The year of the Operator

2015 has been an interesting year in the Cannabis industry. On the enterprise front, it has mostly been about licensees building legitimate, tax paying businesses in the 20 plus states and the District of Columbia with state regulated medical marijuana programs and the 4 recreational/adult-use approved regulated state programs (Colorado, Oregon, and Washington are now fully operational while Alaska continues to develop its program).

It has also been a year for these legally, licensed non-profit and for-profit businesses to develop and institute best practices, all with the end goal of running a healthy and successful ongoing concern that contributes to the economy by creating jobs for thousands of tax paying citizens and supporting local, state and federal initiatives by paying their inordinately high share of businesses taxes. State approved and regulated operators continue to face federal government interference in the form of prohibitive actions regarding access to federally chartered and insured banks (The Fed Crosses the Line: Fourth Corner Credit Union Denied) and unequally applied Federal tax enforcement issues, ie: 280E. And, unlike other industries, cannabis operators have to navigate a variety of other conflicts between state and federal laws.

In the Golden State, California, (with arguably the 7th or 8th largest economy in the world), cannabis is still largely unregulated (with the exception of the Bay Area and a few friendly locally regulated pockets in northern CA) creating all kinds of issues for operators trying to run legitimate medical marijuana co-operatives in the face of raids and significant intrastate transportation issues. It’s a mess in a state that some estimate produces as much as 60% of the legal and illegal cannabis consumed in the US annually, but the recently signed regulations by Governor Jerry Brown are an encouraging sign for medical operators in the state.

With all of that in mind, CBE is following up last year’s inaugural CBE 100 with the, as promised, 2015 list which is based more on real quantitative data (Washington win’s the award for the most transparent state by reporting I502 licensee revenues and taxes on a monthly basis), interviews with industry operators from most of the legal and quasi-legal medical and recreation regulated markets that have shared their best practices, and vendor partner information with CBE over the last 12 months, and by piecing together information from a variety of public sources.

We would like to thank all of those who have made this year’s list. CBE believes that transparency helps establish industry legitimacy where operators are still viciously stymied and, in some cases, heavily penalized by prohibition supporters or just plain old mean-spirited local, state or federal prosecutors or overzealous, corrupt and ignorant law enforcement officials or criminal justice and penal system workers who have been spoiled by the overtime dollars their departments receive annually from the  federal war on drugs.

We also want to especially thank our contributing experts, many of whom either work for legal operations, ancillary businesses our regulatory authorities and industry friends that have pointed us in the right direction to share the information on the 2015 CBE 100 PPRs in hopes of attracting investment dollars from the US capital market system to prime the pump for the fastest growing industry in the country.

Following the tradition and franchise established with last year’s CBE 100, CBE Political 50, CBE Most Influential Women, and The 10 Most Important Companies in the Cannabis Industry there ultimately will be four components to the 2015 list series released over the next several months.

• The CBE 200 will be broken into two parts:
  • The 100 largest operators in the business (CBE 100 PPRs)
  • the CBE 100 Ancillary Businesses
• The CBE Political 100 which is composed of the 100 most influential federal & state regulatory, policy and political players.
• CBE’s Most Influential Women
• CBE’s Most Important Businesses in the Cannabis Industry

The 2015 CBE 100 PPR’s

My friend Matt Karnes, Founder and Managing Partner at Green Wave Advisors, LLC, released the Second Edition of Green Wave Report just last week that reviews current trends and projections for the legal cannabis industry. For those of you interested in the development potential that the industry represents, Green Wave Advisors has increased its 2015 estimate of retail sales in legal markets from $3.6 billion to $4.8 billion, up 50% from what they reported in 2014. They have also raised their industry forecast of revenues to $25 billion by 2020 in light of rapidly evolving statewide initiatives toward both medical and recreational acceptance and regulation from the $20 billion they had projected a year earlier.

The report also notes that capital investment flowing into the industry has increased from $300 million YTD through Sept in 2014 to over $400 million for the same period of 2015. The report is bullish on the Infused product sector composed of edibles, oils, tinctures, salves etc. as consumption patterns and habits are evidenced by the 30-50% that they represent in several regions.

