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Nicholas Vita is co-founder and CEO of Columbia Care (CCHWF). Prior to Columbia Care, Nicholas was a Partner at Apelles Investment Management, a private investment management company focused on the healthcare and privatized military infrastructure sectors. Before Apelles, Nicholas was a General Partner and Portfolio Manager for the Healthcare Sector at ARX Investment Management. He also worked at Goldman Sachs in the Healthcare Department focused on Mergers, Raid Defense and Corporate Finance.
Nicholas also serves on corporate and philanthropic advisory boards including GenNext (NY), Success Academy, Deerfield Club of New York, NY State Industrial Hemp Working Group and US Attorney's (Eastern District, NY) Counterterrorism Working Group (Disruption and Early Engagement).
Topics include:
- Co-founder and CEO of Columbia Care. Spent a long time in financial services an advisor and investor mostly in healthcare. Invested in cannabis, ended up running that investment and from there created Columbia Care, broke new ground as an MSO. Quiet but large.
- Deciding on the MSO space. Regulation can be your friend. Worked in Eastern Europe after the Wall fell - transitioning from command economy to market economy: in an emerging market, you need something of scale - a brand without infrastructure doesn't change things when it's hampered by regulations. State laws dictate federal laws, only exacerbated by Covid.
- How they decided which states to go into first. First experience in cannabis was in DC which was a small, limited market, medically focused that meant regulations allowed them to do the things they wanted. CCHWF chose Arizona as their first market because it was a regulated, medical market, fully integrated (supply chain continuity) and allowed them to touch consumers. Driving the most value and innovating.
- Deciding to exit markets, like they did in Nevada and Puerto Rico - at the time it didn't make sense for them to stay there, but it's a dynamic environment, have to be circumspect about everything, even when you're excited about the progress and growth.
- Keeping an advantage while companies continue to go online. Columbia Care wasn't a rollup, they developed human and cultural capital and infrastructure. Always focused on the long run, which is now coming to fruition based on their model of success.
- Headline is great but integration is hard, driving real value requires real discipline. CCHWF is market leader in most of their markets in multiple states because they've had more time to do it. Most M&A doesn't work out the way it's supposed to. Now Columbia Care can lean further into their model because of how they've handled themselves financially until now.
- Only non-partisan issue is cannabis. Medical side is uniform; adult-use moving in the right direction. Of states Columbia Care is in, 11 are expected to turn adult-use in next year. Building out a lot in New Jersey and Arizona. Built core operational base in East Coast - which is the least developed market and will have a staggering growth rate. Can't be a national leader without a leading presence in the leading markets, so they're also in Colorado through The Green Solution and California.
- Cannabis as a way to break the opioid crisis. One of Nicholas' main drives is helping break that. Education helps but doesn't solve everything.
- Dilution means giving up an enormous amount of control. Debt is great until it's not. As a debt investor, Nicholas has been on the other side, so didn't want to lever the balance sheet, wanted to be disciplined about creating efficiency in capital structure. Can use equity or acquisition - even if it's dilutive in terms of number of shares, it's accretive from a financial perspective.
- Recent record earnings - well positioned relative to anyone else. Still thought of as a medical company but in all the adult-use markets and that growth will be reflected in the next year. Employees across the board at CCHWF are looking at ways to grow within the company - sign of bullishness and growth.
- Thoughts on cannabis in Europe: 3-5 year out story. Massive market but it's a much longer path. Will be medically oriented environment, which is perfectly suited to Columbia Care, a no-brainer for them when you figure in shipping opportunities. But foreseeable future, this economic reality means you have to be a high growth, cash generating business focused on the US. People ask why they spend time doing pilot programs in New York when it's not online, but it will be soon and CCHWF will already have a foothold. So too with Europe, albeit at smaller numbers, more medically focused.
- Growing at a disproportionate rate because of the infrastructure they've ben building. Outside, bigger corporations have much bigger capital, but very few have fully integrated business models like CCHWF. Would CVS or an alcohol company like to own a piece of cannabis space, yes, but there's no natural fit because of how companies work now. What noone is talking about is for hyper growth and high margins - what about private equity? It fits their model perfectly.
- Future of cannabis retail - Columbia Care's credit card which started as a crazy thought, but eventually figured out the perfect application. Biggest obstacle to purchase is method of transaction - this solves that and inherently creates other upsides like loyalty and basket size.
