December 13th, 2017
News, Top News
As more and more states legalize cannabis for medical and/or adult-use, there is a growing need for experts who can handle the myriad of issues and challenges new marijuana businesses will encounter. MariMed (OTCQB:MRMD) offers total solutions for both cultivators and dispensaries, all from professionals with a proven track record of success in the cannabis space. The company recently announced the purchase of edibles company Betty’s Eddies, a maker of an all-natural fruit chews, one of the most popular delivery methods currently on the market.
CFN Media recently sat down with MariMed Chief Operating Officer, Tim Shaw, to discuss the business’s consistent successes throughout the East Coast and beyond, as well as their dedication to consistent dosage for every single product sold.
Rachelle Gordon: How has MariMed grown since its founding in 2014?
Tim Shaw: It’s been an incredible experience. It started when a team of successful businessmen and cannabis experts came together and developed the nationally acclaimed Thomas Slater Compassion Center in Providence Rhode Island in 2012. At this facility, we developed best practices and operating procedures for cultivation, production, and dispensing. We realized we had the foundations for a new cannabis business model, so we developed a strategic plan to transfer this knowledge and intellectual property into a new entity to win cannabis licenses in other Eastern states and replicate the best and most compliant cannabis facilities in the country. That entity became MariMed, offering managed services for the design, development, finance, and optimization of medical cannabis cultivation, production, and dispensary facilities, coupled with licensing and distribution of MariMed branded precision dosed products.
The first implementation of the strategic plan was in Delaware where we developed a 50,000 square foot cultivation, production and dispensary facility for our client in Wilmington. Under our management, the medical cannabis program has been such a great success that in 2017 we developed and opened a second location for the client in Lewes. Subsequently, we have helped clients win licenses and develop cannabis facilities in Illinois, Nevada, Maryland, and Massachusetts. We have six facilties operating and five more under development.
MariMed is building a solid foundation for assets and revenue. We went from start up to $21 million in assets this year – a 150% increase over the previous year. In the first nine months of 2017, revenue was $4.5 million, an increase of 110% over same period in 2016, while EBITDA increased more than 300% to $1.36 million.
We recently developed a 100,000 square foot cultivation and production facility in Maryland. Planting has begun and products will be manufactured and sold starting in Q1 2018 throughout Maryland – to potentially 100 dispensaries that may open in the state’s new medical marijuana program in the next 12 months.
MariMed is poised for growth in 2018. We purchased a 137,500 square foot building in New Bedford, Massachusetts in November and are developing a 70,000 square foot cultivation and production facility that will be opening in Q1 2018. Under our client’s medical cannabis license, we will develop three dispensaries in other municipalities.
We’re also in the Illinois market with two stand-alone dispensaries. Our branded product line is being distributed into the wholesale market, where we’ve penetrated 52 of the 53 Illinois dispensaries. We are now in the Nevada market as well, where we have obtained our cultivation license. We just recently announced that we will be rolling out our branded products in Nevada and Maine.
RG: How do your branded products elevate MariMed’s presence in the cannabis market?
TS: In our seed to sale facilities on the East Coast, our team has been cultivating a full complement of cannabis strains and flowers in a variety of growing systems and methods. These facilities have their own labs, kitchens, production, packaging, and merchandising where we produce full lines of flowers, oils, salves, tinctures, and edibles.
With licensed patients at medical cannabis seed to sale facilities as “captive customers,” branding was not a priority. However, we saw an opportunity to build a brand of licensed products that would be novel in the larger wholesale markets out West. MariMed developed “Kalm Fusion,” a brand of unique, precision dosed, cannabis infused products. Our initlal products are Mari Melts, a thin dissolvable oral strip, Mari Mints/Chewable Tablets, Powdered Tincture a water soluable drink mix, and Kalm Korn, a buttery microwave popcorn. All these products are precision dosed with all-natural ingredients.
