Root & Bloom’s House of Startups

Salisbury, Massachusetts-based Root & Bloom is a locally and independently owned producer of quality cannabis products whose relatively recent entrance into a quickly maturing Massachusetts market has resulted in a string of achievements that include a steady increase in the number of stores their products are sold in, month-over-month sales growth, and a burgeoning reputation in the state as a top-10 flower brand, the #1 concentrate brand, and a key supplier of extracts for top-selling products, to name a few of its accomplishments.

Root & Bloom’s production center is a 50,000 CGMP-compliant facility in Salisbury that has 20,000 square feet of canopy, and will soon have its own adjacent retail space, which they are calling Road Trip. The company is also a growing house of brands, currently featuring house brands Root & Bloom, Crispy Commission, and Goods, and partner brands like Joy Bombs. But Root & Bloom is also a house of startups, so to speak. As explained by CEO Tom Regan, whose cannabis resume extends back to Colorado and Mindful Cannabis (aka MiNDFUL), where he served as president from 2014 until its sale to LivWell in 2021, it’s a model built on experience but also steeped in the unique opportunities that still exist in a Massachusetts market that is finally coming into its own.

“You caught me on a high biorhythm day because we just finished our highest month ever, so I’m a little excited about that,” said a clearly energized Regan during a recent call. “Maybe tomorrow will be a harder day and you will catch me down.” Maybe but maybe not. Regan is a Massachusetts-native, but also a Colorado cannabis veteran steeled in immature markets that take time to find their feet. His previous career in high tech was also in its own way a precursor to the journey that would lead eventually and/or inevitably to Root & Bloom.

“I studied operations as an undergraduate at Northeastern,” he said of his education. “In the old days, they called it Industrial Engineering or Operations, and I had a dual finance and marketing concentration for my MBA at Boston College. Fascinated by technology early on, I then spent a career in high tech mostly at early venture startups, helping to build the team, build the revenue, build the products.

“And then I had a couple of interesting exits,” he added. “Cisco bought a couple of companies I was a member of or early-stage companies I owned, and Intel bought another one that I was at. So, that was a lot of fun in my late 20s and 30s. Then I was at Cisco for about 10 years as a director in their operations group working on acquisitions, and integrating companies that we bought, as well as at one point managing about $10 billion in the supply chain of Cisco’s annual revenue.”

Regan left Cisco around 2012, and started a small software company with a friend who was a professional trainer. “His specialty was training people in presentation skills,” recalled Regan. “We started a company using what’s now called biometrics to help people learn and refine their presentation skills.” In late 2014, opportunity knocked loudly. “One of my partners at one of the tech startups had invested in a cannabis company. It was Mindful. I loved what I saw. It was early stage, and they were trying to build something that was struggling.” He decided to join the team.

With no commercial cannabis background per se, did Regan know what he was looking at when he first assessed Mindful? “I didn’t know cannabis, and I didn’t know anything about farming, but I did know about technology, process, building, repeatability, scaling,” he said. “They were struggling a bit, the grow wasn’t producing what it should, and they had three retail stores that were in the early stage. 2014 was the first year of adult-use in Colorado, and it was a bifurcated market. Everyone started vertical, there were no companies that were just opening dispensaries, or just opening a grow, and everyone emerged from the medical space into the adult-use space. I saw an incredible opportunity that had the bones of a really great vertical business that had tons of potential and just needed a little bit of discipline and some more professional management.”

His experience in high tech and at Cisco turned out to be a decided asset in wild west of weed. “Because the vertical integration, when you throw in the extraction side of the business – which Mindful hadn’t done yet – yes, there were a lot of parallels to high tech and Cisco, and even the small startups, because you’re basically taking a complex process and trying to refine it into a repeatable process,” said Regan.

