This is a fun read and firmly in the great tradition of aggressive American capitalism. The story is full of twists, turns, shady characters, greed and of course the idealistic original founder turfed very early in the game.
Cannabis different? Dream on!
This parable illustrates that others will have to make the difference because the 1st and 2nd generation cannabis companies have not only played the game they also appear to have enjoyed being no different from the rest of the economy.
It’s already playing out in psychedelics.
Here’s the introduction
Small producers have long been wary of the cannabis industry coming under domination by multistate operators (MSO’s) with the worst practices of corporate America. But the revelations of Russian oligarch money in the coffers of leading MSO Curaleaf appear to vindicate even the most cynical observers. These follow a slew of controversies concerning product safety and labor rights at the company.
Now based in the Boston suburb of Wakefield, adult-use cannabis colossus Curaleaf seems to exemplify the industry’s trajectory — from its origins as a local operation for medicinal users to its current status as a globe-spanning titan generating unsavory headlines and a string of scandals.
THE WORLD’S LARGEST CANNABIS COMPANY
Today Curaleaf ranks as the largest cannabis company in the world. Last year, it claimed $1.2 billion in profits. Until recently it had operations in 23 US states with 147 dispensaries, 22 cultivation sites, and 30 processing facilities.
Like other big MSOs, Curaleaf has achieved a dominant position in the cannabis industry by setting up operations primarily in “limited-license states … with natural high barriers to entry and limited market participants,” a strategy that helps “to ensure the company’s market share is protected,” according to the company’s annual investor filing in 2020.
But these “high barriers to entry” are hardly “natural.” They are constructed and promoted by policy-makers, regulators, and some opportunistic legalization advocates who favor restricting access to lucrative cannabis business licenses to a small number of well-heeled applicants.
Curaleaf, a publicly-traded corporation, hasn’t fared as well in states that have lower barriers to entry. In January, the company announced it was pulling out of California, Colorado, and Oregon, and laying off about 4% of its roughly 6,000 employees. The company is said to be seeking $40 million in cost savings in 2023.
These cost-cutting measures, Curaleaf explained, will enable the company to focus more on expanding its global operations. Curaleaf International, the largest vertically integrated cannabis company in Europe, already has licensed products in Italy, Poland, and Malta.
MODEST ORIGINS
Eileen Konieczny, a nurse by trade now living in Southern California, says she is the forgotten figure who was present at the creation of Curaleaf.
“I put together a team to go after a license in Connecticut in 2013,” she says. “I was listed on the application as ‘chief medical officer.’ ”
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