Curaleaf and CEO Joe Lusardi goal to develop into the most important hashish retailer in america – Hashish Enterprise Govt

Like many others in the cannabis industry, Joe Lusardi, CEO of Curaleaf Holdings, Inc. (CSE: CURA) (OTCBB: CURLF) was a reluctant cannabis pioneer. That’s hard to imagine right now, as Curaleaf currently operates 34 pharmacies, 12 cultivation and 10 processing facilities, and focuses on densely populated, limited license states like Florida, Massachusetts, New Jersey and New York.

After graduating from Catholic University with a degree in finance in 1996, the native New Englander spent several years at the Department of Defense in Washington DC before joining Wachovia Bank and completing his MBA from Boston College. He worked at a variety of financial institutions in various roles of increasing responsibility at blue-chip companies such as Liberty Mutual, Fidelity Investments and Affiliated Managers Group before making the regulatory mistake at his private equity strategic finance fund firm, Massapoag the marijuana industry recognized advisors. He and a good friend, botanist Bill Goodfriend, decided to acquire a vertically integrated medical license after Maine passed its medical marijuana (MMJ) bill in 2009. Goodfriend and Lusardi wrote a business plan and application and received one if the first 8 MMJ licenses in the state and opened Maine Organic Remedies for business in 2010.

Lusardi began licensing in Massachusetts in 2012 and opened the state’s first medical pharmacy, Massachusetts Organic Therapy, in Hanover, MA in 2012, now operating under the brand name Curaleaf.

In 2015, Lusardi teamed up with the marijuana fortune he had built in ME and MA, partnering with investor and now Curaleaf chairman Boris under the Pallia Tech holding company he founded Jordan, founder of Sputnik Group who also owned one of 6 vertically integrated MMJ companies in New Jersey. The two shared a vision and goal of becoming the largest cannabis retailer in the U.S. and began expanding to achieve just that. With their public offering last October and a market capitalization of CN4 billion after being listed on the Canadian Stock Exchange, they now have access to the capital resources needed to bring the Curaleaf brand to all populous, limited-license markets (LLMs) to accumulate customers and revenue in the lucrative U.S. cannabis market.

Jordan and Lusardi are proud of the management team they have attracted and the diverse work experience they have brought with them, including Stuart Wilcox, COO, Jonathan Faucher, EVP of Finance and Chris Melillo, Senior Vice President Retail Operations, among several others Executives ongoing state and local operations.

Curaleaf currently operates in 10 states (they have applied for California permits and are waiting for it) and are largely vertically integrated, either directly owned by operations (97% of the asset gains currently go to Curaleaf) or they are in the process of converting minority interests to 100% Curaleaf holdings. Currently operating markets / states include Arizona, Connecticut (currently growing and processing but not currently retailing), Florida, Maine, Maryland (currently processing and retail only), Massachusetts, Nevada, New Jersey, New York, and Oregon Currently hosting and counting 34 retail locations. They are currently in the process of securing licenses in California.

When CBE interviewed Lusardi a few weeks ago, he told CBE that they would be opening a store for a week by the end of the year, bringing the total number of retail stores to 40 for 2018. In Florida, Curaleaf has opened 18 retail stores to date and will have their first, and this month’s harvest in the company’s new 250,000-square-foot greenhouse is growing this month. In Florida alone, 12,000 new patients were enrolled each month, and Curaleaf’s vertically integrated approach across the state and across the country is a huge benefit.

The company has focused on patient advocacy and education, customer relationship building and feedback to create a market-driven portfolio of products and services and the supply needed to meet demand.

The consolidation into one brand was quick through license gains and acquisitions. Lusardi estimates that the growth was 50% evenly distributed between the two processes. However, he sees that the consolidation options become more difficult as the company scales and that new LLMs should be introduced. CBE has heard from other industry leaders that prices for existing businesses in LLMs are getting ridiculous and do not justify the multitude of businesses that are searched for, and that the time to acclimatize cultures in acquisitions presents its own challenges. Curaleaf is fully focused on the United States in its current and future expansion strategy. As Lusardi points out, with a projected US market size of $ 75 billion, this is fertile soil.

As an industrial entrepreneur, Lusardi admits that Curaleaf made some of the mistakes, but confidently told CBE that he wishes they could clone themselves. The company takes great pride in the 100,000+ and growing unique medical patients they care for and, like its competitors at Columbia Care, believes they are more of a wellness than an adult game. Again, they will and will / will switch to adult usage as markets like MA, ME, CA and NJ (NV, OR are already active) offer huge revenue growth opportunities for the company and other states are sure to follow suit.

