Green Growth Brands Doesn’t Want a National Cannabis Brand

Brands and retail are two concepts investors in the cannabis space have started to take more seriously as the market keeps growing.

With this growth, the US cannabis play has also gained the attention of investors. Peter Horvath, CEO of Green Growth Brands (CSE:GGB), is one executive trying to offer a modernized approach to brand creation and valuation.

In an exclusive talk with the Investing News Network (INN), Horvath speaks about the volatile cannabis market, his views on the reach of cannabis brands and where exactly Ontario fits in his company’s plans.

During a chat with potential investors as part of a tour of the Las Vegas cannabis scene in November Horvath related to investors: “Millennials don’t trust national brands.”

He took it one step further by saying a more suited strategy is to go against a national strategy and appeal to cities and even neighborhoods with brands targeting those areas.

“Coming up with consumer experiences that are localized and relevant and reflective of where they live is absolutely going to get you 20 or 30 percent more sales, [rather] than just popping in a generic cookie-cutter experience that is everywhere else in the United States,” Horvath told INN.

As such, GGB has been building a presence in Nevada through a retail network of shops branded The+Source and the promotion of a variety of brands in the popular market.

In August, the Las Vegas Review-Journal reported dispensaries in Nevada sold approximately US$425 million of adult-use product, which gave the state US$70 million in taxes for the first full year of recreational sales.

Additionally, a report commissioned by the Nevada Dispensary Association from RNG Economics projects US$8 billion in economic benefits for the state between 2018 and 2024.

As a result, Nevada is the number one focus for GGB, which has continued to add to its retail network in the state.

In early December, the company obtained seven extra retail licenses in Nevada.

“At maturity, we see Nevada as a consumer market that represents US$150 to [US]$250 million in revenue potential to GGB with ten or more dispensaries across multiple brand formats,” Horvath said to shareholders in a statement.

Ontario play for GGB dispensaries

Horvath told INN GGB’s strategy regarding Ontario is valuable because “it’s a pretty low capital investment for what could be a pretty decent return on invested capital.”

The executive explained the capital needed at this moment is limited to the application cost, risk in locking real estate and building out a story for consumers

“The first step is we could find a dozen great locations and begin doing business in Ontario, that would be a terrific outcome and then see how performances and then expand from there,” Horvath said.

However, when asked how vital the Ontario market was for GGB, given the volatility in the market for regulations and license applications, Horvath admitted it is not priority number one.

Due to Canadian regulations on marketing and the products currently legal, Horvath said GGB’s stores wouldn’t be able to utilize the same skills earned in the Nevada market.

“Ultimately, like everything else in cannabis whether it’s in the States or in Canada, the rules that are there today are likely to change in the future,” Horvath said.

Last Thursday (December 13), Ontario’s government shocked the industry by announcing it would be rolling its retail market opens in “phases” due to the national shortage affecting the legal Canadian market.

“Taking into consideration the required investments for a prospective Ontario private legal retailer, we cannot in good conscience issue an unlimited number of licenses to businesses in the face of such shortages and the federal government’s failure to provide certainty around future supply,” read a statement from Ontario attorney general Caroline Mulroney and minister of finance Vic Fedeli.

Instead of opening its doors to retail applicants, the Alcohol and Gaming Commission of Ontario will now implement a lottery system for the applicants of retail licenses.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Green Growth Brands is a client of the Investing News Network. This article is not paid-for content.

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.