I [00:52:00] think that it’s the only way you’re gonna
[00:52:01]Olivier Blechner: create operational efficiencies.
[00:52:03]Bryan Fields: Allow
[00:52:04]Olivier Blechner: for the ROI from the massive amount of capital that’s been invested into infrastructure. Um, I think that’ll probably be
[00:52:12]Bryan Fields: five to 10 players globally,
[00:52:14]Olivier Blechner: most likely would be my guess. I would, I would, I would bet maybe three to four just in the US and then you’ll probably see three or four large international conglomerates right OUTTA Canada and um, south America.
[00:52:27] But I think it’s the only way the
[00:52:29]Bryan Fields: industry. If you look at like
[00:52:31]Olivier Blechner: tobacco and, and alcohol, yes, there’s micro breweries, but for the longest time in the alcohol industry it was just a couple players building massive facilities in order to supply the entire country. Right? It, it wasn’t until recently where we had all these micro breweries and other, like smaller companies coming onto the scene.
[00:52:49] So I
[00:52:50]Bryan Fields: think it, it has to happen in order to create a healthy industry. What do you think? I think people get up in arms when they hear [00:53:00] the word consolidation, right? Like we’re talking about large MSOs who are vertically integrated in multiple states. Like that’s ridiculous, right? People should specialize in what they do best and allow the the strong to survive because small players can still thrive when industry has specialists.
[00:53:15] And I think as we move towards more specialists in certain regions, I think you’ll see smaller players still doing really well. Do they need to be public? That’s outside my wheelhouse and understanding how those things work out. But I think there’ll be opportunities for everyone across the map to really lock in on what they do best and allow for the bigger players to hone in on their skill sets as well.
[00:53:34] And I think at the end of the day, the people that benefit most are not only the internal people, but also the end, end customer who gets a better product at probably a more affordable price. Yeah, yeah.
[00:53:44]Olivier Blechner: Yeah, that’s, I think that, that I can really appreciate what you, what you both are saying and that focus on the customer.
[00:53:51] That’s really what, what drives a lot of these things, right? Or really should agreed.
[00:53:57]Bryan Fields: So Oliver, for our listeners, they wanna get in [00:54:00] touch and they wanna buy juicy products. Where can they find ya?
[00:54:04]Olivier Blechner: Well, you have to be a medical patient in Pennsylvania or Virginia or Ohio at this point, and you’re very welcome.
[00:54:12] At our Beyond Hello Stores, um, in Illinois, we’re in NA area and the Bloomington normal area with four fantastic stores called Beyond. Hello. You’re very welcome, Massachusetts. We’re called Nature’s Remedy. We’re in Millbury and in Kingsboro. Please come. Mention my name, nobody will know me, no . Um, you’re very welcome to, you’re very welcome to come.
[00:54:37] And in Nevada, um, we’re still operating under the new Leaf name, so three stores in the, uh, in the, in the Vegas area, one in Tahoe. And then we’ve got stores in California under the Beyond. Hello name in Palm Springs, Santa Barbara, and in and in Grove Beach. 36 stores in, in total and growing. [00:55:00] Awesome.
[00:55:00]Bryan Fields: Awesome. We’ll link those all up in the show notes, uh, especially the one where we should name Drop Oliver, when you go to the stores.
