Robust management is the foundation of this MSO's success Competent management is essential to oversee the complexities of a national brand, unfortunately it is difficult to develop a deep management team prior to building a national brand. Jim Cacioppo CEO of Jushi Holdings (OTCQX: JUSHF) joins Dan Humiston to explain how they work through this "chicken and the egg" conundrum by staying disciplined and patient. He shares how a strong balance sheet and a robust management is allowing them to maintain an accelerated growth trajectory. Produced by PodCONX Raising Cannabis Capital - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Jim Cacioppo - https://podconx.com/guests/jim-cacioppo Jushi Holdings - https://jushico.com/
Robust management is the foundation of this MSO's success
Competent management is essential to oversee the complexities of a national brand, unfortunately it is difficult to develop a deep management team prior to building a national brand. Jim Cacioppo CEO of Jushi Holdings (OTCQX: JUSHF) joins Dan Humiston to explain how they work through this "chicken and the egg" conundrum by staying disciplined and patient. He shares how a strong balance sheet and a robust management is allowing them to maintain an accelerated growth trajectory.
Raising Cannabis Capital - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Jim Cacioppo - https://podconx.com/guests/jim-cacioppo
Jushi Holdings - https://jushico.com/
Jushi
Dan Humiston: [00:00:00] Today on MJ bulls, raising cannabis capital. We are joined by Jim catchy OPO, the CEO of juicy holdings. Jim, welcome to the show.
Jim Cacioppo: Thanks, Dan. I appreciate it.
Dan Humiston: Well, I'm glad You could stop by and give us an update. I guess I want to start off with talking about the public markets , cause a couple of years there was a lot of turbulence which scared a lot of investors away, but juicy holding is a publicly traded company, but you've maintained such a high level of investor confidence throughout.
Why do you think that is? , what do you do different that maintain that level of confidence?
Jim Cacioppo: You know what I mean? I think it's three things. One is we we have a great management team. We've always been a management first company. We started the company because we didn't think were a lot of great management teams to the industry. Number two we equate footprint, in Pennsylvania, Virginia, Illinois.
So it's very concentrated , in great states. And I think the third thing is we've done a great job of raising equity capital. So we've always been well capitalized. And so you'd never had to [00:01:00] worry about QC balance sheet or cash flows or whatever. Cause , we just were always very trust balance.
Dan Humiston: Yeah. You mentioned that the management , and, I listened to an interview you did on another podcast, and that was what really impressed me, was your commitment to management. I owned a large chain of retail stores throughout New York state for about 30 years. Hands down. The hardest thing was managing all those moving parts.
How is your commitment to management different than other cannabis companies?
Jim Cacioppo: Well, first I think that we. I think it's supported in all areas. So if you look at a retail store we, you have the retail management we just supplemented our retail team at the top level with the guy named Brenda Lynch,
and he had worked his way up over 17 years, half of anthropology. And then some other places too top, top retail guy. Very into cannabis. We're super excited. So we always see keep supplementing the team on the retail side, but the sort of financial management team as well, [00:02:00] that we've turned our budgeting and systems and being able to do cash controls, security comes in and, they have to make sure the cameras are working in it, making sure that fiber works cause you without fiber, you can't open the store because you need the security cameras to the record for the regulators.
And then of course, a regular. Folks making sure that store complies with all those sort of regulations. And then we have an audit team that comes in and looks at what, everything that we've done at that store to make sure we're complying with the regulations that you could cash controls. So it's really goes beyond just, having a store manager coming in and running the store it's multifaceted , across really the whole corporate.
Dan Humiston: Yeah. It's, some people would look at it and say, it's top heavy, but if you want to get to that level that you. It has to be because , there's just so many moving parts.
Jim Cacioppo: That's a good point, Daniel. It is top heavy. Now we have a lot of G and a, but it's not really top heavy because we have about almost a $200 million revenue run rate right now.[00:03:00] , and we built out the management team and, with rec coming in Virginia and PA and opening more stores expand the growth processors.
We're going to be for access to this size is already built out the management team. You really have to get the management team before you get to that operational level. So I would say that it's, was temporarily top heavy, or we're just inflecting paths, a point where you would consider it.
Gee, they're not covering their Jeanet cause we're clearly not positive thou covering all of ours.
Dan Humiston: Yeah, I used to call it like, no man's land. You had to have the team in place before you could get the stores open, but it was always a challenge. And then once. It became super scalable. And , I see that's where you guys are. I'm looking at your retail stores and I love the name beyond hello and I've seen on your website.