Just last week, Curaleaf experienced a setback when Pennsylvania destroyed all eight applicants for its medical marijuana research program. In a statement by Lusardi to the Central Penn Business Journal, he said, “We have been fully committed to this program for the past two years and plan to use all possible means to get this critical program off the ground.”

The recent public offer was urgently needed to continue Curaleaf’s rapid expansion plans. While the company was happy with how it did in a tough IPO market, they are somewhat frustrated with the valuation gap of Canadian companies that have gone public and where their shares are currently trading. As of Friday’s close of trading at $ 6.55 per share, Curaleaf is trading at a significant discount to Aurora, Canopy Growth, Cronos and Tilray and is in the same price range as Aphria, which was hit last week after the Hindenburg report was released. Cresco Labs, with a growing US presence, was listed on the Canadian Stock Exchange last week, trading at $ 6.55 per CN share last Friday.

They expect volatility in the cannabis sector to continue and US-based public companies to catch up on Canadian stock exchanges as the market realizes how overheated Canadian-listed cannabis companies are currently. They are confident that the financial markets will see the extreme difference in stock prices over time.

The company announced a share buyback program last week aimed at increasing shareholder value. The press release states: “The company is commencing the offering because it believes that the market price of its subordinate voting interests from time to time does not reflect the underlying value of the business and the future prospects of the company. The Company believes that at such times, repurchasing its subordinate voting shares for cancellation would be in the best interests of its shareholders. “

Like many of the top executives I’ve interviewed in the industry, Lusardi is confident that sticking to her strategy and executing that strategy will pay off for consumers and shareholders alike. He believes that Curaleaf is the most accessible cannabis company in the tightly regulated US market and that Curaleaf is ready to advocate a regulated and taxed cannabis industry. Ed Conklin, Senior Vice President Government and Public Relations at Curaleaf, is a founding member of the Cannabis Trade Federation (CTA) (created from the New Federalism Fund) and will succeed US industry leader John Lord of Livwell Enlightened Health as The chairman of CTA after his one-year term has expired.

CBE, as a publicly traded company, attended Curaleaf’s first quarterly earnings meeting last week to get an overview of the company’s current state. Strong retail and wholesale growth resulted in revenue growth of nearly 300% to nearly $ 21.4 million in the third quarter ($ 45.1 million in the first three quarters of 2018) and $ 25 million and $ 55 million, respectively . You count the ME and NJ nonprofit markets that you anticipate will move to for-profit markets in the not too distant future. Currently they only count the management fees generated by each state.

To date, Curaleaf has pursued a strategy of allowing it to control the supply chain and develop products and services to meet the needs of a rapidly growing consumer base, and it already has a presence or is about to become one of the largest markets in the Landes, California, and the largest east coast states where it is present in most of the currently regulated markets and population centers. One could argue that their portfolio does not currently have access to patients and consumers in CO, IL, and WA and they do not currently pursue MI because they do not fit their restricted licensing model or carry multiples that make no sense. In both cases, Lusardi and his team have built a sizable footprint with access to capital so that they can pursue and realize the goal of being the largest cannabis retailer in the United States.

Background information on Cannabis Business Executive

Name of the company: Curaleaf

Founding year: 2010

Ownership structure / operational units: Curaleaf Holdings, Inc. (CSE: CARE)

Leadership team: Boris Jordan, CEO; Joe Lusardi, President and CEO; Stuart Wilcox, COO, Jonathan Faucher, EVP of Finance, Ed Conklin, Senior Vice President of Government and Public Relations, and Chris Melillo, Senior Vice President of Retail Stores

Headquarters: Wakefield, MA


Industry segment / category: Producer, processor, retailer

Current markets / countries served: 11 states, 10 operational (Arizona, California (pending), Connecticut, Florida, Maine, Maryland, Massachusetts, Nevada, New Jersey, New York, Oregon

Number of locations: 34 Retail

Current number of employees: 957

Market strategy / goal: To be the leading US cannabis retailer

Income 2016:5 million CAD

Sales 2017: 25 million CAD

2018 Projected Income: CAD 66 million (CBE projection)

Expansion plans: Concentration on limited license states

Financing strategy: Went to CSE in November 2018 and just started a share buyback program.

Comments are closed.