Still, there was a learning curve. “It was a huge curve,” he recalled. “I knew I understood a lot of elements of the business, but I’d never been involved in agriculture, and certainly not indoor agriculture. It was a huge learning curve, and people were incredibly generous. They allowed me to swim where I was strong, and provided guidance where I wasn’t, and it was incredible to have them as a resource.”

Regan was at Mindful from Q3 2014 until it was sold, which took longer than planned because of the pandemic. “We got to a deal in fall of 2019, and COVID slowed it down a little, but we finally fully executed the deal in early 2021,” said Regan. “And then I left. I’d been commuting from Massachusetts every week out to Colorado.”

The sale essentially marked the end of Regan’s Colorado cannabis days, but he has retained some passive ownership in an Illinois Mindful retail offshoot with Meg Sanders, another recently profiled Mindful alumni now based in Massachusetts, as the co-founder and CEO of Canna Provisions. ‘There’s this dispensary line called Hatch that Meg and I have ownership in as a result of some of the work we did with them,” he said of the Illinois arrangement. And of course, the former coworkers are now doing business in their new stomping ground, with Canna Provisions proudly carrying Root & Bloom products. “Meg is a world class retailer,” said Regan. “She and Eric [Williams] are exceptional at retail.”

Jumping Back into Cannabis

Exhausted from years commuting back-and-forth from Massachusetts, Regan was more than ready to move on. “I have four children, and my family lives here on the north shore of Boston,” he said. “After we consummated the deal with LivWell, and we helped push the PharmaCann thing along, I kind of took a little breather.” The lure of cannabis was never far away. “I had some friends that were out here, saying, ‘Hey, so and so’s starting to grow or so and so has a retail operation, would you talk to them?’ So, I did some light consulting for about a year while I figured out my next move, but I didn’t go hard because I needed some downtime.”

But why return full-time? Regan said he had two reasons for jumping back into the fray. “I came across the Root & Bloom team,” he said about the first. “I met the founders, and I really liked them. I started giving them some advice, they needed some technical folks, and I recommended some of the Mindful team that had since scattered to the winds, working at operations out in Colorado, and some were consultants. I said, ‘Hey, why don’t you speak to some of them,’ and the Root & Bloom team started speaking to those folks, they started consulting for them, did a fantastic job, and [Root & Bloom] started making offers to some of the people I introduced them to. That was my second reason.”

Of course, Regan still keeps his finger on the pulse of other cannabis markets whether he has investments in them or not. “I talk to some of the CEOs of the MSOs just as part of business development, and also just to get to know them,” he said. “I have a lot of friends in this industry from different states, a lot of incredible people. I like to see what’s going on out there, keep my finger on the pulse of the markets as an interest, and I have a fiduciary responsibility to develop this business, and part of that is to keep a finger on the pulse.

“I’ve learned that, like high tech, this is a small industry,” he added. “And I hate to say it this way, but I think a lot of the best people, the brightest minds, the most talented, hardworking people, know each other, we share information, and we share resources where it makes sense. Sometimes, it’s smart to just keep that network going. As evidence of that, I was able to convince most of the incredible players we have on our team here in Massachusetts to move here. They bought into our vision and are now working in Massachusetts, and I think what we’re doing here is amazing. The Colorado experience, while incredibly important, taught all of us what not to do.”

He paused before continuing. “You asked why I did this,” he said. “I love the team, I love the owners, I love the vision for the company. I’m from Massachusetts, and I wanted to work in the state. In Colorado, we built that company up to a size that was way larger than in 2014, and we were vertically integrated. It wasn’t just cultivation and retail. To take what we learned into Massachusetts and to be able to build that with people I know and trust has been incredible. We all have days where we’re tired and don’t want to go to work, but that is not the case for me. I’m more energized than ever by the people we have on this team and what we’re doing and what our vision is. We’re thinking boldly.”

