CFN Media Interviews Medicine Man Technologies
January 17th, 2018
In the fast-emerging legal cannabis market, a few companies have already set themselves apart as leaders. Medicine Man Technologies (OTCMKTS:MDCL) provides expert consulting services on cultivation and dispensary operations, offering everything from facility design to assistance with obtaining proper licensure. This publicly traded company has seen healthy growth across a variety of metrics—including revenues, number of clients and stock price—since its inception five years ago, and has its eyes set on domestic as well as international markets.
CFN Media recently spoke with Medicine Man Technologies Co-Founder and CEO Brett Roper and Chief Cultivation Officer Josh Haupt to discuss the company’s extensive reach and their deep experience throughout the entire cannabis industry.
Rachelle Gordon: What is Medicine Man and what is the history of the organization?
Brett Roper: I have been working directly in the cannabis industry for a little more than five years now, starting with the Williams family and the Medicine Man facility here in Denver in 2012. I directed establishing the new company through the creation of standard operating procedures and other related cultivation elements with the goal of building a consultancy. The partnership was borne out of my knowledge and experience with start-ups with public company ambitions and the Williams’ family experience on the cultivation and dispensary operation side. Medicine Man was incorporated in Nevada in March 2014 and took on its first client in April 2014. So it took us about 18 months between initial concept and starting full operations.
Josh Haupt: We offer a wide range of services at all levels of the cannabis industry. A lot of people think that just because they received a license to grow that it’s a license to print money. It’s quite the opposite. If you don’t have the right standard operating procedures within your garden and your growth facility, you can quickly lose a lot of money and capital. When it comes to handling licensing—or already having licensing and need to be able to grow—we offer guidance at each step of the process.
We do a lot of license procurement work, as well as provide support for dispensary owners to help them monetize their businesses and implement the same standard operating procedures we have here: such as in accounting, in-store product displays, and marketing.
RG: What sets Medicine Man Technologies apart?
JH: We are significantly different from other industry players in that we actually have commercial gardens that can back our reputation. Let’s say, for example, I’m developing a neighborhood and I want to offer tours using a model house. We offer our customers that option.
I’d say the biggest things that set us apart are our operating procedures, our application support—and most importantly, the end grow results. No one else offers the knowledge of how to grow three pounds a light or 100-plus grams per square foot and cultivating the cannabis for $1 a gram. Nobody even comes close.
Additionally, rather than just saying, “Here’s the menu; choose one, two or three,” we can customize a package for a client. We want to make sure that it’s very much a win-win in any relationship. If you want it to be a long-term relationship, it has to be one in which everybody benefits.
BR: At the end of the day, we acknowledge competition will always be there; but for us, it’s about carving out a part of a multi-billion-dollar marketplace. If we could get to a few percentage points of that overall marketplace, I’d be very pleased. Projections show legal cannabis to be a $7 billion-plus marketplace in 2017. If I can have even 2 percent of that $7 billion, that’s $140 million in revenue which would make for an excellent base to build upon. I’d certainly view that as a good next step on our way to a 5 or 10 percent market share.
RG: How long did it take for Medicine Man Technologies to go public once it was formed?
BR: The original goal when we first set up the company was to establish the business and take it public. One of the founding elements of our strategy was once we launched the company, got it operational, and got it to a point where it had predictable revenues; our next step was to take the company public through an S-1 filing process.
We filed an S-1 with the SEC in April 2015. At that point, we had been operating for a year. We found a PCAOB qualified auditor and prepared most of the necessary preparation work in-house, which made it more economical for the company. In late September 2015, the SEC cleared our S1 which then allowed us to file what’s called a 15c2-11 with Glendale Securities, our market maker. By mid-November, FINRA approved our listing, providing us with a symbol as well as opening price of $1. After we were cleared for electronic trading , our first day on the exchange was January 25, 2016. All said and done, from the time we filed our S-1 it took us nine months to go public. If you talk with other people they’ll tell you that’s a very quick turnaround.
RG: Why should investors consider Medicine Man?
BR: For the first three quarters of 2017, our year-over-year revenue increase was more than 300%, as we have reported the revenues from our acquisitions of Pono Publications (Three a Light) and Success Nutrients, both of which closed in the first half of 2017. The company has raised capital that allowed us to retire all of our convertible debt. The company will be entering the New Year with a really strong and growing client base. We also have a rapidly expanding international client base and pipeline for new business among entities that are very interested in clean, well-run grows.
We have also secured international clients, including Canada, Germany, Australia, and South Africa and more recently, we have announced a contingent equity position with one of our Canadian clients in Quebec.
JH: I think potential investors should absolutely be looking at us, and looking at us the same way they look at other companies. Let’s look at their track record. Let’s see what they’ve done. Let’s look at their client base. Let’s see what they’ve done. Let’s look at their client retention. That says a lot about how they’re treating their individuals. And then let’s also look at their staff and the individuals behind it all, because often times, investors want to bet on the and not on the horse.
RG: What are your projections for growth as the global cannabis market continues to explode?
BR: Right now we are focusing on three primary revenue sources. The first is our licensing and consulting advisory service. Whenever a new state legalizes cannabis, we can assist new clients with a program as simple as its design or implementation of standard operating procedures. Alternatively, our plan of action for new clients may be as elaborate as helping them to procure licensure, assisting with design, training, deployment and management, and providing cultivation operation guidance for three to five years.
Our third revenue source is a service called Cultivation Max, where we step in to help an existing grow to realize improved yields and quality, or assist in brand-new grows. Businesses with underperforming grows bring us in essentially to restart the facility: retrain staff, reposition their cultivation methodologies, and so on. Let’s say a facility was getting two pounds per light. After they start working with us, when they begin to yield a harvest of more than two pounds per light, we receive a small share of the revenue increase realized from those crops.
JH: Our international support for applications and overall growth support has increased tremendously during the second half of 2017. We went from a little discussion around one client and one country to client and application support in Germany, Australia, Canada, Paraguay—all over the world, really. We even have relationships with individuals in Israel to help with their gardens.
In the next 10 years, you will see the industry go from zero to hero. We are a growing and management solution for tomorrow’s gardens. We want to help these commercial gardens be as successful as possible.
BR: Our prognosis for our stock is that we believe it will continue to grow in value as we’re able to deliver on the commitments that we’ve made for the company. Longer-term, but perhaps as early as next year, we believe we’ll qualify for QX status on the New York OTC Markets, which is the exchange’s highest listing.
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About CFN Media
CFN Media (CannabisFN) is the leading creative agency and media network dedicated to legal cannabis. We help marijuana businesses attract investors, customers (B2B, B2C), capital, and media visibility. Private and public marijuana companies and brands in the US and Canada rely on CFN Media to grow and succeed.
CFN launched in June of 2013 to initially serve the growing universe of publicly traded marijuana companies across North America. Today, CFN Media is also the digital media choice for the emerging brands in the space.
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