This year’s CBE 100 PPRs represents nearly a billion dollars of reported revenues from only a fraction of the licensed operators in the country. Most are privately held firms (many not-for-profit in medical only regulated states), not currently listed by any exchange, a goal of CBEs from the outset, in light of the large number of scam and non-revenue producing OTC traded stocks that have given the industry a black-eye and attracted a good amount of private and individual investment dollars. We hope this year’s list will help private, individual and institutional capital flow to the owner operators that are building the next great American industry and leading the way to the worldwide end of prohibition.

One exception to this year’s list is GW Pharma, the publicly traded cannabis pure play pharmaceutical company (with its new US HQ in California), listed on the NASDAQ and,  which according to its quarterly financial reports, will do some $35 Million in worldwide revenues through the first 3 quarters of 2015.

Included on this year’s list are companies from Arizona, California, Colorado, District of Columbia, Florida, Maine, New Mexico, Oregon, Rhode Island,  and Washington. California is represented primarily by the not-for-profit cooperatives in the Bay area and few brave companies in other parts of the state that believe that transparency, paying taxes and running a legitimate business are here to stay and the future of the industry. We have not included the small farmers and businesses/growers of Northern California’s Emerald Triangle that employ thousands of workers and are actively working with the state to become part of the new regulatory initiatives, but recognize, as all of you do, the importance and financial contribution to the revenue totals and corresponding jobs and taxes projected for the industry for year’s to come. (See The View from the Emerald Triangle)

Some highlights from this year’s list include:

• The top four state’s with the most companies represented on the list include Washington, Colorado, California, Arizona and Oregon
• Leading Processors on this year’s list include some of the established brands like: O.penVape, Dixie, Bhang Chocolates, GFarma , Golden Leaf, Kiva, and VCC Brands.
• Leading Retailers and Fully Integrated operations include LivWell, Native Roots, Harborside Health Center, SPARC, Colorado Harvest Company (part of the O.penVape family) and Nature’s AZ Medicines.

Congratulations to the 2015 CBE 100 PPRs Top Ranked Company, LivWell Enlightened Health, based in Denver, CO, CEO John Lord and the entire dedicated team of 500 plus employees that have seen 2015 revenues double to over $80 million. The vertically integrated company operates out of their 140,000 sf HQ in Denver which houses a grow and a processing plant to produce their line of infused and edible products and their 12 retail locations in the state of Colorado.They plan to add additional outlets in and out-of-state in the not too distant future.

