Marijuana Business Magazine November December 2018

Partners In contrast to some multistate companies like Organa Brands and MariMed, which possess assets such as dispensaries but not licenses, Columbia Care prefers to own permits outright. But the company also recognizes state regulations don’t always allow for that. In Florida, for example, regulations require that marijuana businesses part- ner with local nurseries. Consequently, Columbia Care is the majority owner in its overall Florida MMJ business, while the nursery holds a minority stake. Columbia Care also has minority interest partners in a couple of other states that are there to help navigate the political landscape. Even when Columbia Care enters a market without partners, it still hires locally to fill executive positions in those markets. Vita notes that, since the Washington DC shake-up, all the executive teams Columbia Care has hired remain intact. “We have a great chief of human capital who is good at finding great state-level CEOs,” Vita said. That human capital officer is Bryan Olson, who was chief human resource officer for global law firm K&L Gates and previously held executive HR positions at Aetna and United Tech- nologies. He is also a former employee benefits and executive compensation attorney at Skadden Arps after starting his career at Fidelity Investments. Olson's key hires include Chief Sci- entific Officer Dr. Rosemary Mazanet and Chief Risk Officer Mary-Alice Miller. Mazanet leads all of Colum- bia Care’s research efforts to examine the efficacy of pharmaceutical-quality medicines in varying indications and to develop future products. She is a board-certified hematologist and oncologist who previously worked at the Dana-Farber Cancer Institute and Brigham and Women’s Hospital, both in Boston. Miller has served as a senior legal adviser at Fidelity Investments and General Catalyst, a venture capital firm, and spent several years running a media tech- nology startup, which she sold in 2016. Miller started her career at the law firm of Ropes & Gray as a corporate and transactional attorney. Columbia Care recently has sought out partners with certain specialties who don’t have stakes in their licenses. In New York, for exam- ple, Columbia Care partners with a delivery company that gives the MMJ firm reach throughout the vast state. It also partnered with a manufacturer of generic pharmaceutical drugs to develop the company’s drug formula- tions and standard operating proce- dures and advise on how to build its manufacturing facilities. “There are things that we do on our own that we are proud of, and there are things we know we need help with,” Vita said. “And in those situations, we look for the very best partners to help us navigate that process. “We have pursuit teams that are responsible for the application process. We have infrastructure teams that are responsible for the planning and build- out process, operating teams that are responsible for day-to-day operations on all sides of the business. And then we have internal mentoring and intern- ship programs.” Cost-Cutting Financing Experience also has helped the Columbia Care leadership team learn about cost-cutting measures. For example, one thing they didn’t do early in their expansion is use modular building systems that are easier to upgrade than warehouses or other structures commonly used by large-scale growers. Modular buildings are comprised of individual units.They are less expensive, and if upgrades are needed, they can usually be made without disturbing other units, or by swapping out other units.The company has been using modular facilities for a few years now, and Vita said they are far cheaper to upgrade than older facilities. “All of those things have a profound impact on our operating margin and our ability to deliver consistency and quality,” Vita said. “But refining those processes and getting to the point where you feel comfortable doesn’t mean you’re done refining, it just means you are bet- ter than you were before.” One area in which Columbia Care is adjusting its policy is how it finances expansion. While the company has taken some outside investments, most of its expansion has been funded by revenue from existing operations. But the company recently raised more than $150 million and plans to use it on “expansion of products and geog- raphies,” Vita said.The raise included institutional investors, but Columbia Care declined to identify them. Columbia Care already has filed applications in Virginia, New Jersey and Texas and will file more applications as more markets open up, Vita said. “We feel comfortable in our ability to meet whatever financial opportunities we encounter,” he said. “We take long-term views to markets that preclude us from being those who like to make a quick buck and sell the most commoditized products in the marketplace.” ◆ Nicholas Vita founded Columbia Care in 2012. Photo courtesy of Columbia Care 58 • Marijuana Business Magazine • November/December 2018