In this episode of Seed to CEO, Nicholas Vita, the CEO of Columbia Care, shares with MJBiz CEO Chris Walsh how he started in the cannabis industry with a mom-and-pop dispensary in Washington DC and now heads one of the biggest cannabis companies in the United States, present in 18 states and abroad.
- The importance of learning from the mistakes made along the way.
- How the company picked and won new markets.
- How he helped build a company that would attract investor capital to grow even further.
Who is Nicholas Vita?
Nick spent six years as vice president at Goldman Sachs and another 10 investing in the health care sector before even considering the cannabis industry. A friend mentioned the potential to him at a party, and his interest was piqued. He left finance and opened his first dispensary in Washington DC in 2013 and quickly expanded to Arizona, Massachusetts and other states.
Welcome to Seed to CEO, the podcast about making your way in the cannabis business. I’m your host, Chris Walsh, the CEO of MJBiz.
In this episode, I’m speaking with Nick Vita, the co-founder and CEO of New York-based Columbia Care. The company started by managing a small dispensary in Washington DC eight years ago. Then it opened its own locations in Arizona, and now it has a presence in 18 states, Canada and even Europe. It also trades on the Canadian Securities Exchange, and the company just announced a $42 million deal to acquire Medicine Man, which operates retail stores and a cultivation facility in Denver.
How did Nick guide Columbia Care from a small mom-and-pop to one of the largest multistate, vertically integrated cannabis companies? That’s exactly what we’re going to talk about today. If you have dreams of building a big company in this industry, you’re going to want to learn how Columbia Care did it.
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Hello, and welcome back to Seed to CEO. Thanks for tuning in. I’d now like to welcome Nick Vita of Columbia Care to the show. Nick served as vice president at Goldman Sachs for six years before working at investment firms focused on health care. He then attended a party in 2011 when the subject of cannabis came up, which piqued his interest in the industry and eventually led to Columbia Care, a company that expects to generate half a billion dollars – with a B – in revenue this year.
Thanks for joining us, Nick.
Thanks for having me.
I understand you grew up in Bethesda, Maryland. That’s where my father lives, and I spent a lot of time there growing up.
It’s a, it was a great place to be.
I’d like you to walk us through the major steps you took to grow from one dispensary and a cultivation operation in DC to one of the largest companies in the cannabis industry. Tell us about your operations today and what Columbia Care encompasses.
Well, it’s interesting. So Columbia today operates in 18 markets. The DC operation is actually not part of Columbia Care. It’s a business that Columbia Care manages. And it was the first sort of exposure I had to cannabis.
Honestly, it was a very challenging experience for a number of reasons. But you know, DC is a very small market, continues to be a small market. And it’s an interesting place to operate, because it’s the seat of the federal government. But the market around the country has taken some very different directions because you know, unlike every other jurisdiction, there’s no federal involvement.
So our first market was really … and our first dispensary that was open was actually in Arizona. And when that opened, it was a real eye opener. We had expected there to be, you know, lines around the corner like we saw on CNN. And as it turns out, there weren’t. That may have had something to do with being in Phoenix, Arizona, in the middle of the summer. But the fact is that it was it was a very sobering series of events that kind of, you know, allowed us to learn from our mistakes over and over and over again.
But the underlying thesis for the business was that we always wanted to have a reliable supply chain, we always wanted to have consistency of our products, we always wanted to engage with consumers directly so we could learn from them. And we always wanted to make sure that we had continuity of culture, because our view is that culture is very, very important, especially when it comes to compliance issues and quality of care and really understanding what the mission of the organization is. All of that ultimately led to our ability to raise capital to continue to expand.
And then, you know, having been the first employee, I can tell you that it was not always a straight line from the lower left to the upper right.
You’re in 18 markets, and what does that encompass? You have about 50 dispensaries, is that right?
So we have over 100 dispensaries.
Yeah, if you include the ones that are under development. And, you know, we just closed the gLeaf acquisition, which was a pretty meaningful acquisition that completed our, our network of facilities in the Mid-Atlantic. And so we’re fully integrated in every state. And so it’s a fairly vast, you know, sort of footprint across the country.
Absolutely. I want to back up a little bit. Let’s talk about this party you attended. You hadn’t seriously looked into cannabis until after it came up in a conversation at this gathering you were at?
