Green Growth Brands is hoping to bring traditional retailing methods to the cannabis industry. The theory is that if it worked well for these other brands, it's bound to work for cannabis. The company is populated with retail leaders from the worlds of Victoria's Secret owned by L Brands (LB) , DSW (DSW) and American Eagle Outfitters (AEO) .
CEO Peter Horvath held top executive positions at Victoria's Secret, American Eagle Outfitters, DSW and Limited Brands. He believes that his experience with at the helm of shoe retailer DSW when it went public on the NYSE at $1.5 billion. Chief Marketing Officer Scott Razek lead creative teams and marketing efforts at Victoria's Secret, Bath & Body Works, Limited Stores and American Eagle Outfitters.
All of the top executives, except for the chief financial officer, are men from these retail companies. No women are on the executive team.
The company recently raised $85 million, more than the planned raise of $55 million. The company is pursuing a reverse takeover of Xanthic Biopharma, which is listed on the Canadian Stock Exchange and is expected to begin trading by the end of the year.
Green Growth is creating a portfolio of brands. In the development stage are Camp -- visualized as a wellness center/grow facility/shopping village and event center. Meri + Jayne are high-quality CBD and cannabis products targeting the millennial crowd. Green Lily is a women's products line billed as "For Women, By Women," although with no women in the C-suite, I'm not sure which women are creating this. Also being developed are 7th Sense CBD-infused beauty products.
Xanthia Biopharma was already a premium cannabinoid brand. It will continue to cultivate and process cannabis and cannabis-infused products. Last month, Xanthic completed the acquisition of Nevada Organic Remedies for $56 million. That was seen as the first piece of the company's emerging retail network. It holds four Nevada cannabis licenses including The + Source dispensaries. This brand is logging $17 million in revenue per year.
"I want to localize the dispensary," said Horvath. He explained how market analysis in his previous retail experience helped determine consumer profiles and allowed for the big chains to target inventory to increase sales. Horvath believes existing dispensaries are not putting consumers first.
Of course, it remains to be seen whether lessons learned in traditional retail can translate to the highly restrictive cannabis environment. For example, store design decisions can be determined by state rules and regulations.
Green Growth is based in Columbus Ohio, which is home to L Brands -- where most of the executives come from. L Brands stock has fallen from $99 in 2015 to around $28. American Eagle Outfitters, also the previous home to many Green Growth executives, has seen its stock rebound to around $21.
Ohio has been trying to launch a medical marijuana program, but has experienced numerous delays. Some cultivators have been given permission to begin growing medical cannabis, according to the Marijuana Policy Project.
Horvath noted that consumers crave authenticity and the cannabis consumer is particularly sensitive to this. It will be interesting to see how Green Growth evolves over time.