In this edition of "Rising High," The Fly conducted an exclusive interview with John Mueller, Chief Executive Officer of Greenlight, a cannabis brand with operations in Missouri, Arkansas, West Virginia, Illinois and South Dakota. Here are some highlights:

MIDWEST ROOTS: Greenlight is a fast growing vertically-integrated multi-state operator with 33 cannabis dispensary licenses, more than 350 team members and 150,000 square feet of cultivation and manufacturing. The company aims to produce strong brands, strains and marketing with a mission to provide “Cannabis with Culture” in an inviting atmosphere. Mueller originally set up operations in Nevada and California with his company Acres Cannabis, which was sold to Curaleaf (CURLF) in a $70M deal in 2019. Following the sale, the CEO said he looked to return to his roots in the Midwest. “My brother and I are partners and we’re Midwest kids to begin with as we grew up in St. Louis,” he said. “We came back to bring premium quality cannabis to the Midwest community, targeting anywhere there are limited licenses.” Mueller noted Greenlight had a unique opportunity in the region as many of the big MSOs and some of the older school operators see the area as flyover territory. “We have a great footprint in the region, with one of the largest operations in Missouri, 3 locations in Arkansas, our fourth store recently opening in West Virginia, another store coming online in Illinois and then another one planned to open in South Dakota,” he said. “The main thing for us is we’ve been a vertical operator before, made every mistake you could during that and coming back here to the Midwest gives us homefield advantage.”

COMPETITIVE EDGE: As competition continues to rise in the cannabis industry, the CEO pointed to Greenlight’s innovative nature as a key differentiator. “We open up our doors to patients and it doesn't feel very medical,” he said. “We are much more attune to who are customer base is compared to other dispensaries, based on our experience in previous operations.” Mueller also cited Greenlight’s size and scale which attracts vendors who want to supply product at a discount. “We buy more than anybody else and we’re also cultivating a big chunk of what we’re producing,” he said. “We can be very aggressive on retaining our consumer base and also expanding that life by having a much more open feel.”

STORE OPENINGS: Greenlight recently opened Greenlight Beckley, its 22nd dispensary nationwide and its fourth location in West Virginia, which Mueller said he sees as a significant milestone. “We’ve opened up stores faster than any of the MSOs that have not done it through acquisition,” he said. “We have organically grown that number. It’s a great milestone for our team.” Greenlight has another sixteen stores in the construction phase, the CEO said, and is hoping to have a 40 store count across the brand by end of next year. “We keep the same look, feel, vibe and everything that is important to our consumer base consistent, which is moving from a medical market today to adult use,” he said. “The growth comes from building a big brand, people recognizing the logo and the exceptional customer service we’re providing.”

LIMITED LICENSE MARKETS: The company has operations in Missouri, Arkansas, West Virginia, Illinois and South Dakota and specifically looks to stay out of markets with unlimited licenses, the CEO said. “We like tested, highly-regulated, limited license markets and the five that we have on here fit that bill,” he said. “Three of those markets, which are the vast majority of our stores, are all flipping from medical to adult-use, increasing our potential consumer base by a lot.” Mueller noted the base can increase 2.2x from the shift, turning a more than $400,000 a month store into a $1M a month store. “We see that growth potential out of these markets and we’ll continue to expand,” he said. “There are other markets that are now doing additional rounds of applications and we are targeting many of the Southeastern states.” The CEO said Greenlight is particularly interested in Alabama and North Carolina as they are limited license states. “It looks to be that they’re still working on the language, but Alabama specifically will be mainly vertical licenses, which is our niche,” he said. “A limited license market like Alabama, with almost 4 million people in population, would be a great addition to our Greenlight family of properties. North Carolina is a similar deal, another limited license market with vertical operations and obviously a great patient base that resides over there.”

MARIJUANA FARMERS MARKET: Greenlight’s founders invented the “Marijuana Farmer’s Market,” a unique experience connecting patients and consumers directly with growers and producers through an engaging open market atmosphere. “It’s something we’re really proud of,” Mueller said. “We recently saw over 1,000 patients attending, which is great for the State of Missouri in a typical dispensary here.” The concept was invented out in Las Vegas with Acres, he said, with the idea to allow cultivators and manufacturers to get behind the register and talk directly to the patient instead of a traditional pop-up. “Instead of patients hearing a third party, like budtenders, you’re allowing the brands of the state you’re operating in to connect directly with the patient population,” the CEO said. “These patients gets to connect directly with their favorite brands to hear about the terpene profiles and why that product is worth their investment.” He added the market has an ambient atmosphere coupled with music allowing consumers to embrace the vibe. “It’s been a wonderful thing to connect the patients and brands together and we’ll continue to expand that,” Mueller said. “We believe that over time, brands will control the market, and this is just expediting that process of connection.”