Well, cannabis … this was back in 2011, and it really wasn’t much of a conversation to have. It only existed in Colorado and California. And the California experience was not particularly inviting because it was so complicated and so difficult to really figure out how, how it all worked out there and …
Unregulated or under regulated, it’s hard to say. But cannabis has always been part of the California culture and I think that, you know, it continues that way today. But it was, it was through a conversation I had with a high school friend that wound up becoming the catalyst for really thinking about cannabis as an economic opportunity.
But I think the thing that really stuck out to me was the fact that everything at that point was being thought of through the lens of medical. And so I thought about all of the things that people use cannabis for, whether it’s oncology or pain management, and I thought about the drugs that, you know, my own family members had been given to address some of those palliative uses and how much more important it might be or valuable or helpful it could be for them to have access to cannabis as a medicine. And that then became the foundation for our organization from the very beginning.
You slipped some cannabis cream to your mother, is that correct?
Well, I … so I convinced her to try it on her hands and, you know, it worked. When someone is dealing with chronic illness, like rheumatoid arthritis in this case, anything that could help alleviate the inflammation and the discomfort and improve of the dexterity of something that most of us take for take for granted without the same side effects, it, that is something that you, you really have to take a step back and marvel at. Because my thought process was simple, you know: If it was good enough for our own family members, and it should be good enough for anybody else. And if it’s good enough for anybody else, then it should be part of the mission. It’s part of the, sort of the DNA of the organization, responsible for providing access to those products.
When you started, did you have, did you have grand plans to be in this many markets? Or were you just kind of focused on a much smaller entry, and a much smaller plan? I’ve found that, you know, especially back then, 7, 8, 9, 10 years ago, most people weren’t thinking beyond one dispensary or one grow.
Well, you know, in DC, the plan was to build out in DC. And that’s the great part about the industry, you don’t really have the ability to expand outside of a market unless you have a completely different set of infrastructure and licenses. Now, for a variety of reasons, the DC business is still just in DC. And that has turned out to be the right thing, in hindsight.
But the reality is that, you know, looking, you know, what we had to do, rather than just sort of build a business in Arizona, we had to build a business on top of the built … the business in Arizona. So we actually had to build all the infrastructure for a national business before it existed. And that was a big risk, because it obviously exacerbated our losses and exacerbated our capital needs and exacerbated a whole range of things that were you know, done on spec.
At the time, people were wondering, well, why isn’t this market more profitable? Why aren’t you actually generating cash flow? And the idea was very simple. You know, when we built that in Arizona, and then we were licensed in other markets as Columbia Care, we needed to have a centralized sort of corporate overhead. And that overhead needed to be built out with the best professionals that we could find too. And in many respects, it was actually done well ahead of its need. And so we had burdened the business intentionally with a structure in order to prepare it for what we hoped would be explosive growth over the next eight years – which is really what we’ve seen.
So that was the game plan since basically day one?
Well, since probably since a year and day one.
A year and day one. Talk to us about Arizona, that was … you went into Arizona, and what year was this?
This was 2013.
- And you just said a couple minutes ago that you … the expectations, at least in the initial days after opening it didn’t match up to the reality what happened there.
I think that, I think with any new industry, you know, people’s hopes and expectations often get ahead of reality. And for us in Arizona, we were in two markets. One was in Tempe, and that location was great. Tempe is sort of in the heart of the Phoenix metro area. And the other one was in Prescott, Arizona. Prescott is a is a fairly small community, and it’s not a densely populated area. It was unclear how quickly that business would grow. And for many years, we lost money.
In fact, you know, if you look at Arizona as a business, and it’s all. it’s performing fine, but that wasn’t always the case, because you had a lot of regulatory changes that had to occur in order for the market to open up. And then on top of that, you had to have a lot of changes occur within the consuming population. It was a really fascinating time to be there.
Again, Arizona was an interesting market because you actually were awarded licenses not only to cultivate, but also to dispense. And so we had to build manufacturing and dispensing facilities, which came with very different problems, different people, different operational requirements, different capital needs. So it was a it was really learning by trial by fire.
Yeah, it’s hard enough just to pick up, pick one part of the industry to focus in on. Then when you’re vertically integrated, you’ve got to learn about all these different parts of the sector.