The Massachusetts rollout was somewhat inverted for Root & Bloom, through no fault of their own, but it worked out in the end. “I joined in April of 2022, and license approval was around that time,” said Regan. “Now you’re four months away from harvesting your first grow, so it’s into September before we can have any flower available. The state came in and actually did it backwards. They approved our manufacturing license in July, and we started producing some simple gummies and vape pens to get going even before our 20,000 square feet grow was ready.

“It was slow growing, because we were jumping into a market without flower, but we just banged away with our 20 employees, and finally we got our first harvest,” he added. “We called the state, they came out in November, we were approved to start shipping, and that’s when we really hit our stride. In November of 2022, we were in about 25 dispensaries, today we’re in over 200, and we’ve sold into 108 in the just last 90 days.”

The Five Startups

Despite the fact that Massachusetts is a fast-maturing cannabis market, everything about this venture feels fresh to Regan. “Maybe that year outside of being an operator got reinvigorated me,” noted Regan, “but the thing that invigorates me the most is that we’re just getting started. Massachusetts is hard as hell. I told some of the founders, three or four of the early people, that this is going to be a rock fight, and they didn’t believe me, but I knew it from Colorado. Seriously, we’re just getting started here.”

That comment reinforced my old theory that because Colorado cannabis companies were forced into being vertical even if they may not have wanted to, they developed a knowledge base and a discipline from that experience that served them well for years to come.

“I totally agree, and I view it as an advantage,” said Regan. “When we started, my experience was retailing and cultivation, both of which are highly people intensive and capital intensive. The investment to start a grow is massive, with the lights and the temperature controls, creating the outdoors indoors. It’s really the hardest part of the business, but what we’re doing here is we’re building a distribution company, we’re building a branding company, and we’re attracting other brands that have been successful in other states to come here and work with us and gain access to the Massachusetts market without all the heartache and the burnout.

“We’ve become a vehicle,” he added, “and it’s really exciting, because I feel like we’re working in a company that’s actually five different startups. We’ve got a cultivation startup, we’ve got an extraction startup, we’ve got a manufacturing and brands startup, and we have a sales and distribution startup. Each one is a unique set of skills and challenges with different funding expectations and margins and everything, but there are five businesses under the one roof that is Root & Bloom. And like I said, we’re just getting rolling.”

I asked what the idea is behind the five-startup business model. “I think for us to be an effective sales organization, a distributor, we needed to start without a retail presence, which is unusual,” replied Regan. “Criticism might not be the right word, but I think there has been a land grab for a lot of the MSOs. Build a grow, go retail, and get going. But I think the greatest growth in this industry is brands, products, and the capabilities that it takes to do those things.

“I saw this in high tech, and I see it in this industry,” he added. “As it transforms, retail is not the only source of revenue. There are other incredible things that you can bring to consumers, and part of our strategy is bringing those things together while at the same time keeping them distinct for the buying public that’s interested in that vertical, if you will. We know that consumers don’t want to order from a million different places to get their products. It’s like Cisco Foods (not the computer company.) A restaurant will order everything from tater tots to prime rib, and even the alcohol, and it shows up on the Cisco delivery.

“That would be ideal for dispensaries,” he continued, “and we have found that catering to that has been an advantage. We want to blow up our brands and make them the most valued brands in the United States, but we also want to use our distribution, sales, and marketing capabilities to serve these dispensaries with other brands that are like-minded around quality.”

Massachusetts does seem to have plenty of brands to choose from, something Regan views as healthy. “I think the end consumer wants variety,” he said. “If I went to Foot Locker and all they had was Reebok, I wouldn’t go to Foot Locker anymore. I think that’s called a factory store. Nike has those. In Colorado, because everyone was vertical, they were like, ‘I’m not carrying anyone else’s stuff. I have a grow. I have a small extraction facility. I’m only carrying my stuff in my store.’ Well, the public thought differently.

