MJBizMag July 2020 - 41

ego for around $12 million. Instead, the
company is focusing on expansion efforts
in states it deems less saturated and more
lucrative. The firm recently launched
recreational sales in Illinois and medical
sales in Pennsylvania, for example.
" We've had to deemphasize in
California, " Jushi co-founder and
President Erich Mauff said, pointing to
what he called " structural issues " such
as taxes and saturation that aren't going
away anytime soon.
" It's just an optimization of investible
dollars, " he added. " It's just adjusting
to the market environment to try and
do things today that you wouldn't have
done four months ago because there
was nothing to buy-or, if there was
something to buy, the price was wrong. "
That said, Jushi is not abandoning
California-just delaying plans to open
retail outlets there.
3
Alternately, consider
accelerating expansion
plans.
While some expansions warrant delays,
others might merit acceleration if the
business is generating revenue and other
circumstances are conducive. Take Lume
Cannabis Co., a vertically integrated
operation in Michigan, for example.
Lume had eight stores open in the state
in early June and hoped to have 20 by the
end of the year. For the next four years,
the company planned to open 20 stores
every year for a total of 100 outlets after
five years.
Business has picked up enough
during the first half of the year that the
chain is accelerating construction on
a 250,000-square-foot expansion to an
existing 50,000-square-foot greenhouse.
Or consider Vertosa, an Oakland,
California-based company that makes
and sells THC emulsions for infused
product manufacturers in the state as
well as hemp-derived CBD emulsions
that are sold to clients nationwide. In
May, Vertosa entered the Canadian market,
where edibles were permitted in late
Doug Hellyar
2019, through a partnership with Vivo
Cannabis, a Canadian license holder.
4
Consider sharing
licenses through
partnerships.
You don't always have to unload a license
to save money. Instead, bringing in a
partner to share the costs of a license can
be a good solution to keeping an asset
you believe will pay off later.
" That came into focus pretty rapidly, "
said Whitney, noting that Nug delayed
opening stores in the San Francisco Bay
Area cities of Alameda, El Cerrito and
Oakland and was seeking to " offload "
other licenses. Nug was determined,
however, to keep the Sundial Collective,
a retail licensee in Redding, California.
Lume Cannabis Co. in Michigan is following
through with expansion plans. Courtesy Photo
But the only way to do that was to
find a partner who could share the
costs. In this case, the company split the
license with the partner 50-50. Having
the partner relieves some financial
pressure-and, because the partner
is local, it is better connected to the
community and the market Nug seeks
to serve.
" Splitting a license with an operator
has been a really successful way for us to
get down the cost of opening up a new
shop, " Whitney said.
5
Manage your workforce
effectively.
Layoffs and furloughs are often
inevitable in a recession. But for
businesses in solid financial positions,
recessions can be a good time to find
top talent for good value.
" There is a plentiful supply of very
talented people that are available, " said
Lume CEO Doug Hellyar, noting the
company was in hiring mode to staff
the dispensaries it planned to open
throughout the year.
Thanks to store openings in Illinois,
Pennsylvania and Virginia, Jushi has been
a " net adder " of jobs, Mauff said, but the
business also has had to cut staff to stay
efficient and free up capital for expansion.
July 2020 | mjbizdaily.com 39
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MJBizMag July 2020

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