Many of you have read that iAnthus Capital Holdings Inc. (CSE: IAN, OTCQX: ITHUF) recently closed the transaction to buy MPX Bioceuticals (CSE: MPX but referred to as MPXB in this article to differentiate it from the MPX brand) US holdings in an all stock deal that has expanded the company’s US footprint dramatically. As the press release notes:
“The combined company (iAnthus and MPX), now has operations in 11 states that will permit iAnthus to operate 64 retail locations and 15 cultivation/processing facilities. As a result of the business combination, iAnthus has added retail and/or production capabilities in Arizona, Maryland, Nevada, California, Massachusetts and New Jersey. These additional licenses complement iAnthus’ existing assets in NewYork, Florida, Massachusetts, Vermont, Colorado, and New Mexico, forming super-regional footprints in both the eastern and western United States reaching over 121 million potential customers.”
What many of you don’t know is the extraordinary story of how merging with MPX became an attractive opportunity for iAnthus and that one of the most prized assets that came with the US holdings in the deal was investment bank executive, MPX’s former COO and second largest shareholder, New Jersey native, and new iAnthus board director, Beth Stavola. When asked for comment about Stavola, Hadley Ford CEO of iAnthus said, “Beth Stavola is one of the pioneers in the industry. What she has been able to do in building MPX while raising six kids is the stuff of legends. We acquired MPX for two reasons: one was the strategic fit for iAnthus, the other was for Beth. I call her the C$835 million-dollar woman.”
Beth Stavola, the married mother of six children, retired from her well-earned Senior VP position at investment bank Jefferies and Company in 2009 at the ripe young age of 39 and began her Cannabis Industry journey 3 years later in 2012 that has since seen her essentially close her second exit (and re-entry) in 6 short years. Stavola who was raised in a strict Irish catholic household in Ocean, NJ, is the oldest of 7 children (4 boys and 3 girls) with her youngest sister, Julie Winter, joining her in the industry in 2014. More on that later.
Beginning at Jefferies in her mid-twenties, Stavola mastered the craft of selling deals brokered by the firm in the testosterone loaded world of Wall Street. Fiercely independent, street smart, outgoing, effusive and sincere, she became the ultimate networker and dealmaker before changing paths in 2009. And make no mistake, she is as tough as any of her peers on Manhattan’s south side.
What I have loved about Beth, after first realizing she was a force to be reckoned with in the industry (she ranked #3 on the 2017 CBE Most Important Woman list), is how wired to the industry she is, her upbeat, enthusiastic, down-to-earth personality, and her transparency with me since CBE has been following her and her accomplishments in the industry now for the last 3 years. We actually began the process of penning her story for our readers last January but I am happy to report, glad that we waited because of her continued ascent and recent accomplishments!
After leaving the commuting grind to Wall Street behind, Stavola focused her time on raising 5 young ladies and a son (and re-asserting the importance for her kids, especially her daughters, to be unencumbered and just as independent a thinker as their mom) while managing her family’s investment portfolio. Her husband, and love of her life, Jack Stavola (Beth affectionately refers to him as Mr. Hollywood), was a teenage friend that Beth reconnected with and eventually married on her second attempt to get it right.
Jack is a principle at Stavola Companies, a half a billion-dollar NJ based private company supplier of stone, asphalt, sand, construction aggregates, and recycled materials to the construction industry. The company, founded by Jack’s family in 1948, also owns and manages shopping centers, office buildings, free-standing retail properties, gas stations, warehouse properties, restaurants, downtown retail properties, and residential properties as well as providing contracting specialties. The couple has 4 kids together plus 2 from Beth’s first marriage. Little did Jack know that his wife would become one of the most influential and powerful people in cannabis when he convinced her to leave Jefferies.
Prior to entering the cannabis fray, a close friend and psychic fortuitously pronounced to Beth that she would one day start a business, related to prohibition, that may become as large as The Stavola Companies….
Beth Stavola’s Cannabis Industry foray begin when she was contacted by a business broker about managing and funding a license in AZ’s new MMJ program in southern AZ. Beth convinced Jack, who she recalls at that time as commenting “you better get our money back” to invest a million dollars in a vertically integrated license in the barren southeastern corner of the state along the Mexican border where El Chapo and his cartel smuggled millions of dollars of illicit drugs across (and under) the US border. Keep in mind that the nascent Cannabis Industry was loaded with (and many will tell you, including Beth, that it still is) unsavory business practices and characters from the black market era of cannabis operators. It was into this environment that Stavola formed S8 LLC (the eight stands for the members in the Stavola household.) and took the leap of faith with her family’s money.
The industry brought her in contact with two amazing women, Sandy Clifford and Michelle Majors in March of 2013 that truly began her cannabis career. The three women formed what they affectionately called “BSM” (for Beth, Sandy and Michelle) and they launched the Health for Life (H4L) brand which consisted of two vertically integrated Arizona Medical Marijuana operations. Beth (S8) invested additional capital to help get the Health for Life (H4L) brand and its licenses up and running under a short 4 month time window to meet the regulatory deadline that was looming. It also was the beginning of building an industry network that includes many professional operators including Steve White, CEO of Harvest Health and Wellness, one of iAnthus’ competitors. When I asked him for a quote about Beth, Steve said to me, “That’s easy. Beth is one of my favorite people in cannabis. She is a good person, who I would want know even if we didn’t work in the same industry.”
