Legal pot has gone from lovable underdog to a multibillion-dollar industry over less than a decade in Colorado, and the state is now home to some of the country's bigger power players, including Slang Worldwide.
A publicly traded cannabis acquisition company on the Canadian Securities Exchange, Slang owns dispensary brands like O.pen Vape, District Edibles and Bakked extracts, among others, and operates licensing agreements in Colorado and Oregon with Cookies Fam — but that's just a portion of what the company is slanging around the country.
To learn more about the cannabis conglomerate and what's on the horizon for Slang, we caught up with president and CEO Chris Driessen, one of our six people to watch in Denver's cannabis scene this year.
Westword: Slang's had an eventful few years in terms of investments and acquisitions. Who operates under the Slang umbrella now?
Chris Driessen: Slang now has six brands that span concentrates, edibles, vapes and ingestibles. Our products can be found in over 2,200 stores across fourteen states, Canada and Puerto Rico. We have been acquiring assets in Colorado and Oregon, which now make us a plant-touching company. We acquire these companies in markets where we have a large distribution footprint and can generate profit by consolidating supply-chain assets like cultivation, processing and distribution to improve unit economics. We are fortunate to distribute to over 600 stores in Colorado and Oregon alone, so being able to roll up companies that help us build on our leadership position in those two states is one of the ways we continue to grow.
As a business with cannabis branches from Portland, Oregon, to Portland, Maine, how big a factor is Colorado in Slang's plans going forward?
Although we are publicly traded on the Canadian Securities Exchange, our corporate office is in downtown Denver. Our staff in Denver is tasked with supporting all other operations across the continent. We also own several cannabis licenses and businesses in Colorado. We have an outdoor and greenhouse cultivation facility in Carbondale, where we grow a large portion of the cannabis we use in production. We also own two different extraction facilities — one in Boulder and one in Denver — where we make all of our concentrate and vape products. Finally, we also own a commercial kitchen and distribution facility in Denver, where we produce our edibles and distribute products from all of the other facilities. With so much infrastructure and leadership in Colorado, it's clearly our home. In fact, we intend to continue to invest in Colorado by creating more high-paying jobs, which Governor [Jared] Polis recently applauded us for and even gave us a tax credit. We are told that this was the first state-issued tax credit for job creation ever extended to a cannabis company.
There was a lot of optimism among cannabis advocates early in 2021, but we've seen little action this year. As a cannabis business operator, has your confidence in federal reform changed at all in the last two months?
I don't get too excited with whatever the latest news is out of Washington, D.C. Both parties have had ample opportunity to adopt a pro-cannabis platform and, more important, act on it. To date, neither party has done much to advance federal legalization. That said, almost 70 percent of Americans support legalization, so it's just a matter of time before it happens. There is certainly optimism with the current administration and a hope that, finally, we'll see some real reform. That reform could come in the form of improved access to banking, lowered tax rates with the removal of [IRS tax code] 280E, maybe even interstate commerce up to full-blown legalization.
When you see just how many headwinds face American cannabis companies, especially the publicly traded companies — many of whom, like Slang, are building vibrant businesses even with these restrictions — savvy investors know that by removing some of the handicaps, these businesses are likely to grow exponentially and therefore present an attractive entry point, given today's prices and lack of regulation.
How much would legitimate access to banking change the outlook and plans of Slang?
We've had access to banking for years in almost every market we are in. I think when most people think of banking, they think of depositing cash, writing checks for inventory and payroll: the day-to-day stuff, which we have had for years. The real shift will be in the type of investor that would be able to come into the market. When institutional money starts to flow into American cannabis companies, like it already has for federally legal Canadian cannabis companies, that's when you will see a massive jump in scale and, ultimately, value. Now that Canada and, soon, Mexico have approved federal legalization, it will only be a matter of time before the U.S. jumps into the game.
A bill proposing a THC potency limit to commercial marijuana is likely to hit the Colorado Legislature this year, and we've already seen Vermont adopt a THC limit, as well. If adopted on a wide scale, how would such limits impact the financial trajectory of the cannabis industry?
There would be a massive financial impact on the industry as a whole, especially if that limit is extraordinarily low, like 15 percent, which is being proposed here in Colorado. [Editor's note: That 15 percent THC limit has reportedly been taken off the table by the legislators proposing the limit, though no replacement number has been put forth.] Most flower that is grown in our state is above this threshold, and virtually every infused product would be disallowed. The groups that support these regulations have long been disproven and are slowly becoming irrelevant. THC limits in the regulated market are always cheered by the illicit market. You are either for safe access in an open regulated market, or you inadvertently support the illicit market. There is no in-between.
The good news is that these proposals have been unsuccessful in virtually every market where they have been proposed. In Colorado alone, you would be risking hundreds of millions of dollars in tax revenue that the industry currently provides. The prohibitionist crowd will argue that the high THC limits in some cannabis products have had an adverse impact on our population, especially our youth. But science and data have flatly disproven that. Our youth consumption rate is virtually unchanged since legalization. And there has never been a fatal overdose due to cannabis in the history of man.
We actively lobby against these people and sometimes poke a little fun at them, too. Once, an anti-cannabis group took out a billboard on Lincoln Street that claimed cannabis was a hard drug and had a website that was "www.canpotkill.me," so we bought the URL "www.canpotkillme.com," which simply said "Nope" with the logo for one of our brands. These proposals are the last dying breath of a movement that has long since lost its relevance.