During a recent interview with Benzinga, Red White & Bloom Brands Inc.'s (OTCQX:RWBYF) chairman and CEO Brad Rogers said he and his team are focused on executing the business plan they believe works.
"We know our business. We know our plan," the CEO said.
The cannabis multistate operator and its several brands aim to focus on the quality of states in which it's involved in rather than the quantity, he said.
The vision includes brands like Platinum Vapes, a company RWB acquired in July 2020. Rogers said the line now holds roughly 35% of the Michigan vape market share.
The company also has a deal with HighTimes Holding Corp. to create branded products, including unique products for the Michigan market. Rogers said the partnership with High Times helps further bolster RWB's brand presence.
Establishing Power Through Branding
Rogers served as president and COO of Canntrust Holdings Inc. from 2015 to 2018.
With Platinum Vapes, Rogers said he sees entryways into markets that MSOs have traditionally steered clear of like Oklahoma.
He views the entrance into Oklahoma as a low cap, high distribution level move where the brand can attempt to enter a competitive space without much capital invested.
If it succeeds, Rogers said, the company can secure a significant market share in short order at a low cost.
RWB has a presence in six states at this time.
RWB began with investments in Illinois before moving on to Michigan and Massachusetts. The company's latest endeavors include expansion in the key California and Florida markets.
Rogers calls RWB's approach brand-centric. When at speaking engagements, he often brings up one of his favorite examples in branding, Starbucks Corporation (NASDAQ:SBUX).
Securing Cannabis Brand Value Through Fundamentals
"I've always got a Starbucks coffee in my hand, and I ask everyone who grew the beans," Rogers said.
Most customers can't answer the question, but they still will pay $4 or more for a cup, he said.
This is why RWB is focused on securing its brand value, Rogers said.
"We're trying to fortify all those brands that we have right now with all the line extensions that we offer the market," he said, calling the industry a brand game.
Growth is always considered, but Rogers says the company is focused on creating an "inch wide, mile deep" impression in each state where it operates.
"Flowers are nice, but without roots, they die," he said, summarizing the company's approach.
Rogers added that his later entry into the U.S. market after success in Canada was a "gift and a curse." While unable to participate in the U.S. early on, he said he could sit back and assess the ecosphere and its various models.
Citing his track record of EBITDA-positive ventures, Rogers said he can't see himself on a path of burning cash.
"The fundamentals of business are key for me to be able to build a business on," he said.
Instead of establishing one store in each state for the sake of presence, Rogers would rather hone in on creating value in fewer state markets.
Citing his favorable views for a model used by the likes of Trulieve Cannabis Corporation (OTCQX:TCNNF) and Verano Holdings Corp. (OTCQX:VRNOF), he added it makes no sense to him why some companies choose to have one store in a state "just to say you're there."
Rogers said the market is at its tipping point.
"How this plays out over the next little while is going to be very interesting," he said, adding he's happy to take the ride.
Disclosure: the author owns shares of Red White & Bloom.
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