Boris Jordan on Curaleaf's European Strategy: Building Coca-Cola of Cannabis

Boris Jordan on Curaleaf's European Strategy: Building Coca-Cola of Cannabis

Boris Jordan: Great companies were never built by conservative leaders. Great companies were built by risk takers — those that go for it and they roll it, and that's how they do it. Yes, there are a lot more failures than there are successes, but the good ones... and I've done it six times in my life, built six big businesses, do it on the basis of taking risk and having vision. Bryan Fields: What's up guys, welcome back to another episode of The Dime. I'm Bryan Fields, with me as always is Kellan Finney, and this week we've got a very special guest, Boris Jordan, founder and chairman of Curaleaf. Boris, thanks for taking the time, how you doing today? Boris Jordan: Great, happy to be here guys, excited to dive in. Kellan: How are you doing, doing really well? Really excited to talk to Boris, really excited to dive into Curaleaf. I mean, probably one of the first and only real international cannabis companies out there. Bryan Fields: Yeah, I'm excited. I think it's going to be fun today — talk not only about the United States but about Europe, which seems to be really growing in interest and in being in the news. Boris, we got a little East Coast/West Coast battle, and I think it's really important just to put you on the map. I know Curaleaf has a specific home state, and I was curious if you could share with us what that home state is. Boris Jordan: Well, this company was launched in New York, and up until very recently our headquarters have been in New York. I do have to say that for price reasons and being economical, we just moved our headquarters up to our offices in Stamford, Connecticut, but we still consider ourselves a New York company. Bryan Fields: Let the record reflect. Kellan: Yeah, that's funny, I saw that and I was looking for a West Coast tie at all, and I was like, New York University — I got nothing. Boris Jordan: No, yeah, I was born and raised in New York, and I did go to NYU. I sit on the board of NYU, but I myself live in Florida. Our company's headquartered up in New York and now offices in Connecticut. Kellan: I love it. So Boris, for our listeners — they have a very strong understanding about you and Curaleaf, but I've heard you mention recently that Curaleaf has the strongest growth catalyst of almost all the companies out in the industry, and I'd like you to dive in and elaborate specifically on why you think that is, for those who are unfamiliar with some of these specifics. Boris Jordan: Let me go first from a 30,000-foot level and talk about it from there. In the United States, the following catalysts are coming up for not only Curaleaf but for a lot of the other MSOs. New York just launched adult use in December — we obviously got off to a fantastic start, we can go into that. Curaleaf has always been a dominant player in New York, that's our home market — we've had a 50% wholesale share, very strong retail share as well, and that's in the medical business. Now that's going to be moving over to adult use as we get into the first quarter. Obviously Ohio passed adult use, that's going to happen at the end of this year. Curaleaf has one of the larger grows there, we have two stores, we're about to open up three more that we're going to get under adult use, and we're in negotiations to acquire another three, so we'll have the full eight stores as the program gets launched. The next catalyst obviously is Florida — we've got two weeks until we go on the ballot officially. We all know the Supreme Court has to opine on it, or if they don't, as of April 1 you automatically go on the ballot, which is what I expect will happen. I don't think the Supreme Court's going to rule on this issue, I think they're just going to leave it alone, and then officially we go on the ballot. We're pretty confident that ballot will pass — it is a higher threshold than other states, 60%, but we're very comfortable the industry is very united on this issue, we're all going to be working together, all putting up money to get this across the line. Curaleaf is currently building out a very substantial addition to our indoor grows so we have as much capacity as the largest player in the market, Trulieve. We're also adding another 25 stores to our infrastructure — we'll have all of that operational by the time the program launches, which we expect to be July 1, 2025. Trulieve is expecting a triple; we're being a little more conservative and saying we think it's a double with some upside for tourism — 135 million tourists last year, 25 million population. We think it's going to be a really big catalyst for us, probably after Germany and Europe, probably the second-largest catalyst for Curaleaf. Then, staying in the US, we fully expect that later this year or early next year we'll probably get Pennsylvania. Pennsylvania is surrounded by all adult-use markets, and it looks like the governor and the legislature are having serious conversations on the matter. There's some resistance still, but we're pretty