Nancy Whiteman Company Wana Brands built an edible-marijuana giant and then sold it for $350 million — just before the weed’s stock market crashed.
One Saturday morning not too long ago Nancy Whiteman, 64, completely stoned, found herself in a Boulder supermarket in 2010 with an edible marijuana company Wana Brands the co-founder tested the new gel her company had developed. The product development team wanted Nancy to share how this gel affects her, especially her physical and mental energy. She ate the jelly shortly before her pilates workout… and two hours later she sobered up while researching labels and products at her local King Soopers in the supermarket.
“I’m always the guinea pig,” says Whiteman. She checks every one They have products, including gels, designed to make their users feel calm, fall asleep or focus. “I wasn’t particularly hungry, it wasn’t about the treats, it was more of a cognitive makeover. I said to myself, “Oh jeez, look at the packaging! Who knew there was tuna in a glass jar washed down with extra virgin olive oil?” Suddenly it became very interesting to me – precisely with this particular wording.”
A little more than in a decade Whiteman, who in 2017 was dubbed the Queens of legal weed, has built one of the most successful brands in the cannabis industry. She is not widely known, but quietly and methodically made it They have for one of the largest producers of edible hemp products in the world. Its revenue in 2022 reached 115 million dollars. And after Whiteman, who owned 100% of the company, in October 2021 with a cannabis business Canopy Growth signed a $350 million contract for They have sales, she became the richest entrepreneur in the $26 billion legal weed market.
Canopy located in Canada, where cannabis is legal across the country, but listed in the US. This means that the deal can only be made once marijuana is legal at the federal level. Therefore, to deal with They have and other similar companies could be concluded as soon as possible, Canopy has decided to register the company in the USA. True, Whiteman has already received most of her money. The deal she made is truly unique. She convinced Canopy buy option to buy They haveand Canopy she was paid $297.5 million in cash for 85% of the company. She will receive the remaining 15% when the transaction is completed. Forbes estimates that after taxes, a significant amount of employee benefits and a $50 million donation to her non-profit organization, Whiteman’s capital will be 225 million, enough to make her debut in this year’s America’s Most Successful Women Entrepreneurs ranking.
“She’s a winner! As the sole owner, she managed to realize one of the most successful transactions leaving this market. She picked a very good time and everyone who works with gels owes Nancy a debt of gratitude. It’s easy to follow someone’s example, but she showed it,” says Emily Paxey, who invests in the cannabis industry but has not invested They have and in 2013 was an innovative hedge fund in San Francisco Poseidon co-founder.
They have not a flashy or media-loving brand like its competitors Wyld and Kiva. It is a stable company in its sector. ‘We don’t really care about being cool,’ over breakfast – scrambled eggs and fries – at a Manhattan restaurant Lambs Club, says Whiteman. “It’s important for us to be efficient and innovative.”
According to data companies Headset According to the information gathered, edibles make up about 13% of the legal cannabis market, which last year was about $3.4 billion in sales. In his native state of Colorado They have immediately behind Wyld is the second best-selling edibles brand, with 26% market share and $61 million in retail sales in 2022. Overall They have and its licensees produce almost 100 million gels per year. Although Kiva and Wyld are bigger brands in terms of sales, They have is the most common, available in 15 US states, Puerto Rico and nine Canadian provinces.
“I think, that They have the strategy is one of breadth rather than depth – in that they have more exposure in the States than most brands,” says Headset co-founder and CEO Cy Scott.
It’s not that becoming a serious player in the weed business was a no-brainer for Whiteman. Born in Chicago and raised in New York White Plainsshe received her master’s degree from the University of Massachusetts and lived in Boston until the early 1990s, where she worked as vice president of marketing for a respected insurance company Paul Revere. Whiteman, her husband and child moved to Boulder in 1996. In this city, she started her own consulting business, helping with marketing for clients such as Microsoft MSN.
One fine day in 2010, a friend was visiting her daughter, and Whiteman and the boy’s father started talking about work. “When I asked him what he did for a living, he said, ‘Oh, you wouldn’t understand,'” Whiteman recalls. “That caught my attention.” He explained that he was making marijuana-infused lemonade. Although Whiteman was very familiar with marijuana, which she started smoking as a teenager, she was unfamiliar with the business language of legal weed. “I didn’t even know what he was talking about, but he explained that the lemonade was spiked with marijuana extract. Marijuana is what we called it before we started calling it cannabis,” she says. “And so we started talking.”
