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Ethos Cannabis CEO Gibran Washington on Growth and Profitability

33 minutes reading time (6554 words)

Based out of Philadelphia, Ethos Cannabis is one of those rare beasts in the cannabis realm, a profitable multistate operator whose growth trajectory is up and under control, and whose ambitions, borne of discipline and focus, are seen by its team as relatively limitless. A vertical company currently operating in three states – Pennsylvania, Massachusetts, and Ohio – with 13 stores operational with the grows and manufacturing to support them, Ethos hired a new CEO, Gibran Washington, about a year ago to take the company to the next level. A Black CEO under the age of 40 is rare in the cannabis space, but as Washington explained to Cannabis Business Executive in a recent interview, Ethos identified his management experience and leadership skills and aggressively reached out to him, eventually wearing down his initial reluctance and finally convincing him to take the leap into an industry whose future is being created now. Once he agreed, the shift was organic.

“I think the transition into cannabis was probably a little bit more natural for me than most executives,” explained Washington. “The journey with me and cannabis started at a much earlier age than is probably socially acceptable, but I was about 10 years old. I have older brothers and siblings, so cannabis was always around, and my parents were more apt to allow us to consume cannabis than they were allowing us to consume alcohol, which was something that they didn’t believe was a good substance to partake in. So, cannabis was never presented to me in the same way that I think it was for most people. It was always somewhat socially acceptable. I wouldn’t say it was condoned in my house, but it was less frowned upon than other things.”

Gibran Washington, CEO

Cannabis was also relevant in more profoundly personal ways. “My father had cancer and used RSO,” he added. “He was a pretty big-time executive, and I got to see the medicinal aspect. A brother of mine also lost his life in the war on drugs before cannabis became recreational. He lost his life as part of the illicit side of the industry before it saw the light of day. So, I had some bifurcated experiences with cannabis. I saw an executive use it, be highly functional with it, and help him with the illness that came with cancer and prostate cancer, and then also saw my brother, who was highly educated, college degree and very smart, go into a business that was illegal, but was probably not as bad as some of the other ones, and lose his life. I didn’t look at him as someone who was evil or a bad person. He made decisions that I wasn’t going to make at the level he was going to make, and that maybe allowed me to shape the narrative around cannabis a little differently.

“So, fast forward to the opportunity today,” continued Washington. “When they approach me, the initial reaction was no when the recruiters came, because I was set on continually moving my food and beverage career as an executive down the road. Then they approached me again, and we had a little bit of a deeper conversation, and I understood that Ethos was more rooted in the medical efficacy of the plant, and they were the first in the country to do medical research, which was very interesting to me, because I understood the medical efficacy of the plant. And then some equity and some right numbers later, I decided to make the jump and join Ethos as the Vice President of Retail, with the full understanding from me and from them that I wanted to be in the C-Suite. And luckily enough, I guess I did enough disruption in my first year that within about 10 months I went from the VP into the CEO role, which I’ve been doing for a year at the end of August.”

What was it about Washington’s years of experience in food & beverage that so impressed them? “I think they went out looking for someone with heavy retail experience,” replied Washington. “Obviously, I have that in the food and beverage space as well as the retail experience I’ve had in my career. I think they were looking for someone with transferable skills, and once we got to talking, they understood that I wouldn’t call myself a novice or an expert, but I’m somewhere closer to probably an expert in cannabis in terms of understanding it and the use of it and all the different efficacies. So, meeting an executive with my experience in corporate America, and then my in-depth knowledge of the plant itself coming into this industry, I think they saw that it was a perfect combination that doesn’t normally happen. Especially in the industry right now, you don’t usually get someone with that kind of combined skill-set.”

Washington potentially could have entered the industry earlier, but his instincts told him it was too soon. “I’ve dabbled with the industry over the years,” he said. “My younger brother has a series of smoke shops, and he’s done CBD sales for years. I have been helping him stand his business up, and over the last 10-12 years I have been interfacing with a lot of people in this industry and the cannabis industry, and I just frankly didn’t feel it was right for me and what I was trying to do career path-wise to join such a young industry. I feel as though where we are today in cannabis, it’s professionalized itself a little bit more, and it doesn’t have what I would call the same negative connotation as it did years ago. So, for me coming into the industry, all of those things were coming into play. I saw over the last decade dealing with my younger brother that the industry was unstable, not in dispensaries, but just in the entire cannabis and hemp space.

Watertown, Mass. dispensary

“And I was also concerned about the negative connotations that come with working in this industry, and what that would do to my career trajectory as it moves down the road,” he added. “I felt that I’d gotten to a level in my career where the goal is to stay there forever. Obviously, I love cannabis, but if I ever did have to pit out, I feel that I’ve established myself on the corporate America side, so taking this risk is not the same for me as it would have been a decade ago. And I also don’t know if I would have learned the things that I learned that I’m now able to bring into cannabis in a way that is not a wrong fit for cannabis, because sometimes that corporate feel doesn’t fit the cannabis culture. I think the hybrid approach is perfect for where the industry needs to be right now, and I’m looking forward to seeing where it goes from here. That’s kind of the calculus that went into when and why, and of course I also felt that Ethos was the right professional type of organization to be a part of.”

Many companies at a certain place in their growth, when they might be stuck for one reason or another, bring someone new in to take them to the next level. Was that the situation here? “I think the journey of any cannabis company is many different phases,” he replied. “and the same individuals or mindset or mentality that you have in the startup is a little different once you have established it. We were at that transition point where we needed organizational design and instruction, we needed someone who didn’t have to focus so much on finding real estate, money, licenses, or lobbying, and more on how to run the day-to-day aspects of the business and grow it so that it can be scalable as we move the business forward. Ethos was really big into trying to go as deep as possible in the markets they’re in instead of some other organizations that decided to go as wide as possible and stay shallow, so they also wanted someone who had roots in the Northeast, which I do. All of my family is there. I was the first child born out of Philadelphia, but we still have homes in Philadelphia, so it’s still home to me.” Washington has a home in Tampa, Florida and a home in Philadelphia, and lives between both locales. “I do prefer the tax structure in Florida,” he noted.

When he got to Ethos, Washington also steadied the pace of the fast-moving startup. “There were a lot of opportunities when I got there, as you can imagine, with a company that is built from the ground up and acquired some things and built out some other things, and is moving at the speed of light,” he said. “I was able to give some calmness to the storm, some steadiness, some consistency, and put a real structure in both the retail and wholesale channels to build something that we can point to and say, ‘Okay, this worked, this didn’t work, let’s keep doing this, this and this,’ versus trying to reinvent what you’re going to try to accomplish every day.”

Vertical Integration

Ethos employs a vertical model in every state it is in. “When I got here, we had 16 locations,” said Washington. “We sold three of those locations in Maryland, so we’re down to 13 now, but we do have some additional growth. We’re currently building two more sites in Ohio, we have another site that we’re locating in Pennsylvania, and there are some other opportunities that we’re looking at.

“We prefer to retrofit instead of build-out at this phase of our growth, so we’re looking at several different markets right now, and we love limited-license states,” he added. “We’re excited about Ohio because of the potential growth there, and Pennsylvania, as they can continue to talk about going adult-use. And there are limited-license states in the South Atlantic or Atlantic region that are probably going to transition from medical to rec over the next several years that we’ll definitely keep an eye on. For us, the catalyst is, are you vertical, and is there something that’s going to add to our bottom line? We’re not trying to do three- or four-year buildouts at this time. If the opportunity presents itself and the market is small enough where we can grow with the market, it might be something we’re interested in, but we’re not looking at California, Oregon, Washington, or any place like that.”

Was he a part of the decision to leave Maryland? “I was,” he replied. “I was still going through transition at the time, and our former CEO, who is now our chair of the board, led up most of that decision-making calculus, but I was lucky to be in the room for the conversations. We wanted to be vertical in the state. We understood that it was going to be as advantageous as possible for us, both short-term and long term, and we couldn’t find the right acquisition target, so we made the calculus to leave the state temporarily. Maryland is definitely still on our radar. I know there’s a three- or five-year ban before you can sell businesses, but there’s always different types of structures and deals to be made. So that was the main reason why we left, and the best time to sell was right before [Maryland] went recreational, so we were able to recoup all of that initial investment and reinvest in other places and other grows, and another facility that was starting to build out.”

Similar to the experience of most companies, Ethos’s entry into each state took myriad forms due to evolving circumstances. “In Ohio, we bought two separate licenses, and the price made a lot of sense for us at the time in both of those locations,” said Washington. “We’ve won an additional two licenses there, and that’s where we’re siting the other two locations, so that was somewhat organic growth.

“In Massachusetts,” he added, “we bought it from an existing organization. They only had one site and a cultivation that was limited, and we built that out, so we were able to grow that footprint from one store to three. We used to have four, but we consolidated one of the medical licenses into the recreational footprint.

“In Maryland,” he continued, “we made that decision because when we bought Maryland from Mission, we got those three stores. We also got the three stores in the Northeast that we have in Pennsylvania, so it was really a six-store deal. But Maryland was the afterthought of that deal, because we really wanted those three stores in Pennsylvania. So, that is a perfect example: we went into Maryland because we wanted those additional three stores.”

Fitchburg, Mass. Grow

Ethos is a private company in a highly regulated and competitive environment, but it says it delivers positive revenue despite the tax burden of 280E. “From a financial aspect,” explained Washington, “we’re one of the few people in cannabis producing capital positivity for several quarters, so we have navigated the 280E obstacles pretty well. There obviously are ways that we can get better at managing costs and figuring out how to maximize our 280E deductions and cost of goods sold (COGS), but that’s always an uphill battle.

“The roadmap for us as an organization is to continuously grow out in our current footprint by continuing to expand our wholesale offerings, which right now are growing about 300 percent year over year,” he added. “We hope to continue that trend for the next year or two as we continue to build our footprint. I don’t think we were late to the game, but we were a little bit behind in terms of construction buildouts of some of our facilities. But within the last 60 days, we were able to get everything up to the level we needed to get to in terms of capacity and output. So, we are now looking forward to this upward trajectory of us continuing to be one of the largest regional players in the Northeast, and then we’ll move our way across the nation.”

Was that success the result of an innate fiscal discipline within the company? “You know, we come into an organization, we do some things, and we take something to the next level, but we sometimes forget about the people that stood this up, and what was their vision, what was their journey,” replied Washington. “Our former CEO, now board chair, and one of our founders, has a background with Ernst & Young. He is an auditor by trade. He does deals and understands finances innately, so he was the mastermind of putting us in such a strong financial position with his ability to finance us through debt servicing the right way, making the correct deals with a lot of the earlier acquisitions that we made. We do not have one leaseback in our entire organization, which is unheard of a lot of time in this industry. So, not only are we cash-flow positive after debt and taxes, but if we wanted to, we could raise capital through leasebacks overnight without having to go raise capital anywhere else.

“And we have not had to raise any money outside of our initial investors,” he added. “We’ve been lucky enough to have a group of very wealthy individuals who are financially backing us, and we do not need to go outside of our initial group of small investors to be able to raise any capital. Plus, I can raise capital without going to them by leveraging the assets that we currently have to raise capital for acquisition. So, we’re in a rare position where our debt and our equity holders are the same people, so we’re just in a different position than most organizations.”

Perfecting the Retail Experience

As Ethos expands its retail holdings, it is also in the process of creating a consistent experience throughout its chain of stores. “We’re going through remodeling now, and we’re reimagining what our space looks like,” said Washington. “Our newly reimagined spaces are definitely more open, more modern, and more chic. We’ve gone through our first remodel and will be going through another over the next 12 months.

“We’re also adding technology because we are understanding that the visual aspects to what that experience looks like needs to be modern age,” he added. “85 percent of our orders are online, so we put in a lot of infrastructure and building out our new websites to create a seamless experience where you’re limiting the number of clicks, and you’re able to get people to where they want to be and what they’re looking for.” The Ethos website now also sports an AI assistant.

“And when you’re actually in one of our spaces, no matter what state you’re in, we have a medical component to it,” stressed Washington. “You have access to consultations no matter where you are in our ecosystem, to be able to talk through questions you may have and how the product may interact with you and other medications you may be taking. So, we build trust that way. When you come into any of our stores, no matter what time of day, I would say the average is about a six-minute turnaround from the time you enter the door to the time you’re walking out the door. We have put a lot of infrastructure into creating a seamless experience in the front of the store, and we have also just launched a loyalty program to create some stickiness between us and our guests.

Watertown, Mass. dispensary

“That’s what we’re trying to do in the retail space to set ourselves apart,” he added, “but I think the big difference is our medical component, our consultation aspect, where we are still the educators in our stores. We’re also launching the first internship program in the country with a pharmacy school for cannabis, and we’re going to continuously show that we are a thought leader in this space.

“And lastly, we believe we are the community that we serve,” he continued. “We are active in all of our communities, and our initiative this year was to knit 200 community events by the end of the year, and we’re well on track for that this year. Next year, our goal is to have one community event per store every month to make sure that we are actively serving the community. Those are all the different pillars that we stand on to push this business forward. Some of them are revenue generating, some of them are trust generating, and some of them are just community equity aspects of how we look at the business in terms of the retail front.”

Has Washington noticed any consumer trends since his time in the industry? “I would hate to generalize anyone, so I’m just going to use broad numbers,” he replied. “I would say 10 to 15 percent of the ecosystem in cannabis is either a legacy user, informed user, or has some good knowledge of the plant itself. So, I would say 85 percent are following trends or are not fully educated about what they are getting and how the plant works. It gives us a great opportunity to try to continuously educate them, and for them to be able to understand what they’re buying and how they’re buying it.

“But regardless of what happens,” he continued, “we’re learning that that 85 percent uses less scrutiny between strains, and more scrutiny towards price. So, they’re price shopping. They’re going for the cheapest price for the highest THC, which I think is the wrong recipe for the history and the future of this plant. I think the majority of them are chasing THC and price. Eventually, hopefully, we’ll educate enough to them to understand that if they want the maximum benefits of the plant, you want all the minor cannabinoids as well as THC, and if you’re going into it for anxiety, for example, you probably shouldn’t have high THC. So, these are just some different elements that I think we have to shape as an industry and change, but right now, they’re chasing THC percentage and price.”

Ethos Brands & Branding

When it comes to branding, Ethos wants its product names in consumers’ heads. “We lean more heavily into the product branding aspect, because we think that is the stickier element with consumers,” said Washington. “Our products can be found outside of our stores, not just in our stores. We feel it’s more beneficial to focus on the product itself, and not necessarily Ethos as an organization, especially as we start to come out with more products in Q3 and Q4, and as we attach that with our research partnership with TJ U, it’s going to be more brand centric.

“In terms of product lines,” he added. “we have a few coming out based on research studies that we’ve already done. So, we have some high-ratio vapes for sleep, high-ratio vapes for anxiety, with minor cannabinoids and different mixtures in there. We’re also coming out with our edibles in Massachusetts, or trokies, as they’re called in Pennsylvania, and they’re going to be ratio-based as well. You’re not allowed to have edibles in Pennsylvania, so please make sure that’s very clear: there are trokies in Pennsylvania and edibles in the other markets. But the products we’re coming out with are going to be cultivated with a purpose in mind.”

Ethos has four main product brands: Eleven, Headliners. Meigs County, and Natural Selections, each with a distinctive identity, explained Washington.

Natural Selections is our premium brand,” he said. “It is the brand that we use in Massachusetts and Pennsylvania, and if you’re looking for the purest quality, that is where you would go.

