The old saying goes that a good start is half the work. As with every saying, it could be applied to anything, but it is especially relevant when it comes to new endeavors, just like the cannabis industry. Most companies have no previous expertise to rely on. This can be clearly seen in the challenges that growers have faced in the past couple of years.
At the same time, there have been some unicorns among this herd of horses, and 4Front Ventures surely is one of those. “We started back in 2011 as consultants,” Mark Passerini, Executive Vice President of Operation of Mission Dispensaries, says. “In the past 9 years, we have helped over seventy companies to gain access into the cannabis world and secure their licenses. Then, with all the expertise we acquired over time, we decided to involve ourselves directly in this industry. So we shifted our focus, starting to run our own facilities.” As of now, the company operates in Michigan, Illinois, Massachusetts, and Washington.
“The company is divided into a retail side, where we have five stores with a six coming online in Q2 2021, and a cultivation and processing side, which we have been expanding into California over the past year,” he explains.
A patchwork of regulations
The difficulties of setting up a cannabis business in the US are also related to the way the industry is regulated, according to Mark. “There is a patchwork of policies throughout the country,” he continues. “Every state has its own laws, and the situation can differ strongly from state to state. This creates challenges for the cannabis supply chain as a whole.” Indeed, this can be equally different in every state. One company that operates in multiple states might have to face different challenges in each state. “For instance, when Michigan rolled out the program it was too hasty and there weren’t enough products on the shelves,” he continues. “For almost six months, it was a struggle to keep our shelves full. This happened because they didn’t issue enough growing licenses, and there was an actual shortage of product. But in Massachusetts and Illinois, we are vertically integrated, so we didn’t have such an issue.”
The situation in Michigan is completely different from the one Washington, for instance. “Washington is a very saturated market. There are a lot of growers and processors, and the competition to get to the retailers is fierce,” he continues. “However, that didn’t stop us to be the number #1 infused product wholesaler and #1 overall wholesaler in the entire state. It surely feels good to get such a recognition from the market.”
Cannabis supply chain
Considering the challenges of the supply chain, the global pandemic didn’t help. “Everything had to change in terms of operation,” Mark says. “Initially, there was a huge scare, and we had to shift the way we carry out business. In some states, they immediately allowed for curbside delivery. The differences between the states that existed before the pandemic got bigger when Coronavirus hit.”
Fortunately, 4Front Ventures could rely on its own supply chain, which proved to be successful thanks to its experience in Washington state. “Our goal in 2020 was to take the expertise we gained in Washington state and use that again in Massachusetts, so that we would be able to provide the supply chain ourselves,” Mark says. “We wanted to replicate this similar plan in Illinois, where prices are much higher.”
Despite the challenges for the supply chain during the pandemic, 4Front Ventures has been able to keep operating and maintaining the supply chain steadily, especially thanks to their confirmed successful processes. “One thing that we couldn’t be more proud of as a company is that our yields are consistent,” he remarks. “Across all of our facilities, we get the same amount of flowers both in terms of quality and quantity. If anything, some perform even better. We pride ourselves to be one of the most efficient growers, and that’s reflected in the consistency of our products.”
It goes without saying that for such a company, the possibility of upcoming federal legalization sounds particularly attractive. “I am really optimistic,” Mark says. “I hope that the new administration and Congress will take a good look at federal prohibition. I think there are high chances of federal legalization in the years to come. This will eventually lead to the eradication of the illegal market, allowing growers to compete for the highest quality at low prices. It’s a win-win situation for both the industry and the market. Federal decriminalization would also open up cross-state commerce. Our facility in Chicago could then be a real hub in the Midwest. That’s something we are really looking forward to.”
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