AR: What drove Green Dragon to the northern Colorado market?
AL: So, we have decent coverage around the entire state. We have a lot of stuff in western Colorado, central [Colorado], and a little bit east of Denver with [the] Aurora [dispensary]. Telluride is southwestern Colorado, [and] Boulder is a little further north, but we’ve never really had anything that far north. Fort Collins is a huge population center in Colorado, and we’ve looked at things there for a while, but it hasn’t worked out until now. So, as I said, we were able to put this deal together, and we acquired the license, and we are super excited to be in Fort Collins.
AR: So, I noticed that Green Dragon opened its first dispensary in Colorado in 2009. Is that correct?
AL: Yes, and at the time, the company was [called] Greenworks. So, [it had] slightly different [owners] and different brands. But yes, the company that is now Green Dragon has been in continual existence since that time.
AR: Can you describe some of the significant changes from acquiring a license and opening a dispensary now compared to then?
AL: Back then, it’s interesting because the farther back in time you go, there were more organic licensing opportunities, meaning more cities were actually giving out licenses for the first time. So, I would say that there were less licenses trading hands. Especially in 2009, there were no licenses to trade because that’s when people were getting kind of the first round of medical licenses. But as the years have gone on and cities have imposed moratoriums or license caps, you start to see more trading of those licenses, to the point where you’d even have applicants just get licenses for the sole purpose of flipping them, like getting them and then immediately selling them.
Another huge change historically was back in the medical days, and in the very beginning of recreational, there were vertical requirements, meaning that you weren’t allowed to get these licenses without being able to grow. And that was in place for years and years and years. … Basically, when recreational first started in Colorado, you couldn’t just get a recreational license, you had to have had a medical license prior, and there was this preference given in most cities for like almost a year. … So, it was really restrictive. … Also, while it was medical, there was this provision called 70/30. Basically, you had to grow 70% of your own product. Meaning if you had some growing issues, or you weren’t good at growing, that limited how much wholesale you could buy. If you had more patients that you [could] grow for, you couldn’t wholesale your way out of the problem. You couldn’t just buy flower to meet demand. You were very much limited by what you could grow.
Another thing is that up until fairly recently, Colorado had some of the most restrictive outside-of-state ownership rules in the country. Colorado got left in the dust a little bit because other states allowed investment to flow more freely. So, if a group of operators wanted to apply for a license, or they wanted to expand, or they wanted to grow their business, they [had to get] financing from people outside of the state. Keep in mind, we can’t …….