Eleven Cannabis is our value brand but is still grown with the same craft mentality in mind,” he added. “That is the lower part of the planet and is something we machine trim, so it’s got as much love in handling as we do with our Natural Selection brand. That extends to our big products and process products as well. So, if it’s a distillate product, it is obviously something that we’re going to put our Eleven brand. If it’s a live product, it’s going to go on our Natural Selection brand.

Headliners is our preroll brand, made with your premium whole flower. We don’t use scraps. It’s a premium whole flower preroll, so it is a little bit pricier on the premium side, but it’s not a smoke that you will ever forget. Great impacts and great effects.

“And we just launched Meigs County Grown, which is our value brand in Ohio,” he concluded. “Meigs County brand is not going to be changed, because we are in the heart of Meigs County, and if you’re not aware, Meigs County – as it relates to the Midwest – was the heart of cannabis cultivation, and we’re the only grow in the traditional Meigs County up in the mountains. So that had a regional historical feel, and we’re going to ride that Meigs County brand all the way through, especially in Ohio, but there is a regional reference that you can attach to the Meigs County brand.”

I asked Washington to describe the research partnership with Thomas Jefferson University. “We were the first in the country to have a medical partnership with the research facility at TJ U, and that’s been a wonderful partnership led by Dr. Brooke Worster on the TJ U side, who also is a part of our organization as well. She wears both hats for us. She’s an oncologist by training and does a lot of research with her cancer patients but also on the opioid epidemic and opioid addiction. She was studying sleep, pain, anxiety for studies that we’re in the process of doing or are already done, and her team has written several white papers on the topics. So, we feel that we are with an organization that does believe in the medical efficacy of the plant.

“We fund the research,” he added, “so we are obviously financially invested in the outcomes of these studies, but we believe that this is what needs to be done as we continuously figure out what products we need to create to meet the actual needs of both medical and recreational patients, though we don’t really feel there’s much of a difference. You look at cannabis when it goes recreational, people are still using it for medical efficacy, and not to go out to the club and party. You’re probably going to need another substance to get you up and going for that.”

Equity in Cannabis

I also asked Washington about the state of accessibility and equity for minorities in cannabis, as well as his take on how social equity programs are being deployed, and the results thus far. “When we talk about this arena, there are two things I’d like to touch on,” he said. “One, you got the behind-the-scenes piece, which I can dive into here. But the other thing that I don’t think is talked about enough is the equitable access to cannabis. I think, as an industry, we really need to understand that in urban areas or lower income areas, dispensaries don’t usually exist, and I think there’s a huge benefit to having access in communities that traditionally have turned to harder substances or even, “lighter” substances like alcohol, where this can be a true alternative to some of the things that happen to those communities. That is a conversation that we can talk about for days and days and days.

“On the social equity aspect,” he added, “I think that there has been a lot of good faith effort put to people who are negatively or disproportionately impacted by the war on drugs and the war on cannabis to let them have a seat at the table. I think that on the retail front, that is one avenue, but it is still a hard ladder to climb when you don’t have access to additional financing, and you have predatory lenders out there who are giving you loans and deals that aren’t advantageous. I think that that is not the best situation for someone who may not be well versed in business.

“I think the other element is with a lot of these social equity funds, especially in Massachusetts, where none of the dollars have been given out yet, so what are they going to be able to do to stand themselves up,” he noted. “I would love if some of these state-level individuals would understand or take a page out of the airport industry’s book and allow for larger corporations to get some type of tax breaks by partnering with smaller operators and allowing them to still stay in charge of their businesses at a majority stake and allowing us to help prop them up. I think that the fastest way to help the social equity applicants and all these markets would be to allow the industry to support itself, but we can’t do that if we’re not going to get some kind of tax benefit by making that kind of concession and reinvest our dollars in another way.”

How does change like that come about? “I think it has to happen at the legislative level,” replied Washington. “The airport was federally regulated, so you have federal restrictions in terms of minority ownerships, and you have to have a DBE (Disadvantaged Business Enterprise), or a certified minority business, involved in these contracts at airports. They do that to make sure that the industry isn’t gobbled up by the big guys. If we do that in cannabis, and we turn into the Walmarts of cannabis, we lose the nuance in the plant, and we lose the creativity in the plant.