comfortable we think we can get this done. Curaleaf has very strong positioning in Pennsylvania — we have our full complement of 18 stores, two large grows there, fully ready for adult use. So look, between New York, 20-plus million people; Ohio, 10 million-plus; Florida, 20 million-plus; Pennsylvania, 9 million people — you've got a huge TAM coming onto the market over the next two years. We think this market will return to double-digit growth numbers again in '25, '26, and '27 for the larger players. Then for Curaleaf, in Europe we've got the UK, where we have just under 50% share and growing at more than 50% annualized. We have Germany, which has just decided not only to decriminalize but to reschedule cannabis completely off the narcotics list — a major move by a major G7 country, the second one after Canada to do it. We should have the Bundesrat vote on the 27th, and we're hopeful that program will launch either April 1 or very soon thereafter. We're fully ready in that market through our 420 subsidiary, our 420 brand, with a 23% share. We also just opened up a new market in the fourth quarter of last year in Poland — a 60 million-person market with very strong growth prospects. We just bought a Polish wholesaler, so we're now bringing our brands into that market, not just selling into it. Today we made our first sale into the Czech Republic as well. That market is moving on the back of Germany. We have full operations for growing, manufacturing, and distribution out of Portugal — an EU GMP-certified facility there, which takes a long time to get. We expect full certification on April 15 of this year; that process sometimes takes two to three years. We invested in that market three years ago, getting all our certifications and product registrations done, so it's a much more difficult market than the US to get into — the barriers to entry are very high, but we feel we have a head start on everybody. If you add up Germany, 84 million people; Czech Republic and Poland, another 60 million; UK, 60-plus million — we're talking about an overall European TAM of over 700 million, twice the size of the United States. We think that's what gives us a catalyst nobody else has. Kellan: Curaleaf has always been a first mover — I remember seven years ago you went out and acquired Select, huge waves throughout the industry, brought a lot of legitimacy to the industry, showed that large acquisitions were possible. In the early days you must have learned a ton from fast growth in the domestic US market. What kind of lessons have you employed as you expand throughout Europe, given Europe is probably ten years behind the US market? Boris Jordan: The big difference in Europe is that we're focusing only on markets that have scale potential — we're not going into small countries. You might argue I just mentioned Czech Republic — well, in Europe, unlike the US, we're able to grow and manufacture in one place and sell through the whole continent without building facilities in every country. So we're unlikely to build domestic distribution in Czech, but we'll sell into distributors there. We will build domestic distribution in Poland, because anything over 50 million people, we want to be there. In the US, because it was a new industry, we spread the flag very wide, very fast, and we definitely made mistakes — we went into markets we shouldn't have been in. In '23 we rationalized Curaleaf quite dramatically; we've closed or sold markets and assets we didn't want, written off those bad investments, and we're done with that. We go into '24 with a completely clean balance sheet from a legacy-assets perspective. We're in the 17 best markets we want to be in. Kellan: Just to make sure I understand correctly, for the listeners who may be confused — in Europe, like you were saying, there are certain countries that allow you to distribute products to other countries. That's all Europe? Boris Jordan: All Europe. Kellan: Got it. So it's because it's legal in Europe, unlike the United States, right? Boris Jordan: It's medically legal, so you can actually move product. We grow and manufacture in Portugal and sell to England, Germany, Czech Republic, Poland, and hopefully soon Ukraine. In markets like the UK, Germany, and Poland, because they're over 50 million people, we're building domestic distribution too, so we can move our brands there. In smaller markets, we sell into local wholesalers who distribute the products. Kellan: Got it, thanks for clarifying — I think that's a unique difference that's not clear from the outset, that they operate differently, so strategically you're positioning your assets uniquely. So Europe is much more what the US should be? Boris Jordan: Sure, right, it's a classic consumer products market where you can manufacture and grow in one place, get economies of scale, and then distribute all over the continent — you don't have to build these crazy facilities in every single state. That's where some of the mistakes were made by Curaleaf early on. We didn't realize some of those US markets were too small to justify the size of investment, and they weren't