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Rank	Company	HQ	Ownership/ Management Team	Staff	2015 Revenues (000)	2014 Revenues (000)	% Change	Category
100	District Growers	Washington DC	Corey Barnette	7	550	300	83.33%	Producer, Processor
100	Metropolitan Wellness Center	Washington DC	Michael Cuthriell & Corey Barnette	7	1,500	500	100.00%	Retailer
99	Auntie Delores	Oakland, CA	Julianne Carrella	16	1,000	780	28.21%	Processor
98	Mountain Medicine	Denver, CO	Jaime Lewis	10	1,200	600	100.00%	Processor
97	Cannasol Farms	Riverside, WA	Jeremy Moberg	NA	1,525	515	196.12%	Producer, Processor
95	Farmer J's	Spokane Valley, WA	Jared Herling	NA	1,615	600	169.17%	Producer, Processor
94	Greenleaf Compassion Center	Portsmouth, RI	Seth Bock, co-owner	25	1,650	1,615	2.17%	Producer, Processor, Retailer
93	Thames Valley Alternative Relief	Uncasville, CT	Laurie Zrenda and Meredith Elmer	12	2,000	175	1042.86%	Retailer
92	PureGreen	Portland, OR	Matt & Megan Walstatter	12	2,000	1,600	25.00%	Producer, Processor, Retailer
91	Nothwest Patients Resource Center	Seattle, WA	John Davis	14	2,000	2,000	0.00%	Retailer
90	Noble Farms (Spinning Heads)	Tacoma, WA	Chris Kealey, Brent Gravley & Natasha Combs		2,000	54	3603.70%	Producer, Processor
89	Botanica Seattle	Seattle, WA	Tim Moxey	30	2,000	250	700.00%	Producer, Processor
88	The Clone Zone	Arlington, WA	Brian Lade	18	2,025	0	First Year	Producer, Processor
87	Cultivated Industries	Portland, OR	Norris Monson, Angel Henne, Neil Clementson	15	2,100	650	223.08%	Producer, Processor,
86	Green Fire Production	Arlington, WA	Keith Holton	25	2,100	16	13025.00%	Producer, Processor
85	Life Gardens	Kittitas, WA	Mark Ziegler, Coo	30	2,130	462	361.04%	Producer, Processor
84	Prime Wellness of CT	South Windsor , CT	Tom Nicholas	10	2,150	213	First Year	Retailer
83	Avitas	Arlington, WA	Jason Smits and Adam Smith	15	2,165	578	274.57%	Producer, Processor
82	Canuvo	Biddeford, ME	Sage Peterson	18	2,200	1,400	57.14%	Producer, Processor, Retailer
81	Evergreen Herbal (part of VCC Brands)	Seattle, WA	Marco Hoffman & Kenny Morrison	40	2,300	1,300	76.92%	Processor
80	GROWSTATE-ONE	Spokane , WA	Kip Paulson	48	2,300	0	First Year	Producer, Processor
79	Altitude	Prosser, WA	Tim Thompson	NA	2,546	858	196.76%	Retailer
78	Shango	Portland, OR	Brandon Rexroad, Shane McKee, Ashley Hollo and John Davis	64	2,600	250	940.00%	Producer, Processor, Retailer
77	ARTIZEN CANNABIS COMPANY	Tacoma, WA	George Jordan	65	2,650	0	First Year	Producer, Processor
76	Buddy Boy Farms	Spokane, WA	Kenneth "DJ" Parker & Steve Walser	20	2,750	800	243.75%	Producer, Processor
75	Catalina Hills Care	Oro Valley, AZ	Nolan Ryan	NA	3,000	NA	#VALUE!	Producer, Processor, Retailer
74	OR Finest	Portland, OR	Tyson Haworth, Troy Moore, Mark Seid	35	3,000	1,600	87.50%	Retail
73	Om of Medicine	Ann Arbor, MI	Mark Passerini	12	NA	NA	NA	Retailer
72	Dockside Cannabis	Seattle, WA	Maria Moses, aaron Varney, Oscar Velasco-Schmitz	46	3,232	NA	First Year	Retailer
71	Bud's & Roses	Studio City, CA	Aaron Justis	15	3,300	2,500	32.00%	Producer & Retailer
70	Bluepoint Wellness of CT	Branford, CT	Nick & Judy Tamborrino	NA	NA	NA	First Year	Retailer
69	Rogue Raven Farms	Chelton, WA	Marc Van Driessche	30	3,500	0	First Year	Producer, Processor
