Marijuana Business Magazine September 2019

Marijuana Business Magazine | September 2019 96 Jushi, which began trading on Canada’s NEO exchange June 10, started the application to go public in January 2019, co-founder and President Erich Mauff said. Part of the thought process on the timing of going public was a practical one. Jushi wanted to acquire a Pennsylvania company, Franklin Biosciences, which operates 12 dispensary licenses in the state. Jushi was unable to secure the deal by staying private, however. It closed the $63 million transaction in July. But going public had always been the plan. “We would have liked to stay private longer, but it was always part of our game to go public,” Mauff said. “We could not have gotten regulatory approval in Pennsylvania by staying private.” Now, the focus on building a successful company must continue as new phases of consolidation in the industry emerge, Mauff said. The game isn’t over just be- cause one exit strategy has been achieved. ‘BIG GOBBLE’ UPCOMING Big players, such as those in established consumer packaged goods companies, will be looking for strong management teams that run cleanly audited companies in states with hard-to-get licenses. “That will be what I call ‘the big gobble,’” Mauff said. “The likes of beverage companies will be coming in looking when they are physically allowed to buy—either through federal legalization or normalization.” Such big retail companies may well come in, agreed Ralph Morgan, CEO at globally focused cannabinoid company Collective Hemp, but you might do well to position yourself as a potential target in conjunction with competitors you trust. “It is by investing in peers and collaborating (that you will find success),” Morgan said . “It is your weakest competitors who are the biggest threat.” Simply expecting to be acquired by big pharma or big industry is “naïve at best,” Morgan said, making an analogy to the eventual fate of mom-and-pop hardware stores when big-box competitors came to town. “Home Depot and Walmart came in, but they did not buy the stores, they simply made them uncompetitive,” he said. “This is absolutely the tip of a new industrial revolution. A lot of people will therefore not survive, or they will be the casualties.” Home Depot and Walmart came in, but they did not buy the stores, they simply made them uncompetitive. This is absolutely the tip of a new industrial revolution. A lot of people will therefore not survive, or they will be the casualties.” —Ralph Morgan, Collective Hemp CEO EXIT RAMP UP