going to yield enough return, so we had to backtrack and focus on the big ones. Kellan: That makes sense, given that states operate at different speeds. So just from a macro understanding standpoint, size-wise, is there a market you can relate Germany to, to give people a rough understanding of the implications of these markets — like, do you see Germany being comparable to Florida? Boris Jordan: Germany is 84 million people — take California, at around 40 million, and it's basically two-plus times California. Very popular product, cannabis, in Germany, very widely used. I want to stress, because there's a lot of misunderstanding — it is a medical market. Yes, there's something called Pillar Two in the law, which is the social clubs, but we're not focused on that, we don't think it's an interesting market. We're focusing on the widespread medical market. What's going to make it very large is that, by taking cannabis off the narcotics list, doctors are no longer capped in how many narcotics they can prescribe per patient, and cannabis was always last on that list. By removing it from the narcotics list, doctors have no limitation. There were 600,000 patients who never entered the program because they were rejected by their doctors — that's an official number. Those patients will come back into the program. Curaleaf did about 25 million in Germany last year; that could be a five-times growth rate based on our market share. Compare that to Florida, a $6 billion-plus market. It won't happen day one — these things take time — but I promised investors I'd be ready as these markets come online, and we are, through our 420 brand and 23% share. That's why I carry a bit more leverage than other companies, and my cash is a little lower — because I'm investing all the time, building. I don't understand the fanaticism on cash, as long as I can pay my obligations. I want to be investing in the future in an industry that should be growing at 25% annualized. That's the difference between Curaleaf and a lot of other companies — they're building a moat, I'm about building and growth. I don't believe the genie is going back in the bottle. Kellan: One of the biggest differences between the German and other European markets — I think the UK has a similar program — is you get compensated by your insurance company for medicine prescribed by your doctor. How is that infrastructure set up? Why is that different in Europe? Has it always been that way? It's not that way for private insurance in the US. Boris Jordan: Because we're federally illegal in the United States and not classified as official medicine, no insurance company will ever pay for it. In Germany, first of all, you have a socialized system of medicine and private insurance as well, so there are green and red lights allowing you to get refunded for cannabis or not. The current draft of the law in Germany would allow about 50% of the 300,000 patients to get insurance refunds. Under the new program, it looks like it's going to be close to 100% refund from both private and public insurance, which is going to give a massive kickstart to the program. We've never seen anything like that in the United States. Kellan: When you were laying these plans three years ago for Europe, what assumptions did your team make, and looking back, what did you get right and what did you get wrong? Boris Jordan: We all think reform is going to happen fast — I didn't think we'd still be discussing rescheduling in the US, or safe banking passing the House so many times. This is not only a US phenomenon, it's global. Global governments, particularly the G7 and Western Europe, have really slowed down their ability to reform. I'm very worried about the Western world. I have experience in places like Russia, Eastern Europe, Africa, and Asia, and I can tell you the reforms in the Emirates, Saudi Arabia, are happening at lightning speed compared to the US. They remind me of the US in the 1960s, '70s, '80s, and '90s, before ideology and partisanship replaced bipartisanship. I worked on the Hill in the 1980s for a Republican congressman on the Ways and Means Committee, and everybody worked together because the goal was to better the country. Now it's all about ideology and partisanship, not bettering the country — and it's the biggest issue, the slow crawl of reform. Nobody dies from cannabis — you die from alcohol poisoning, cigarettes, opiates, fentanyl. Cannabis is actually a healthy plant if used properly, and it's still Schedule One — it's insane. The problem is pharma lobbying — they're scared to death of cannabis being legalized because it threatens their pain and anxiety medications. They only work with synthetics, and every synthetic cannabis company has gone bankrupt because they couldn't compete economically with natural plant-based products. Europe is a bit more progressive on homeopathic medicine, and their regulators encourage plant-based medicine over synthetics. Kellan: And taking it off the narcotics list is obviously a big game-changer, allowing doctors to move it up the list for patients, especially compared to opioids. And