Guest Post by John Downs of The Arcview Group
Grassroots Cannabis has quietly grown to have 61 total licenses and operations in 11 states with more than 340 employees, making the Illinois-based company the largest privately-held Multi-State Operator in the cannabis industry. At the Arcview Group’s most recent cannabis investor forum in Santa Monica on February 7th, Mitch Kahn, Co-Founder and CEO of Grassroots Cannabis, sat down for a wide-ranging conversation with Arcview Director of Business Development John Downs.
Mitch reveals that Grassroots is closing a private $60M convertible note round. The company has won 34 of their 46 dispensary licenses and believes winning licenses to be the most accretive way to grow value. Yet they are on the lookout for acquisitions, particularly in limited license states where they have existing operations but don’t operate with the same large scale as they already do in states like Illinois and Pennsylvania. While limited license states are most attractive to Grassroots, the company is keeping a close watch on California, searching for the right combination of assets and team to lead their efforts there.
Mitch sees people as the key to success in the industry and finding good people as one of his biggest challenges. He believes that most cannabis “brands” are really just products today, and discusses the importance of proper branding to long term success. He states that the quality of the software in the cannabis industry is not at the level it needs to be at and is directing resources towards addressing the problem, signifying opportunity for entrepreneurs developing software and data solutions. He also calls for more clarity on regulations for CBD, and believes that the next five years of growth of the CBD from hemp market will eclipse the pace of growth of the THC market over the prior five years.
Here is the complete fireside chat:
About the author:
John R. Downs is Director of Business Development for The Arcview Group. Prior to joining the cannabis industry in 2015, John was a Registered Investment Advisor for boutique wealth management firm, advising on over $130M for HNW clients, and participating in dozens of corporate finance transactions for small-cap high-growth companies.
He has been an investor in the cannabis industry since 2015, was formerly Entrepreneur-in-Residence and voted a “Top 3” mentor by the first cohort of cannabis business accelerator, Gateway, has sat on the California Cannabis Industry Association (CCIA) Legislative and Manufacturing sub-committees, and was a founding board member of the Minority Cannabis Business Association (MCBA). He graduated from UC Davis with degrees in History and Political Science, where he was an all-conference student-athlete. He lives in Los Angeles, where he enjoys hot yoga, reading, sailing, and advocating for free markets and free minds.