California , if you can make it there, you'll make it anywhere Cannabis multi-state-operators (MSO's) are employing many different growth strategies. Frank Knuettel the CEO of Unrivaled Brands (OTCQX: UNRV) join Dan Humiston to explain their West Coast strategy. He discusses the challenges of consolidating California's fragmented markets and why becoming the dominate player in the largest cannabis market in the world is so important. Produced by PodConX MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Unrivaled Brands - https://unrivaledbrands.com/ Frank Knuettel - https://podconx.com/guests/frank-knuettel
California , if you can make it there, you'll make it anywhere
Cannabis multi-state-operators (MSO's) are employing many different growth strategies. Frank Knuettel the CEO of Unrivaled Brands (OTCQX: UNRV) join Dan Humiston to explain their West Coast strategy. He discusses the challenges of consolidating California's fragmented markets and why becoming the dominate player in the largest cannabis market in the world is so important.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Unrivaled Brands - https://unrivaledbrands.com/
Frank Knuettel - https://podconx.com/guests/frank-knuettel
an Humiston 1: . [00:00:00] Today at MJ bulls, we are joined by Frank Nautilus, CEO of unrivaled brands. Frank, welcome to the.
Frank Knuettel: Thanks very much for having me on.
Dan Humiston 1: Well, I'm glad that you could join us. We have a lot to cover in a short period of time. Unrivaled brands is a publicly traded MSO with multiple brands, cultivation, distribution, and retail. Let's start with the cannabis equivalent to the 800 pound gorilla, California. It's the largest market in the world.
It represents about one fifth of the us market. Why are there so few MSOC.
Frank Knuettel: Well, it's fundamentally , it's a harder state in which to operate it is highly fragmented. There's a more prominent historical illicit market. While the, a lot of the municipalities control licensing, it is unlimited in certain jurisdictions. So for, some of our larger brethren it's been easier up until now to focus on.
Limited licensed states primarily in the Midwest and the east coast. And to your point, it is one [00:01:00] fifth. It was the national market. It's the largest market in both the country and the world. And, I'm a big fan of the old Gretzky quote, despite not being a hockey player that you skate to where the puck's going to be.
And , everything points to California at some point. And because it's so fragmented right now, and there's a lower level of competitive pressures, we have an opportunity, to really build our platform out here at this point,
Dan Humiston 1: I agree with you a hundred percent. Everything starts and finishes with California since you've taken control of the company about a year or a month ago. You've really doubled down on what you call the west coast concept. Can you explain this strategy?
Frank Knuettel: Yeah, along with Oregon and maybe Washington and, potentially Colorado, three or four, the earlier states that legalized adult use and generally states that are more open competitively tend to be the ones that here to for the larger MSOE have avoided. So from our perspective it's not just [00:02:00] California, it's really the whole west coast.
And to that end, we have operations in Oregon as well. Brands, distribution cultivation, and think, that the thesis is very similar to that as California, where you have a more competitive market one that is, got a lot of historical cannabis culture and is likely to be the Genesis along with California as the, of the brands that ended up dominating across it.
Dan Humiston 1: Yeah, I can't, I you just feels like that's the direction you go and you talk about , how fragmented these two markets are. But if when you combine California and Oregon, they have a, almost 30% of the national footprint, but it are all, they're all a bunch of smaller companies, a lot of fragmentation going.
It seems like it's teed up for a roll-up as acquiring assets in these markets, sort of the centerpiece of your growth strategy.
Frank Knuettel: Yeah. So just as a historical example. And by that, like the last six months during that period of time, we we merged with umbrella and acquired silver streak and [00:03:00] peoples. And we went from a little over 5 million in revenues and few on 21 to 2 23 0.4 million in revenues in Q3 21.
, there's some organic growth there, but you know, most of it was by virtue of, I'm an a, and it, because it's so fragmented and the market is evolving so quickly. There's very considerable opportunities to bring on good brands. Good. Dispensary's at rates that are reasonable and certainly a lot of the smaller players are becoming aware that being part of a bigger platform is important part of their strategy.
and growth and path forward.
And it allows us , to bring up. No good pieces that compliment our business, whether it's geographically, for dispensaries or brands that feel product types that we don't currently have. And and at the same time generally bring on some pretty good people. It's a really I think a win-win opportunity for both the shareholders of [00:04:00] unrivaled, as well as the owners of some of the smaller businesses that joined our.