telemedicine too is a big game-changer — can you explain how that works for people unfamiliar with the benefits? Boris Jordan: The US has telemedicine for cannabis in different states, like Florida — I actually had my Florida appointment yesterday on telemedicine. I usually meet with my doctor in person, but I was traveling for my son's bachelor party, and my card was expiring, so I got on the telemedicine platform, had about a 15-minute conversation with a responsible doctor who likes to talk with patients about what they're using it for. I use cannabis for sleep deprivation, because I travel so much, and for arthritis and inflammation pain. I'm not a smoker, I use rubs and edibles. The Curaleaf X gummy is my absolute favorite — I can't live without it, it puts me down for eight hours and I sleep like a baby. I love our Florida Diamond Vape — best vape I've ever tried, doesn't hurt your lungs, tastes great, gives a really good entourage effect. It's made through our proprietary technology called ACE, which is now operational in Massachusetts and Florida, and we're moving that technology to other markets. For my arthritis, I use the Curaleaf rub every day — we're actually working with Imperial College in the UK on a medical certification for this rub as well as a tincture, running trials as we speak, and results are incredible. It could be one of the first cannabis medicines to get real certification for pain and inflammation. Kellan: One thing I'm curious about — since your company has exposure to a global audience to build global brands, are you open to conversations with other MSOs who might say, "Boris, would you be open to white-labeling our products?" Boris Jordan: My goal at Curaleaf is to truly build global brands, so I'm kind of stingy that way — if I sell somebody else's brand through my facilities, that means I'm not doing my job. I'm out there to promote and build Curaleaf, Select, Grassroots, 420, Jams — those are my brands. I want to be the Coca-Cola of the cannabis industry, I want my products on every shelf in the country and in the world. Kellan: In Europe, since it's medical, how do you balance deploying all these brands that have been successful in the states? Is there a strategy to that in terms of deploying brands in the medical market? Boris Jordan: There's definitely a strategy, because in Europe cannabis is regulated like a pharmaceutical drug. We did this investment three years ago because we knew it would take three years to get certifications and approvals — every strain has to be approved by regulators in the UK, Germany, Poland, and in some countries it takes over a year per strain. We have to have EU GMP-certified facilities, at a much higher standard than anything in the US — full white clothing, gloves, no bacteria allowed. I bought this facility in Portugal from a South American company going bust about a year and a half ago, and I'm only getting recertified April 15 because of the change of ownership. That's what I'm comfortable with in terms of my moat — anyone trying to come in is going to take a long time. A lot of my Canadian competitors just package flower in Canada and send it over; I'm on the ground building brands, working with pharmacies — we've got 10,000 pharmacies in Germany starting to distribute product April 1st — educating pharmacists on our products, that's how you build brand loyalty. Kellan: Are there any other countries in Europe you've got your eye on? Boris Jordan: We're part of a group selected by France to do a medical cannabis test — France is actually the largest cannabis market in Europe by usage, bigger than Germany, which surprised me. Spain — we have a partnership at the University of Alicante with a processing facility that's EU GMP-certified, which we're using now as our large-scale Portugal facility gets certified, and also as a research facility with free PhD students. We're getting the same in the UK. In Italy, we have a partnership with the military, which is actually the distributor for medical cannabis there — a small market, but we want the relationships as it legalizes. We're also looking a little at Asia — just a hint, can't say more. Kellan: Besides population and regulation, what other factors does your team look at when evaluating new markets? Boris Jordan: Number one is usage — some cultures just don't use cannabis, like China, the largest hemp grower in the world but they use it for textiles, not smoking. Russia — Putin doesn't even allow GMO in his food, hates drugs, plus there's a war. We look for markets with historically strong cannabis use as a base to expand through marketing and education. Two is population size. Three is purchasing power (PPP) — if people are making $100 a month, you're not going to make money in the cannabis business there. Kellan: I know one of your big recent focuses is educating institutional investors — what does that actually mean? Boris Jordan: Yesterday I was in New York and had a second meeting with one of the largest fund managers in the world, a trillion-plus fund manager. We first had a Zoom a month ago with their tobacco and alcohol