GTI Has High Hopes for Maryland – Cannabis Business Executive

Two weeks from now, Maryland will begin adult-use sales of cannabis for the first time and as with other states that have integrated recreational sales into an existing medical cannabis market, there is a great deal of excitement among existing retailers and other operators in Maryland about the shot of adrenaline they expect to see in their businesses come July 1. One such company is Green Thumb Industries (GTI), a whose vertical integration in the state includes four dispensaries, which is the maximum currently allowed.

Headquartered in Chicago, the publicly-traded MSO just opened its 80^th cannabis dispensary overall in Bristol, Virginia. Operating mostly under the RISE brand, GTI’s stores are spread across 15 markets in the U.S., supplied by 18 manufacturing facilities that produce GTI’s roster of brands, which include Beboe, Dogwalkers, Dr. Solomon’s, incredibles, RHYTHM, and Good Green. A smattering of GTI dispensaries still operate under other names, but the plan is to consolidate all of them under the RISE brand, according to GTI SVP of Revenue, Dom O’Brien, who spoke recently with Cannabis Business Executive about the introduction of adult-use sales in Maryland.

“RISE is our flagship retail brand,” he said. “That’s the brand we want consumers to learn about to become comfortable with coming to the store and have access to great high quality cannabis products, pricing that is competitive, and a wonderful customer service experience.” O’Brien previously spent almost two years at PAX before moving to GTI a little over two years ago. “I’m responsible for our regional business units, which, depending on the size of the market, are either a single state or a compilation of several states,” he explained.

Regarding the Maryland launch, O’Brien said the company anticipates a strong market and is preparing to meet increased demand. “We’re incredibly excited about Maryland,” he said. “We know that cannabis is a product that consumers want for both medicinal and recreational purposes, and it’s a historic moment when another state is taking a step against the immoral and racist war on drugs.

“In terms of preparation, we’ve got a great team there,” he added. “On the retail side, there’s a lot of work we’re doing to ensure that we take care of our medical patients first and foremost, and there’s a lot of work being done to help streamline the customer experience so that we can meet the increased demand that we’re expecting. On the production side, we’re ramping up production so we can offer the products not only in our stores but other stores as well. That means new jobs and a lot of hiring that’s being done and has been done.

“One of the great things about cannabis and about adult-use is demand goes up,” he continued. “So, we’re going to do our best to increase production to meet that increased demand and that means we need more budtenders working at the stores, and we need more folks working to manufacture more products. And it’s a great win for the state. In addition to the tax revenue, in addition to consumers getting a product that they’re excited about that helps them enjoy their life, we’re creating jobs and we’re proud of that.”

I asked O’Brien how the start of adult-use sales in Maryland fits into GTI’s strategy for the region and its overall growth. “We’ve seen a number of markets that we operate in make the transition from medical to adult-use over the past couple of years,” he said. “Obviously, Massachusetts is a bit more mature. We’re in Massachusetts, Rhode Island, and Connecticut. Rhode Island just made the change in December of last year, Connecticut just made the change in January of last year, New Jersey made the change from medical to adult-use in April of last year. So, there has been an acceleration of this move from medical to adult use on the Atlantic coast, which has been great to see.

“And these are markets that GTI has been in for a while,” he added, “so it’s nice that we already have those relationships with the medical customers, we already have our grow assets up and running. and Maryland is the next one. You do see a bit of a trend going from up north, down the Atlantic coast. Massachusetts was one of the earlier ones. So, Maryland is an exciting market for us to operate in. We’ve got really high-quality products there, and we couldn’t be more excited about the change.”

GTI also does wholesale business in the state, but keeps the precise amount close to its vest. “I can say that wholesale is a meaningful portion of our business, and we have a good mix between retail and wholesale,” said O’Brien.

The subject speaks to where GTO expects to realize growth in sales and revenue in Maryland, and whether gaining additional market-share is a part of the game plan. “We’re thinking more in terms of meeting the untapped demand of the adult-use or recreational consumer,” said O’Brien. “We always want to have as much market share as we can, but we are focused for this launch on making sure we offer great CPG products and a great customer experience at the stores. That’s going to keep folks loyal to our brands in our stores.

“And we feel good about our [Maryland] stores,” he added. “We’ve got stores in Hagerstown, Joppa, Bethesda, and Silver Spring, and we think there’s going to be consumers in all of those areas who have either been going to the illicit market and now want to buy a high-quality product that they know is safe, they know where it’s come from, and it’s been tested and packaged as a product, or maybe they’re folks who want to reenter the category; it’s something they haven’t done because it’s been illegal and now that it’s legal they want to try it.”

GTI is also counting on the strength of its CPG brands, which it goes to great lengths to make available in most if not all of its markets. “Most of our brands are available in most of our markets,” said O’Brien. “They’re not all available everywhere. Sometimes it just takes time to add a brand to every market. Beboe, for example, is not in all of our markets. We really want to focus on building that brand in Illinois and Nevada first, but most of our brands are in most of our markets.”

The company keeps brand partnerships to a minimum. “We don’t have a ton of partnerships with third-party brands,” said O’Brien. “Most of our brands are our own brands, and similar to how we have some legacy retail brands, we also have legacy CPG brands. When I say legacy, I mean a brand we acquired as part of an M&A transaction. So, in some of our markets, the company we acquired may have had their own brands, and in some situations we chose to continue to sell those brands.”

For each of its markets, including Maryland, consumer data and feedback is essential to deciding what goes on the shelves. “It’s incredibly important,” said O’Brien. “What’s nice about being a vertical operation is that we’ve got wonderful data, and we know what products sell in our stores. We also know how quickly they turn, and how quickly consumers respond when a new product is brought to market. We are looking at that data every single day.”

As Maryland opens up to adult-use and the sense of hope that brings, the industry has also seen some big companies decide to leave markets they no longer considered worth the effort. Does GTI have any similar misgivings about any of the states it is in? “We feel good about all the markets that we operate in, and it has always been a part of our ethos to ensure that we run a profitable operation in every single market,” replied O’Brien. “That is how we do our business, and it’s why we focus so much on each individual market rather than territories. To date, we have been fortunate that we’ve been able to do that, and we want to keep doing it.”

To that end, what’s next after Maryland? “We’ll see,” said O’Brien. “Progress at the federal level has been slow, but we’ve seen a lot of continued progress at the state level. Currently, there are a number of states that are in the process of evaluating things. We operate in Minnesota, which just passed adult-use, so we’re excited about that. We’re going to get into New York and adult-use, there’s a potential ballot initiative in Ohio, and at some point Pennsylvania is going to make the switch. We operate in each of those states, and we’re excited about all of them.”

But first there is the opening day of adult-use sales in Maryland. “All our dispensaries are going to be open at 8am,” enthused O’Brien. “We’re going to have ribbon-cutting ceremonies, we’re going to have music, we’re going to have balloons, and we’re going to have doughnuts for folks. I mean, it really is going to be a celebration, and I can tell you, having done this in a number of states, the vibe is not only from all the consumers who have wanted this for so long and are so pumped, but from the employees, many of whom work in this industry because they’re so passionate about it. It’s a festive event, and people realize that while it happens in a number of states, in every single state it’s really a once-in-a-lifetime experience.”