Adam Bierman, the bullishly confident 36-year-old CEO of MedMen—the first American cannabis company to be valued at a billion dollars—thinks Donald Trump is very good for business.
“This administration is the best we’ve had in a very long time for our cause,” he told me last week as we spoke in a spotless white conference room inside his company’s new $15 million marijuana factory, near Reno. “This administration have said that they’re a champion of states’ rights. They’re a champion of business. When people say, ‘The last person in the world that would sign a marijuana bill into law would be Donald Trump,’ I don’t think it’s that crazy. I think it makes perfect sense for him to be the person that would sign it.”
What about Jeff Sessions, the famously anti-marijuana attorney general? What about the fact that it’s largely been Democrats, rather than the Republicans actually in control of the federal government, who have backed marijuana legalization?
Bierman waved all of that away.
“In the United States, Congress makes the laws,” he said. “What’s important to remember is that in November 2016 we elected Donald Trump president of the United States. We also legalized marijuana in California, Nevada, Maine, and Massachusetts on the same day. That means the day after the election, congresspeople from those states showed up in DC representing constituents that voted to legalize marijuana. The real momentum has very little to do with the White House. It has everything to do with Congress.”
It’s true that support for marijuana legalization seems to be growing across the country—a recent Pew poll found that 61 percent of Americans support it. The Trump administration gave assurances last week that it will not go after states that have legalized marijuana, thanks to pressure from Colorado’s Republican Senator Cory Gardner. Democrats have signed on in droves to a bill from Cory Booker that would end weed prohibition, a show of support that it's more likely the party will tackle the issue should it take power. The same week that MedMen’s Nevada factory began production, former Speaker of the House John Boehner joined the board of Acreage Holdings, a cannabis-centric investment firm—seven years after the Republican said that he was "unalterably opposed" to marijuana legalization.
If federal law does change within the next few years, MedMen will be ideally placed to profit. Bierman and co-founder Andrew Modlin started the company in 2010 after their PR agency, ModMan, was called in to build a website for a small weed shop. They couldn’t believe how much money the business was bringing in, so they decided to scrape together $13,000 to start their own cannabis company. Eight years later the pair now runs 11 dispensaries that look like Apple stores in California, Nevada, and New York—with a 12th due to open this Friday in Manhattan on Fifth Avenue. In the next few months MedMen are set to become a publicly traded company in Canada, where federal legalization is on the way. Last month, Canadian investment firm Captor Capital Corp. announced it had bought 2.3 percent of the business for $23 million, valuing MedMen at a billion dollars—which gives it the status of a "unicorn" company. It is already a major player in the national marijuana market, which took nearly $9 billion in sales last year and is predicted to hit $21 billion by 2021.
Now the company is opening what Bierman calls “the most high-tech marijuana factory in the world” here in Nevada. The site features a sterile tissue culture lab where plants are sliced up and multiplied, a purple-lit cloning room where weed grows in test tubes out of agar jelly, a $4,000 Futurola grinder capable of shredding three pounds of flower in two seconds, and a 26,000-square-foot Dutch-designed warehouse that will soon be home to 25,000 plants. Manufacturing manager Jeff Spinder says the factory will be capable of producing 10,000 pounds of marijuana every year.
MedMen are also currently building exact replicas of this factory in Desert Hot Springs, California, and Utica, New York. This isn’t just a facility I'm touring, it’s the birth of Big Weed.
Companies like MedMen have an open field because existing giant corporations are reluctant to get involved until marijuana finally becomes legal at the federal level, said Troy Dayton, CEO of the Arcview Group, the largest investor group focused on the cannabis market. “Part of the great strategy in companies like MedMen and others is that they’re getting a chance to take a crack at a multibillion-dollar market which is growing with a 27 percent compound annual growth rate before they have to compete with the big dogs, and as a result they’re becoming a big dog in their own right,” Dayton told me.
Bierman agrees with this assessment, and says the current federal uncertainty is both an asset and a cause of anxiety. “I feel like I’ve got a race to run and, yeah, I’m ten laps ahead of everybody else but the other guys—that in a moment’s notice could lace up their shoes—are way faster than I am,” he said. “I have to keep running hard and fast and not take a break because I have to assume that at some point they’re going to let them come run.”
Chris Walsh, the founding editor of industry journal Marijuana Business Daily, says that the reticence of big money to get involved won’t last long. He pointed out to me that Constellation Brands (the $42 billion multinational that brings you Corona and Modelo) announced in October that it's bought a 9.9 percent stake in the $2 billion Canadian marijuana firm Canopy Growth. (There are unicorns north of the border too.)
“The stigma is rapidly eroding,” said Walsh. “But it’s still there, especially if you’re tied to a mainstream investment firm who might worry that its other clients would get upset, or that they might face some kind of backlash, or just that maybe they personally still view this industry incorrectly and think it’s a bunch of hippies running businesses. It’s not. This is becoming a very professional industry, so that stigma is going to evaporate fairly quickly in the next year or so.”
Bierman is no hippie. He’s never made any secret of the fact that he’s a business guy more than a weed guy. But while his company may not have deep roots in the decades-old marijuana culture, he plans to make the MedMen brand synonymous with the new era of American weed.
“This isn’t some serial entrepreneurs that started a business to go flip to private equity. We’re building an empire,” he told me. “The biggest marijuana company in the world is going to emanate from the US. Being the biggest marijuana company in the US, it’s mine to screw up.”
This era of Big Weed corporatization will not be exactly what the more utopian legalization activists once dreamed of. Even as companies like MedMen thrive, half a million people, disproportionately black men, are still being arrested each year for marijuana possession; people of color have been largely frozen out of the legal industry. But from an investors’ viewpoint, Dayton thinks there are still plenty of people in the business who are there for moral reasons.
“It’s a unique industry in that so many people are involved in whole or in part because they want to see a better world,” he said. “They want to see cannabis legal because they care about the medical benefits, or because they care about freedom, or because they care about the racial injustices of the drug war. But if you want something done in this world you’ve got to figure out how to make it profitable.”
For now, MedMen finds itself in a perfect position. Trump has said that he won’t back a federal crackdown that would wipe out the industry, while at the same time the major food and beverage players won’t start competing until it’s legal across the whole country.
Cornering the market pre-legalization is a play with historical precedence. The last time prohibition ended in America, Joseph Kennedy was already in business thanks to some medicinal whisky import licenses. Kennedy made a lot of money from that deal, and his kid became president. Don’t think Adam Bierman hasn’t already considered this.
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