Medicine Man just went on a $300 million spending spree in a bid to protect Colorado’s cannabis industry. CEO, Andy Williams, sits down to tell us what’s next.
Another day, another CannaGather event, another blog post!
At Simplifya, we love our local CannaGather events (both sponsoring and attending), because they always draw such big names and influential figures from the industry. This month’s event was no exception, since they were able to snag a few hours with Andy Williams, CEO of Medicine Man Technologies. For someone who just spent the last year dropping around $300 million to acquire a slew of cannabis operators from all over the Colorado market, Mr. Williams was surprisingly down-to-earth.
Medicine Man History
We learned of his humble beginnings opening a lone medical dispensary with his “cannaseur” brother (his words) in 2009. His brother was a caregiver operating out of his basement in 2008. But when the Colorado Health Board permitted the new dispensary model (allowing caregivers to have more than 5 patients and dispense to them from a storefront; later formally approved by SB 10-109 and HB 10-1284), and Obama’s DOJ released the Ogden Memo (precursor to the more-famous Cole Memo), Mr. Williams saw it as a green light for a new industry. Combining his business acumen with his brother’s extensive knowledge of the plant and cultivation techniques, the dynamic duo were able to grow that dispensary into the consulting behemoth it is today.
Okay… they also got $150,000 from their mom at the start. He also acknowledged that they lucked out by acquiring a property in the middle of Denver that was zoned to allow a grow operation and dispensary in the same location. But the growth is still stunningly impressive; especially considering how many have tried and failed to get their share of Colorado’s Green Rush over the last 10 years.
So Why Is Medicine Man Going Ham All of a Sudden?
According to Williams, he wants to protect the industry he’s grown up with. Colorado has the most mature cannabis market, full of experienced players who “have already solved problems that the new industries don’t even know they have yet.” That’s valuable in his eyes. But the reason he’s feeling extra pressure to serve as industry-protector is that a huge change is about to come to the industry.
Colorado passed Bill HB1090 this summer, and it
will go into took effect on November 1. The Bill finally opens up Colorado to investments from out-of-state investors and publicly-traded companies while streamlining the finding-of-suitability process for investors. This change is anticipated to bring in money like never before. Mr. Williams expects, understandably, that this new era of investment will result in a lot of market consolidation. So, his goal is to snatch up all of Colorado’s talent and expertise before the outsiders do.
On a more cynical note, if he does change his tune in the future, he will be one of the most well-positioned people in the market to profit from all this outside money. He was also a major supporter of HB1090. But hey, if that’s his motivation, it’s a shrewd business move in my book.
Medicine Man’s Acquisitions: OGs Recognize OGs
When asked how he decided which operators would be getting purchased, he said, again, that he values the people who were early-movers in the industry and had seasoned, mature business practices. He specifically called out Bob DeGabrielle, founder of Los Sueños Farms (and a Simplifya client!) for having a level head on his shoulders. Los Sueños, located just outside of Pueblo, boasts the largest outdoor cannabis grow in North America, with 36 acres of outdoor cannabis crops.
He also mentioned that he purchased the only licensed research operator in Colorado, MedPharm, because he is passionate about the untapped potential still hidden in the plant. We certainly still have a lot to learn about this plant; with over 100 cannabinoids, and over 100 terpenes, there are literally uncountable numbers of chemical combinations that can have different effects on the brain and body. And now anything MedPharm develops from that research will likely become Mr. Williams’ intellectual property.
It is certainly a testament to his respect for these operators that many of them will be joining him on Medicine Man’s board. Bob DeGabrielle will be joining the board, as will Brian Ruden from Starbuds.
Also, a quick shoutout to another one of our clients, Incredibles, who was similarly lucky enough to join the Medicine Man family!
Harnessing The Law
One major theme that stood out during Mr. Williams’ talk was how closely he watches the development of cannabis laws.
- He was on the cusp of Colorado’s “Green Rush” because he recognized the importance of the Ogden Memo.
- He was behind the introduction of the MED’s research license which will certainly yield a lot of valuable IP.
- He helped pass HB 1090 which allowed him to make all these purchases and will likely net even more investment once it officially takes effect.
The law is a very powerful tool, with the potential to decide winners and losers in the marketplace. At Simplifya, we can definitely appreciate that. Which is why we try to give our clients the tools to understand the laws that govern their operations.
What’s Next for The Medicine Man Empire?
Many people in the audience wanted to know what’s next for Andy Williams (including Yours Truly).
Part of Williams’ recent acquisitions included this author’s neighborhood Starbuds dispensary, so naturally, I wanted to know what changes I’m going to see there under the new ownership. Williams reemphasized that he picked acquisitions based on who he thought had all their ducks in a row. Because of this rationale, he plans to provide a very hands-off approach to managing his empire. So, hopefully, I won’t see many changes next time I go to the store! He did mention that some of his favorite brands will probably be appearing on shelves at his dispensaries– like Dabble Extracts, a manufacturer from Colorado Springs, who not-so-coincidentally, was recently purchased by Medicine Man Technologies.
Mr. Williams was also asked what markets he’s eyeing in the future. To this question, he mentioned that he wants to acquire as many vertically integrated operations as he can (Medicine Man was vertically integrated, as were all medical dispensaries, at the start of the Green Rush). He also mentioned that he is a fan of freer markets, which has him looking at Michigan, Illinois, and Oklahoma.
Keep your eyes on Medicine Man (not to be confused with the notorious MedMen), because they’re working on some big things with surely more to come.