In this edition of "Rising High," The Fly conducted an exclusive interview with Bill Thurman, Founder, and Nimesh Patel, Co-Founder of Redbird Business Group, the majority owner of RB RealtyCo LLC, which leases its Stilwell, Oklahoma facility to medical marijuana producers, Redbird Growers and Redbird Bioscience. Here are some highlights:
FULLY INTEGRATED: Redbird is an Oklahoma-based medical cannabis operator with a focus on large-scale cultivation and processing to produce and distribute pharmaceutical-grade products for patients. The company’s genetics and product line aims to treat a variety of medical conditions including chronic pain, anxiety, sleep disorders and numerous other clinical indications. “Nimesh and I looked at this industry for almost a decade really from the perspective of our background, which was chronic care, end of life, palliative care and pain and symptom management. Oklahoma allowed no plant count limits, a non-restrictive diagnoses market and it also allowed for a highly competitive non-restricted licensure market.” Thurman noted when he got into healthcare, it was a highly restricted licensure industry that resulted in low quality, low competition and a host of problematic outcomes for the consumer. “This industry kind of followed the same model, highly restrictive licensure, low competition, low quality,” he said, adding Redbird did not want to be in a restrictive market. “We chose Oklahoma because Oklahoma allowed us to build a fully integrated industrial scale agriculture, processing, consumer product packaging, distribution and service company.” Thurman said Redbird started out by aiming to serve about 600 locations with a normal square footage shelf space and distributing anywhere in the state same day to those locations. “In our studies around the country, we saw a small-town dispensary or a very-limited medical dispensary, for example let’s say Colorado Springs, they’ll only use about three and half to five and half pounds of flower per week,” he said. “That represented about 20% of their total store sales. To do that in Oklahoma across 600 locations because there are 578 towns, we would need about 75 tons a year. When we looked around at other companies that had failed to produce even 15,000 pounds a year, which we already do well over that, we felt like Oklahoma’s disposition towards the consumer, non-restrictive diagnoses, non-restrictive licensure was an advantage.” Thurman added the eastern side of Oklahoma is also the heart of adjunct farming country and gives Redbird very low power costs. “They have 20c per kilowatt in California, we have about 3c per kilowatt here and we’re in the center of the United States,” he said. “We have an endless supply of fresh clean water and virgin soil and so we looked at the state and purchased a Tyson Foods complex.”
COMPETITIVE EDGE: When asked about the company’s key differentiators, Thurman cited Redbird’s first mover position as a competitive edge. “One of the main factors Nimesh and I considered in moving so hard and so fast in Oklahoma was that we had an opportunity through our representation to talk to many of the larger public companies,” he said. “They had no interest in the state, they were not coming to Oklahoma and we said, ‘Well good. That’s exactly what we were hoping you would say.’” Those companies wanted to target highly-restricted markets with limited competition, Thurman said, adding Redbird sees competitive markets as an advantage. “Competition is good for the consumer and this is a consumer product,” he said. “Our advantage is they didn’t come so we could be an early mover and scale with no limit to our plant count and the ability to create a fully-integrated CPG model.” Patel also noted that Thurman and his background in healthcare set the stage for Redbird to be well-positioned for high competition. “With our background, we actually thrived when competition was flourishing because that was dictated by the consumer and in our case that’s the patient base,” he said. “When it’s consumer driven, quality actually comes to the top and that is what we will cherish and value when more competition comes into the space.”
BELUSHI’S FARM: In May, Redbird announced it had entered into a licensing agreement with performer Jim Belushi and his cannabis company Belushi’s Farm to debut its products in Oklahoma. “We felt like the Blues Brothers would be received very, very well in Oklahoma and other southern markets which we have some interest in,” Thurman said. “There was an opportunity, we had just met Jim by chance and developed a great relationship with him.” Thurman said Redbird shares a similar mission with Belushi’s Farm and Jim’s public presence has allowed him to see how intense public demand is. “Jim is just an exceptional individual, very, very kind, energetic and a real pro when it comes to how he approaches marketing and branding through his ability to speak to the public,” he said. “We have a great opportunity because we can grow his strains and we also agree with his philosophy. Cannabis has a great application in general well-being.” Thurman added in Oklahoma, the company is not restricted by diagnosis, allowing consumers to seek out products through their own desire for a balanced life. “We felt like his philosophy aligns with ours,” he said. “We can produce strains that have qualities from a potency and terpene standpoint that are very nice for people to consume that are looking to improve the quality of their life.”