analysts, and they called us back to come into their New York office for a wider group. We spent an hour and a half educating them on the industry and on Curaleaf. These investors are early-stage in covering the sector — firms like BlackRock and Fidelity were in early but were forced out, so they need new education too. I can get in front of them now not just because of potential rescheduling and safe banking, but because Curaleaf did the work to uplist to the TSX and get custodied by Bank of New York Mellon, Pershing, State Street, Morgan Stanley, and Goldman Sachs. Now I can say, "You can actually own us." This particular fund manager said their compliance can now invest in the sector — that's a win — and now we just have to make sure they think the sector is exciting. Curaleaf attracted BlackRock and Fidelity as investors in our IPO originally, but we lost them because of Jeff Sessions and the rescission of the Cole memo, and FinCEN couldn't give guidance, so they all got out. Now we start all over — I've been doing this 30 years, and cannabis is an easier story than markets like Russia and Nigeria, which I used to educate people on. Kellan: I'm fascinated that these investors understand exposure across US medical and rec markets plus German medical infrastructure — is that the combination that helps them grasp your strategic arrangement? Boris Jordan: Some of these people are very smart. Retail has kept us alive for five years since we've been public, so thank you retail, but it's a difficult market to educate — they're traders, chasing Bitcoin one day and cannabis the next. I'm happy to talk to investors who really understand — yesterday we talked about how Ozempic and Wegovy are affecting cannabis demand, since we've seen a falloff in alcohol and food demand from those drugs. I told a fund manager we're the antidote to that — we have a slang term in our culture called "the munchies," we make people eat, the opposite end of that drug. These investors are doing thorough due diligence on consumer metrics, which retail investors never ask about. I think we're at the beginning of a new wave of much larger-scale investment into the sector. Kellan: I have to ask about New York, Curaleaf's home state and a big wholesale market for you. On a scale of 1 to 100, how confident are you in New York's cannabis market and the direction it's heading? Boris Jordan: I'm super excited about it. I spent the last week and a half personally visiting accounts in New York, wholesaling and selling the Curaleaf brand — I love doing that, I hate managing a big corporation, I'd rather be out in the field. I met with a lot of social equity license holders, getting them past the stigma around big cannabis, explaining that we were them eight years ago — I started Curaleaf with $450,000 in a small art studio in Sea Cliff with one store and a license. We had a lot less certainty than they have now — you could get arrested and thrown in jail for what we were doing. I told them we're just a few years ahead of where they are, there's a place for everyone, and if they do well, we do well, because they'll be buying our products. Yes, there's an illicit market, but the way to beat it is to make better, safer products and win market share that way — the idea that illicit weed is the best weed is a myth. Curaleaf has really upped its game — we bought a genetics company in California, Dark Heart, and changed most of our genetics around the world. I'm excited about New York — it's the largest adult-use launch since California. Kellan: Why do you think there's such stigma against big cannabis in New York specifically, more than other states? Boris Jordan: Because the New York government created that stigma — they were out slamming us, attacking us, telling everyone we were bad, which is nonsense. We took them to court over it and settled, and now we're moving forward. Both New Jersey and New York had hostile regulators, and I think that's the main problem. The first ten minutes of these conversations with license holders are always tough because they've been brainwashed — my family fled the Soviet Union because of communism, and that's exactly what these governments are doing, dividing people. I'm a first-generation American, my parents came off the boat, I'm no different from anybody else who started a business in the US. Within fifteen minutes we're usually hugging it out, because the cannabis world is a Kumbaya environment — we all love the plant. I'm 100% sure Curaleaf will have better than 70% penetration in the adult-use market under social equity licenses within the next six months. Kellan: I think big cannabis actually provides stability that's lacking in the industry, especially where smaller operators pour their life savings in and then hit a bad harvest with no resources to recover. Boris Jordan: The first thing Curaleaf did when we got our adult-use license in December was save a hemp farmer — we placed a huge order of oil from a farmer who was literally going bust, and they survived because of it. We're limited to three adult-use stores in New York, so I can't build a huge