After successfully test marketing this brand in our Rhode Island and Delaware facilities, we soft launched them along with Betty’s Eddies, a mouthwatering, all-natural fruit chew product, into the wholesale Illinois market. Betty’s Eddies became the most popular product in the 51 open dispesaries. With this success, we tore up our rep agreeement and acquired the brand. We are now implementing our strategic plan to license the manufacturing and distribution of these hot products in all the legal states. We have just signed and launched our brands in Nevada, Maryland, and Maine. And there’s more to come in 2018
RG: How do you ensure precision dosing for end users?
TS: A major priority in our brand of products is both quality and consistency. The consistency is key – we’re solving an issue that plagued this industry as a whole. A ten milligram product should give you a relief of ten milligrams. No matter if you bought it in Massachusetts, California, or Illinois – you should get the same experience, similar to having two Tylenol. At the moment, that is tough to come by in our market. People are buying a ten-milligram brownie in one state, then they go to another location and that same ten milligrams puts them over the edge and makes for a bad experience.
We have developed or embraced the most stringent production, quality and security testing standards for distillation and dosing in the industry. All of our products go through rigorous testing, making sure each is precision dosed to within 5% of the amount stated on the package. That way my mother could have a ten milligram in Massachusetts, travel to Illinois and buy the same product without fear of overdoing it. We do a third-party lab test and back-check their testing with our own internal testing labs at each of our locations. If it comes out anything but perfect, we redo and re-test until it’s appropriately dosed.
RG: What differentiates MariMed from potential competitors in the space?
TS: We’ve been in this space as a team since 2012 with many of us working in the space prior to that, so- our sleeves are rolled all the way up. We already have a proven track record of operating and managing facilities in several states with thousands of patients. There are a lot of companies who tout the same abilities and the same know-how, but have never actually done it. We have. And through this we’ve made mistakes. We’re not the smartest guys in the world, but we’ve learned from our mistakes in order to make the company even more successful.
We have a proven track record of profitability as a fully reporting public company. We’ve successfully replicated our business model into multiple states. We’ve leveraged our years of experience so our customers, our clients, and our partners have all hit the ground running and prospered.
RG: Why should potential investors considering buying in to your company?
TS: MariMed’s professionals have multiple areas of expertise and a proven track record of success in cannabis and other businesses. Few companies in this market have our depth of expertise or a comparable track record. We are bringing professionalism into a hodge-podge industry. With MariMed, you are investing in a proven, tested company, with facilities and businesses that are thriving. We are profitable. We’re continuing to grow our client base, facilities and product lines. Our IP is scalable to every state.
Additionally, part of the upside to investing in MariMed is that we own the assets in all the locations where we establis facilities. We have hard assets; hard collateral to backup everything that we’re doing. We also have the intellectual property (IP) that we have created over the past four or five years. Our standard operating procedures (SOPs) are working documents that have been dialed in and are best practices in all aspects of the cannabis operation.
The investment momentum in now really starting. MariMed is focusing on attracting long-term strategic investors versus a short-term public investors. We’re being very careful with the bigger players that are coming in because it is about scaling. Once you’ve got the scaling element it attracts the acquisition purchase.
RG: What are your plans for expansion as the legal cannabis industry continues to grow?
TS: New facilities and product line expansion are our two high priorities for the end of this year and early 2018. MariMed is currently expanding into the Maryland and Massachusetts markets with new facilities and assisting clients in applying for facility licenses in Ohio and other states as they open applications. Additionally, we’ll be progressing on the expansion of our branded product lines nationally through licensing agreements.
As states close out their application processes for cannabis licenses, we’re going to be shifting our focus from application processes and building facilities to acquisition of existing companies. There are a lot of operations that are up and running and don’t know how to grow further.
Fortunately MariMed has the proven expertise that can maximize productivity while maintaining consistent product quality and potency, coupled with solid product R&D, marketing strategies and a rapidly expanding product distribution network to ensure continued growth on multiple levels nationwide.