EXPANSION PLANS: Redbird Growers and Redbird Bioscience are based in Stilwell, Oklahoma and grow cannabis in RB RealtyCo's 20,000 square foot indoor facility as well as an 18,500 square foot outdoor greenhouse. “The Oklahoma market should be a $1.2B robust market this year and that gives us the ability to scale,” Thurman said. “Oklahoma is a market where we can have simple principles as well as quality selection, value and service.” As far as other states go, Redbird does have plans to expand, Thurman said, with an application currently in Georgia and a complex under option twice as big as the one in Stilwell. “We also have an interest in Mississippi,” he said. “We had a facility there we were working on, but Mississippi had a setback with their Supreme Court, so we’ll see what happens there.” Thurman also pointed to interest in Texas citing his and Patel’s long history in healthcare in the state. “We’re very privileged to serve and honored to serve their large populations in chronic care and end of life,” he said. “Nimesh continues to serve and I’m retired from that but Texas is definitely on our radar. We have a lot of connectivity down there and would be honored to serve that state as well.”
LEGALIZATION: When asked about the potential federal legalization of cannabis in the U.S., Thurman said he believes the new administration is still doing their best to deal with the impact of the coronavirus and ensure a thriving economy. “We don’t have a crystal ball, but we have a lot of conversations,” he said. “We believe that we’ll start to see movement in Q1/Q2 2022 and then we should see something in early Q1/Q2 2023.” Taxation will also be an important key to legalization, Thurman said. “We pay living wages, we’ve been doing that for a very, very long time,” he said. “Everybody on our team, they’re at actually no less than $15 an hour, everybody has a W2, we have Blue Cross and we pay 75% of the benefit for our employees. We’re very hopeful as we move into 2022, Q1/Q2, that we’ll be in the position to pay 100% of the healthcare for our employees and our families.” There is an emerging philosophy behind the administration and the youth in the U.S. for companies to be good corporate citizens, Thurman said, and Redbird aims to do just that. “It will be very important that we have regulations so that cannabis does its part to contribute to paying living wages and from a tax standpoint to help people in need,” he said.
DELIVERY METHODS: As technology advances and delivery systems for cannabinoids become more diverse, Thurman said flower continues to hold a strong position in Oklahoma followed by concentrates. Patel added as the space gets more technically sound and deregulation comes into play, he expects consumers to seek products that offer instant relief. “Edibles and other consumable products have to go first pass through the liver so your absorptivity of something that does 1000 mg at 10%, may get you a 25%-30% efficacy,” he said. “We’re looking at more things that can get past that liver first pass and get directly into that bloodstream.” The vice chairman cited sublinguals, transdermals and aerosolized based meter dose inhalers as potential modalities that go directly into the alveoli and give a user almost 98%-99% efficacy. “Knowing what happened with vape pens, I think that consumers are going to be more proactive in saying, ‘Hey, I want something that’s relatively safe and efficacious if I’m going to try it,’” he said. “Being a physician, the first thing we learn in medical school is do no harm and when Bill and I took this journey, that was the first component. We want to make a difference in our consumers’ lives and our consumers are our patients, we want to provide top quality product.”