The recently closed iAnthus deal includes the management contract for the three Health for Life (HFL) licensed operations in Mesa, AZ and The Holistic Center in Phoenix, AZ. The AZ holdings generated in the neighborhood of $50 million in revenue in 2018. Ironically, as Beth was building HFL in AZ, iAnthus CEO, Hadley Ford’s brother Willie Ford, was building a strong New Mexican franchise, R. Greenleaf that is part of the iAnthus footprint today. While operating in AZ, Beth and her right hand operations manager, Jason Gully (she often says she could never have done this without him) also launched the Melting Point Extracts (MPX) brand of oils, concentrates and infused products in 2014. Early on in the game, Beth realized that it would be brands and not flower that would have the most value as part of a cannabis portfolio long-term.
Not one to sit back and let things magically happen, while getting the AZ operation up and running in 2013, Stavola became interested in the newly and rapidly forming Nevada Medical Marijuana program. She tells CBE that it was in close proximity to the S8 AZ holdings and she thought it could be an attractive market to enter with its daily and annual influx of tourists and conventioneers. She applied and won 2 cultivation licenses and 1 processing license and in 2015 launched her efforts to acquire locations for the two facilities to begin operations as a Nevada wholesaler.
In 2016, an adult-use regulated program was on the ballot in NV and, as the luck of the Irish would have it, it passed. In 2018, the state of Nevada announced an RFP for more retail dispensary licenses and awarded them, this was her chance to become fully integrated in that state. Beth applied for and was awarded 4 provisional retail licenses. The licenses were awarded in the City of Las Vegas, Henderson, Clark County and a Reno dispensary as well.
Also in 2016, Beth applied for and ultimately won a dispensary license in Baltimore MD, under the GreenMart Moniker that would ultimately do business as HFL. They worked with Offit Kurman’s Mid-Atlantic cannabis law practice to arrange management contracts with two other MD dispensaries in Bethesda and White Marsh, MD as well as a Processor license in Montgomery County doing business as MPX Maryland. All of the HFL dispensaries were operational in Q4 2018 after local government zoning delays held up the process. MPX products can be found in 40 medical cannabis dispensaries throughout Maryland.
The state of MD does not currently allow for ownership of multiple retail licenses so the management route that Beth and the MPXB took in the state now provides iAnthus and the MPX branded products access to medical consumers in the city of Baltimore, its northern suburbs as well as the lucrative Montgomery County, MD, DC suburban market. The MD producer and processor licenses will allow iAnthus to gain a strong foothold for MPX branded infused products, oils and concentrates in the state.
Michael Bronfein Co-Founder and CEO Curio Wellness, a MD Cultivator/Producer Processor, and someone who Beth also counts as a friend, is both a supplier to the HFL MD dispensaries and a competitor as iAnthus ramps up Melting Pot Extract branded product distribution in the state. He told CBE, “Beth is the consummate professional and brings her strong corporate and entrepreneurial experience to her passion for building best in class cannabis derived products. She is a proven leader who possesses the intellect and courage to challenge the status quo and bring sustainable innovation to this nascent industry.”
Beth Stavola’s first real exit in the Cannabis Industry occurred when she sold all of her marijuana related assets to MPXB in a reverse takeover in Canada on the Canadian Stock Exchange (that occurred in January of 2017). As Beth told me at that time, the deal helped her realize several goals she had set when she first entered the industry back in 2012.
Going public in Canada meant that S8 would have the capital it needed to finance the growth of its rapidly expanded licensing and management contract operations.
It would help her recruit and reward qualified talent to fill areas of need that she had had problems filling in her earlier years. Remember, in those early cannabis days, and, as she repeatedly pointed out during our interview, the market was littered with ex-black marketeers who didn’t have the skill sets needed to meet the increasing needs of a company and industry that was professionalizing and scaling quickly with the stark truth of falling behind and missing on the opportunity the industry represented hanging over her astute head. A trusting soul by nature, Beth had been burned more than once in the talent acquisition game and the corresponding consequences were tough both on the business and tough on her psyche. After all, the independent Stavola was a problem solver and solution provider by training and her expectations were high for employees to take ownership and do just that.
When Beth Stavola entered the cannabis industry, she had vowed to herself that she would never ask an employee to do what she hadn’t done herself. She literally got her hands dirty during harvests (she even handled trimming duties) back in her early AZ days.
The acquisition also satisfied her desire to reward loyal employees. Her years on Wall Street had inspired Beth to one day have a company where she could ring the bell as it went public, not for the sheer vanity of it, but to benefit all those who had shared in her struggles with hard work, dedication and creativity to ultimately help her take a company public and to help carry S8 to the public markets and investors worldwide.
After the transaction closed and yielded roughly $25,000,000 before taxes for S8, Beth Stavola was the second largest shareholder of MPXB stock and named its Chief Operating Officer and had indeed more than recovered the family’s investment.
