Vireo Health, the Minneapolis-based vertically integrated cannabis company, has been very busy since it started trading on the Canadian Securities Exchange March 20.
The physician-led group, which trades under the ticker VREO, has made acquisitions in four states since then, entering the Arizona, New Mexico, Massachusetts and Nevada markets.
The fact that the two most recent acquisitions in Massachusetts and Nevada have been in adult-use markets does not indicate any shift in strategy, CEO Kyle Kingsley told Marijuana Business Daily.
“For us, there is no fundamentally obvious break between adult use and medical,” he said. “I very much support precision and safety right across the cannabis spectrum.”
Many companies, particularly in the medical marijuana space, talk about the primary importance of serving their patients. But, with Vireo, it might actually be true.
Kingsley, an emergency physician by trade, believes fully that cannabis is the best alternative out there for general health and wellness, whether someone suffers from serious illness or from lesser conditions that are nonetheless debilitating, such as low-level insomnia.
“A lot of the industry is focused on cannabis, on the plant, our focus is on our patients,” he said.
That said, the ability of the cannabis plant to offer different properties is something Vireo wants to exploit as it focuses on the science to drive the company forward and offer ever improving product alternatives to its patients.
“It’s a mix for us to focus on capitalizing on short-term opportunities in the different states and then IP development as we build our reputation as the scientific leaders of the MSOs (multistate operators),” Kingsley said.
As well as Kingsley, Vireo’s leadership team has a number of scientists, medical experts and intellectual property professionals.
Intellectual property expertise is an important advantage Vireo has, said Jamie Blundell, president of Cannabis Growth Opportunity Corp (CGO), a Toronto-based cannabis-focused fund investing in both private and public companies. CGO has over one million shares in Vireo, worth approximately 5 million Canadian dollars ($3.75 million).
Vireo said April 25 that a patent associated with technology to reduce harmful effects from tobacco by using cannabis-based additives can be granted to the company.
“It’s another example of the IP that they have,” Blundell said. “It’s not just vaping, they have a few technologies including ones to do with ingesting cannabis and how to harvest hemp industrially.”
The company also has a different look from many of its peers, a number of women and people of color being either in management or on the board of directors.
“Diversity is absolutely fundamental to what we do,” Kingsley said. “We really are stacked with diversity through and through, it is a very organic thing, not contrived.”
Such diversity is vital because it helps add shareholder value through improved business practices, he added.
“For example, it is a fundamentally different experience to have a board where the rank and file is one race, gender and creed,” Kingsley said. “Humanity is diverse, our customer base is diverse and diversity leads to optimal business decision making.”
Vireo Health is now present in ten states with operating facilities currently in six of those – Minnesota, New York, Pennsylvania, Maryland, Arizona and New Mexico.
For now, the company is “laser-focused” on executing its strategy but Kingsley isn’t ruling out being caught up in the inevitable consolidation of the industry.
“We are focused on building maximum value for our shareholders, our consumers and patients, and on IP,” he said. “That could make us a target for acquisition.”
Whether the company gets caught up in the consolidation of the industry sooner or later, it represents an attractive investment, Blundell at CGO said.
“This company has a good track record of combining organic growth and accretive acquisitions,” he said. “They are still trading at a fairly attractive discount to their peers and are taking a measured approach to growth.”