Body and Mind Continues to Expand Its Cannabis Operations Through Winning Licenses and M&A

Exclusive Interview with Body and Mind CEO Michael Mills and COO Trip Hoffman

Multi-state operator Body and Mind (CSE: BAMM) (OTCQB: BMMJ) has fueled its growth in the cannabis industry through applying for opportunities in limited license states and launching those operations as quickly as possible. The Body and Mind team least spoke with New Cannabis Ventures in February, and since then, the company has continued to turn assets on across its footprint. CEO Michael Mills and COO Trip Hoffman checked in to talk about progress in each of its markets, a recently announced debt facility and plans for continued expansion. The audio of the entire conversation is available at the end of this written summary.

Developing Talent from Within

The Body and Mind leadership team remains fairly lean, with a lot of growth coming from within the company. For example, the company has taken assistant managers of dispensary operations and moved them to manage new operations as they open up across the Body and Mind footprint.

The company currently has 130 team members, and Hoffman expects that number could nearly double within a year.

Body and Mind Team Members


Over the past six months, Body and Mind has made significant progress in the Ohio market. The company won a dispensary license and a provisional production license when the state first opened for medical cannabis. It quickly opened the dispensary, and it just opened its production facility last month. The company expects to have branded products coming out of that facility shortly.

Additionally, the company is planning to put in a number of applications in the state’s new dispensary licensing round.


This summer, Body and Mind announced management agreements and the option to acquire two entities in the Illinois market. As the market moves forward and the company has a better understanding of what licenses look like in the state, it will move fairly quickly, according to Mills.


In the spring, Body and Mind began cultivation at its Arkansas facility. It will have its first harvest within about a month, which will mean Body and Mind branded products out on shelves soon.


In California, Body and Mind won a manufacturing and distribution license, and development continues there. The company opened its San Diego dispensary in the middle of the COVID-19 pandemic. Now, it is considering M&A opportunities in the state.

Inside the Company’s San Diego Dispensary


Last year, Body and Mind built new production operations in Nevada, taking production out of its cultivation building and expanding its canopy by about 20 percent. Now, the company is fully realizing the benefits of that expansion, according to Hoffman.

Inside Body and Mind’s Nevada Operations

Entering the Michigan Market

Body and Mind is entering the Michigan market with vertically integrated operations. The company believes that winning and developing licenses, though slower than acquisitions, is the better way to build shareholder value, according to Mills. The company entered Michigan with a dispensary license, which is under construction now. It is also building out its cultivation and production facility. The first phase will open approximately 20,000 square feet of space in the facility. Then, the company aims to use cash flow from those operations to build out the second phase of the facility.

M&A Outlook

While the company is bullish on license wins, it is also considering potential M&A. Body and Mind has an approximately $28 million run rate, and a single acquisition (cultivation, production or dispensary) could have a big impact on the top and bottom lines, according to Mills. The company takes a careful approach, considering the strategic and cultural fit and ROI of any potential deal. It aims to go deeper into its existing markets, and it is open to entering new markets via acquisition if the deal is right.

Debt Funding

Over the summer, Body and Mind announced the close of an $11.1 million debt facility. The proceeds will help the company to build out the expansion opportunities in its pipeline and to reach cash flow at those operations. Debt rates have come down, and debt could continue to be an option for Body and Mind going forward.

Investor Mix

Australis Capital made a large investment in Body and Mind in 2018, approximately 40 percent of the company at the time, according to Mills. Since then, Australis has divested ownership in the company; it had about a 16 percent stake in the company earlier this year. It sold about half of that stake to Toro Pacific Management, bringing its ownership in Body and Mind to less than 10 percent. This new investor has a long-term view of the cannabis industry, according to Mills.

Body and Mind has a few large groups and founders in its investor mix, but the majority of its investor base is retail.

Over the past year and a half, Body and Mind, as well as the rest of the industry, have had to change how they interact with investors due to the COVID-19 pandemic. In the past, conferences, in-person meetings and facility tours have been essential to introducing the company to investors. Now, virtual meetings have a much more prominent position in building relationships with investors.

Financial Metrics and Growth Outlook

While the pandemic has been a challenge, the Body and Mind team has been able to execute. Both its San Diego dispensary and its Arkansas facility came online during the pandemic. The company also reported a strong third quarter, with a 580 percent increase in revenue over the fiscal year 2020. Revenue grew 13 percent quarter over quarter, and its net operating income from the previous quarter was up 268 percent. Gross profit (up 55 percent) and adjusted EBITDA (up 133 percent) increased as well.

Developing its Michigan licenses, getting products out of the Ohio facility, leveraging the Nevada canopy expansion and the new harvest out of the Arkansas facility will help to drive growth for the company.

As it executes, the company faces the risk of delays, whether from a permitting or contract perspective. But, the industry is growing, the risk is lessening and each day takes the industry closer to federal legalization. In the meantime, Mills is pleased with how far the company has come over the past several quarters due to the hard work of the Body and Mind team.

New Cannabis Ventures provides a sponsored Investor Dashboard for Body and Mind.

Exclusive article by Carrie Pallardy
Carrie Pallardy, a Chicago-based writer and editor, began her career covering the healthcare industry and now writes, edits and interviews subject matter experts across multiple industries. As a published writer, Carrie continues to tell compelling, undiscovered stories to her network of readers. For more information contact us.

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