Building a multi-state cannabis enterprise easy of the Mississippi Ascend Wellness Holdings is a vertically integrated cannabis company with operations in MA, OH, IL & MI. Abner Kurtin joins Dan Humiston on the BioTrack Cannabis Dispensary Spotlight Series to explain why non-vertically-integrated-dispensaries are at a disadvantage in many states. He also discusses their acquisition and future capital raising plans. Produced By PodCONX
Building a multi-state cannabis enterprise easy of the Mississippi
Ascend Wellness Holdings is a vertically integrated cannabis company with operations in MA, OH, IL & MI. Abner Kurtin joins Dan Humiston on the BioTrack Cannabis Dispensary Spotlight Series to explain why non-vertically-integrated-dispensaries are at a disadvantage in many states. He also discusses their acquisition and future capital raising plans.
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Abner Kurtin: [00:01:04] Our primary focusing on the transition to adult market adult use market is driven by sophisticated customers, quicker transactions, way higher transaction volumes.So we define our business as trying to get a thousand people in and out of a dispensary a day at our busy dispensaries from MJ Bulls Media.
Dan Humiston: [00:01:34] It's the Raising Cannabis Capital show. Hemp Dan Humiston in today's show is another chapter of the bio tracks cannabis dispensary Spotlight series featuring another dynamic retail pioneers journey to crack the National and International Expansion Code.
Dan Humiston: [00:01:59] They Raising Cannabis Capital we are continuing this month's track Cannabis Dispensary Spotlight series with Abner Kurtan, founder and CEO of Ascend Wellness Holdings. Abner, welcome to the show. Morning. Appreciate you taking time out during this craziness. Ascend Wellness Holdings is the leading private, multi-state operator currently operating in Massachusetts, Illinois, Ohio and Michigan. And you're fully vertically integrated company, meaning that you have cultivation, production, distribution and retail in all the states that you operate in. Can you give our listeners an overview of your dispensaries and some of the things that you're doing differently in your dispensaries?
Abner Kurtin: [00:02:43] Yeah. So we currently have licenses for 20 dispensaries and we have four open right now and we should have about eleven or twelve opened by the end of the year with one of the largest dispensary groups in Illinois with two stores. Those two stores are doing over a million dollars a week combined. We have one store in Michigan and we have a medical dispensary in Ohio. We are currently in the process of opening another five stores in Michigan. We have two more stores opening in Illinois in the fall. We are under construction on what should be the largest dispensary in the East Coast, a 16000 foot dispensary in downtown Boston, 16000 square feet.
Dan Humiston: [00:03:31] Holy smokes. That's awesome. And your Web site, it says you're focused on limited license and near-term adult use markets. What does it mean by limited license or near term adult use markets?
Abner Kurtin: [00:03:44] We think that the medical business is a tremendous business and obviously helping your patients. It's just not our business. Our primary business is focusing on the transition of this to an adult use market. The adult use market is driven by less sophisticated customers, quicker transactions, times and way, higher transaction volumes. So we define our business as trying to get a thousand people in and out of a dispensary a day at our busy dispensaries.
Dan Humiston: [00:04:13] I see. I see most of your stores are on east of the Mississippi. Is your plan to stay focused on this side of the country?
Abner Kurtin: [00:04:21] Yeah, we basically view that markets west of the Rockies are just a wasteland. There is so much competition in Colorado, Oregon, Washington and California in particular that we just don't view them as very attractive markets. That said, we know there's some great operators out there. There's going to be some winners of that space. But in general, they're tougher or less profitable markets.
Dan Humiston: [00:04:45] I see. I see, you know, another advantage that normally multi-location operators hand over single operators, you can leverage your economy of scale. But with all the different rules and Cannabis, are you still able to leverage some of your economies throughout your chain?