“You asked about driving far,” he added. “If I’m going to shop, I want to go to a place where I can look at the new Adidas sneakers, the new Nike, the new Reebok, or the newest brands. I think consumers want and demand that. Being vertical, and being in a closed architecture, so to speak, where you only carry your own, works for some people and it works for a little while, but at the end of the day, these retailers are selling real estate. If you’re a good retailer, you want to serve the public and give them what sells at the best margin for you and the best value for them. So, while a lot of these closed shops are successful and good for them, I think as consumers get more sophisticated, we’re going to see people ask for variety when they shop. At the end of the day, the patients and consumers are why we’re in this business, and we need to serve them.”

Regan was warming to the subject. “It reminds me of when I was a teenager and in my early 20s, when people would turn their nose up at Californian wines,” he continued. “Then the public got educated on what California wines were, and all of a sudden California wines became a world standard. A think we’re seeing a little of that in cannabis. There’s an opportunity for people to become more educated about certain cultivators and what they’re offering, their strains, the way they grow, and I think a lot of people associate their consumption experience with how the grapes were grown, how the plant was grown, what went into it, who’s the grower, and what is their philosophy. I think that’s becoming more important in a state that’s a little younger than California or Colorado, and we’re going to see more of that here.”

To that end, is the bottom line for Root & Bloom to provide quality products that define as craft? “I think you hit it,” said Regan. “Our VP of cultivation has very high standards, and our founders have incredibly high standards around what they expected, and it all starts with flower. First and foremost, we wanted to be among the top five quality flower producers in the state, and that was from day one. It was already cemented before I joined, and when I joined in April of 2002, we absolutely knew that it was possible.

“We don’t have 100,000 square feet, so we’re not the biggest grow,” he added, “but we have the best team in the industry. I’m going to brag a little. Every CEO says this, but they work here, and our goal was to make sure that the expertise and the passion for the product and this industry came through in our flower, and I think we’ve achieved it. We may not be number one in revenue because we don’t have a 100,000 square foot grow, but if you go to Reddit, where nobody says anything nice, we show up pretty well. I think we’re one of the top five flower producers for quality and consistency in the state. I’ll claim that right now.”

Does everything flow from that? “It’s opened a lot of doors for us,” said Regan. “Because of the way we got our licenses, starting off as a scrappy startup with a gummy and vape line, and then the flower opened the door for us in late 2022, it set us on a trajectory that was just straight up.”

It also appears to have unleashed Crispy, which has not only broken $1 million in total retail sales in the last six months, but it also was first in retail sales in December for all extracts. And it all happened in a relatively short period of time.

“It sure did,” enthused Regan. “The original plan for the company wasn’t necessarily to launch a dabable extract brand, but with the team’s experience, we really have great extraction capability, so we launched a brand. And it’s interesting, a lot of people in Massachusetts were shopping for concentrates in Maine because it doesn’t have the same testing criteria, it had a better cost profile, and a lot of people here didn’t have a highly evolved extraction capability because of the testing requirements. So, all of that really allowed us to take off.”

There is, he added, room to add more sales. “I can tell you this,” said Regan. “In Colorado and other mature markets, concentrates alone, not including vape, usually are between 12 and 15 percent of the revenue. In Massachusetts, when we started off, it was 3 percent of revenue. Now, I know California is a different than Colorado, which is different than Massachusetts, but they’re not that different. So, something was going on if there was 12 to 15 percent of revenue in every state except this one. And I think it’s because the testing criteria and the technical expertise to work within those constraints weren’t widely available. So, for us, it was a huge opportunity, and we’ve really dedicated ourselves to capitalizing on it.”

Growth Areas

Wholesale is another areas of growth for Root & Bloom, almost another startup that opens up a myriad of white-labeling opportunities. “It’s really exciting because it allows us to get our flower into other stores that might be closed off or not interested in carrying other brands. It’s been an incredible opportunity for us. It’s the same with Crispy. If somebody wants to give us their biomass, we’ll convert it. It’s probably one of the fastest segments of our business.