Whiteman and her husband began making edible marijuana products in a commercial kitchen they shared with the father of their daughter’s boyfriend in Boulder. Legal cannabis in the early days, edible marijuana products in Colorado mostly looked like homemade food. “We just tried everything one after the other. We had baked goods, we had candy, and for a brief moment we made corned beef,” Whiteman says with a laugh.
Without data firms or customer relationship management software to help entrepreneurs make product decisions, Whiteman visited every pharmacy that carried her product to find out which products were most popular with customers. “We stopped making things that weren’t bought and kept making things that were bought,” she says.
At the end of 2011, the Whitemen had already moved to their kitchen – and divorced. Seven years later, Nancy bought back her ex-husband’s shares to become the sole owner. They had developed a product – a gel with marijuana extract – that made the company They have will become familiar. At the time, a competitor in Denver simply bought jelly bears and sprayed them with hashish oil. Whiteman felt they could come up with a better product, and They have created the first vegan pectin gel.
“We got into that product segment very early, before the data said that gel was going to be, so to speak, the most popular application of edible marijuana products. Now, of course, gel covers 75% of the products in the category and has become the platform for edible marijuana products,” says Whiteman.
2015. year They have expanded and opened a company in Oregon. Because marijuana was and still is federally prohibited, cannabis cannot legally cross state lines. Whiteman was faced with the choice of opening a manufacturing facility in each state where she wanted to expand, or license her recipes, formulations and brand to oartners in other states. She chose licensing. “We decided not to cross state lines and not raise a lot of money, not build a big portfolio of assets, and that’s a very capital-efficient way of doing things,” says Whiteman, who still looks like she’d fit in at any company’s boardroom but can tell in detail about different THC extraction methods.
“I looked at other business models and felt that licensing had the potential to be just as profitable or even more profitable than setting up factories in every state. At the time, we all thought that federal legalization could happen a little faster, so there was concern that as we opened plants in every state, they would soon have to close.” Now the company has 16 partners in the USA and Canada. Depending on the need to hire local sales and marketing staff, Wana charges partners 15-40% of revenue.
This strategy has not always paid off. Despite the fact that They have is one of the largest producers of edible marijuana products in the United States, the company no longer has a presence in California, the country’s largest consumer of marijuana, with $5.3 billion in 2022 revenue. Retail sales in this state Kiva In 2022, it brought in 183 million, but Wyldafter Headset data, 127 million dollars. (Both companies sell wholesale.) But despite the money at stake, They have left California after two and a half years of operation.
“What happened was that we entered the market when wholesale prices started to decline. Our partner, understandably, did not want to risk everything. We were in the unenviable position of being a very expensive product in a market that was experiencing severe price compression. I didn’t see how to keep a profit,” Whiteman recalls. Launched in California in 2019, They have left the competitive market in the second half of 2022. For similar reasons, the company is now leaving Oregon.
2020. in the year when it looked, that federal legalization under the Biden administration was possible, Whiteman began holding talks with some of the big cannabis companies that had cultivation, manufacturing and retail facilities in several states. To find out what it might be worth They have, private equity firms and investors outside the industry were also approached. “I had a feeling that the industry was starting to change, and I realized that working with a bigger organization would make more sense for an independent brand,” she recalls.
Whiteman began negotiations with the company Canopy. It is included Nasdaq listed, and 47% owned by the New York Alcohol Group Constellationwhich brews Corona beer and cook A witness vodka. “Like all of us, I was optimistic about the possibility of federal legalization in the near future. I sure liked it Constellation communications and access to liquor stores. It felt like the right time,” says Whiteman.
Federal legalization is still up in the air, and Canopy shares have lost 86% of their value since April… In such circumstances Canopy The US is building a company to complete They have purchase transaction.
“Nancy’s timing was perfect,” says Emily Paxey of the foundation Poseidon, explaining that Whiteman sold the company at a time when the market was at its highest point, before the industry experienced a recession following the pandemic boom. With the sale, Whiteman has become one of the most successful entrepreneurs cannabis in the industry.
After finishing breakfast Lambs Club, she ponders a question ahead of a marijuana conference across the street where she will be speaking. Given that New York’s licensed marijuana economy is struggling with the gray unlicensed market, or They have will start operations there?
“Given taxes and lack of enforcement of anti-illegal marketplaces, the New York market is not attractive to legal brands. It’s hard for me to see how anyone could make money here now,” says Whiteman. And instead of struggling with insomnia in the city that never sleeps, Whiteman focuses on strong growth markets that don’t attract too much attention. “Sales are booming in Missouri, I can tell you that for sure.”
2023-07-28 03:42:16
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