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Q&A with Charlie Bachtell: Founder and CEO of Cresco Labs
The Cannabis 50 celebrates the organizations, individuals, and companies who are working to build a responsible, sustainable, and equitable future for the cannabis, hemp, and related industries. In addition to the 2021 Cannabis 50 Impact Review, we are also sharing interviews with our honorees to help spread their messages of positivity and growth. Publicly traded and based in Chicago, Cresco Labs Inc. is the leading wholesaler of branded cannabis products in the United States for 2021. Consistently earning the top spot on the BDSA top-five brand list, the company has operations in ten states where marijuana has been legalized for adult and medical uses, as well as a diverse array of products to meet its customers’ needs and the ability to place these products on its owned retail and third-party shelves, increasing accessibility. We sat down with Charlie Bachtell, the founder and CEO of Cresco Labs, to learn more about how he transitioned from the mortgage banking industry to the cannabis industry, what landed on Cresco’s biggest highlights of 2021, and how he thinks the industry needs to evolve in 2022. MGO: How long have you been involved in the cannabis industry? What inspired you to get involved with cannabis? Charlie Bachtell, Founder and CEO of Cresco Labs: We founded Cresco Labs in 2013 after I spent a decade in the mortgage banking industry watching it go from unregulated to hyperregulated overnight because of an economic downturn. Its regulatory framework was structured state-by-state. Illinois was different than California, which was different than New York. At that time, the mortgage industry had a ton of negative stigmas associated with it—and it mandated that businesses like ours focus on an executive business model heavily rooted in compliance and simply doing the right things. This included transparency and building trust with your customer base—all under the umbrella of absolute guidance with regulations. I read the guidelines and application process for Illinois’s pilot cannabis program, and I realized it mirrored the industry I currently worked in! Cannabis, too, was an industry going from unregulated to hyperregulated overnight on a state-by-state basis because laws were state-based and siloed from each other. So, I’d done this before, and I would say most of the lessons, strategies, and experiences I developed in the mortgage banking space gave me a roadmap of exactly how we would be successful in this new industry. I applied what I learned in my previous industry here, and I’m proud of Cresco’s successes thus far. MGO: The cannabis industry saw several trends emerge in 2021. What do you think was the biggest one for Cresco Labs? Bachtell: One of Cresco Lab’s biggest themes was executing our vision of strategic breadth and depth in the most strategic states. We expanded our wholesale and retail footprints, which increased our leadership position as the current number one U.S. wholesaler of branded cannabis products. According to BDSA, our Cresco cannabis brand was the top-selling cannabis brand nationwide, and in both Illinois and Pennsylvania, we provide the top portfolio of brands. Many of our Sunnyside stores around the country continue to deliver revenue exceedingly more than respective state averages, outperforming their fair share of sales. Today, our geographic footprint is comprised of the most valuable states, seven of which are already over a billion-dollar run rate, and five of which are medical markets that are likely to introduce adult use in the near term. Overall, it’s been an incredibly productive year investing in our strategic footprint, and in 2022, we’ll continue investing in our markets to bring our industry-leading portfolio of brands to more consumers. MGO: What were some of the biggest obstacles you faced in the industry in 2021? How did you manage and overcome these issues? Bachtell: One of the biggest obstacles for every cannabis company is access to affordable capital. The passage of cannabis policy reforms like the SAFE Banking Act would be a big step forward, allowing for more affordable access to capital, the ability to use credit cards, normalized banking, and the possibility of listing on major U.S. exchanges. These are essential steps for an equitable industry—not just for large publicly traded cannabis companies, but also for private operators who will create the much-needed diversity in this industry. At Cresco Labs, we’ve focused on succeeding under the current regulatory framework while also preparing for what we believe the normalized future framework will look like. MGO: What were the biggest highlights and most positive changes for Cresco Labs in 2021? Bachtell: Nearly 70% of Americans now support legalizing cannabis, according to the latest Gallup poll. For the cannabis industry, 2021 saw four states in allowing recreational cannabis: New Mexico, New Jersey, Virginia, and Connecticut. Many states like Ohio and Florida began discussions surrounding legalization, and states like New York expanded existing medical programs, providing greater consumer accessibility to cannabis products. Another highlight was the wealth of discussion and policy ideas in Congress targeted at ending cannabis prohibition—I truly think it’s a matter of when and not if at this point, and I’m excited to be at Cresco Labs at such a pivotal time to witness the laws change in this country. I’m hopeful we can make this a vibrant industry for everyone to be able to participate in. Cresco Labs has seen the industry growth from a consumer standpoint remain incredibly strong. We’re proud of ourselves and our ability to have a diverse portfolio of products to meet the needs of all consumers—and our ability to get that portfolio on the shelves of third-party stores. In 2022, we’ll keep executing on what makes us successful: a strong product assortment, quality and consistency at each price tier, and a robust innovation pipeline focused on providing customers new and exciting products. MGO: What should the cannabis industry be focused on in 2022—and beyond—to keep it moving forward in a positive way? Bachtell: We all want to see legalization at the state level, with all states building out regulatory frameworks that will make cannabis accessible to more people. We remain focused on our mission to normalize and professionalize cannabis, so we hope to see the end of federal prohibition—the descheduling of cannabis—as well as federal decriminalization and expungement. Congress’s enactment of the SAFE Banking Act will provide greater access to capital for both large and small businesses in the United States. MGO: How do you think the cannabis industry will continue to evolve in 2022? What are you personally most excited about? Bachtell: We shouldn’t forget the fact that the U.S. easily remains the largest source of worldwide cannabis revenues and the largest contributor to growth in 2022. We’re in the early stages of converting an estimated $50 billion illicit market in the United States while still expanding our legal market to consumers who’ve never participated in the category. Beyond this increasingly large addressable market, the best companies are driving efficiencies in their operations and distribution and retail networks. The entire value chain is getting better and is poised to capture that growth.