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I n s t i t u t i o n a l A n a l y s t I n c
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‘Northwest King of Cannabis’ Chats with the
Marijuana Stock Review.
First Interview
W
ith CEO Jake George
.
While much of the
Cannabis Press is focused on Colorado the ‘first state’ and California
, with an
estimated 5 million pot smokers
-
up in Washington State, home of Affordable Green Holdings
–
Ja
ke
George
has become widely
known
as
an
elder statesman and
the
‘
Northwest King of
Cann
a
bis
.
’
He has
over
nine
years of
boots on the ground
background and
experi
e
nce
,
dealing in
nearly all
facets
of the
b
us
iness
from seed to store
–
which includes navigating banking and taxation issues
.
Sought after for
his
advice related to
zoning
, growing
and more
–
we had a chance to speak at
length, where he
asked
us
the first question
–
being
“Do
you
have any idea how large the
industry
is
up
he
re
in
Washington
State
?
”
We guessed $20 maybe $50 million. He replied
,
“I
n the last two
years,
Washington residents have spent a total number of
just over
$
1.6 billion
on the
marijuana
!
That's
almost $2
billion dollars
being spent
just
at
the
retail
level
.
”
Medical
#
Recreational
#
Growers
#
Edibles
#
Technology
#
ETF’s
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Under his
st
e
wardship
, Jake has acquired
over 250
licensed
acres of
premium
farm
land
,
while also
continuing to expand and develop verticals within the companies portfolio
.
The
cannabis industry is a business on the brink of exploding
in Washington
and
both
entrepreneurs
and investors seem to be
clamoring to get
involved.
Currently, there are over 400
recreational shops running operating
in Washington.
Out of those
400 plus
stores, the
cannabis industry has made roughly
$
742
million dollars in excise tax
.
M
ore than 60 percent of these funds
over the next two years
is
slated to
go toward public health programs,
including Medicaid, substance abuse
prevention efforts and community
health centers, according to the
Washington State Office of Financial
Management.
"Most people would be amazed to know that it's all walks of
l
ife
n
ow
consuming
cannabis," George
told us
when asked about the average demographic of cannabis consumption.
"It seems to be everybody across the board and I can see the stigma slowly wearing off.
Quite
literally, there has never been a better time to be in the cannabis industry.
"
To take advantage
of
the numerous
opportunit
i
es
in
Washington
and
beyon
d
,
Affordable
Green
Holdings recently announced it was being acquired for $6.5 million
by a
pu
b
licly
traded entity
,
which enables
it to have
improve
d
access to invest
ors
and subsidiary
channels to acquire
to acquire
additional growth capital.
?
Interview #1. The First in a Series.
Marijuana Stock Review (MSR):
It’s our understanding that the core of
Affordable Green
’
s
business operations
are
contained through exclusive service, lease and consulting agreements
diversified over numerous verticals which
allows
the company the flexibility to participate in various
markets, both in the public and private sectors.
Currently
,
under your
umbrella
,
there’s a 250
-
acre farm with multiple licenses
.
There are
processing facilities, bakeries, relationships with
retailers,
in addition to dozens of well
-
known
brands such
as
Jam Rocks, Rockit Oil and Firebird Vaporizers
-
Affordable Green seems to be in a
unique position in the marketplace to have done and
be
doing just about everything weed related.
With almost a
decade in the
industry
,
we’ve heard competitors refer to you fondly as the Northwest
King of Cannabis.
There is a saying
“The pioneers get the arrows and the settlers g
e
t the land
.” Can
you tell us how
you got started and managed to avoid the arrows?
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Jake George
:
Actually
,
I have
de
al
t
with more than a few arrows,
mostly
super
fi
cial
though.
No
doubt, things were a lot
more
difficult 10 years ago
,
then they are today
. A lot
more
difficult.
But
now thankfully, we have the winds of regulation behind our
back
,
pushing us
forward
and the most
diff
ic
ult
thing
is k
eeping pace and being
compet
i
tive
.
After I got my degree in economics I spent 5 years
working for a major
e
lectronics manufacturer. I was a
technology training specialist and spent most of my
time
working closely with large
-
scale distribution
companies and electronics retailers. I was exposed to
a great deal of branding and product development, I
always knew I would own my own business and use
d
that opportunity to learn as much as I could about
prod
uct development
,
sales distribution and backline
support.
MSR
:
S
o when and where did Marijuana
–
I hope you
don’t mind me calling it Marijuana
instead of
Cannabis
, I’m old school, near 60
–
how
did Marijuana
come in
to
the picture.