68	Arborside	Ann Arbor, MI	Rhory Gould	14	3,500	2,500	40.00%	Retailer
67	Green Lady	Olympia, WA	Mike Redman	12	3,605	441	717.46%	Retailer
66	Cinder	Spokane , WA	Justin Peterson	12	3,700	141	2520.40%	Retailer
65	Issaquah Cannabis Company	Issaquah, WA	Clifford Gehrett	20	3,800	0	First Year	Retailer
64	Rainier on Pine	Tacoma, WA	Alex Rodriguez	19	3,890	1,224	217.81%	Retailer
63	Speedweed	Los Angelas, CA	AJ Gentile	68	4,000	2,500	60.00%	Producer, Processor, Retailer
62	The New Mexicann	Santa Fe, NM	Len Goodman	36	4,000	2,250	77.78%	Producer, Processor, Retailer
61	The Herbery	Vancouver, WA	Jim Mullen & Rick Zahler	40	4,050	0	First Year	Retailer
60	Minerva Canna Group	Albequerque, NM	Eric Briones	38	4,300	2,600	NA	Producer, Processor, Retailer
59	Cheeba Chews	Denver, CO	Dave Maggio	35	4500	NA	NA	Processor
58	EdiPure (Green Cross LLC)	Denver, CO	Mark Austin Smith	NA	4500	NA	NA	Producer, Processor
57	Green-Theory	Bellevue, WA	John and Debbie Bacon	25	4,858	977	397.03%	Retailer
56	Dank	Denver, CO	Greg Gamet & Justin Jones	30	4,400	4,100	7.32%	Producer, Processor, Retailer
55	Zoots (Db3)	Seattle, WA	Patrick Devlin		5,240	847	518.65%	Producer, Processor
54	Herball Wellness Center	Phoenix, AZ	Thai Nguyen	NA	5,400	NA	NA	Producer, Processor, Retailer
53	Reynold Greenleaf & Associates, LLC (R. Greenleaf Organics, Inc.; Medzen Services, Inc.; G & G Genetics, Inc.; Elemental Kitchen & Laboratories)	Albequerque, NM	Willie Ford	63	5,484	2,810	95.16%	Producer, Processor, Retailer
52	Sativa Sisters	Spokane, WA	Don Henrichs	14	5,500	1,500	266.67%	Retailer
51	Satori	Spokane, WA	Justin & Estee Wilson	13	5,500	645	752.71%	Retailer
50	BMF WASHINGTON	Raymond, WA	Peter Saladino	45	5,500	1,746	215.01%	Producer, Processor
49	The Novell Tree	Bellevue, WA	Allie & Chris McAboy	12	5,800	311	1764.95%	Retailer
48	Northwest Cannabis Solutions	Olympia, WA	Leo Gontmakher	100	5,900	0	First Year	Producer, Processor
47	Clear Choice Cannabis	Tacoma, WA	Adam Schmidt	22	6,000	950	531.51%	Retailer
46	Greenlight	Spokane, WA	Sonny Langdon	12	6,100	407	1398.77%	Retailer
45	Cannabis City	Seattle, WA	James Lathrop	15	6,300	3,113	102.38%	Retailer
44	Thomas C, Slater Compassion Center	Providence, RI	Gerald McGraw	56	6,500	5,115	27.08%	Producer, Processor, Retailer
43	Ocean Greens	Seattle, WA	Oltion Hyseni	NA	6,500	965	573.51%	Retailer
42	Venice Cookie Company (Part of VCC Brands)	Venice, CA	Kenny Morrison & Marco Hoffman	50	7,000	NA	NA	Processor
41	Bloom Dispensary AZ	Phoenix, AZ	Ed Judice	NA	7,200	NA	NA	Producer, Processor, Retailer
40	Denver Relief	Denver, CO	Ean Seeb Kayvan Khalatbari Nick Hice	21	7,500	NA	NA	Producer, Retailer
39	Chalice Farms	Portland, OR	William Simpson	34	8,000	1,500	433.33%	Producer, Processor, Retailer
38	Green Side Rec	Seattle, WA	Seth Simpson & Dave Ahl	30	8,200	1,144	616.78%	Retailer
37	Grow Op Farms	Spokane, WA	NA	100	8,500	49	17246.94%	Producer, Processor
36	PP Wellness Center	Glendale, AZ	Paul Perez & Branden Orr	50	9,000	NA	NA	Producer, Processor, Retailer
35	Monarch	Scottsdale, AZ	Dustin Johnson	NA	9,600	NA	NA	Producer, Processor, Retailer
34	Phytologie	Oakland, CA	Jamie D'Agostino	NA	NA	NA	NA	Producer, Retailer