CORONAVIRUS: The coronavirus pandemic has impacted many companies globally in the cannabis space and Thurman said it stalled out a lot of opportunity in the industry that might have arrived a bit sooner. “Safe Banking and other things just certainly got moved to the back burner which was appropriate,” he said. “I think that we probably lost a year and a half to even two years of advancement in Safe Banking and potential decriminalization from the financial industry being able to bring in a lot of opportunity here through the U.S. stock market.” The sooner a normalized model is put in place, the better, Thurman said. However, he added issues created by the outbreak needed to be handled first and thanked the incredible healthcare workers who have served during the pandemic. Speaking from a physician standpoint, Patel said the coronavirus created an uptick in demand for the cannabis industry due to the added stressors to everyday life. “Even though coronavirus kind of debilitated the economic component of the U.S., you didn’t see cannabis itself take a bump in the road, it just continued to have greater demand,” he said.
CHALLENGES: When asked about the biggest challenges facing the industry, Thurman pointed to the long-term impacts from the War on Drugs as well as the need for more regulation. “We need to end the War on Drugs,” he said. “The War on Drugs was not a war on drugs, it was a war on people and it’s resulted in so many shattered lives and so much harm. We’ve taken three or four decades of lives and communities and just waged war on them, that has to come to end.” Thurman also cited the issue of non-licensed production of cannabis goods as one that needs to be addressed. “When we quantified the disposition toward non-licensed production of products, you have products being manufactured by individuals that don’t really care what happens to the person consuming them,” he said. “That’s created a vast illicit market that operates fairly freely.” However, once the federal government decriminalizes cannabis and implements taxation, the problem should resolve, Thurman said. “You don’t see illegal liquor and cigarettes being manufactured and distributed all over the country because it’s a federal tax issue instead of a local sheriff’s issue,” he said. “That will have a wonderful impact for the consumer, for the industry and also give us an opportunity to show that cannabis can not only contribute robustly to quality of life, but also contribute significantly to our tax base locally and federal.”
OPPORTUNITIES: As the cannabis space develops, Thurman said he sees opportunities in the Oklahoma market and in the development of more products to meet significant needs. “Nimesh and I got into this looking at Oklahoma as what we call a beachhead, which gives us the opportunity to build a scale model but also focuses on traditional business roles,” he said. “And to expand into the market that’s most dear to us, which is some more micro-dosed, thoughtful products.” The CEO said he sees possibilities for cannabis products that address industries like palliative care, pain and symptom management and psychosocial care. “There’s a whole host of opportunities there,” he said. “We’ve been successful in scaling in an integrated way, vertically-integrated and stabilizing, and we feel like we are in a good position to move that in direction. That’s my hope, that we will be able to start serving that population effectively very soon.” Patel added that the company’s healthcare background also positions it well for the future as federal deregulation starts to occur. “The passage of these products are going to probably go through physician’s offices,” he said. “As a consumer the first thing you’re ultimately going to want to do is your own research, but then get a second opinion from a clinician. Knowing that our basis is healthcare and our network is physicians primarily throughout the whole U.S., we have a great position moving forward.”
OTHER CANNABIS/PSYCHEDELIC STOCKS: Other publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Aurora Cannabis (ACB), Auxly (CBWTF), Body and Mind (BMMJ), CannTrust (CTST), Canopy Growth (CGC), Canopy Rivers (CNPOF), Clever Leaves (CLVR), Compass Pathways (CMPS), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos (CRON), CV Sciences (CVSI), CURE Pharmaceutical (CURR), Delta 9 (VRNDF), Emerald Health (EMHTF), Fire & Flower (FFLWF), FluroTech (FLURF), General Cannabis (CANN), Greenlane (GNLN), Green Thumb Industries (GTBIF), GrowGeneration (GRWG), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), High Tide (HITIF), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), Inner Spirit (INSHF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), MediPharm Labs (MEDIF), MedMen Enterprises (MMNFF), MJardin Group (MJARF), Neptune Wellness (NEPT), Omnicanna (ENDO), Organigram (OGI), Planet 13 (PLNHF), Skye Biosciences (SKYE), SLANG Worldwide (SLGWF), Sproutly (SRUTF), Stem Holdings (STMH), Sunniva (SNNVF), Supreme Cannabis (SPRWF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Valens (VLNCF), Village Farms (VFF), Vireo Health (VREOF), WeedMD (WDDMF), Wildflower Brands (WLDFF), YSS Corp. (YSSCF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).