In December 2019, you told a radio station, I believe you’re talking about your earlier days. You said, “Everything that could have gone wrong went wrong. My girlfriend dumped me, my parents thought I was crazy. My friends thought I lost my marbles. And everyone I ever worked with told me I’d never get another job.” Can you, can you expand on that? Was that going into Arizona – that time period or before?
That was a sustained feedback loop that I received from the time I moved to Arizona to open up those businesses until the time, really, we went public. I think that even today, you know, we, we still don’t have access to the banking system. It’s, it’s still … there’s this disconnect with the federal perspective and the state law and regulation. You know, when I say cannabis, you know, people still snicker, there is a stigma to the job and to the organization.
And one of the great opportunities for us has been to be the people that helped prove everyone wrong.
But you know, when I say everything that could have gone wrong, did go wrong. I mean, I mean, you know, we had people who forged checks, we had people who, you know, tried to steal from the vaults, we had people who did everything they possibly could to get in the way of the business, because when you have a business that isn’t as stable as, say, the aerospace industry or Apple, you attract different people. And we happen to attract, you know, as an industry for a long time, people that they didn’t necessarily have the same type of training or interests that, that, you know, that you saw typically at a larger, more institutional environment. So we had to kiss a lot of frogs.
And, you know, that was a very painful, drawn out experience. And we learned from that, and that’s why, you know, the first major hire we, we actually took, was on human, the human capital side. And that’s why to this day, you know, human capital is at the heart of everything we do, because having the right people is the main factor that makes or breaks any organization, in my opinion. But, you know, especially one that’s as high-growth and capital-intensive as cannabis, that’s so highly regulated. You just can’t afford to have anything but the best people that you can find.
Let’s talk about that a little bit more. When you talk about human capital, making sure you have the best team, the best people working for you, what do you look for? And how do you ensure you’re getting those people?
It’s, it’s funny, I have this conversation all the time with people in and outside of the industry, you know. What do we look for?
Surprisingly, even you know, if you if you take what I just said, we’re not looking for people who have been in the same job at the same company for 35 years. We’re not looking for, you know, folks that have 25 years of experience at a big CPG group.
We need people who are innovators, we need problem solvers, we need people who can do things and are willing to roll up their sleeves and are not waiting around for someone else to make the decision. We need people who are high integrity, who are just as comfortable raising their hand to tell you something went wrong as they are telling you something went wrong, but they have a solution. And so that type of confidence is a very rare, rare skill set.
But ultimately, we need people who are committed to the mission. And the mission at every part of the organization is to serve the community, to the people who come through our front door. But for me to say that there’s a one size fits all, in terms of recruiting, I would say that’s just not the case. If you find a good athlete, they’ll perform well in any sport. But if you find a good athlete that loves that sport or just really loves to compete, I think you’ll end up in a better place.
And what we’ve really struggled to do – and what we continue to struggle with and, but what we’re getting much, much better at, is making sure that anybody who joins the company, at any level, has visibility on a career path, a way to actually build, build a successful kind of career across a variety of functional areas. Because we have such an unusually diverse business, across a variety of geographic areas, because we are so spread out. And that to me is really exciting because, you know, building a company today, and sort of doing it in a way that everyone is happy with, is different than building a company 30 or 40 years ago, because we really do have to care about the longevity of the relationships we have with the people we serve as well as the communities we serve.
Yeah, hiring can be a really big challenge in this industry. We’ve experienced it as well.
When you’re talking about your expansion and looking at other states, what … how do you approach that? Have you done it by winning licenses and acquisitions? I know you had a big (acquisition) in Colorado recently. Talk to us about how you analyze a market and the opportunities around it and how you make a go-or-no go decision.
One of the areas where we’ve been most successful and one of the things we’re most proud of is that we built the business organically. So we were awarded a number of licenses just by filling out the RFPs properly and by sort of presenting our case to the regulators. We were able to win licenses, commit our capital to building new buildings and developing those markets in the way we feel comfortable today.
We do engage in M&A as well. And we do have RFP processes going underway. We have all, you know, expansion programs in almost every single state. But what we do, I think, that maybe slightly unique is that we characterize and prioritize and assess every opportunity through a very consistent lens. So we look at a set of opportunities. And then we compare the relative value tactically, strategically, financially, operationally, based on the priorities of the organization. And that’s how we decide to sort of, you know, place one program or one investment or one acquisition ahead of another.
Can you dive in a little bit more on that, and maybe give it a specific example of a market that you found attractive and the reasons why?
Sure, so one of the most recent acquisitions we made was a million-square-foot greenhouse in eastern Long Island. We made that decision because we had applied for a DEA license, and we were going through the process, and the DEA told us we needed to separate federal operations from state programs. So we agreed to do that. And, you know, at the same time, it turns out, there was a discussion for adult use that actually finally made it across the finish line in New York.
So now we find ourselves in a position where we have, you know, one of – if not the – largest single cannabis operating infrastructure on the East Coast that can produce, you know, high-quality flower at a very competitive rate, comparable to any other grower in the country. And, you know, we’re in a market where you’re gonna see, you know, frankly, very, very high levels of growth. So for us to invest in expanding that million-square-foot facility and really preparing it for the inclusion of flower in the medical program, or the expansion of adult use, or making it available for social equity applicants to partner with us so we can help them get up to the what’s called the infrastructure curve and create a profitable business for themselves – that is something that will have enormous economic, political community effects that are very, very difficult to beat, just based on the fact that you’ve got a market that’s going from $100 million, roughly, to, you know, several billion dollars. So that’s one example of how we sort of thought about sort of prioritizing capital.
Another example would be the recent acquisition of gLeaf that just closed just a couple of days ago. That was a business that perfected our infrastructure and made us a leader in Pennsylvania, Maryland, Virginia and Ohio. Now, we already had leading positions, but it was a very important way for us to close the scale gap. So now we are the most scaled operator in each one of those states. And that’s something that no one else can count.
And then the mid-Atlantic is full of markets that are, that will be transitioning from medical to adult use. Virginia just announced, Maryland is expected to go next year, but perhaps Pennsylvania will join too.
And then we have an acquisition opportunity like TGS (The Green Solution), where we went from, you know, not being in the market to being the number one player in that market overnight.
And you know, we have 150 acres, and it’s, you know, over 5 million square feet of growing space in one location in Pennsylvania. I mean, that is, you know, unequivocally, I think one of the most scaled operations in the country. So if we ever see an interstate commerce, guess what, there’s no one better position than us to actually, you know, take advantage of that, because we have our infrastructure built out in Colorado already.
In the meantime, we have one of the most fragmented markets in the country, that’s very high growth, where none of the other MSOs are really paying attention. And we can, you know, I think, add a lot of structure and discipline to it otherwise, inherently, sort of highly fragmented marketplace.
How have you financed a lot of this growth along the way from the early days, up until now? Getting publicly traded opens new doors for getting capital, but can you walk us through how you approach that?
So in the beginning, it was really friends and family and our own money. There wasn’t a lot to go around, which is one of the reasons why we’ve spent so much time sort of filling in the gaps today. Because earlier on, we just didn’t have access to that much capital.
But now that we’re a public entity, we’ve seen a massive shift in a very significant level of interest from some of the world’s most important sort of financial sponsors and institutional investors. And so we’re very, very grateful for, you know, for that capital, because it allows us to find these opportunities that don’t have that much spectacular rates of return, but allow us to really prosecute on our mission.
And every dollar we, we saw to this point has a financial return, has an operational return, has a sort of community-based return. Some of, some of those measures are more quantitative than others. But it all factors into the way we think about deploying that capital. And ultimately, if you ask me, what makes the difference between a company that’s going to be a market leader and five years in, and sort of a very strong competitor today, it’s going to come down to the organizations that are the most disciplined at deploying capital and finding those diamonds in the rough and being disciplined stewards of other people’s capital.
And what are you seeing out there with other companies attempting to do the same thing? I’ve found that a lot of them don’t seem to … it seems to be changing, but a lot of them don’t seem to have a real strategy, and they’re kind of grasping at every bright, shiny object or new model. Are you seeing similar things among the MSOs?
There is now a lot of new capital coming into the market. One of the benefits of having a company that’s I think the first MSO … I mean, Columbia Care was, you know, involved in multiple states when, before most companies existed. The reason why it’s been easy for us to kind of stick to our knitting and kind of ignore some of the some of the noise in the marketplace, because we always kind of knew what we were and we knew what we weren’t. And we knew what we wanted to be.
There’s only one other company that actually has more markets than us, and very few that come close to the number of markets we have. So if you’re thinking about a call option on the industry, from a financial perspective, if you don’t have a real viable strategy and toehold in each one of those markets that’s sustainable, you just don’t have the same type of call optionality in your business, right?
Then I think, ultimately, the market wakes up and realizes that and begins to price people differently. So the, the fact that you’re seeing a lot of multistate operators go through sort of just very aggressive expansions to increase number of markets, to catch up to what we have, I think that that’s, that’s normal. And I think that, you know, to a certain extent, you have to have that, especially, you know, when we think about what happens when the U.S. government decides to normalize cannabis. If we can get access to the capital markets or the banking system, you can imagine what will happen to our cost of capital.
And at that point, then, you know, the real estate sort of the barrier to entry will be, do I have a license? Can I actually operate in that market? And do I have scale? So it’s about licensing and time, as opposed to capital, because capital will really begin to flow into the sector. So I think that’s a real competitive advantage to be where we are today, because we go from 18 to 25 markets very quickly, whereas other people are going from 10 to 12, or 12 to 14.
Well so, while we’re on the subject of capital and money and expansion, can you … a lot of our look, our listeners are looking to get into the industry, can you give an example or two of startup costs for a new market? And I know it varies greatly, depending on what you’re doing, and you have every market’s completely different in your approach. Can you shed some light on, you know, the differences that you’ve seen and how much it costs to enter a new market?
Hard and fast rules are always incorrect, meaning, you know, whatever I share with you right now, please take with a grain of salt, because it can always be done better, faster, cheaper. And that’s why, you know, we’re always sort of looking for ways to do it better, faster, cheaper. If you want to build a scaled cultivation facility that can produce high quality flower on a consistent basis year-round, you’re probably gonna spend about $160 a square foot, $150-$160 a square foot. Now you’re gonna pay a premium, because you’re in the cannabis industry.
But there are ways that you can kind of reduce that cost, but cultivation is without a doubt the most capital-intensive part of the business. Manufacturing is less so but you do have to invest in automated machinery in order to be competitive long term and in order to be scalable. Dispensaries, you know, depending on the market, you can open a dispensary from anywhere between $400 and $1,000,001, you know, in terms of just upfront cost to make it, you know, really beautiful and really pop and to make it differentiated in the marketplace.
But ultimately, you know, as important as capital, as you can make up front, you really have to understand the segment of the markets you want to pursue, you have to make sure you have the right products on your shelves, not just any products, and you have to make sure you have the right training for your people. So if you’re a wholesaler, you need to know what you’re making and why and who your ultimate consumer is. If you’re a retailer, same thing. But you know, the bright side is that there are no shortage of opportunities. I mean, the market is growing so quickly.
Are there any trend lines you see through that, that you say, these are some keys to success to winning a license? You know, regardless of state, this is what the people making decisions are looking for, and this is why you’ve been successful in that?
In general, we are, we have a lot, you know … I’m a nerd, we have 11 nerds on our team. We fill out paperwork well, meaning we follow the sort of the procedures and policies very carefully. We try to stay within the boundaries that were given to us. We don’t … we try to make as few unforced errors as we can. And I think that has helped, you know, us be as successful as we may have been.
We have lost a lot of states too, so we weren’t always successful. There are a range of reasons why we won or didn’t win. But I think if there was one thing that I would say really does matter, you have to engage locally. You have to have credibility with local decision makers. That means a lot of different things in each market. But you if you just show up, and you know, you’re kind of new to new to the environment, no one really wants to take a risk on you.
And so I think if we’ve done one thing right, it’s that we were willing to sort of take the time to introduce ourselves, to talk a little bit about who we are and what we do and why we do the things we do. And I think that ultimately did pay off because it helped us understand the communities that we were hoping to serve.
What about the reverse of that? So the ones you lost? Did you look back when you kind of do the analysis and say, “Oh, this, we might have done this differently or maybe this is why we didn’t get it?”
All the time. Unfortunately, we probably spend more time thinking about why and how we lost or how we could have lost rather than enjoying the wins. And I would say engagement is probably one of the things that was most common. Meaning, you know, we just showed up because we were in 15 markets, and we were, you know, an impeccable operating track record and history. That matters, but that’s not the only thing that matters.
What are some of the biggest differences you see, operating in all these markets, across them? I know a lot of people getting in the industry don’t really have a full grasp that, you know, opening a cannabis business in Colorado is a lot different than California. Where do you see these differences? Is it, is it the types of customers? Is it the people in the industry that you’re doing business with? Is it the regulations?
It’s … I mean, it’s literally everything. Our ability to find scalable overlap amongst the markets, it has been a very long process. There are things that we do, you know, from a record-keeping perspective, in one state that we couldn’t do in another, point of sale systems that we can’t use in some states, we can use in another. There are things from a marketing perspective we can do in one state we can’t do in another. It is as varied as you can imagine.
And that’s that that delicate dance between the different markets and understanding where you can find the synergies and where you have to just leave things independent. And frankly, redundant. That is not an easy thing to figure out. At least it wasn’t for us.
I think we’ve gotten better at it. But Colorado and California may be the two oldest markets, but they couldn’t be more different. You know New York and New Jersey may be next door neighbors, but they couldn’t be more different. It you sort of look around and it just, it really is that way. And so the irony is that the operators are … are really kind of the connective tissue that and the regulators are the connective tissue and the conversations that they have between one another for the regulations, the laws are so different. And even the consumers are different because of the regulations and the laws.
What are the differences that you see are the considerations in operating in a medical-only market and adult-use market from a business perspective?
It’s a really interesting question. It truly does depend upon the regulatory environment. So in some markets, you have THC caps. In some markets, you have product purchasing caps. In some markets, you have the restrictions based on qualified conditions. And obviously, all that goes away with with, with it, or most of it goes away with adult use.
I think at the end of the day, it really comes down to access and who is trying to access the marketplace. I think with adult use, you get the full swath of individuals in use cases. That means that this section becomes more complicated when you move from medical to adult use, because medical is very simple. When you have a … You can position yourself in a particular way. Because you know that the consuming population that you serve, the communities you serve are there for a reason that it’s very well defined. When adult-use transitions occur, the things that that make you relevant to the consumer may be slightly different, but the firm foundation will change, meaning you still have to provide value, you still have to provide service, you have to provide, you know, the highest quality products and the best selection of products. And you have to be consistently fair, which I think a lot of people have a hard time with.
So the basic business concepts hold true in both markets?
They do but you know, when medical, it’s uh, you know, you definitely have a higher frequency of, sort of, repetition. You know, a more predictable cadence to to when a consumer comes in, and you have higher basket sizes. So it does it does change.
But it doesn’t change, it doesn’t change the fundamentals.
I agree with that. In many states, we’ve seen patient numbers start to decrease a couple years after legalization of adult-use marijuana. Where do you think medical is going overall?
You just said that, you know, this is still an increasingly overlooked part of the market as everyone focused on recreational but it’s, you see a lot of opportunity there. How are we likely to see this unfold in the coming years or over the next decade?
We’ve always estimated that the adult use, sort of … Well the medical market’s roughly between 20% and 30% of the total market opportunity, which doesn’t seem like that much. But when you look at a market like New York, which is gonna be a $5 to $7 billion market, that alone is a billion-dollar-plus – a lot of money.
It’s a lot of good, right? It’s a lot of, it’s a lot of people that you can help avoid opioids, it’s a lot of people who can help avoid benzos. And so it’s for me, it’s not just about the economic opportunity, it’s about the human cost of not making these products available in a way that is relevant or acceptable by not only the the doctors but also by the patients. That sort of stuff really weighs on us heavily at Columbia Care.
But the fact is that it was easy for us to continue to push the medical narrative because it’s always been part and parcel of the theme. But I think that actually is what makes our consumer products even better, because we bring that discipline and that focus and that understanding and that compassion and empathy into the same sort of functional manufacturing processes in the same way we engage with consumers and adult use.
Columbia Care has been ramping up over the years. It’s lobbying for various legalization initiatives. There was a time in Massachusetts, though, that you guys lobbied against rec legalization. And now you’re, now you’re in that market and have a big presence. Can you talk about why you were opposed to that?
Yeah, I mean, I think that it’s, it’s really funny. So we were never against it, per se. We wanted there to be a very thoughtful and deliberate legislative review and process so that we would have a program that could stand on its own and really accelerate the conversation, not necessarily become a point of conflict for decision makers. Because when you go through a voter referendum, you don’t necessarily wind up in a place where the Legislature is happy.