“The best weed will still be grown in a 10,000 or less square foot canopy,” he added. “I don’t care who you talk to, the smaller grow is better. Anyone will tell you that a smaller garden is better than a bigger garden. My grandmother’s tomatoes are better than the ones in the grocery store. So, I think that we have to be realistic about the opportunities that allow us to invest in the industry. And I think, from a selfish perspective, that we haven’t done enough about allowing minorities to get into the cultivation aspects. I think that’s where the true stability is, and we have positioned it so that we’re just in the retail fund. So, cultivation is where I would love to see more minority applicants and minority businesses start to stand themselves up.”

With a name like Ethos, one assumes the company intends to walk the walk. “Our vision and mission statements are pretty similar,” said Washington, “but our mission statement is making sure cannabis has an appropriate place in society, and that is who we are and what we’re going to be about. I mean, my predecessor walked the walk and talked the talk, and I’m doing my best to continue that legacy, running this business with high integrity, high ethics, and doing it for the right reasons, which again, is making sure cannabis has its appropriate place in society. So, we want to continuously extend our medical research and education to the larger population while running a business internally that values the individual to express themselves and they feel comfortable with an inclusive environment. So yeah, that’s our ethos, that’s what we believe, and we believe we personify that as an executive team and as leaders of the industry.”

NCAA & Cannabis

When we jumped on our call, the news had just broken that the NCAA had loosened restrictions on cannabis use for athletes. I asked Washington, a former college athlete, was his reaction was to the news. “Being an ex-college athlete, I was very excited for these young men and women and their ability to now get access to cannabis,” he said. “I have one of those not quite horror stories, but a not-so-good story about my life playing college athletics. I was given pills at halftime, sample packs for months on end. I had a bad kidney out of it all, because we were on so much for so long without a prescription ever written, so I think giving athletes access to high CBD products for anti-inflammation and things of that nature is really huge.

“I also think giving the athletes who may be dealing with any type of depression or any type of anxiety issues access to cannabis – instead of going to Big Pharma or alcohol, which a lot of college athletes go to because it’s so accessible on college campuses – makes sense as well,” he added. “I think giving them another way to de-stress is huge.

“I am disappointed that it’s just in the postseason and in the finals,” he noted, “but it’s a good step in the right direction. I think once it gets another year or so to normalize, they’ll understand that it’s not going to have a negative impact on the product that they’re trying to sell in college athletics or sports in general, and it actually has a lot more benefits than people being on all these prescription pills as they’re just trying to make it to the next game. Because one thing that all college athletes have to deal with is when the trainer or the coach comes up to you and says, ‘Are you hurt or are you injured?’

“It took me a long time to figure out the difference between those two,” he added. “If you’re hurt, you can play, but if you’re injured, you can’t play. So, you’re always asked that question, and you’re always in that mindset of trying to do whatever you can to be able to play. Now there is a better pathway for them to be able to get themselves back to playing by taking on inflammation. Inflammation is pain, they say, so if I can get rid of the inflammation with a natural or homeopathic approach, I think there are a huge benefit to the student athlete, and it doesn’t create an opioid user as soon as they get to college, which happens a lot.”

I also ran the other recent news by Washington for reaction: the not-so-surprising revelation that pesticide use is widespread in the legal California cannabis market. “In terms of our approach, we limit [pesticide use] as much as possible,” said Washington. “I want to say after week three or four, they won’t touch our plants. We use peppermint oil and IPM processes, so we don’t feel as though it is something that should be heavily used. We feel pesticides should be limited in the use of cannabis. However, we also are fully aware that the levels at which we’re allowed to use certain products is much lower than the food and beverage industry, and they’re consuming these products. But we do understand that there is concern about combustion with pesticides, and we are trying to limit the use of pesticides as much as possible. We also have to remember that this is a plant like any other plant, and pesticides were created for a reason. But this should not be something that is overly used and I think we need to put a limit in on how many weeks [during cultivation that] pesticides should be used.”