retail business there — my retail business in New York is almost irrelevant right now, it's the wholesale business that matters. I need to create good terms and products for store owners, build relationships, help local farmers. That's where the angry regulators don't understand — they hurt the industry rather than helping it, the slowest, most awful launch we've ever seen. We've settled with them and are trying to build a better relationship moving forward. Bryan Fields: Let's quickly switch gears to a rapid-fire round. True or false: you, Boris Jordan, are the wholesale Curaleaf sales leader in New York? Boris Jordan: True. Bryan Fields: Five years from now, rank these markets for impact on Curaleaf over the next 12 months: Florida, New York, Germany. Boris Jordan: Florida, because we have a huge base there, then Germany, then New York. Bryan Fields: Three people to share a vape with, dead or alive? Boris Jordan: I wish I could have shared one with my dad — he died, he never tried it, and he was my best friend. That would have been number one on my list. I'll leave it there for now. Bryan Fields: What question do you wish more people asked you? Boris Jordan: Probably why I care about the industry as much as I do, rather than talking about money, market caps, investors, revenues, and EBITDA. Bryan Fields: Tell me something true that almost nobody agrees with you on. Boris Jordan: That Curaleaf is anti-social-equity and anti-home-grow. Bryan Fields: Under-the-radar state or country you think most are missing? Boris Jordan: Europe as a region is misunderstood, and other players are missing it. In the United States, I think it's covered. Bryan Fields: True or false, by 2026 Americans will be able to get their insurance to cover medical cannabis? Boris Jordan: No. Bryan Fields: What outside company are you drawing inspiration from? Boris Jordan: I draw less inspiration from companies than from leaders — I've read every book about JP Morgan, Rockefeller, Steve Jobs, Jeff Bezos, Elon Musk. I love entrepreneurs, how they built their businesses. Companies come second, people come first. Bryan Fields: What is the most expensive lesson you've ever learned? Boris Jordan: Get out of Russia before the war starts. Bryan Fields: What do investors never ask for but they should? Boris Jordan: It depends on the investor — the current investor in the industry is overly focused on cash flow and conservatism. Great companies were never built by conservative leaders, they were built by risk-takers. I've built six big businesses on the basis of taking risk and having vision, and the problem is this industry has lost its vision — everybody's obsessed with quarterly earnings and cash flow instead of building brands and investing. Bryan Fields: What aspect of your business keeps you up at night? Boris Jordan: Every aspect of my business at the moment. Bryan Fields: If you could put anything on a billboard to get a message out to billions of people, what would it be? Boris Jordan: Peace and love. Bryan Fields: A year from now, what does Curaleaf look like? Boris Jordan: A company that returns to mid-double-digit growth with a much healthier balance sheet after our restructuring, and hopefully a happy team — that's what I really care about. It's tough going through restructuring, most difficult on the people who work at the company, and we're through it now, so it's time to rebuild the culture. Bryan Fields: Prediction time — with the narrative that big pharma, tobacco, and alcohol industries are gearing up to eventually dominate the cannabis sector, how do you see the evolution of the industry, and Curaleaf's opportunity to collaborate with or fend them off? Boris Jordan: Bring it on, guys. We're building Curaleaf not to sell, we're building it to compete. Bring it on. Kellan: I don't think pharma has the same skill set — both pharma and Curaleaf had to start from scratch, but pharma is now a decade behind Curaleaf in experience. I'm betting on Boris. Bryan Fields: I think hearing what Boris said about the learning curve and evolution of skill sets, I don't think you can simulate that no matter the resources or reach — the detailed nuances he laid out today give operators like this a real advantage. Bryan Fields: Boris, for our listeners who want to get in touch, learn more about Curaleaf, and buy Curaleaf stock, where can they find you? Boris Jordan: Through our IR department, Camille, who used to be at BTIG — we hired him about a year and a half ago, terrific person, very in-depth knowledge of the industry, always happy to answer any question. Reach out through our website, our IR pages, and frankly, reach out to me — I'm always available on Twitter, I answer questions in the DMs from small investors who put in $100 or a thousand dollars in our business. I always believe you've got to work with everybody, no matter how small or big — if they're an investor of yours, they've risked their capital in your company, you have to keep talking to them and educating them. Bryan Fields: Love it, appreciate you taking the time, this was a lot of fun. Boris Jordan: Thank you, likewise.