What we saw in Massachusetts, even today, I mean, you know, … I’ll use our experience in Boston. We have been approved or pending approval in Boston for I don’t know how many quarters now. And we’ve been incredibly grateful for the support we’ve been given by the city of Boston about the CCC, but you’re supposed to be on the docket June 17 for final approval. And lo and behold, you know, they don’t have our fingerprints there or something like that. Well, guess what? My fingerprints have been with the city, with the state of Massachusetts since 2014.
So you run into these inconsistent, you know, these, these, these complexities, where from a regulatory perspective, when the legislators aren’t able to lead the process. And I think that’s where we had concerns.
And now … But the flip side is, you look at Virginia. Virginia is a state where the Legislature took the lead with the governor. And they introduced medical. They used it as a case study. They learned from it. Then they introduced adult use. That went through a very rigorous process with the legislature in both houses, as well as the governor. And now the regulatory authorities are going through it. But that’s a process that ought to be fairly streamlined.
So I think it’s really about, uh, it’s having been in the market, as long as we have, we have an appreciation. And we have a goal and an interest in seeing a sustainably viable program that actually invites capital that actually invites adoption that invites access and invites adherence to the compliance to the rules, regulations.
What is your overall kind of lobbying philosophy? I’ve picked up over the last couple years, there seems to be a growing resistance or even a resentment in some areas of the cannabis industry internally over the MSOs in general. And its people thinking, you know, these big companies are starting to dominate the markets, they’re pushing out others or mom-and-pops, gobbling up, you know, more and more companies, and like we’ve seen in every other industry, and also that they’re shaping the laws or that, especially at a federal level. I know there’s concerns that the big companies are going to dominate that discussion as we go down that path. I wonder how you respond to that. And again, what you’re kind of, you know, overall lobbying approaches, whether federally or at the state level?
Well, I think our number one priority federally is to make sure that the social equity programs that have been adopted and administered were or are being administered at the state level remain. I don’t I think that, you know, there’s always room and there was always an opportunity for miscommunication or misinterpretation.
But for us, you know, making sure that the markets are fair and free, and making sure that the political priorities and the community priorities are maintained, and actually embraced, and, and, frankly, turned into commercial opportunities for new applicants. It’s something we’ve actually led, led on in every respect. What we have done is tried to help everyone understand the importance of diversity, the importance of focusing in on social equity, the focus and the importance of taking this industry, of any, and using it as an example to really foster and develop those ideals.
I can’t speak for everybody else. Our business was, was a small business. It’s still a relatively small business. That’s all my money that went into building this business, and Mike’s money. And so and when we decided to commit ourselves to it, we knew we could lose everything. And so I don’t think there’s anyone better positioned to empathize with a small company and understands the the importance of, you know, maintaining the integrity of these state level regulations and rules…
Because you’ve been through it yourself.
Absolutely. I don’t think people realize this, but I used to run around, you know, New York City, trying to find ATMs that dispensed with $5 increments because we didn’t, I had less than $20 in my bank account. It wasn’t just a punch line. Like my girlfriend literally left me. You know, my parents, I was living on their couch. I mean, the things that we did we did to try to get this business off the ground is something that I think that it’s easy to talk about the hindsight, but the time it was, was pretty unsettling.
And so I have no interest … I mean that the greatest thing for me about this industry is that it is a real opportunity for for small players to come in, right?
Well, I want to get to two more things before we wrap up. I read somewhere that your philosophy on mistakes is you’re okay with them. And they’re actually good as long as everyone learns from them, which which I would completely agree with. We’re all gonna make mistakes. Can you give us an example of what you would call a bigger mistake that you or your team, the company made along the way and how you course corrected that for the future?
Oh, gosh, that’s, that’s like asking me to pick a needle out of a stack of needles. I think that yeah, I mean, I can, I can, I can point to one, and it actually has, … you know, I can point to 1,000. But I’ll point to one that really does stick out.
What people may find … So I remember when we, when we first started, the first big, the first million dollar investment we received was from a very successful gentleman out in California, and he said, “You know, when now … You’re not successful now. But if you ever become successful, that’s when your problems will start.” And what was interesting is that I had no idea what he was talking about. But what I will say is that the thing about this industry is that it attracts a lot of different people, some of whom will see eye to eye with you, some who won’t. But everyone will always have their own version of history. And what I would say is that the things that have come back to, I think, really proven to be problems are not necessarily what we did. It’s what we didn’t do.