Jake
: Funny, no Marijuana
is fine
.
In the late
2000
’
s
,
it was recommended to me by a
d
octor that I try
cannabis for
a
health
condition
. And
as I'
d
never tried
cannabis in any form
,
I pursued getting a medical
authorization
which
proved to be a nightmare. I didn't end up at a
d
octor's office like I assumed
.
I
was in someone's garage with two other people and a
d
octor that had flown in that morning from
California.
MSR
:
Not the experience that most people have become accustomed to when being seen by a
licensed physician
, no
doubt.
Jake:
Major difference. Anyway,
I left that day with my authorization and
very soon after,
my first
business plan. You see
,
the clinic I went to had so many people there that they were parking cars
in the middle of their front lawn and up and down t
he streets
.
F
olks and wheelchairs were all
around me and many of the people there we're dealing with significant ailments and
being
exposed
to a very shady operation.
MSR:
S
o
with the brief exposure and experience to this operation the proverbial
lightbulb went off?
Jake
: Exactly.
It was so poorly managed and put together I knew I could compete with very little
start
-
up costs.
I recognized
a
low barrier
to
e
ntry
,
unsophisticated competition
,
and
I felt strongly I
was an outlier with a unique perspective and enough business acumen to bring
credibilit
y
to the
industry.
Professional
ism
in other words.
MSR:
So what
happen
e
d
next?
Jake:
After setting up a proper office space we contracted with doctors
from Bastyr to see patients
once a week
.
Mean
while
,
a small staff
and I
got medical releases from prospective patients and we
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handled all the administrative prep work. We were a small professional outfit
but
quickly ran into a
problem
–
the first arrow
-
we were getting backlogged and we were sending new
patien
ts
into the
market with very few safe options to acquire
the
product
they so
desp
erate
ly
needed
.
This began the second phase of our operations, GreenLink Natural Health added a
second
division
which
became GreenLink Collective, our
medical
dispensaries.
MSR:
Fascinating,
please
conti
n
ue
.
Jake:
Well,
there were some
more arrows.
In 2010
,
we ran into issues with our city and ultimately
got caught up in a zoning battle. This part of our story is well
-
documented but we spent a good
portion of the next year working closely with the City of Issaquah Washington. After losing a hotly
-
contested v
ote at the city council we began the process of working hand in hand with the then chief
of police Paul Ayers, Mayor Frisinger
,
and almost every level of
c
ity governments.
Through coordinated efforts with the city planning office the police department and
our
patients
,
we were able to craft one of the West Coast's
first
city ordinances that regulated
and
monitor
ed
business activities of a marijuana
medical
dispensary.
MSR:
So with cannabis operations considered by many at the time to be a fringe business
,
the
medical marijuana ordinances acceptance from the city was a pivotal benchmark moment?
Jake:
Yes,
t
his was a huge turning point because it put us on the map globally and allowed us to
take confidence in our business and invest in our
medical
stores.
Th
e ordinance was ultimately
adopted by many other municipalities throughout Washington. With the success of our first
dispensary
,
we
also opened a second medical dispensary
in Seattle right next to the stadiums and
launched
the
G
reen
L
ink family of brands
,
which included
Sweet
Nirvana Bakery
.
In turn,
the rest
of our vertically integrated operations quickly became one of the most widely recognized brands
with respect to
both q
uality and service.
MSR:
This m
ust have been
some
exciting times
?
Jake:
Yes,
defin
ite
ly
but times are
even more exciting today. I'm proud to say that after nearly 5
years on Leafly
our dispensaries were
rated 4.9 out of 5 with hundreds and hundreds of reviewers.
Our
commitment to operating quality businesses and engaging in a positive w
ay with our
community landed us on NBC Nightly News, World News Tonight, the New York Times, the New
Yorker, Wall Street Journal, NPR and virtually every local news media Outlet.
MSR:
So the transition from the Wild West to
main
street was becoming more of a reality. What
strategic steps did you take to ensure you were setting up the organization for continued growth
down the road?
Jake:
In the early days of medical marijuana in the northwest, there wasn’t a blueprint for how to
operate these businesses so we searched Nationwide for a CPA that could help us properly
vertically
integrate
in a way that allowed us to file a proper tax return and run a legitimate
business.
MSR:
Great, it’s a downfall or danger we see
conti
nu
ing
today.
Jake:
Yes it’s unfortunate
,
but good for us
,
as t
his
effort
led to full vertical integration and it was
the foundation for most
s
tates to build
the
ir
recreational programs. It was also apparent that the
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