INFLATION CONCERNS: When asked about how rising concerns around inflation will impact the space, the CEO said he does expect the industry to experience a decrease in sales. “If you look at states’ reports from last month, I think you see that the pocketbook is getting squeezed,” he said. “Consumers are buying gas instead of cannabis and there is more value shopping going on.” In addition to that shift, the space is seeing a little more supply coming online, Mueller said. “Everybody is feeling it in the pocketbook today and you have to figure out how to navigate that for each person’s family, whether it’s putting gas in the car or picking up your products at your local dispensary,” he said.

FLOWER VS. DERIVATIVES: As technology advances and delivery systems for cannabinoids become more diverse, Mueller noted derivative use has accelerated as new consumers became interested in the adult-use category, but flower sales still remain strong. “You look at Colorado and it’s about 50/50 on flower versus your edibles, beverages, and all other concentrates,” he said. “But here in our main states, it’s really patient driven. It’s still 65% on the flower category, which includes pre-rolls.” The CEO said he does expect a change over time as new technology emerges on concepts like beverages and low dosing. “You’re seeing a lot of innovative products coming out, but there’s still Colorado with 20 years in the equation, that still has 50% of the market that is flower-based,” he said.

LEGALIZATION: When asked about the potential of federal legalization, the CEO said he does not expect any vote until after November. “Even though we’ve got over 90% approval rating on medical across the country and mid-60% approval on adult-use, we just don’t see a lot of the republican and heavy conservatives wanting to put that on their voting record before the November election,” he said. “We think there could be some movement right after November, even if there’s a transition in the House or the Senate.” Mueller said he does believe there is a good opportunity to see Safe Banking at the end of this year or first quarter next year. “It really changes the dynamics of our business,” he said. “The large multi-state operators will be allowed to list on the NYSE and Nasdaq, it opens up capital markets to greatly reduce the cost of capital to expand a business, and it changes the tax code in the country.” Additionally, a lot of venture groups and private equity firms that are sitting on the sidelines would be able to jump into the space, the CEO said. “We think there is going to be another resurgence of cannabis the minute that Safe Banking passes,” he said.

CHALLENGES: When asked about the largest hurdles facing the cannabis space, Mueller said a lot of challenges existed around banking and regulation but Greenlight has taken experience and lessons from its first business to conquer any issues this time around. “We basically made every mistake in the world, so we see the company as Cannabis 2.0,” he said. “There is probably a lot of people like us that sold into the big MSOs, gone out and reloaded with a significant footprint, but we’re not just any of the operators out there. We’re a top five independent operator now and we’re rebuilding a business as experts, that is significantly easier on us then it was on the first round.” As the market shifts, the CEO said he does expect to see tightening of the wallet, but companies that ensure exceptional customer service can retain consumers.  “A lot of the banking restrictions that we faced just a few years ago have declined,” he added. “There’s a lot more FDIC lenders, much more credit union and traditional banking and that is already existing prior to Safe Banking.”

OPPORTUNITIES: As the cannabis sector develops, the CEO sees the biggest opportunity as the industry moves towards increased brand loyalty. “How do you build a wonderful brand that people are highly loyal to and prideful that they are a consumer to?” he said. “To Greenlight, it’s about always protecting our brand identity, always delivering on customer service and quality products whether they go in a jar, gummy, or vape.” The key for a cannabis company is to ensure that a product delivers the same consistent experience, no matter what time or what location,” Mueller said. “Being able to find that talent to expand quickly and maintain that customer service is important,” he said. “The biggest challenge for the industry is ensuring that you deliver on what you promise to the consumer just like any consumer-centric brand.”

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Atai Life Sciences (ATAI), Awakn Life Sciences (AWKNF), Ayr Wellness (AYRWF), Aurora Cannabis (ACB), Audacious (AUSAF), BC Craft (CRFTF), Body and Mind (BMMJ), Cannara Biotech (LOVFF), Canopy Growth (CGC), RIV Capital (CNPOF), Chicago Atlantic (REFI), Columbia Care (CCHWF), Compass Pathways (CMPS), Clever Leaves (CLVR), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos (CRON), Curaleaf (CURLF), CV Sciences (CVSI), CURE Pharmaceutical (CURR), Delic Holdings (DELCF), Delta 9 (DLTNF), Entourage Health (ETRGF), Fire & Flower (FFLWF), Flora Growth (FLGC), General Cannabis (CANN), Goodness Growth (GDNSF), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), InterCure (INCR), Wellbeing Digital (KONEF), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm (MEDIF), MedMen (MMNFF), Neptune Wellness (NEPT), NewLake Capital (NLCP), Thermic Science (ENDO), Organigram (OGI), Planet 13 (PLNHF), RIV Capital (CNPOF), Relmada (RLMD), RYAH Group (RYAHF), Sproutly (SRUTF), Stem Holdings (STMH), Small Pharma (DMTTF), Skye Biosciences (SKYE), Sundial Growers (SNDL), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Valens (VLNS), Verano Holdings (VRNOF), Village Farms (VFF), Wesana Health (WSNAF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).