Green Growth Brands' CEO says he's gearing up for an M&A tear and explains the types of companies he's going after
Courtesy of Green Growth Brands
- Marijuana retailer Green Growth Brands is gearing up for lots of M&A, the company's CEO Peter Horvath said in an interview with Business Insider.
- Horvath also said Green Growth Brands will be "following through" on its bid to take over Aphria.
Marijuana retailer Green Growth Brands is gearing up for a dealmaking tear, the company's CEO Peter Horvath said in an interview.
In the rapidly growing marijuana industry, "M&A is part of the game" said Horvath. "It's safe to say we'll be involved for at least five years in a meaningful way."
Horvath said Green Growth Brands would prefer to acquire targets who own licenses to operate dispensaries in states with legal marijuana, but that don't have the retail stores up-and-running yet.
"We aren't wowed by what people out there are doing," said Horvath, who comes to the cannabis industry with a wealth of retail experience across Victoria's Secret, American Eagle, and DSW. "We prefer to buy unexecuted licenses so we can make all the decisions."
He also said that he thinks other marijuana retailers are spending "too much" on licenses and that Green Growth is "trying to be smarter than what we see out there."
Horvath listed off eight transactions Green Growth Brands has made in recent months as examples, including partnerships with DSW and the Simon Property Group to sell its Seventh Sense brand of CBD skincare products in malls around the US.
Horvath also said Green Growth is still interested in its bid to take over Aphria, even after being turned down in December.
While Green Growth isn't likely to raise its bid for Aphria, Horvath said, it remains committed to trying to get a deal done.
Irwin Simon, Aphria's new board chairman, said earlier in January that the two companies may enter a retail partnership at a later date, an idea that Horvath is open to.
Aphria, however, isn't the only target Green Growth Brands has in the near-term, said Horvath, though the company will hold off making formal offers until the Aphria bid is resolved.
One thing Horvath said that he won't be spending lots of money on is advertising.
He said that MedMen, a publicly traded chain of upscale marijuana dispensaries in the US, was "wasting its time" putting up billboards and trying to run ads on television.
MedMen recently partnered with director Spike Jonze to produce a 2-minute spot called "The New Normal," which was rejected by major TV networks and posted directly online.
"That's 0 calories," said Horvath. "I don't know what that has to do with their business - it's not going to create new customers."
A spokesperson for MedMen couldn't be reached after several attempts for comment.
Rather, Horvath said in his view the best way to create and retain customers is through word-of-mouth. If someone has a great experience in-store or with a product, they're more likely to tell their friends, family, or co-workers about it.
For what its worth, Horvath isn't concerned about the Food and Drug Administration's recent moves to crack down on CBD-containing food and drinks, because they're focused on the skincare side for now.
"I'm kind of agnostic to that," said Horvath. "If the FDA came down hard, our competitors would be sitting on inventory they couldn't sell. If I'm being malicious, I hope they come down hard."
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