Dan Humiston 1: Yeah, it just seems like it's a great opportunity. I know a lot of MSO is loved the fact when they're in a limited license state that they have that minute. Going, but I think the competitive market, you you're better in the long run because you don't have that luxury of having the state controlling who your competitors are.
You, you have to fight it out. And , if you win to quote Frank Sinatra, if you can make it there, you'll make it.
Frank Knuettel: So yeah, I, I largely agree that, If you can make it there, I E California and Oregon, you can make it anywhere. And I think, one of the other really valuable points you made was, , the hardening that comes with the competitive pressure.
So for companies that operate in California, we have a higher level of competitive pressure in a fragmented market. So we have got to have better processes and systems we're scrappier frankly, , it's like if you're an athlete and you're training against , the best other athletes, you become better yourself.
And. If you're [00:05:00] competing and a limited licensed state, you don't have the same level of competitive pressure to hone your edge if you will. So I, not withstanding the fact that I think, California being the largest market is ultimately going to be a very substantial contributor to any national play. it.
also happens to be where frankly brands tend to be created. So if you look at the history of brands in the United States I think there's an old expression that brands are created in California and codified in New York or something along those lines. And in between the historical cannabis culture in California, the fact that we grow the best cannabis in the world here combined with the size of the market that, I it's a brand that wins the California market will.
The brand in any other state. So, when we do see legalization and interstate commerce I think the California company is because of the competitive environment they've operated in, are going to have a significant leg up on other players.
Dan Humiston 1: jump around a little bit. And let's talk [00:06:00] about branding. Obviously promoting one brand is the easiest way to build. Brand loyalty, brand equity, but your name suggests multiple brands. Moving forward, do you intend to have multiple brands under one umbrella, sorta like a yum brands did with KFC pizza hut and taco bell?
Or are you going to try to transition all your assets into one?
Frank Knuettel: We actually have four brands now. So we have our premium indoor grow we have outdoor grow. We've got various other edibles, Cabana and sticks certainly in Corova and Buku our sort of existing brand portfolio and they really tackled different components of the market.
And I think what we're going to continue doing is,, as we grow by M and a , we'll continue with the brands , we may acquire and, because they've already got established market presence in their niche. So, to the extent we bring on a product that fills a hole in our portfolio, but already has a following in that niche, we're going to keep it and continue growing it.
And, [00:07:00] ultimately we're going to expand our licensing program. So currently relicensing Corova in Arizona, in Oklahoma. And we've got to push this quarter to launch a licensing program for other states as Well, as other brands in those two states. So, part of a little bit part of the, the next step in our growth plan and evolution is we chatted about where the California brands wound up being a major player.
This is our next.
Dan Humiston 1: like I said, it works great for a young brands. A lot of companies have approached it this way and I think it makes sense. Let's talk about the next 12 months. Where do you see unrivaled brands over the next 12?
Frank Knuettel: Yeah, I think it's fundamentally, we're just going to continue to grow as we've been doing. We have holes in our product portfolio. We want to fill. So we've got a pretty robust pipeline of branded products that we're looking at big state in California and no retail presence in Oregon.
We're looking geographically as well to add dispensary. , I can't No state with any level of definitiveness, but I would anticipate would be bringing on some number more [00:08:00] companies this year that fill one of those two directives.
Dan Humiston 1: So , kind of a combination of of organic growth and some acquisitions are probably , in the mix for the next 12 months.
Frank Knuettel: Yeah. And then on the other, on the organic growth side we opened the people's downtown LA dispensary at the end of December. We'll be opening the people's Riverside dispensary and in March or April. And those were both dispensers that were in development. We acquired as part of the people's acquisition.
So we've got two new dispensary's effectively. Yeah, that will be contributing to revenue for this year on top of whatever acquisitions we may make.
Dan Humiston 1: That's exciting, exciting stuff. Frank we'll have all of unrivaled brand's information in the show notes, including their stock information. So if you're a west coast cannabis company looking to sell, or you're looking for a great investment, just click the links in the show notes. Frank, thanks for being on the show.
Frank Knuettel: Absolute pleasure. Thank you for having me.