“When we started,” he added, “business to dispensary was our original line of business. We made products and brands and sold them in dispensaries. That was 2023, our first full year of operation. At the end of last year, we started to find that a lot of people were coming to us and saying, ‘You guys have an incredible capability on the manufacturing side. Can I buy biomass, and have you converted into the quality and volume type products that you’re doing?’ Some people will call it Crispy, and other people call it whatever their brand name is, but it’s been a massive opportunity. So, we’re really excited about that not just on the bulk flower side, but also people buying bulk concentrates from us. A lot of folks come to us and say, ‘We have a grow with incredible biomass, but we don’t know how to convert it into quality wax or distillate or THC isolate.’ We can do that, and we’ve been doing it.”

The Joy Bombs collaboration is a perfect example. “Joy Bombs is kind of like a joint venture,” explained Regan. “We knew them from Colorado, they jumped in with us, and they’ve been a smashing success in Massachusetts. They brought the technical, the IP, the know-how, and the brand, we brought the capabilities and the distribution network, and we put them together. It’s a really unique opportunity because it’s a form factor that doesn’t exist elsewhere in the market.”

So, if someone else said, ‘Can you make gummies for us? We have our own brand, and we’ll take care of everything else,” you can do that?

“We’d be open to that for sure,” responded Regan. “We do have an entrance criteria for partners. They have to be technically competent, well-funded, and show some demonstrated success in another state. That’s because we think we have a unique capability, and we’ve gone through the licensing and the capital expenditure and building out the team, so we want to make sure that we’re optimizing that with the best-supported brands, with the best reputations, and quite frankly, the easiest to do business with. We don’t want to deal with people that are hard to do business with. We’ve learned that lesson as well.

“One of the things I’m most proud of with this team is that we’re up to almost 80 employees now, and I would say the vast majority – 70 out of the 80 – had zero cannabis experience before coming here, and we’re really proud of that,” Regan emphasized. “We had a core of 10 people with cannabis experience, and then the other almost 70 had no experience walking through the door. One of the most satisfying parts of what we do is bring people in whose earning potential is at a certain level, they come in here, and it’s almost like getting a PhD in cannabis, whether it’s extraction or cultivation, or sales and distribution or marketing, finance, when they walk out the door, they are marketable. I don’t want them to walk out the door, but we are creating immense value for people with zero experience. It’s really a delight to see.”

Root & Bloom has also received a grant from the state to do leadership training with Northern Essex Community College. “Eighteen of our mostly mid-level employees are going through training – what I call an MBA in a box – where they go out every Tuesday for four hours at the campus, and we pay them while they’re there. So, we’ve got a lot going on. We were recognized as the best cannabis company in New England. The numbers are the numbers, but the thing that’s more exciting is the energy that this team has to go out into a world-weary market and dominate.”

Road Trip

And now Root & Bloom is adding retail in a way that meshes perfectly with their existing operation. “Interestingly, we’re zoned in a place in Salisbury that is very close to the New Hampshire border in a zone that was approved for cannabis licensing. There was a licensee that was next door [to us], but they didn’t do anything with it. They were trying to raise money to build out, and we bought that license from them. It is 100 paces from our front door on an adjoining lot. What we have here is almost a cannabis experience, with a giant grow and a big red farm building.”

Is it a one-off or the first of more. “My philosophy is that we’ve bitten off a lot,” said Regan. “We’re talking about five startups under one roof, including now retail, so that might be number six. I’ve lost count. And every day you earn your check, especially growing. We’ve built an incredible infrastructure and team and a reputation around our cultivation capabilities. So that’s been done, and it’s starting to earn profits for us. We’ve done that with extraction, manufacturing, and we’ve done it with sales. With retail, it’s very labor intensive. You’re dealing with hundreds, hopefully thousands, of people walking through the door every day. You need to delight each and every one of them, and it’s a different set of skills.

