Green Thumb Industries (GTI) is one of the world’s largest cannabis companies. In two quarters of 2020, business has already doubled since last year. In May, GTI announced first quarter revenues surpassing $102 million, making them the first U.S.-based firm to reach nine figures in a single quarter.
CEO Ben Kovler, who founded the company in 2014, credits their large numbers and success to a relatively small focus.
“We start with the consumer. The business is built for the American consumer. That’s where we stick, and that’s where we see a ton of momentum,” Kovler said in a phone interview.
The American consumer is certainly responding well in the company’s home state of Illinois, where recreational cannabis brought in $100 million in sales in its first three months. Now, despite a rocky year ending with a massively important election, GTI is ready to expand in both its patient service and contributions to correcting the notorious unfairness of the industry.
Eye on Nevada: Essence Acquisition & Partnership With Cookies
Last summer, Green Thumb announced it had closed on the acquisition of Integral Associates, the parent company behind the Essence cannabis brand. Essence owns eight licenses in the state of Nevada, including the only licensed dispensary on the Las Vegas Strip. As part of the deal, GTI also gained control of Cannabiotix, a 41,000-square-foot cultivation and processing facility.
“We had three stores and are now up to five in Las Vegas. It’s gone really well,” Kovler said of the acquisition. Essence opened two new retail stores during Q2. But GTI’s crown jewel in Vegas is yet to come: In August they announced a partnership with Berner’s high-end Cookies brand that famously claims responsibility for the original Girl Scout Cookies strain.
The partnership with Cookies, which positions itself as a luxury consumer cannabis brand, represents a broader point in GTI’s strategy: teaming up with companies in the space that already have success
“We’re looking for acquisitions that create long-term shareholder value,” Kovler said when asked about GTI’s approach to the mergers and acquisitions that are so common in cannabis. “Some people buy businesses that are broken that they need to fix...we’re buying and partnering with leaders.”
Cookies is set to open its first store in Nevada on the Las Vegas strip in Q1 2021, while all Essence locations in the area will begin carrying signature Cookies strains, including Gary Payton and Cereal Milk.
GTI and the Drug War
Kovler also recognized that claiming the mantle of “American cannabis” may paint a bright and profitable future, but comes with a dark past.
“We’re not blind to the fact that we’re building a business in an industry that has put a lot of people in prison...essentially ruined people’s lives, and their opportunity for success,” he said.
Kovler described GTI’s new License Education Assistance Program (LEAP) in its home state of Illinois. LEAP is a pro-bono initiative to guide social equity applicants through the process of applying for a license, which is often confusing and time-consuming.
“Here comes an application from the state – nobody has any clue really how to do it, we have an edge. So we can help educate folks, put them in a position to be successful,” he said.
Once the state of Illinois awards its next round of social equity licenses – expected to happen in the next few weeks – LEAP will enter its second phase as an incubator to “help promote opportunity and success for new social equity entrepreneurs in the nascent cannabis industry,” according to a statement released by the company.
“That program will eventually transition from LEAP – which is license assistance – into actually a financial incubator...think of like a ‘Shark Tank’ situation where we can pick the most qualified entrepreneurs who are in need of capital to underwrite their business plans to help them enable success,” Kovler explained.
Green Thumb has already earmarked $1 million in capital for dispensary incubator program participants and $200,000 for craft grower participants. GTI will not retain any ownership in the businesses that participate.
“I actually think Illinois will be a leader [in social equity] and foreshadow other programs in places like New Jersey and Pennsylvania,” Kovler predicted. While the state has its share of challenges – exacerbated during the coronavirus pandemic – Illinois’ “three-legged stool” approach of restoration, reinvestment and inclusion of the communities most afflicted by the War on Drugs.
“We can’t control the external environment...what we can control is how we execute,” Kovler summarized. “So that’s been the key...just continue to deliver day in day out, setting a standard of excellence in trying to build a great American consumer brand, one day at a time.”