Unique Interview with MedMen Co-Founder and CEO Adam Bierman
Hashish retailer MedMen (CSE: MMEN) (OTC: MMNFF) has been working in the US for practically a decade. Now that the corporate has established a robust, bi-coastal presence, it’s centered on operationalizing its footprint. Co-Founder and CEO Adam Bierman spoke with New Hashish Ventures in regards to the firm’s market technique, retail shops, and the significance of rising with a transparent mission. The audio of your entire dialog is obtainable on the finish of this written abstract.
Bierman and his companion Andrew Modlin began MedMen from the bottom up. Bierman was fascinated with how a lot folks had been keen to threat to entry cannabis and noticed how a lot alternative the rising authorized market represented. As the corporate has grown, it has gained extra objective, in response to Bierman. And, because the business evolves, he sees the businesses which have a clearly outlined mission as those who can be in the end profitable.
The Folks at MedMen
Bierman and Modlin have been enterprise companions for nearly 15 years. Over the past 5 years, their different companion Chris Ganan, Chief Technique Officer of MedMen, has been instrumental in serving to the corporate develop, in response to Bierman.
MedMen has greater than 1,300 workers. Bierman and his crew spend a major period of time on the corporate’s folks, and he sees that mirrored within the retailer expertise.
The Markets That Matter Most
MedMen is at the moment lively in a number of states and has greater than 30 shops open, however for its first six years, the corporate operated completely in Los Angeles. Bierman and his crew set out from the begin to construct a nationwide retailer, which is why they really feel California is so necessary. Bierman sees that state as an incubator for dominant manufacturers.
After California, MedMen moved into different key markets together with New York, Nevada, and Florida. “We’ve not been enjoying the sport of chasing what number of states we will brag about being in,” says Bierman. “Not all states are created equal.” MedMen is aiming to create dominant positions and acquire extra shopper belief in these markets. The corporate goes as deep as potential in these key markets, which is able to enable it to achieve model energy and to take its time on widening its footprint.
MedMen’s public debut helped it to entry capital and change into intensely acquisitive. The corporate’s acquisition of Treadwell took it into Florida, and its acquisition of PharmaCann (anticipated to shut this yr) will take it into Illinois, which is on the eve of changing into an adult-use market.
The final yr and a half has been about establishing a nationwide footprint and infrastructure and creating defensibility in key markets, in response to Bierman. Now, the corporate’s subsequent chapter will focus much less on acquisitions and extra on operationalizing the footprint it has achieved to-date.
MedMen’s retail shops are important to its technique. The corporate’s shops are designed to have a mainstream setting in prime actual property areas. MedMen needs individuals who have by no means used cannabis to be curious sufficient and comfy sufficient to step inside a retailer.
As soon as inside a retail location, shoppers have entry to cabinets with rigorously curated, high-quality manufacturers. The variety of SKUs is determined by the markets. For instance, shops in California have tons of of SKUs, whereas the corporate’s areas in New York might solely have 40 to 50 SKUs as a consequence of stricter laws.
In terms of the query of CPG manufacturers versus retail shops, Bierman sees retail as having extra leverage within the provide chain. If a MedMen location swaps out a top-selling model for an additional, gross sales don’t change. Bierman sees manufacturers gaining loyalty energy within the cannabis enterprise finally, however at the moment, shoppers are in search of a product kind, not a specific model.
Retail stays the corporate’s core technique, however MedMen has launched an owned model technique to complement its shelf house. The corporate has launched its Statemade and MedMen Crimson manufacturers, and it has half a dozen others coming sooner or later.
MedMen is utilizing information gathered in its shops to tell that technique. Its owned manufacturers are a solution to what shoppers have already expressed wanting. Because the owned model technique continues to roll out, MedMen is targeted on nationwide presence. Shoppers will be capable of purchase any of MedMen’s owned manufacturers in any of its shops, irrespective of the market.
Lengthy-Time period Imaginative and prescient
The corporate introduced preliminary This autumn outcomes of $42 million, nevertheless it chooses to not launch income projections for 2020. Bierman nonetheless sees the market as within the strategy of constructing success. Providing projections might result in over-promising, he says.
As a substitute, the corporate is targeted on executing its long-term imaginative and prescient of finally changing into a long-lasting enterprise price $50 billion to $100 billion. Attaining that sort of success means strolling a positive line between seizing progress alternatives and managing spending to nonetheless obtain profitability. Bierman believes MedMen has been strolling that line over the course of its historical past, by no means lacking payroll because it has hit progress milestones.
For its first six years, the corporate was self-funded. Gotham Inexperienced just lately invested a further $30 million in MedMen, and the corporate nonetheless has $125 million on its Gotham Inexperienced facility. MedMen has but to entry its subsequent tranche. Bierman views the funding from Gotham Inexperienced because the gas the corporate wanted for intensive progress. In the present day, the corporate has entry to that remaining capital and a robust stability sheet, in response to Bierman.
Hashish Sector KPIs
Bierman just lately shared his views on the significance of key efficiency indicators within the cannabis business. Earlier than understanding what KPIs to make use of, you will need to break down the business into its completely different verticals. You can not evaluate MedMen to a Canadian LP or a Midwestern MSO with a give attention to its rising capabilities, in response to Bierman.
For MedMen, the necessary KPIs stem from its give attention to retail and what it will possibly obtain inside its personal 4 partitions. The corporate tracks metrics equivalent to the proportion of shoppers who stroll into considered one of their shops and buys one thing (conversion ratio), how a lot every shopper spends (common greenback sale), gross margin, whole retailer visits, and the full variety of folks in its loyalty program (100,000 and rising).
Delivering on Guarantees
There isn’t any precise blueprint for achievement within the cannabis business–it’s nonetheless so new. When trying to find the closest instance, Bierman seems to Entire Meals. The grocery retailer chain utterly modified the well being meals business. The corporate, which has a dominant market share in MedMen’s residence state of California, had a lot model energy that Amazon needed to have it, in response to Bierman.
Bierman sees MedMen delivering on the promise to be a dominant, nationwide retailer in cannabis and to persistently scale with velocity.
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