“So, yes,” he added, “we would love to expand our retail footprint beyond the first store, but as CEO I have to make sure we do that to our standards. First, we want to build up a retail culture and a core of capabilities right next door. We want to get it to where we’re delighting everyone that walks through that door, and then maybe in the second half of this year, if we’re successful upon our opening and become an excellent retailer, we’ll start to look at a second location and possibly a third. But the lesson I learned in Colorado with retail is, open one and get it right, build a culture, and then you can expand.”

Is there any sense of urgency? “No,” he said. “We’re in no rush in the sense that it’s limited licensing in this state and we just want to be incredible. We mean that. We’ve passed out to the team a book by Will Guidara titled Unreasonable Hospitality. It’s an incredible book that is all about creating experiences. We’re in the hospitality business, and you had better be good at it before you expand.”

While on the subject of opening a cannabis dispensary, I asked Regan about his experience with price degradation and experience and how they’re dealing with that in the current environment?

“In terms of price degradation, we probably picked the very worst time to open and get our license,” he admitted. “We got the license and opened for revenue in about August of 2022, and if I remember correctly, the price of cannabis was $7.76, in September of that year, down from almost $13.50 eight months before, in November. So, we opened in the middle of that, and it was a great lesson. It forced us to be incredibly resourceful, which is something we talk about a lot here at Root & Bloom. Make do with what you have, be creative.

“In 2023,” he added, “prices stabilized, so even though we saw prices go from $14 a gram to seven when we were about to open, while that’s catastrophic in most businesses, and can be business ending, I don’t think we were spoiled like a lot of the people that opened earlier, when it was $14-$15 forever. I think it was almost a gift to open in a time when the market was having huge price degradation. It forced us to be more resourceful and efficient with the resources we had, and really kind of built that muscle up.”

Had he also gone through price compression in Colorado? “It was even more catastrophic there,” said Regan. “When I started at Mindful in the fall of 2014, wholesale prices were $3,000 a pound, and by 2017-18, some people were selling pounds as low as $600.”

It was an invaluable experience. “If there was one secret weapon I personally had,” noted Regan “it was seeing this movie in Colorado, and while the movie in Massachusetts is painful for many, I don’t think it’s the price degradation that’s really killing people. I think this was the first state that the MSOs – who all started in Illinois, which followed Colorado – came into with a fury and a ton of public money. We couldn’t do that in Colorado, so they started in Illinois and were quickly able to raise a lot of capital. The next state that came up was Massachusetts, which is where all that MSO money went, and it flooded the market with 100,000 square foot grows.

“Too much public money, and crazy terms,” he added, “but I think that a lot of that has shaken out, and the market is now operating under true supply and demand, not artificial supply and demand of people just throwing money into a state to plant a flag and report public earnings.”

Is Root & Bloom profitable? “We are,” Regan confirmed. “We were not in the first two quarters of last year, but we broke even in Q3 of 2023, we made a profit in Q4, and hopefully we’ll be profitable from this point forward.”

Bullish on Massachusetts, Open to Expansion

Root & Bloom may be at the beginning of its journey, with the world as its potential oyster, but for now its focus is home. “I think there’s tons of growth in Massachusetts,” said Regan. “A lot of people were doing the retail-cultivation land grab and spent all their money on that. What we’re doing in the wholesale space is we have tons of capacity to bring on other world class brands, like Joy Bombs, and create an opportunity in a business partnership to bring them into a state that would take them millions of dollars, years of time, and probably many sleepless nights of heartbreak to do. They can do it with us by partnering, and that allows us to be selective and choose who we partner with to the advantage of both us and the partner.

“There’s room here,” he added of retail. “Where we’re situated, opening a dispensary near the New Hampshire border, and we’re about three miles from one of the most popular beaches in New England. On a summer weekend, there are probably 100,000 people coming and going to that beach, so I see nothing but opportunity in Massachusetts. As we expand our B2B business using our capability and selling both products, and not just to dispensaries, we can be the fuel, almost like a refinery. We can sell refined oil and oil products to other brands so that they can make that part of their ingredients. We have the bulk capacity to do that.”

