With Missouri on the verge of legalizing adult-use cannabis this November, the door could soon swing open for publicly traded companies to more easily enter the state market.
For Greenlight, a multistate operator with 15 medical cannabis dispensaries and roughly 150,000 square feet of cultivation and manufacturing space in Missouri alone, that means buttoning up strategic partners across the state in preparation for increased competition and consolidation.
Greenlight was founded by Missouri native brothers Jim and John Mueller in 2019, following the $70 million sale of their Nevada-based company, Acres Cannabis, to Curaleaf that year.
While Greenlight also has cannabis licenses in Arkansas, Illinois, South Dakota and West Virginia, the company’s roots in Missouri provide a distinct homefield advantage ahead of future reform across the Midwest, CEO John Mueller tells Cannabis Business Times.
Tony Lange: Is there really such a thing as “homefield advantage” in the cannabis space?
John Mueller: I think that the key for us is, one, getting strategic partners across the state so we [span] the whole state [with our] 15 stores, and then being able to be the second cultivator up and operating. Once you retain those patients and you treat them like they’re part of the Greenlight family, they tend not to move to other dispensaries after that. So, I think getting up and operating is really where the homefield advantage is, and then also knowing where the strategically located [opportunities are]. Something may look good on a real estate brochure, but there’s reasons why some of the locations that people pick are maybe not ideal for the cannabis industry.
Also, getting local approvals is key. You’ve got to have that strategic ground game, and that comes from relationships and having the right people on the ground ….
TL: Illinois and Michigan seem to take center stage with their adult-use markets in the Midwest. With just a fraction of the population, how can Missouri compete with the likes of those states?
JM: Obviously, the population dictates some of that. But I think the strategic [move] is looking at Illinois and how many people are heading east across the Mississippi River and look at what stores [there] are going to be doing versus now staying here at home [in Missouri]. I think our tax rate is going be significantly less. So, I don’t see people crossing the [state] border ever again, not that they should be to begin with, technically.
TL: How can Greenlight or other medical operators in Missouri, regardless of size, start preparing right now for the possibility of adult-use legalization?
JM: We follow our predecessors—everybody that’s converted from medical to adult use—and you look at population. I always estimate 2.2 to 2.5 times current run rate. So, if you’re a $400,000 store, hopefully you’re a million-dollar-a-month store after that. We kind of look at those dynamics, and then how do you break that down as your percentage of flower and edibles and concentrates, etc.?
The good news is we’ve got a lot of people [and] a lot of data before this that we can gear canopy [size] around as an industry. And a lot of people built out a significant amount of canopy here because when we did our application process, we had to tell the state [the size] we were going to do ... and the state basically held you accountable to what you said in your application process…. And most of those [canopies] were built out to make sure you won your application, and now those are matching up to what it looks like in an adult-use market.