There are only 24 hours a day, you know, so for example, if you do something for the right reasons, in hindsight, and you don’t document it properly, it can be turned into 1,001 different stories. So I would just say that the thing that people often forget about when you’re running a business is that everybody ultimately is an armchair umpire. And there are going to be people waiting on the sidelines to nibble away at your heels and try to basically undermine you at every step of the way. No matter how long it takes, right? That is it. And the more successful you become, the more likely that is to that is to materialize.
The thing that you have to remember is that the, the opportunity set that we all have is really second to none. It’s an, it’s an amazing industry and has … you can do such powerfully good things, no matter what happens in hindsight. You can think of 1,000 things that you could have done differently or 1,000 mistakes, just make sure you always have a very clear record of what you’ve done. So that, you know, you can stand on it.
And then the second thing is, you can’t you can’t focus and dwell on problems. And you have to make sure that you have an entity, so an organization that doesn’t do that either. Because you learn from those mistakes, you get better. And as long as you do the right thing, you know, sort of, you will ultimately prevail, and you will ultimately win, you just may take a few iterations to get there.
Great. Thank you. I’d like to end with federal change. What’s your, what’s your outlook? Do you think we’re gonna see something happen in the next year or two? And what might that look like?
You know, I think you do see federal change. I’ve never been a huge believer in comprehensive change, because comprehensive is a four-letter word in legislative terms. But I do think that we’re going to see incremental change, and it’s going to be very positive. And the great part about it is that any incremental change that we see for this industry is materially positive, because we have been sort of living in the shadows for so long.
So I would just … I don’t think waiting around for something to happen makes sense, because the industry continues to grow and thrive. But, you know, we are certainly building our business with the expectation that someday – maybe it’s not, you know, this calendar year, maybe it’s next calendar year – you see some form of normalization. And when that happens, you know, everyone is off to the races.
But it is such a complicated issue, touches so many things that, you know, we’ll we’ll have to keep our fingers crossed. But I’ve always believed that incremental expansion is the way to go. Because if you can do something incrementally, you can not only take new ground, but you can hold the ground that you take, which to me is just as important.
Excellent. That’s kind of how we’ve seen the industry develop over the years with these little incremental changes that add up to something big. So fingers crossed, we’ll get something good here in the next year or two.
Thank you so much for joining us. I really appreciate it.
Okay, and that concludes my conversation with Nick Vita of Columbia Care. Nick did a really good job early in our discussion of summing up a lot of the keys to the company’s success. They include learning from your mistakes, something other guests on this podcast have brought up as well, pivoting when things don’t play out as expected, which happens a lot especially in the early days when starting a cannabis company.
He talked about creating and controlling a reliable supply chain that allows for product consistency and direct engagement with customers. This is in fact why the company is vertically integrated in all its markets, and why for many years it focused on winning its own licenses rather than acquiring other companies.
He also brought up their focus on creating a continuity of culture and how the company’s backbone was truly on the medical side of cannabis. All of these created a foundation, or a DNA, that allowed the company to effectively expand and raise capital. As Nick said, “We knew what we were, we knew what we weren’t.”
The team also knew they wanted to eventually create a national business, so they had to start laying the groundwork for that very early on. Part of this included building a corporate infrastructure and bringing on high-level professionals that could manage and execute a larger expansion strategy. They did that well in advance of when it was actually needed, which did create some business challenges and a lot of extra costs, but it ultimately paved the way for their growth.
Nick also shared insight into how his company hires. Basically, they look for people who can innovate, who can roll up their sleeves and get things done without always being asked to and who can tell you when something goes wrong and come to the table with solutions.
When looking at expanding into new markets, Colombia Care’s strategy is to take the opportunities and line them up against the value tactically, strategically, financially and operationally and ensure they fit within the company’s mission.
Finally, like myself, he also expects some type of incremental reform at the federal level this year or next, which he expects to open up even more opportunities.
Okay, that’ll do it for this episode. Thank you all for listening. Feel free to share this with anyone who might be interested and post a review on whichever platform you use to listen to podcasts. You can also follow us on Twitter. Our handle is @MJBizDaily.
And with the Fourth of July holiday coming up, we’ll be taking next week off. But we’ll be back July 8 with a new guest. Stay tuned to our social media feeds in the coming week for details. Also, make sure to check out MJBizDaily.com for the latest news and data on the cannabis industry. Sign up for our newsletter while you’re there.
Thanks again for listening, and I’ll see you next time.