Exclusive Interview with Vireo Health Founder, Chairman, and CEO Dr. Kyle Kingsley
Vireo Health (CSE: VREO) (OTC: VREOF) is one of the largest multi-state operators with a presence in 10 states, according to Founder, Chairman, and CEO Kyle Kingsley, MD, but size isn’t the company’s only differentiator. Vireo is backed by a team of physicians, scientists, and engineers who work together to build a comprehensive portfolio of intellectual property. Dr. Kingsley spoke with New Cannabis Ventures about the company’s growth strategy and approach to leveraging IP.
During his 10 years working as an emergency medicine physician, Dr. Kingsley saw firsthand the effects of the opioid epidemic. He also learned about the therapeutic possibilities of cannabis, which led him to enter the space and start Vireo.
The Vireo Leadership Team
Dr. Kingsley is not the only physician at the helm of the company. Joseph Westwater, MD, JD, is the CEO of the company’s subsidiary Minnesota Medical solutions. Stephen Dahmer, MD, a well-known ethnobotanist, is Chief Medical Officer. Gary Starr, MD, is Chief Quality Officer. The company’s management team also has the expertise of Eric Greenbaum, JD, a pharmacologist and an IP lawyer, as Chief Intellectual Property Officer.
The Vireo Footprint
Vireo is in 10 states: Arizona, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, Ohio, Pennsylvania, and Rhode Island. The company also has a binding purchase agreement in Puerto Rico and an agreement to enter California. A team of approximately 350 people supports the company across this widespread footprint, and Dr. Kingsley expects the team to double in size in short order. Vireo has attracted talent from big-name companies like Johnson & Johnson, FedEx, Amazon, and Macy’s, according to Dr. Kingsley.
Vireo has an in-house application writing team, which enables the company to pursue licensing in other desirable markets. The company is interested in earlier stage markets with a limited number of licenses, markets that will likely transition to more open regulatory structures down the road. Some markets of interest include Georgia, Missouri, the Carolinas, and Utah.
Dr. Kingsley is cognizant of global opportunities represented in markets like Europe and Asia, but Vireo’s focus remains on the United States for the time being.
Growth by Acquisition
Vireo has plans to continue its growth through acquisition, but this strategy will focus on cost-effective opportunities. Dr. Kingsley doesn’t foresee acquiring a Florida license for $100 million, for example. The company will pursue merit-based application processes and acquisitions in the ancillary space. He sees Vireo having a robust deal pipeline going forward. And as the company closes deals, it has a comprehensive process in place to integrate its new acquisitions.
Retail and Branding Strategy
At present, Vireo has diverse branding for its dispensaries across different states, but the company is the process of rebranding to its Green Goods dispensary concept. The concept aims to marry legacy cannabis culture with professionalism. It is this type of experience that will appeal to the broadest segment of consumers, according to Dr. Kingsley. He sees this middle ground between a medical approach and “rec vibe” as a strong answer to the long history of western markets as well.
The Importance of IP
Vireo has a portfolio of approximately 25 different brands in various stages of development, according to Dr. Kingsley. The company is building that portfolio around proprietary, protectable products.
The company looks at IP in two different segments: opportunities that can be monetized in the short-term and opportunities that merit more substantial time and capital investment, such as its recent patent for combining cannabinoids with tobacco to create less harmful products. Vireo’s work in IP spans products, formulations, and processing equipment. The company is developing proprietary processing equipment in an effort to become the industry’s most efficient processor. The Vireo IP pipeline includes granted patents, pending patents, and ideas still in development.
Funding
Vireo has gone through five rounds of funding, beginning with its seed round about five years ago, according to Dr. Kingsley. Last June, the company made its first foray into institutional capital with its Series D round. Then, the company raised $51 million as a part of its RTO this spring. Dr. Kingsley sees the company as well-capitalized for the time being.
The company is focused on growing with the help of the “bread and butter MSO playbook,” according to Dr. Kingsley. Vireo will continue to build its footprint, aggressively expand cultivation capacity, and grow its distribution network. With all of that in mind, Dr. Kingsley views Vireo’s IP development as the company’s ace in the hole.
Vireo Health is a client of New Cannabis Ventures. Listen to the entire interview:
