On March 2, Cresco Labs co-founder Joe Caltabiano announced that he had resigned from his role as president effective immediately, a decision that he says he had been considering and discussing with the Cresco team for a few weeks.
Caltabiano co-founded the Chicago-based multi-state operator in 2013, and said it is time for him to “step back and look at some opportunities that I’ve always wanted to pursue,” as his skillsets no longer align with Cresco’s future needs.
“My skills were very tied to the early success of the organization and building it and running into brick walls and overcoming obstacles,” Caltabiano said in an interview with Cannabis Business Times. “When you’re starting out in a start-up company, it is growth at all costs. You make a lot of decisions on how to drive growth within the organization, and as a company matures, it starts being less about growth and more about return on invested capital and how do you maximize dollars for your shareholders in the long-run. And those are very different skillsets and very different ideals that sometimes coincide but sometimes conflict.”
He said as a Cresco shareholder, he wants to be sure that every decision made is “for the best interest of shareholders of the organization.”
Caltabiano said he hopes to continue his role on Cresco’s board, but believes that the 1,800-person company operating in about a dozen states has good, stable footing and that now is an “opportune time” for him to leave the executive role.
“Any time you step away, it’s a difficult time. There’s never the perfect opportunity, but I felt like we’ve accomplished so many things this year with getting Illinois [adult-use] launched and closing on the Origin House transaction," he said, also noting the launch of Cresco's Sunnyside branded dispensaries. "All … that we’ve accomplished really put Cresco in a great position now and in the future.
“We’ve brought in an incredible amount of talented individuals from various CPG [consumer packaged goods] industries that know how to steward and shepherd a company through this next phase,” he added, noting recent hires from companies like MillerCoors.
Cresco CEO and co-founder Charlie Bachtell, who previously worked with Caltabiano at mortgage lender Guaranteed Rate, said in an email that he wishes his co-founder the best in his next endeavor.
"We’re sad to see Joe leave as he was a huge part of building the early foundation of the company,” Bachtell said. "This is sometimes what happens as a company matures past startup phase, but we have an incredible professional management team that runs things day-to-day, and we are in a really good place and well-positioned for the future. We wish Joe the best of luck in whatever he does.”
Although Caltabiano said that he has no specific plans moving forward beyond his desire to stay within the cannabis industry, he said that the “opportunity to acquire distressed assets” is what excites him about the industry.
“As I look at this industry and having a background in mortgage banking, and having watched the real estate and mortgage industries grow and bust and grow again out of the ashes, I feel like part of the cannabis industry is kind of in that ashes situation right now,” he said. “You have a lot of companies with great licenses in various markets, good team members and good footing, but for one reason or another I don’t know that they survive in their current form without new leadership, new capital being injected or without a new vision or strategy for them going forward.
“I feel like there’s this new opportunity to acquire distressed assets or be a part of rebuilding some distressed assets, that really excites me. As I look at how a lot of the fortunes have been in made in the U.S., the opportunities exist … as some of these companies have fallen on hard times, there’s certainly value investors out there that look at opportunities when the assets of the company is worth more than the current value of the company.”
When asked what he would miss most about his time at Cresco, he said leaving the team was the most difficult aspect of his decision, but he is looking forward to the next chapter.
“I’ve developed a lot of relationships there and watched people grow as individuals. And to see people start as interns and now run various divisions in the organization -- that’s hard. The people I’ve watched and grew alongside me while we were in the trenches together,” he said. “I think this plant is an amazing plant. We’ve only started to scratch the surface of what it can and will do. We’re truly only in the second or third inning of a nine-inning baseball game, and my goal is to stay in the industry, look for opportunities within the industry and try to bring value to whatever company or organization or opportunity comes my way.”