Industry

“5 Questions You Should Ask in Order to Successfully Invest in the Cannabis Industry.”, with Mitch Kahn and Len Giancola

"There is a lack of brand discipline in our industry and we have made it our mission to change that! We know that brands matter but in the cannabis space, there has been little attention paid to brand building until recently. It has largely been about strain names and new products."

I had the pleasure of interviewing Mitch Kahn. Over his thirty-year career, Mitchell Kahn has demonstrated a successful track record of business management and entrepreneurship. In 2014, after Illinois passed its medical cannabis program, Kahn co-founded Grassroots Cannabis (“GR”), a company that grows, processes and sells cannabis through its vertically integrated business model in order to provide safe and efficacious cannabinoid products to consumers. With Kahn in the role of CEO, the company has grown to have operations in eleven states with more than 61 licenses and more than 400 employees, making it the largest private multi-state operator in the United States. Grassroots continues to rapidly expand its footprint and develop the company’s portfolio to address the key medical, wellness and adult-use market sectors. Kahn also serves as Co-Founder and Chairman of Frontline Real Estate Partners, a Chicago-based real estate investment and advisory company with expertise in the acquisition, development, management, disposition and leasing of commercial real estate properties throughout the United States with a focus on the Midwest. Founded in 2010, Frontline invests in value-add properties and provides transactional and advisory services to banks, financial institutions and owners with a focus on the real estate restructuring industry. The company has acquired properties valued at more than $125,000,000 and has built a successful brokerage and property management business currently managing more than two million square feet of properties. Prior to forming Frontline, Kahn co-founded and served as President and CEO of Hilco Real Estate, one of the country’s leading real estate restructuring, disposition valuation and appraisal firms. During his tenure, Kahn grew Hilco Real Estate from a startup subsidiary of the Hilco Organization into a company with more than 30 employees and annual revenues in excess of $15,000,000. Prior to joining Hilco, Kahn served as Senior Vice President of Sportmart, a retail sporting goods chain. During his tenure, Sportmart grew from 20 stores to 70 retail locations throughout the United States and Canada before the company merged with Gart Sports. Kahn graduated from the University of Wisconsin and Northwestern University Law School. Kahn is actively involved in the Les Turner ALS Foundation and ORT America, in addition to several other charitable organizations.

Thank you for joining us! Can you share with us the story about what brought you to this specific career path?

When I was a kid growing up my dad made it clear that if he ever caught me with marijuana, I wouldn’t have to worry about the cops — he’d be calling them on me himself. Decades later, post legalization in the first handful of states, as my business partner and I explored the arena, my father said, “If you could get me something that would help my arthritis, I’d be happy to take it.” It was a lightbulb moment, if my father could change his view, so could anyone. From that moment, we have been building Grassroots.

Can you share the most interesting story that happened to you since you began leading your company?

There are so many interesting stories. However, I believe it is the human stories that are especially profound and the most interesting and rewarding for me. Our patients, day in and day out, share their journey from pain and suffering to complete relief, often stating that our products have saved their lives.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I am ambitious by nature and thought working behind the counter in our first dispensary would be a walk-in-the-park. I couldn’t have been more wrong. In doing so, I learned that it requires an educated person with product and ailment knowledge, as well as great customer service skills, to properly service our customers. Our Herbologists in all our dispensaries are put through extensive training and have a healthy obsession with the plant. They are much better behind the counter than I was.

Are you working on any exciting projects now?

Yes! As a nascent industry, with a significant focus on compliance, the software necessary to properly run a large business has not existed. The industry is basically devoid of metrics. We are currently investing in data and analytics and a state-of-the-art CRM system to allow us to run the business based on the real data we get from our dispensaries instead of assumptions. This will help us to better service our customers and their individual needs.

We are building this in a way that makes us HIPPA compliant as well.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

My business partner, Matt Darin, is a person that I trust, respect, and support. We met in 2005 during our time at Hilco and from that point forward have forged partnership in various arenas. I will forever be grateful for our partnership and friendship.

This industry is young dynamic and creative. Do you use any clever and innovative marketing strategies that you think large legacy companies should consider adopting?

There is a lack of brand discipline in our industry and we have made it our mission to change that! We know that brands matter but in the cannabis space, there has been little attention paid to brand building until recently. It has largely been about strain names and new products. We have exceptional talent in our marketing department and hired our CMO, Lisa Hurwitz, from a big CPG company about a year ago. We put brand fundamentals in place early that have allowed us to do a few innovative marketing strategies that the big companies often struggle with — test and learn is our approach to everything — in our content, our media, with influencers, with our platform partners, and in our product launches. We often fail fast and learn from our mistakes, which we can do in such a young and nimble industry.

Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?

The most exciting part of the cannabis industry is being part of its creation from the ground up. It’s equally thrilling to develop such a wide variety of usability from beverages to beauty products. Also, the broad patient spectrum never ceases to astonish me. Along with the excitement there are also concerns. Political control, goldrush companies that tarnish the industry and scaling with varying degrees of regulations are all front of mind while developing strategies and making sound business decisions.

Can you share the 5 questions you should ask in order to successfully invest in the cannabis industry”? Please share a story or example for each.

1. What did the CEO and executive team do prior to cannabis?

2. What is the management’s team depth of experience?

3. How much capital has management invested in the business?

4. What’s the vision and position on growth?

5. How is the company prepared to deal with…

a. No federal legalization

b. States’ rights being enacted

c. Full federal legalization

d. Federal enforcement of illegality

What advice would you give to other CEOs or founders to help their employees to thrive?

Hire the best people.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

I believe we are inspiring the medical cannabis movement currently. Our mission is to Serve, Advance and Respect the Movement. I believe that the fight for legalization will bring significant good to people of all walks of life. We are solving the opioid crisis, and providing relief to cancer patients and a vast array of other medical conditions. Our movement has grown from Illinois to 11 states.

What is the best way our readers can follow you on social media?

Instagram: grassrootscompanies

Facebook: grassrootsMMJ

Website: www.grassrootscannabis.com

Thank you for all of these great insights!

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