But Root & Bloom is much more than a cannabis company with assumed limitations. “Crispy, with its great name and being the number one concentrate brand, would be hugely attractive to someone in New Jersey or possibly New York,” said Regan. “So, how do I get involved with that? I think that comes with not just the branding and the product quality and the name, but also the IP that we’ve developed around it that is incredibly valuable. And I consider us an IP company first and foremost. We’re a technology IP company. That’s my experience, but we’re not that because that’s where I come from and it’s easy for my brain. We’re that because we have so many degreed professionals on the team; we have somebody with a botany degree, a lab science degree, we have engineering, marketing, you name it. We have a capability here that I think is limitless. People say, ‘The market this, the market that,’ but I’m just bullish on Massachusetts.”

Does that mean we will one day see Root & Bloom products in other states? “It does,” he said. “We’re open to other states, and I’ve had discussions with operators in other states, almost the reverse of what I described with Joy Bombs. Experienced talented operators with the facility and the license that might want that IP. And it’s not just the brands. When it comes to extraction, it’s about who has the technical capability to do this at scale again and again and again. I think that’s very underestimated in this business. People are like, ‘I’ll open a grow, and people will buy it, it’s cannabis.’ And I’m like, ‘No, palates are evolving to be more discriminating.’”

Without getting political, were there any catalysts Regan would like to see that would improve the business environment? 280E going away? “Yeah, this is the only business that I know of where you’re taxed at gross margin, and you can’t write off your general sales and administrative costs,” he replied. “If you’re a retailer, that’s all your costs, other than what you purchased to put in the store. The lease, the people, the marketing, the store, the heat, you can’t write that up. I think whether it’s rescheduling that eliminates 280E or SAFE Banking, I would not be sad if 280E went away. It would put cannabis on an equal footing with other businesses that are heavily regulated, like alcohol or other businesses that have high degrees of regulation but are enjoyed by millions of consumers.”

Still, because of the uncertainty, is the company mindset going forward to plan for the worst and hope for the best? “It is,” said Regan. “As a businessperson, if you’re designing your business for something that has to happen at the ballot box or the legislative level, and you bake that into your plans, you’ve given up all control of your plans. I think you can plan for the best and you can model it and have a best-case scenario, but as a responsible business leader you have to build into your assumptions that things are not going to change, so you have to build a business that can last under the current conditions. And if the best-case scenario does happen, it’s great!”

Possible Off-Ramp?

It seemed somewhat perverse to ask a newish company about an M&A off-ramp, but this is cannabis, and the query was not unanticipated. “In my experience in high tech,” said Regan, “I’ve seen a lot of companies start off and they say at the dawn of their company, the day they start, ‘We’re building this company to be sold.’ And when you do that, you have two options. You built a company to be sold, and if that doesn’t work out, you’ve done a bunch of things that mean your other option is to go out of business. You don’t have a third option, which is to build a business that’s sustainable.

“The philosophy we have here at Root & Bloom is, let’s build a business that’s highly sustainable, respected, valuable, and creates value for our community, our employees, for the state, and for our stakeholders and investors as well,” he added. “And then if the option comes to sell that company, we built something that’s sustainable already, and if someone’s interested in buying it, that’s attractive to them as well.

“But I’ve seen a ton of high-tech companies, like pets.com, that decided to spend on Super Bowl ads,” he cautioned. “They spent $5 million on an ad, but they didn’t build a sustainable company. They build it for an exit, and if nobody was interested in that exit, they just blew the whole thing up. Our goal is to build a sustainable company that people love, with products they love, that people love to work for. I want everyone to come to work excited to be here, and I want customers to walk through our door and be excited and delighted to see what we’re going to do next. Now, if you said to me, ‘I’ve got a half a billion dollars, and would you like to talk to someone,” of course I would! That’s my job. But we’re more focused on building something to last that’s meaningful.”