CFN Media Interviews Golden Leaf Holdings
December 18th, 2017
News, Top News
The number of publicly traded cannabis companies, while small, is starting to rise. Investors interested in this emerging industry have a lot to take into consideration, and want to know that the companies they decide invest in are both rapidly growing and led by authorities in the field.
Golden Leaf Holdings (CSE: GLH) (OTCQB: GLDFF) is a vertically integrated company within the cannabis space offering an impressive array of products and industry expertise. The firm has announced several operational highlights including Golden Leaf received city licensure to sell cannabis in Las Vegas and other key Nevada jurisdictions; secured USD 10.8 million in a debenture financing to pay off outstanding accounts payable and provide working capital; completed the acquisition of Medical Marijuana Group Corporation (“MMGC”), who recently received a cultivation license from Health Canada for an Ontario grow facility.
CFN Media recently sat down with Golden Leaf CEO, William Simpson, to learn about his deep cannabis roots and why Golden Leaf’s award-winning brands continue to disrupt the market.
Rachelle Gordon: What is your background in cannabis?
William Simpson: I originally got into cannabis because my dad put me into full-contact martial arts when I was four years old and I was bleeding by the time I was five for trophies. I was really rough on my body my whole life. I got into wrestling and football in high school, continued mixed martial arts and I’m an avid surfer and snowboarder, so my body was ruined by the time I was in my early 20s.
My doctors, of course, had me on buckets of painkillers and muscle relaxers like it was no big deal. I had a really good friend of mine convince me that that stuff’s going to kill me and I should try something different. He made me cannabis chocolate chip cookies. I’d eat a quarter at night before I went to bed. I was able to wean myself off of pharmaceutical drugs in three weeks. I’m 38 now. I haven’t taken more than a couple pills after surgery since I was 22.
After that, the light bulb was there. I was in finance for a living at that time; I never thought I’d end up in cannabis. I was an amateur horticulturist on some level. I grew 50 of the hottest peppers in the world at home. I still do to this day, because I love hot food. That was my hobby. I figured, “I could probably grow my own medicine!”
I always believe the harder you work, the luckier you get and that happened. I ran into a horticultural professor who saw my passion and took my under his wing. I ended up doing a four-year internship around cannabis with a botanist professor in lab settings.
Along that path, we started developing my genetics. All of a sudden I was winning awards and gaining notoriety and people started saying, “Hey, could you help us do that?” That’s when I finally realized I could do something I believe in and love for a living. I started a consultancy company and I built a retail hydroponics store. For nearIy a decade now, I’ve been selling all the equipment, all the lights, and all the nutrients. We also built hundreds of grow facilities for people; the largest of which was a $15 million, 100,000 square-foot facility in Illinois.
RG: How did this experience inspire you to reach even further into the emerging cannabis industry?
WS: I’ve always wanted the industry to be something we could be proud of. I wanted it to be this prestigious and beautiful thing. Unfortunately right now, we aren’t quite there. Things are getting a lot better but our idea was we wanted to build a consumer experience in the retail dispensaries that changed perceptions and got rid of stigma. That was when Chalice Farms was born.
As a patient, often when I walked into a dispensary it would have a sterile and/or criminal feel. My ailments weren’t necessarily embarrassing—I had all kinds of pain. But we’d have people that came in and have bowel issues or things that are not easy to talk about in the first place. Then they’re coming into an environment where they’re already uncomfortable, and now they’re supposed to talk about something very uncomfortable.
We want people to come in and let their guard down so they can be open, thus enabling us to work with them the best way possible – and educate. If the patient is not comfortable and they’re just going to grab what they need and leave, you’re never going to get their attention to be able to explain the good, bad, and the ugly of the industry. I wanted an environment where people felt at home.
RG: How did you secure funding for Chalice Farms?
WS: I knew that developing Chalice was going to be very expensive endeavor. To attract investors, I went and built a beta dispensary. It was a local neighborhood store with our own farms, to prove our model. I didn’t want to go and say, “Hey, I think I can we can do this, give me money.” I wanted to go and say this is what we did. If we scale it now, this is what it will become.
The first investor we talked to was an angel investor who gave us $10 million on a handshake. We had worked with him as a consultant and he said, “I understand you know what you’re doing. I’ve seen what you’ve accomplished and with that vision, we’re going to do really great.” After that, we built Chalice to four retail stores that were open and featured products from our farms. We had four different proprietary strains. Since then, we have had five or six first-place medical cups and/or recreational Cannabis Cups and the DOPE Cup Heisman trophy. We also won first place in the stores category for atmosphere, store environment, and store merchandising, which we pride ourselves in because that was what we really built for.
We then created our own entire edible line featuring truffles, chocolates, and gummies. We created our own carbon dioxide and our own distillate. We understand cannabis, truly, all the way through from seed to sale. We own the vertical. We knew at that point we were doing something well because everyone loved it.
RG: When did Chalice decide to partner with Golden Leaf Holdings?
WS: Obviously, we wanted to grow our company. We said, “Hey, we can take this to other states. We can take it to other countries. That’s going to take additional capital. So we’re going to need to do an IPO or we’re going to need to go get additional funding through a private placement.” We ran into Golden Leaf around that time and we thought, this could be that vehicle. They’re already publicly traded. We could have access to the Canadian Public Market money to expand quick. They have licenses and dealings in Nevada and Canada so this could be really great. We decided upon an acquisition. They acquired Chalice and we somewhat merged – it was an M&A deal truly.
I was made CEO of the public company that purchased my company. Post-acquisition, we didn’t have enough capital to bring my original vision to completion. So I had to go right back on the road to show the vision of what we’re doing, what we need to accomplish, and where we want to go. That led to the company raising an additional $15 million.
RG: Why should investors look at Golden Leaf and what exposure to the broad cannabis market do you offer?
WS: There’s no sure investment in anything in life but you have to look at the horse that you’re betting on. It’s just the way it is in any business. If you look at our management team and you look at other cannabis industry management teams, ask yourself, “How many of them have a CEO, COO, and CFO who worked in this industry with their hands in the dirt all the way up, but are not underground cannabis people?”
The C-level group has been in cannabis from seed to sale all the way up. We have a very fundamental understanding, thoroughly, of every single process in the chain. When you look at this evolving world and commoditization of the flower product itself, you have to look at the team. There’s a lot of brands, there’s a lot of companies, there’s a lot of groups out there that just got into this. They may have a flashy model or symbol—but what is their depth of knowledge? Do they really, really understand?
When you pair that depth and longevity with a business background and the capital to execute, and a proven track record of consumer brand awareness, I think that speaks for itself. If I’m somebody that’s going to attach my carriage to a horse, that’s personally the horse I’m betting on, right? And I am. I’m the largest shareholder of the company. So I’m betting very heavily on it.
RG: What are your projections for growth over the next couple of years along with the exploding global market?
WS: Our focus is on driving organic growth complemented by growth from the acquisition of Chalice Farms. We expect our strong retail presence to drive a more favorable product mix and drive improved EBITDA results. We are dedicated to achieving positive cash-flow generation and building value for shareholders.
Now there’s a lot of market pressures and things out of our control and things we don’t understand but, again, when you think about the political topography, the financial topography, the cannabis world and the flow chart from start to finish, I think we have everything it’s going to take to navigate that successfully.
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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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