Abner Kurtin: [00:05:01] Because the supply chain and Cannabis is so narrow and so dislocated differently state by state, being just one part of the value chain is very challenging. The retail business on its own is just a very challenging business model. There are many states where the retailers make no money and there are some states where the retailers make a lot of money. Retail only stores are at the mercy of the wholesale supply chain. And then they also have the challenges of 280 taxes. So retail only is a pretty challenging business models. There's no question that Cannabis will develop like every other consumer product. But for now, that's just a very problematic business model.
Dan Humiston: [00:05:44] In most states you make a really good point. Cannabis is different in so many ways and the retail is another example of really rewriting the rulebook as to how sectors are defined in retail is defined completely differently and Cannabis in any new states, in the works or in the plans.
Abner Kurtin: [00:06:05] So we're currently doing an acquisition in New Jersey that we're pretty excited about. New Jersey is of close, I think 9 10 million people and has I think 9 or 10 stores open. So it's a very underserved market, very much like L and I came out of a long period of a Republican governor that was very outside the medical program. You now have a Democratic governor who's trying to expand the medical program and go recreational. So we think it's a very attractive market with good demographics in our first state, Illinois. The cap is 10 stores and we very much want either partner or acquire other retail assets to take advantage of our brands and cultivation assets around the state. Right now, we tend to be in the south western part of the state, closer to Missouri. We have one store in Springfield, a one store very close to St. Lewis. So we are looking at the other part of the state, obviously closer to Chicago.
Dan Humiston: [00:07:03] Take a short break to let you listen to a quick preview of our next episode.
Carlos Frias: [00:07:07] And in November of 2018, Mexico issued the regulations and we received twenty five product permits to export all of our portfolio of products into Mexico through our partner. So we've since then imported three shipments of products into Mexico and we're roughly in three thousand pharmacies in Mexico.
Dan Humiston: [00:07:24] Tune in on Easter Sunday to hear a special holiday encore performance with Carlos Frias from G.L. Brands. And now let's get back to today's show.
Dan Humiston: [00:07:37] You mentioned the acquisitions a couple of times, especially now with the challenges that everyone's dealing with with the crisis. Are you looking for opportunities to maybe acquire more locations?
Abner Kurtin: [00:07:47] Yes, certainly. We expect that over the next 12 to 18 months, over half of the companies in the industry will basically have significant financial problems. and/or liquidation. Our goal is twofold. One, to survive and then to try to find opportunities. We think over time there'll be some really interesting opportunities as companies are forced to make their best teachers or seek partners in a very difficult capital raising environment.
Carlos Frias: [00:08:17] Are there any plans in the future for your company to be raising capital?
Abner Kurtin: [00:08:21] Yes. So, look, we feel we're in a fortunate position in that we are currently cash flow positive by focusing on adult you states. We really have driven growth and profitability. We went from a million dollars of sales and I think last September to $10 million of sales in March. So we've grown tenfold and we are operating free cash flow positive after tax now. So that puts us in a very strong position. That said, we think that the idea of acquisitions at the right price in the right market can be very additive to the value of the company.
Dan Humiston: [00:09:01] And so we would be looking well, we'll have all of the Abner's information, send Wellness Holdings information in the show notes and M.J. dot com. So if anybody wants to circle back and talk to Abdnor about possibly acquiring your business or talk about investing, it would be a good way to start. Abner, appreciate you taking time out today.
Dan Humiston: [00:09:22] Speak with us. Good luck with this.
Carlos Frias: [00:09:24] Thank you so much.
Dan Humiston: [00:09:28] Today's show was made possible by the generous support of our sponsors, like all 36, the country's premiere blockchain payment processing platform that's providing dispensaries and its customers with a safe and secure payment option other than cash. To learn more. Go to all 36 dot com. Today's podcast was produced by MJ Bulls Media. The industry's premier Cannabis podcast network with original music produced in part by Jamie Humiston. I'm Dan Humiston and you've been listening to the Raising Cannabis Capital podcast.
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