Marijuana Business Magazine October 2018

A s more states legalize cannabis and the industry charts a path to explode globally, it’s “Prohibi- tion 2.0” according to Ben Kovler, CEO of Green Thumb Industries (GTI) and heir to the Jim Beam bourbon whiskey empire. Since founding GTI in 2014, Kovler and former CEO Pete Kadens have grown the Chicago-based company into a multistate and multimillion-dollar cannabis enterprise with operations in Illinois, Maryland, Massachusetts, Nevada, Ohio and Pennsylvania – plus plans to expand to Florida and New York. The vertically integrated medical marijuana company went public in Canada in June and is now among nearly 30 U.S. cannabis companies that list on the Canadian Securities Exchange. Green Thumb reported revenue of $13.6 million in the second quarter, a nearly 300% increase year-over-year. Net income for the quarter was roughly $400,000, up significantly from a first-quarter loss of $1.6 million. Kadens stepped down as CEO in late August to focus on philanthropy, among other activities. With his departure, Kovler took over the job – a position he held before Kadens, who remains on the GTI board. As Kovler expands his cannabis empire, he’s taking a page from a playbook crafted by his great-grandfather, bourbon mogul Harry Blum, who made his fortune invest- ing in Jim Beam at the end of Prohibition. Marijuana Business Magazine caught up with Kovler to get his thoughts on brand-building, corporate leadership and alcohol companies investing in cannabis. Q What lessons can the cannabis industry glean from the alcohol industry? A I think there is a lot of similarity. We like to say that history doesn’t repeat, it rhymes. This is Prohibition 2.0. And just as credible, trusted brands transformed the alcohol industry, we believe the same will happen in cannabis. The tidal wave of demand combined with operating at the cusp of regulatory change presents massive opportunity. Q What’s your take on the targets Big Alcohol firms are looking to acquire, and is GTI positioned to take advantage of the opportunity? A At this point we’ve got our heads down, focused on executing our strategy to enter limited-supply mar- kets, get open and scale our CPG (consumer packaged goods) and retail businesses. At the same time, just as Big Tobacco acquired alcohol companies in the 1960s, it makes sense for alcohol companies today to pay attention to cannabis as consumer preferences shift. GTI is poised for growth with a strong balance sheet, and we like to put ourselves in the position to maintain optionality that maximizes shareholder value. Q You’ve talked about the importance of brands in the industry. How is GTI positioning its brands to win over consumers in the marketplace? A Brands are real. They are trusted and authentic relationships with the consumer, and they drive purchasing decisions every day. We believe brands distributed at scale is how to win, and we’re investing heavily. We’ve developed several and will continue to expand, including Rythm, The Feel Collection, Dogwalkers and a female-focused brand that is under development. In the same way that alcohol compa- nies categorize hard liquor, beer and wine, cannabis has those parallel segments with concentrates, vape and flower. We are a consumer packaged goods busi- ness creating cannabis brands and experiences. Q&A Fighting Prohibition … Again Five questions with Ben Kovler, CEO of Green Thumb Industries and Jim Beam heir By Lisa Bernard-Kuhn Ben Kovler assumed the CEO role at Green Thumb Industries after the August departure of Pete Kadens. Photo courtesy of Green Thumb Industries 16 • Marijuana Business Magazine • October 2018