Unique Interview with Ascend Wellness Holdings Founder and CEO Abner Kurtin
Eighteen months in the past, Ascend Wellness Holdings didn’t exist, however already it’s executing on an aggressive restricted license market technique. As a comparatively new entrant to the cannabis house, the corporate is taking a special method than many early mover MSOs. Founder and CEO Abner Kurtin spoke with New Hashish Ventures in regards to the firm’s technique to change into a prime participant, the ramp-up of its operations and plans for a possible public itemizing.
Kurtin comes from the hedge fund house. A couple of years in the past, he noticed the foremost alternative within the cannabis house created by capital deficiency and large gamers. He began a fund, which rapidly centered on the vertically built-in MSO mannequin. The fund was an investor in personal rounds for firms like Grassroots, GTI, 4Front, NorCal Hashish, and City Leaf, in line with Kurtin. As the corporate constructed a big portfolio of MSOs, Kurtin noticed the chance to begin an organization: Ascend Wellness.
Kurtin’s companion Frank Perullo was a guide within the cannabis house earlier than becoming a member of Ascend Wellness. He labored extensively in licensing in markets like Massachusetts, consulting for firms like iAnthus, GTI, and Tilt. Now, Perullo is the Chief Technique Officer of Ascend Wellness.
Ascend Wellness additionally employed Andrea Cabral, who serves as the corporate’s CEO of Ascend Massachusetts. Cabral is a former elected Sheriff of Suffolk County and former Government Secretary of Public Security within the Commonwealth of Massachusetts. Her expertise in regulation enforcement and historical past of elected standing in Massachusetts helped the corporate land a license in downtown Boston.
When Kurtin appears to be like on the cannabis house he sees two primary teams of MSOs: one which has grown by profitable licenses and the opposite than tries to plant a flag in as many states as attainable to develop. Ascend Wellness is taking a deep quite than extensive method, which means the corporate is purposely deciding on restricted license, leisure markets and dealing towards turning into a top-three or top-five participant in all of its states. “We view ourselves as MSO 2.0.,” says Kurtin.
Many MSOs have had a first-mover drawback in terms of retail, in line with Kurtin. Difficulties zoning cannabis retail has led a lot of a state’s first dispensaries to open in industrial areas, removed from conventional retail areas. On account of hesitancy from landlords, many cannabis firms have had to purchase retail out of necessity.
Although vertically built-in, Ascend Wellness is just not an actual property proprietor. As an alternative, the corporate companions with REITs like Revolutionary Industrial Properties. These teams perform as the true property homeowners and operators, whereas Ascend Wellness focuses by itself operations.
By way of constructing a staff and branding technique, Ascend Wellness is utilizing the identical methods as many different MSOs, in line with Kurtin. The corporate is wanting to herald prime expertise from conventional retail and CPG industries and specializing in constructing a powerful digital and in-store buyer expertise.
Ascend Wellness’s Operations
Ascend Wellness’s footprint extends throughout Ohio, Massachusetts, Illinois, and Michigan. In Ohio, a brand new marketplace for the corporate, Ascend Wellness has a cultivation facility and flower available in the market.
In Massachusetts, the corporate has three shops within the higher Boston space and a cultivation facility of greater than 150,000 sq. ft, together with 80,000 sq. ft of cover. As these operations open subsequent 12 months, Kurtin believes the corporate is well-positioned to be a top-three participant within the state.
In Illinois, the corporate bought an current asset: dispensary chain HCI. Ascend Wellness additionally has a 75,000-square-foot cultivation facility within the state, which is simply coming on-line. The corporate can be pursuing further acquisitions within the state.
The corporate has 12 municipally accredited dispensaries, both owned or about to shut, in Michigan. The primary of those will open in Morenci, Michigan subsequent week. A complete of 4 are slated to open by the tip of the 12 months, with the rest opening by spring of subsequent 12 months.
Ascend Wellness’s space of focus is north of Florida and east of the Mississippi. This space has restricted license states with a number of the most troublesome zoning legal guidelines – two areas Kurtin considers the corporate’s core competencies. Already, the corporate is concentrated on closing an acquisition in New Jersey.
Going ahead, the corporate is using a mixture of natural development and acquisition techniques to broaden. Ascend Wellness has pursued further areas in all of its present states and been profitable, in line with Kurtin. In the case of acquisitions, the corporate is concentrated on piecing collectively a state-wide acquisition technique by making various smaller transactions.
As Ascend Wellness ramps up its operations, its staff is about to broaden dramatically. Proper now, the corporate has roughly 150 staff. Kurtin expects that quantity to be over 1,000 by the primary of the 12 months and over 2,000 by the tip of subsequent 12 months.
The Flagship Retailer
The corporate’s downtown Boston location will function the flagship location for Ascend Wellness. Town’s restrictive boundaries to entry imply it is going to solely have 30 to 35 shops, in line with Kurtin. The corporate’s five-story, 16,000-square-foot constructing is close to certainly one of Boston’s main commuter stations and close to Faneuil Corridor, a major vacationer vacation spot.
The shop will supply fast in-and-out entry for commuters, however it is going to additionally supply an immersive expertise much like what Planet 13 provides in Las Vegas. Shoppers will have the ability to store and discover interactive flooring impressed by sights just like the Museum of Ice Cream. For instance, guests will have the ability to take photographs in an Alice in Wonderland-style bud exhibit and odor several types of terpenes to find their private preferences. Kurtin envisions the shop as a beacon for east coast cannabis and the trade as an entire.
Ascend Wellness’s household of manufacturers contains Tune, Prisma, and Ozone. Tune, impressed by music and the way it makes you are feeling, is designed to resonate with the newer adult-use shopper. Prisma attracts on the recognition of the fruit-flavored vape class of the market, whereas Ozone is impressed by the wine trade. This model will delve into the lineage of various strains and cater to the extra refined shopper.
Along with its personal manufacturers, the corporate can be partnering with west coast manufacturers like 1906, which creates effect-specific edibles. Ascend Wellness is in superior discussions with different west coast manufacturers, in line with Kurtin.
Funding and Going Public
Earlier this 12 months, Ascend Wellness raised $55 million, and the corporate has simply closed a $30 million funding spherical. The most recent spherical was completed in anticipation of a liquidity occasion and potential public itemizing subsequent 12 months, in line with Kurtin.
As the corporate’s property come on-line and gross sales ramp up, notably on the downtown Boston shops, Kurtin sees the corporate having a number one place and the visibility to method the general public markets in spring of subsequent 12 months. He’s additionally conscious of the consolidation development within the trade. The corporate is just not dedicated to going public solo. Quite, it is going to search for the very best alternative to generate liquidity and worth for buyers, in line with Kurtin.
The corporate is at present producing a run price of 12,000 kilos of cannabis per 12 months and has a handful of shops open, however it is going to be ramping as much as 75,000 kilos of annual manufacturing and 25 shops open by the tip of 2020. With that development in thoughts, Ascend Wellness is projecting roughly $325 million in gross sales in 2020 and $450 million in 2021, in line with Kurtin.
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