It looks like a super uniform, almost like a franchisable look. Is that an important part of your national stress?
Jim Cacioppo: Yeah. We built the look of the store and the really thinking about the customer, all the [00:04:00] different customers really focusing in on, what, older folks who go in my life, what women go into the store, my life and, and it's really sort of a natural color scheme.
Our sort of scope beyond just, the natural woods and the grays and Browns. But we also focus in on the spell of the store. We have our own center on counts banks to sell candles where we're allowed to,
and we have our own beyond hello radio. So this Orland sounds are curated. So it's this real customer experiential thing that we do to make sure that the experience the customer has and they walk into the store, it's just, fantastic every time. And of course we train the staff.
To be, get the customer out very quickly in and out if they want to be in and out, but also spend a lot of time with them if they need their handheld to learn about some new products or whatever it is that they do.
Dan Humiston: Hence the name beyond. Hello? That's great. It works. It works great. You're racing to establish a national footprint and there are a number of ways to do this. You can grow it organically through acquisitions or [00:05:00] through mergers. How do you intend to maintain this growth trajectory?
Jim Cacioppo: We have that strategy of really building out our licensed footprints, very, very methodically and, on a, really nice pace, I'm going too fast where we, throw up that's the words, or, A growth process. That's under scaled and not perfectly built out.
So Pennsylvania, for instance, we're just about to get the 18, which is the max that we own. And really right now, the most that anybody owns in the state and we're expanding our grower processor. I think. First quarter of next year out of all the stores open and we'll have the grow processor to a size where we had a decent wholesale business, or we could really feed about 30, 35% of our own needs and offer the customer other choices as well.
We're doing the same in Virginia. We're behind Pennsylvania. And we started building that one out later because the program started later, which is Virginia was a dual program. And that will start really producing again. The first quarter, the scaled approval process will be a small one operating and post dates.
And then, the stores there will [00:06:00] won't get open fully until the end of 2020. When the first order of 23 and those states are expected to go rack. I mean, Virginia is already in the books to go wreck on January 1st of 24, because they'll bring that forward to January 1st, 23 sooner.
And we think Pennsylvania, by the end of the year, you're going to see they're going wreck. So we really have to focusing on scaling up to do that both on our world process. And they can store orange stores, could handle the increased volumes. So we just have a tremendous amount of organic growth in those two markets.
And then what we do is we go into states that we really think are great, where we want to sort of build up. We don't feel pressured because we just have such a great core market. The other thing I didn't mention, we have four stores in Illinois that are possibly, top 10 stores in Illinois.
Just have a fantastic in Illinois and that's fully gold. And so then we go into these newer states, like Ohio is one, we have a girl processor and that we're looking to do retail. They're just putting out applications for more retail. You're allowed to have five. We think it's a great time for us to buy there because everybody else is, finished [00:07:00] by new in Massachusetts.
We are closing on a deal. We hope by the end of this month or early next month in Massachusetts, where we pick up two dispensary's and a great girl processor with fantastic. And then we're doing the same thing, like in Ohio doing that Nevada and California. So we just go into these states and we started acquiring critical mass.
We'd like our states. We don't feel pressure to grow super fast. We think we have sort of years to get the full footprint built out. And the good news is some of our best financed, best managed competitors. They're fully filled out almost surely. Where could they go? They're fully built that. GTI is getting pretty far along that frontier as well.
And Verano is as well. So when you look at those acquirers out there, there's 200 fewer of us competing with each other. So we love our positioning.
Dan Humiston: It's exciting. My next question was I was going to ask you what's the roadmap look like, but you did a good job of explaining it to us. , but you mentioned one thing that I just wanted to clarify. You mentioned that. You are doing some acquisitions. When you do those acquisitions,[00:08:00] do you convert them to your branding or do you stay with the existing brand?
Jim Cacioppo: Well, it's a kind of a combination of both, you need regulatory approval often to these things, and also you want to check to see how the customers feel about it. So we don't feel super religious about our brand that we have to go in and do it right away. But our goal is to do it in the longterm.
Dan Humiston: Okay. Well, that's good to know. I'll have all of gyms and GCs holdings information in the show notes, including their stock information and their ticker symbol. , I don't think there's going to be a better time to get into now because I just think the way the industry is going and the way you guys are growing that now is the time Jim, I appreciate you being on the show today.
Let's do this again.
Jim Cacioppo: Thanks, Sam really appreciate it.