Benzinga Interview with Kyle Kingsley CEO of Vireo Health

Scott Willis interviews Kyle Kingsley, CEO of Vireo Health and discusses their business to business cannabis operations.

Transcript

Capital 10X: Just to start out for our viewers who don’t know Vireo, could you in a few sentences tell us what you do and where your operating?

Kyle Kingsley: Vireo Health is a large Multi-State-Operator, we’re actually in 10 states. We’re freshly listed on the CSE here as of a few weeks ago. Our main operations are up and running in New York, Pennsylvania, Maryland and Ohio in addition to some other states.

Capital 10X: So you know it’s starting to get to be a crowded field in the MSO game, I’m just wondering how should our investors and viewers differentiate you guys from everyone else?

Kyle Kingsley: So there aren’t that many that are 10 states or larger, there’s only a handful of us. Our big differentiator is I’m a physician, we have medicine and science through and through as an MSO. and that leads to a very differentiated company. We’re the science MSO, is the way we look at ourselves.

Capital 10X: From that science aspect it seems like you’re doing something a little different than everyone else, how do you see leveraging that part of your business, how will that grow?

Kyle Kingsley: We’re fighting the MSO fight, rapidly expanding, fighting for distribution, a retail footprint, ability to cultivate and process at scale, but the biggest thing that we produce is intellectual property and that permeates everything we do. From next generation of processing equipment to the next generation of cannabis products, that’s really our forte is developing the next new thing.

Capital 10X: So is that making sure that you’re well positioned when the pharmaceutical industry start playing a bigger part in this industry?

Kyle Kingsley: Ya it’s all the big interfaces, it’s going to be big pharma, big tobacco, big alcohol, big ag [agriculture], they’re all gonna come and play in this space. We have intellectual property in all those realms that’s going to be meaningful long term in the cannabis industry and so we think we’re very well positioned.

Capital 10X: I’m curious, what state would you say of the ones your in do you like the best as far as the near term growth opportunity and which one is less exciting for you?

Kyle Kingsley: I’m most bullish on Minnesota and New York. Minnesota actually has the same population as Colorado, there’s only two vertically integrated manufacturers there, a really transformative opportunity. I’m very excited about change in New York as far as potential adult use legislation, that’s very exciting as far as augmenting our customer base. We’re excited about all of our markets, its just a matter of whether its short or long term. There’s no market that we’re in right now that we’re not excited about.

Capital 10X: You’re bread and butter is Minnesota right?

Kyle Kingsley: Minnesota, New York we’re one of the 5 there and we’ve got a pretty large market share there since day 1. So Minnesota and New York are kind of our bread and butter. Long term I think Minnesota is going to be a major opportunity cause we’ll probably limit the number of licenses there long term. And legislative change, policy change is kind of afoot in many of the states where we operate.

Capital 10X: Looking at the store footprint, how many stores do you have now and how many do you plan to have by the end of the year?

Kyle Kingsley: Right now we have 11 stores that are operational and assuming no additional political augmentation of the numbers, we’re hoping to get between 25 and 28 open by the end of the year, possibly sliding into 2020. We’re working really hard on that front to expand our footprint there.

Capital 10X: As you’re looking at expectations for what these stores can do, I’ve looked across the country, you know some stores are doing $20 million a year, some stores are doing $2 million a year, what is your expectation where you’d like to be, what do you think you can do?

Kyle Kingsley: You’ve hit it on the head. All dispensaries are not created equal. You look at a dispensary in New York is not the same as a dispensary in Florida, is not the same as dispensary in Minnesota. So it really depends on the specific state. We’re in a lot of markets that are more juvenile, they’re not established markets, the upside is yet to come, very limited patient numbers, limited qualifying conditions. In places like Minnesota and New York we can’t even sell flower yet, which is pretty interesting, so all of that is coming and we’re very excited about the early status of our geography of our footprint right now.

Capital 10X: You’re making it sound like it’s hard to compare apples to apples at this point, cause it is all over the map with regulation, products you can sell in the store, store locations, all that.

Kyle Kingsley: Aboslutely. You compare a dispensary in Minnesota, let’s say that does $10 million a year versus a dispensary in California that does $10 million a year, you take Minnesota every day of the week. We’re 1% of the way home in Minnesota, whereas Calfornia is completely cooked at this point.

Capital 10X: For our viewer base, what are some upcoming catalysts that you think are most important that you think they should be watching when they’re looking at your stock?

Kyle Kingsley: We’re just executing on what we represented as part of going public. You’ve seen the acquisitions here in the last several weeks, we’ve closed acquisitions in New Mexico, Arizona, Nevada and Massachusetts. We’re excited to close on the remaining, outstanding acquisitions including Puerto Rico that we represented. We’re just really excited to augment our existing footprint and existing markets and look for other opportunistic opportunities that are out there.

Capital 10X: So is this an optimization year for you guys or could we see you doing some more expansion?

Kyle Kingsley: You know they’re really one and the same to us. We’re opportunistic growers, we’re very good stewards of capital. You’re not probably going to see us paying hundreds of millions of dollars for a license. But every merit based license process that’s out there, you’re going to see us there. We’re very uniquely positioned there, physician leadership, heavily stacked with science. So that’s a big part of our strategy. We’re excited about the likes of Missouri, the likes of Utah, the likes of Georgia, these more conservative states that are more going to heavily focus on medical teams.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

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Scott has over 12 years of institutional investment management experience analyzing both debt and equity securities. He has held senior investment research roles at Credit Suisse, and TD Asset Management. His core areas of investment coverage at Grizzle include marijuana, energy and crypto. Scott is a Chartered Financial Analyst and has been featured on Bloomberg, CBC, CNBC and Macleans. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.

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