33	Bloom Room Collective	San Francisco, CA	Stephen Rechit	NA	NA	NA	NA	Producer, Processor, Retailer
32	TruMed Dispensary	Phoenix, AZ	Jon Pilkington & Mike Anton	40	10,000	9,000	11.11%	Producer, Processor, Retailer
31	Live Green Cannabis	Denver, CO	Brook Gehring	80	10,000	10,000	0.00%	Producer, Processor, Retailer
30	Good Meds	Denver, CO	Kristi Kelly	55-70	10,000	4,500	122.22%	Producer, Processor, Retailer
29	Incredibles	Denver, CO	Bob Eschino & Rick Scarpello	55	10,000	5,000	100.00%	Producer, Processor, OEM
28	Kiva Confections	Bay Area, CA	Scott Palmer & Kristi Knoblich	50	10,000	NA	NA	Processor
27	G Farmalabs	Anaheim, CA	Ata Gonzalez, Nicole Gonzalez, Dr. Cristina Gonzalez	50	11,700	4,000	192.50%	Producer & Processor
26	MedWest	San Diego, CA	Jim Slatic	NA	12,000	NA	NA	Processor
25	Euflora	Denver, CO	Jamie Perino	50	12,000	4,000	200.00%	Producer, Retailer
24	New Vansterdam	Vancouver, WA	Brian Budz	50	12,500	2,795	347.23%	Retailer
23	Blum Oakland	Oakland, CA	Salwa Ibrahim, Margaret Moore and Lillian King	62	15,000	11,500	30.43%	Producer, Processor, Retailer
22	Apothecarium	San Francisco, CA	Ryan Hudson	55	NA	NA	NA	Producer, Processor, Retailer
21	Wellness Connection of Maine	Portland, ME	Patricia Rosi	68	15,000	10,000	50.00%	Producer, Processor, Retailer
20	The Clinic Colorado	Denver, CO	Max Cohen	135	NA	NA	NA	Producer, Processor, Retailer
19	Mindful	Denver, CO	Meg Sanders	114	15,000	6,300	138.10%	Producer, Processor, Retailer
18	Uncle Ike's	Seattle, WA	Ian Eisenberg	NA	15,500	519	2884.21%	Retailer
17	Golden Leaf Production	Portland, OR	Don Robinson	72	16,000	12,000	33.33%	Processor
16	Mainstreet	Vancouver, WA	Ramsey & Adam Hamide	36	16,000	1,800	788.89%	Retailer
15	Berkeley Patients Group	Berkeley, CA.	Tim Schick	80	17,500	15,000	16.67%	Retailer
14	Shawn Phillips (Strainwise Branded Stores)	Denver, CO	Shawn Phillips	250	NA	NA	NA	Producer, Retailer
13	Medicine Men	Denver, CO	Andy Williams	68	18,000	8,600	109.30%	Producer, Processor, Retailer
12	Natures AZ Medicine 1	Phoenix, AZ	Mark Steinmentz	48	19,200	NA	NA	Producer, Processor, Retailer
11	Rocky Mountain High	CO/NJ	David & Michael Weisser	NA	NA	NA	NA	Producer, Processor, Retailer
10	Colorado Harvest Company	Boulder, CO	Tim Cullen	65-100	20,000	8,300	140.96%	Producer, Retailer
9	Bhang Chocolates Company	Miami, FL	Scott Van Rixel	NA	NA	NA	NA	Processor, Private Lable Consumption Gear and Licensing
8	SPARC	San Francisco, CA	Eric Pierson & Robert Jacob	282	25,426	16,730	51.98%	Producer, Retailer
7	Harborside	Oakland, CA	Steve DeAngelo	138	30,000	30,000	0.00%	Producer, Processor, Retailer
6	Green Solutions	Denver, CO	Kyle & Eric Speidell	NA	NA	NA	NA	Producer, Processor, Retailer
5	GW Pharma	Salisbury, UK	Justin Gover	350	36,000	35,000	2.86%	Pharma
4	Native Roots	Denver, CO	Josh Ginsberg	300	NA	NA	NA	Producer, Processor, Retailer
3	Dixie Brands	Denver, CO	Tripp Keber	NA	NA	NA	NA	Processor
2	O.penVAPE (Allied Concessions Group & National Concessions Group (Licensing Arm)	Denver, CO	Ralph Morgan	120	NA	NA	NA	Processor, Private Lable Consumption Gear and Licensing
1	LivWell Enlightened Health	Denver, CO	John Lord	500	80,000	40,000	100.00%	Producer, Processor, Retailer

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