With our remaining minutes, I asked Washington about a few cannabis/hemp catalysts looming in the distance: rescheduling and the Farm Bill. About the former, he commented, “You really can’t go too far out. Are we excited about the announcement? Yeah, but we’ll be excited when it’s actually signed into law. But we’re excited about what this can mean for us as an industry, and for us specifically. It’s going to allow us to invest more in research and gives us some tax relief by investing so heavily in research, as we do every year. But also, for the industry, it’s going to allow for true research to happen around the plant. I think it’s going to continuously shift us in a direction that we don’t even see right now. It’s hopefully going to let us talk more about all the 170 cannabinoids that are in the marijuana plant and what they can do and what levels they should be used at.

“And over the next several years, as more research is allowed on the federal, regional, state, and local levels, and funding for real research with real blind studies and patients, I think that’s going to be hugely beneficial to the industry,” he continued. “I’m excited, because when you start talking about Schedule 3 and ending 280E, it’s starting to become more like a normal industry. And I think that the trajectory of the industry is going to be exactly where they say it’s going to be, about $30 or $40 billion in the next several years. I think it’s going to be well within that range, if not higher, because I see more and more people coming to cannabis for their solutions to a whole range of things, whether that’s your night cap move into a cannabis beverage instead of some glass of wine, or a vape of some sort, or if you were on pain pills, or if you couldn’t sleep, or if you had anxiety, or any number of other things that people are now coming to cannabis for. More and more people know someone who’s used it and it’s worked for them, so I think we’re in a good place to move forward, and we’re happy that legislation has finally caught up.

The Farm Bill is another story. “I’m not comfortable with what they’ve manipulated the Farm Bill to become,” said Washington. “I think that industry is dangerous. It needs to be heavily regulated. I think there are some good actors, and there are also some bad actors, and I think if some bad some people get sick, or some bad product gets into the marketplace, that will set the industry back several years by having something horrible happen.

“And if they are going to exist,” he added, “they need to be on the same regulatory authorities that we’re on. I don’t think it’s a fair apples-to-apples business analogy. They’re able to grow and not be tested and do things that we would do in a heartbeat, but we’re not able to because we’re so heavily regulated. If we’re going to have a cannabis conversation, we have to have a level playing field, and the Farm Bill, as Mitch McConnell says, is for rope, not dope. So, the fact that they backed into it this way is not, I think, the intent, and we’re in full support of a crackdown on anything that’s not coming on the regulated market.”

My last question had to do with any specific partnerships or assets the company is looking for. “We’re always looking to grow, and we’re always looking for acquisition opportunities where we can build the business with like-minded organizations that are going to add to our bottom line,” said Washington. “If I told you what it looked like today, I can tell you something different tomorrow, but we’re definitely in a growth phase. We want to grow quickly over the next 24 to 36 months in order to become at least a regional dominant player, and we have plans and hopes that we can be a national player over the next several years.

We have seen an increase in distressed assets for sale within this industry, often assets for going firms that are not bad businesses, but maybe the owners are just burned out. “That type of situation would be perfect,” said Washington. “We’re finding it all over the industry where there may be opportunities for us to grow in an organic way, buying something that already exists, not necessarily from dirt all the way up, but we feel like there are going to be distressed assets with a like-minded organizational philosophy that we can merge with and grow our business portfolio, and we’ll look at that. Or if there’s an opportunity for us to be a minority investor and support someone and give them some of our operational know-how, we’re interested in those kinds of investments as well.”

Would that include social equity partners? “Yes, we’re currently looking at social equity parties in New Jersey and Connecticut,” said Washington. “I’m having conversations around those now and seeing if it makes sense for us to partner with some of those as well. We would love if Massachusetts would allow us to do it there, and there have been talks of that happening, because it would be very easy for us to do with the footprint we already have versus trying to build the social equity from the ground up where they don’t have a space or a grow or a footprint yet. But we definitely would love to invest more in the social equity space.”

(Originally posted by Tom Hymes)


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