TILT Holdings Heading in a New, More Focused Direction

TILT Holdings Heading in a New, More Focused Direction

A Q&A interview with the vertically integrated company’s newest CEO and COO.

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March 6, 2020

On Feb. 19, TILT Holdings’ board of governors officially appointed Mark Scatterday as CEO, removing the “interim” from his title, and confirmed Tim Conder as the company’s newest president and COO.

The duo both joined TILT in 2019 through acquisitions made by the holding company—Scatterday is the founder of Jupiter Research, a vape technology manufacturer, and Conder is the founder of Blackbird Logistics, a cannabis technology company developing distribution, delivery and customer service software. With their new titles confirmed, Scatterday and Conder hope to make TILT profitable by refocusing on the company’s strengths.

In this Q&A, the executives share the dynamics of co-running a company, what the future holds for its cultivation and retail assets, tips for cultivators and more.

(Editor’s note: This interview has been edited for length, style and clarity.)

CBT: How will the executive responsibilities be divvied up between both of you?

Mark Scatterday: We're really not operating a whole lot differently since I nominated Tim as my chief operating officer. I believe that was back in July of 2019. I've been interim CEO since May 10 for TILT Holdings. I was a former founder and CEO of Jupiter Research. We were acquired in January of 2019 then I stepped into the interim CEO role in May of 2019. In July of 2019, Tim stepped into the role as my chief operating officer and Tim and I have been working hand in hand with the refocus of TILT Holdings: cutting costs, driving revenue and just restructuring the company, so to speak. Just really focusing on some foundational and business principles: driving revenues, focusing on bottom line profits, cutting cost and the unnecessary spending and making sure there is proper allocation of capital.

With the board’s confidence I stepped into the role as permanent CEO. Tim and I have demonstrated that we've worked extremely well together, and I wanted him to give Tim a little bit more responsibility on the day to day and authority and therefore he is now president of a TILT Holdings. But as far as how we've been operating, anything different today than we've been operating in the last seven months, not a whole lot of difference.

Tim Conder: One of the best things about our acquisition and now working at TILT from my perspective has been working alongside Mark and his team. The two of us have been in lockstep for the past seven months. This is just a continuation and maybe crystallization of how we've been operating up to this point.

Like Mark said, we’re excited about the work that we've been able to do together and continue and we’re really, really happy that the board has confidence in both of us to continue moving forward. And from my perspective, I’m just excited to continue to learn from Mark and how he's built his business and really leverage those fundamentals throughout TILT.

CBT: In the press release that was sent out about your confirmed positions, it was also mentioned that TILT is foregoing its pursuit of Canadian cultivation licenses. Why is that?

TC: Our core focus is going to be on innovation and technology and the assets that we have today that really embody that core focus, Jupiter and Blackbird. That doesn't mean that we're abandoning these other assets. What it means is that we will not expand our reach into cultivation, retail and production. Rather, we may look for opportunities for divestiture of these assets or we'll continue to just leverage the cash that these assets make to grow the technology and innovation.

READ MORE: How Briteside Technology Drives TILT Holdings' Delivery Strategy

We want to be cognizant of the teams and operations that we've built over the past 17 months and of the success that they've had, but also be clear with the market and clear with the industry about what our focus is going to be moving forward. And that really goes for Canada and the U.S.

We're continuing the licensing process [in Canada] and looking at opportunities as to what to do with all of the licenses either in Canada or in the U.S. as it relates our new core focus.

CBT: We’ve been seeing a lot of change and shakeups at the executive level in the cannabis industry. What does that say about the current state of the marketplace?

TC: I think at a high level, it says that the industry is nascent, which we all knew. Anyone that has started a business knows that it's pretty infrequent that the way that you start a business is the way that that business continues to perpetuity. There oftentimes changes that need to be made in leadership or changes that need to be made in strategies or even changes that may take place on the board. And that shouldn't necessarily be viewed as a bad thing. It's businesses making real time adjustments to make sure that they're successful.

I think a scarier thing would be if nobody was making any changes. Because it's just not a real reality that everybody has the perfect team on day one.

CBT: Why do you think refocusing on technology is a better market for you versus expanding your cultivation or retail footprint?

TC: That's where our expertise is, right? Mark has built one of the largest cannabis vaporization technology companies in the world. And Blackbird is still the largest infrastructure and technology company in cannabis. That's where our knowledge base is, so that's what we want to focus on.

MS: We feel MSO [multi-state operator] market is pretty crowded and if we can be that support and that foundational technology to support all the MSOs and hold the category globally through technology and technology assets, you know, it's really what we feel is a great model moving forward.

CBT: With that perspective, where do you see the next bottleneck or pinch point coming?

TC: There's new hurdles that present themselves constantly. The vape crisis was a really good example of an unknown offense that is really going to change the way that operators do business. I think it's great to align focus on safety and ensuring that the consumer is having a safe experience.

The hurdles really are unknown, but from my perspective, the largest choke point will be federal legalization in the U.S. and what kind of effect that will have on the industry.

CBT: How does operating as a vertically integrated company with assets in cultivation, retail and in the technology sector impact how you manage your business?

TC: [Having plant-touching assets] was a function of how the business was initially formed. But I think one benefit that we see is that, from a technology and innovation standpoint, we truly understand the pain points of our customers.

When we were initially acquired by TILT, both Jupiter and Blackbird were really worried about the perception from our plant-touching customers that we were now competitors. And that's definitely not been the case. I think rather than being competitive, we are really learning what it means to be an operator in the cannabis space. You know, Blackbird has held cannabis distribution licenses in both Nevada and California, so we understood what some of the hurdles were in obtaining and maintaining cannabis licenses. But what we've been able to learn by operating cultivation, manufacturing and retail assets over the past year or so or you know has been a huge advantage to us in servicing our customers that are operators in the cannabis space.

MS: And as far as Jupiter goes, we have always focused on being our customers technology partner. [Being in the plant-touching sector] just furthers our ability to be the best partner we can. Our customer success is our success.

CBT: What tips can you offer cannabis cultivators?

TC: Diversifying strain offerings is great, but still high-yield, high-potency strains are continuing to sell the best.

MS: It's really focusing on what you do best and really being the best in your area of expertise and really focusing on that and providing the customer a great experience. So, don't compromise quality in every aspect of your business.