The timing of the deal also helped fuel addition expansion of the footprint Stavola had been developing. In April of 2017, after looking to buy something in the MA market (MA had approved an Adult-Use ballot initiative in 2016), MPXB bought 51% of a fully vertical license in Falls River, MA as well as a cultivation and processing license to build out a facility that could produce and sell the MPX line in what promised to be a lucrative market. MPXB also received a permit for a second medical dispensary provisionally in Attleboro, MA that they will begin building in the first quarter of 2019 and was looking for a third medical dispensary location at the time of the iAnthus merger. MPXB bought out the remaining 49% in an all stock transaction prior to the iAnthus/MPX deal closing.
Under Beth, MPXB’s portfolio of US properties grew (they also contracted with a California producer processor licensee which will start production in March 2019.). Beth’s company MPX New Jersey single-handedly led their efforts to win one of NJ’s new vertically integrated medical marijuana licenses with the highest score of any applicant. MPXB also became a Canadian licensed producer during her stead setting the stage for the iAnthus/MPXB merger that closed last week making iAnthus one of the largest consolidators in the US with Acreage Holdings, Columbia Care, Curaleaf, Cresco Labs, Green Thumb Industries (GTI), and her friend Steve White’s Harvest Health & Recreation.
CBD for Life (CBDL)
As if all that Beth has accomplished to date in the Cannabis Industry wasn’t enough, she began working on formulations for CBD infused products back in 2014 which ultimately led to her launching CBD for Life LLC in 2015 with her sister Julie Winter, the company’s COO. Julie has been working with her big sister since 2014 and ran East Coast operations for MPX Bioceutical prior to the iAnthus deal.
This appears to be another smart and fortuitous move in light of the recent legalization of hemp as a result of the passing of the Farm Bill at the end of 2018. This seismic federal policy shift, which not only removed hemp from the controlled substances list but also allows for intra-state commerce of hemp, fit right into the Stavola sister’s distribution model that began targeting dispensaries, spas and pharmacies back in 2016.
The passing of the Farm Bill, which has legitimized the CBD craze to some extent, has spurred a landslide of inquiries from the distribution channel which now includes interest from both big box and specialty retail stores (apparel, vitamin stores, specialty foods etc.) to go along with their e-commerce play that they have been operating and learning from for the past couple of years.
The two sisters have positioned the company (which they affectionately refer to as their “side-hustle”) in the mainstream market combining two lines of products Self-care (beauty) and Wellness as well as a rapidly increasing SKU mix. If you haven’t figured it out by now, Beth is the consummate marketer and networker, CBDL has since day one worked with a another of Beth’s pals, Kathleen Croddick-Molyneaux, President & CEO of Suite-K Value Added Services, a NJ-based GMP certified contract manufacturer. CBDL has had a contemporary and attractive packaging profile since launch that provides a competitive edge marketing product lines that look and feel like products from well-known Fortune 500 health and beauty firms that have been on the shelves for years and capturing consumer dollars for years. They have set the bar high out of the gate and have a head start against cannabis industry products that lack the sophistication of what the Stavola sisters are bringing to market. CBDL won The Hollywood Beauty Awards “Best New Brand” in March of 2018, Cheech Marin presented the award to Stavola in LA.
In January 2018, CBDL products were available in 37 states and electronically, and expect to be available in all 50 states soon. Not bad from a business that began with limited distribution in their cannabis and home backyard of NJ, AZ and NV. They are working on a number of distribution deals and will be making announcements soon about the expanded availability CBDL lines.
As a lean and mean operator, CBDL has 12 employees now and expects to expand to 16 plus shortly. Revenues/Sales have doubled annually from $750,000 in 2016 to $3,000,000 in 2018 (split evenly between wholesale and e-commerce). Current wholesale distributors include but are not limited to Of a Kind (a Bed Bath and Beyond subsidiary), The Grommet, The James Hotel, and Exhale spa. The momentum should translate to a large increase in 2019 revenues and Julie sees revenues continuing to double over the next two years.
What’s next for Beth Stavola
As a board member of iAnthus, Beth was named Chief Strategy Officer at iAnthus. She brings a lot to the table to help the company consolidate its brands and has successfully done just that in the Cannabis Industry since starting S8 backing 2012. After covering the industry for the past four and a half years, I have yet to meet someone with Beth’s high-level of energy and sophistication to go along with a network of movers and shakers from both inside and outside of the world of Cannabis.
Expect to see her playing a major role in not only consolidating the branding of the family of iAnthus Holdings but also expanding their access to consumers domestically through additional acquisitions and innovation. And I wouldn’t be surprised to see her in the middle of any of the company’s efforts to access new and emerging cannabis consumer markets to give the Cannabis Industry upstarts in the “Great White North” a run for their money world-wide. After all is said and done, iAnthus has added a partner and a mover and shaker to their senior management team and Mr. Hollywood has indeed gotten his family’s money plus a lot more with a life partner and successful bride to be extremely proud of as well.
Oh, and BTW, that psychic is the Real McCoy!
Stay tuned for more!