Exclusive Interview with Michigan Pure Med CEO Michael Elias
Vertically integrated cannabis company Michigan Pure Med is establishing a deep presence in its home state before considering multi-state expansion. CEO Michael Elias spoke with New Cannabis Ventures about his company’s hybrid greenhouse, the Common Citizen brand and hiring during the COVID-19 pandemic. The audio of the entire conversation is available at the end of this written summary.
Bringing Lean Manufacturing to Cannabis
Elias comes from a healthcare background; he spent much of his career driving lean manufacturing in complex acute care environments. It is this expertise he brings to the cannabis industry and Michigan Pure Med’s operations.
Michigan Pure Med strives to keep its executive team lean. Elias leads the company with President Joe Jarvis and CFO Brian Smith. Jarvis has a background in civil engineering, which is a strong asset as the company continues to scale its business. Smith has a strong background in both financial leadership and lean manufacturing.
The Hybrid Greenhouse
The company’s cultivation and manufacturing operations in Marshall, Michigan can be scaled up to a total of 1.2 million square feet. Currently, approximately 200,000 square feet of the facility is built and operational–a total of five rooms growing high-quality flower. Michigan Pure Med has the ability to scale in a modular fashion. It can build a 14,000-square-foot room every 30 days.
The greenhouse utilizes sunlight to offset energy costs while leveraging the control of an indoor system. When it cannot use natural light, the facility supplements its grow operations with artificial light. The model allows the company to drive down its costs while still producing a high-quality product, according to Elias.
The Common Citizen Brand
Michigan Pure Med’s retail footprint operates under the umbrella of the Common Citizen brand. Each retail location is designed to slow people down, provide a high level of education and normalize the consumption of cannabis. The company’s Flint dispensary, which won a design award from the International Council of Shopping Centers, includes a café right outside of the retail floor, a model the company is aiming to replicate across its retail operations.
Citizen Advisors, the company’s name for budtenders, are there to help consumers through the retail experience. Common Citizen’s products are grouped into four different categories: Time to Shine (a high-TCH recreational product), Unplug (a product segment for solo consumers), Daily Dose (a wellness-focused category) and Sweet Relief (the company’s medical category).
Investing in Brand and People
Michigan Pure Med is focusing on Michigan first because it wants the time to build its culture and brand. Expand too quickly and building that internal culture will be difficult, according to Elias. The company is investing heavily in its staff with an emphasis on people passionate about the industry.
The company is also putting a significant amount of capital into growing its brand, according to Elias. It is focused on establishing its business model and service in Michigan before looking to other markets.
While Michigan is the focus at present, the company will not be afraid to explore other markets in the future, whether capped or not, according to Elias. He considers Illinois, California and Florida to be interesting markets.
Business during the Pandemic
The COVID-19 pandemic has caused some fluctuation in demand, but Michigan Pure Med has developed curbside and delivery services and demand has largely normalized, according to Elias. The company is also taking precautions to maintain social distancing measures and provide protective equipment for its staff.
While many companies are laying off employees during the current crisis, Michigan Pure Med is actively hiring. The company is holding a virtual job fair a few days a week, and hundreds of candidates have already signed up for the available meeting times in April, according to Elias.
Funding
Michigan Pure Med has largely been funded by private equity. Its business model–driven by a focus on Michigan, lean manufacturing and scalability–is garnering interest from the investor community despite the difficult capital landscape, according to Elias.
As for the future of funding, Elias is looking for a mix of equity and debt. The company is considering debt options, as well as potential sale-leasebacks.
Meeting Increasing Demand
The Michigan market is projected to demand 1.2 million pounds of product in the next four to six years, according to Elias. As demand ramps up, he expects the company’s revenue to increase five to six times over the next couple of years.
As the legal market continues to evolve, Elias is hoping to see a continued push to drive quality and minimize the impact of the illicit market. Michigan Pure Med’s facility is designed to meet cGMP certification, and Elias has been pushing for legislation in that area. He is encouraged by what he has seen from regulators, and the company will continue to focus on quality as it scales.
To learn more, visit the Michigan Pure Med website and the Common Citizen website. Listen to the entire interview:
