MJBizMag July 2021 - 60

SCALE
HOW IT
SUITS YOU
Multiplying
M
Executives share strategies for growth
in an expanding marijuana market
Gage Cannabis always sought to be one
of the largest cultivators in Michigan,
but the business started small, according
to CEO Fabian Monaco. The company
opened its first dispensary in September
2019-shortly before adult-use sales
began-followed by two cultivation sites
in 2020: one 12,500 square feet, the other
17,500 square feet.
Together, the two facilities produce
Michigan
in
By Omar Sacirbey
ichigan is fast becoming one of the nation's leading marijuana markets, and many cannabis
executives are vying to rule the state. MJBizMagazine spoke with two Michigan cannabis
executives whose companies are in the midst of scaling for their thoughts on what smart
growth looks like in a rapidly growing market where adult-use sales launched in December 2019.
START SMALL AND ESTABLISH YOUR BRAND
Gage Cannabis * Detroit
Fabian Monaco
about 400-500 pounds of cannabis flower per month, which
vertically integrated Gage sells through its own retail channels.
The company opened three more stores in 2020.
When Gage started, the company intended to use its small
cultivation facilities and retail outlets to establish brand
recognition for its cannabis products before going big,
Monaco explained.
" We focused on funneling all the product we grew into our
retail channels. We built the narrative around the brand. We
controlled how the consumer received the brands, how they
interacted with the brand at retail, " Monaco said. " Once we
had that brand validation in the market, then we really had the
confidence to go big. "
Gage opened a third cultivation facility in 2021, essentially
doubling the company's canopy space, Monaco said. That
facility became Gage's " flagship " grow that the company would
use as a " showcase, " Monaco said.
Gage has opened five more stores so far in 2021, bringing
its total to nine. To support those retail outlets, Gage also has
five contract growers for a total of eight cultivation facilities,
including three of its own.
60 MJBizMagazine | July 2021
Gage-grown cannabis makes up about 60% of the companyʼs retail
offerings. Courtesy Photo
SCALING WITH CONTRACT MANUFACTURERS
Contract manufacturers have been a key part of Gage's
scaling strategy. " We've ramped up our cultivation with our
contract growers. And as we continue to open up retail, I think
the contract growing is also a big differentiator for us in the
industry, " Monaco said.
Gage's own products make up about 60% of its sales, with
the other 40% coming from other cultivators. If a certain
cultivator's product is performing especially well, Gage will
explore inviting them to become a contract grower, pending
appropriate vetting.
" We thrive in identifying great cultivators and then asking
them to join the family, " Monaco said. " It's kind of a step-by-step
progression and process, where you buy wholesale from them,
then you give them a couple of your own genetics to see how
they perform with your stuff. And then they grow for you. "
Gage makes about 50%-53% gross margins with contract

MJBizMag July 2021

Table of Contents for the Digital Edition of MJBizMag July 2021