Steve White hasn’t applied for any alternative treatment center licenses in New Jersey. But through a series of acquisitions made by his Arizona-based company Harvest Health & Recreation, he’s now arguably one of the biggest players in the state’s cannabis industry.
Harvest Health announced its acquisition of CannaPharmacy, parent company to Woodbridge-based Garden State Dispensary, in a deal of undisclosed value on April 9. It then acquired Verano, one of the state’s “new six” license holders, on May 13. The latter deal is thus far the largest acquisition in the nation’s cannabis sector, ringing in at $850 million.
These acquisitions put White in a position different than any other operator: Of the twelve licensed alternative treatment centers in New Jersey that are already live or expected to go live in the coming months, he is at the helm of two. According to White, they were opportunities he couldn’t pass up.
“I hope it’s good for New Jersey, too,” he said. “We think we’re really good operators and really responsible members of the community and I hope that people are excited about us coming.”
What does Harvest Health, which now spans 17 states and over 200 facilities, consider when looking for a market to enter? First, they examine the regulatory regime: is there a limit on the number of grow or retail facilities, and what are the restrictions on ownership? Beyond that, how mature is a given market?
“You look at some of those more mature markets like California and Oregon, we’re not interested in investing in cultivation in those places. We think the opportunity there has past,” he said. “New Jersey, by contrast, is a great opportunity to do well in cultivation, and for someone who is well capitalized, we feel like we can come in and really help in an area where maybe the incumbents haven’t had the ability to build out the facilities they were given license for initially.”
If you remember that the program is about the patients, he said, everyone should want growth. The more places products are available, and the more product overall, the better for everyone.
White opened Harvest Health’s first location in Arizona in 2013.
Much has changed for the company since then, including, he said, its ability to take chances. When the opportunity arose to apply for a license in New York, it passed on applying because New York wasn’t a profitable market.
“People spend a load of money on New York for the right to lose money. That’s not something we could have done,” he said. “Now we have the ability to have a little more of a time horizon on returns, so if the right New York opportunity came, even if the market conditions were as they are today, it’s something we would consider.”
Also a newer opportunity: White’s ability to take a salary. He worked for over two years without taking a salary, opening and closing its Tempe, Ariz. shop. Meanwhile, he said, he dwindled his savings down to nothing and ran up credit cards, because that’s what was needed for the company to succeed.
“[I was doing] just what most people do when they’re starting a new business. They go all in,” he said. To avoid losing his house, he started taking a $60,000 salary and kept it the same for some time.
Now that Harvest has had marked success—reporting $16.9 million revenue in Q4 2018—he makes more. Still, he said, “we don’t have excessive executive salaries. We work really long hours and we work really hard, but we don’t get paid $1.5 million,” referring to the reported salary of Adam Bierman, chief executive at Culver City, Calif. based cannabis giant MedMen.
MedMen made news this week with $63.1 million Q3 net losses. It subsequently trimmed Bierman’s salary from $1.5 million to $50,000.