Marijuana Business Magazine November December 2018

C olumbia Care was supposed to appear above the fold of the front page of The Washington Post the morning the dispen- sary opened in Washington DC in 2013. But the day before, the Vatican’s College of Cardinals elected Pope Francis, bumping the Columbia Care story below the fold.Was it a bad omen? Perhaps – at least initially. The dispensary suffered from person- nel issues, compliance shortcomings, reg- ulatory misfortunes and other problems that resulted in hundreds of thousands of dollars in losses – issues that likely would have driven other businesses and their executives to surrender. But Nicholas Vita, a former Goldman Sachs executive who founded Columbia Care in 2012 and was installed as CEO by Columbia Care’s board that same year to put out fires, believed the ship could be righted with research, data, patient outreach and by sticking to key principles of his original game plan – as well as learning from earlier mistakes. Today, privately held Columbia Care has what are primarily vertically integrated medical marijuana operations in 11 states and DC, and the company has applications pending in at least three other states. “Every market has its own unique challenges. What has changed over time is that we have become better. While we have made every mistake conceivable, what we have become quite good at is not making the same mistake twice,” Vita said. Ready for Market Vita had multistate visions when he was planning Columbia Care, but he was also concerned about federal interference. (It was before the Obama-era Cole and Ogden memos had been drafted to give marijuana business owners a degree of legal wiggle room.) He explored various medical marijuana markets but settled on Washington DC, largely because of a little-known provision that the local gov- ernment and health department receive their funding from Uncle Sam. “Our thought process was that if the federal government was, even in a backhanded way, sponsoring the crea- tion of a medical marijuana program – even though it was restrictive and highly regulated – we thought that was a low-risk way to build a petri dish and understand that, yes, this is something you can turn into a multijurisdiction business,” Vita explained. While DC was perhaps more insu- lated from federal interference than other markets at the time, it was beset with different problems. “We initially had a very tough time LEARNINGFROMMISTAKES Columbia Care HEADQUARTERS New York City YEAR FOUNDED 2012 ABOUT Columbia Care specializes in vertically integrated medical marijuana businesses in most markets. STATES Arizona, California, Delaware, Florida, Illinois, Maryland, Massachusetts, New York, Ohio, Pennsylvania and Virginia. Also in Washington DC and Puerto Rico. EMPLOYEES 400 2017 REVENUE More than $33 million BUSINESS STRUCTURE Announced plan to go public RECIPE FOR SUCCESS After Columbia Care’s rocky start in Washington DC, the company’s board installed Nicholas Vita as CEO. When entering new states, Vita says, the company keeps the following top of mind: • Be ready for a market – not first to market. • Seek highly regulated markets that have strict rules and place a limit on the number of licensees. • Know your capabilities and find partners to help with weaknesses. • Find ways to cut costs, such as modular building construction. • Consider a major capital raise to expand further and go deeper in existing markets. Columbia Care learned the importance of being ready for a market – not first to market By Omar Sacirbey November/December 2018 • Marijuana Business Magazine • 55