There is money to be made in the nascent recreational marijuana industry. In the first full week of recreational sales in Massachusetts last week, the two shops that are now open pulled in more than $2.5 million. A new Massachusetts-based company is looking to make it big in the marijuana industry, and not just here in the Commonwealth. TILT Holdings goes public on the Canadian Securities Exchange Thursday. TILT CEO Alex Coleman spoke with WGBH All Things Considered anchor Barbara Howard about the company and its goals. This transcript has been edited for clarity.
Barbara Howard: What is it that makes TILT different? I've heard it's based on sort of a "7-Eleven of marijuana" model. How so?
Alex Coleman: So TILT is a business-to-business company. Our goal is to help the industry grow, and the thing that the industry does not have right now is capital and resources.
Howard: So if I own a marijuana license, you'll help me set up my shop?
Coleman: Correct. So we will help you identify real estate property, we’ll help you buy it, we'll finance it, we'll train your employees, we’ll help you screen your employees, and we'll help you manage your shelf and engage the customer for the experience.
Howard: And you'll also provide the actual marijuana itself?
Coleman: Absolutely. We've got a full range of products, from the basic plant to more engineered products, including vape pens and consumable products.
Howard: And these would be put into facilities. Say I have a license and a person a couple of towns over also has a license — you can help us both set up? Will it look like McDonald's or 7-Eleven? Will our shops look the same?
Coleman: They can at the election of the license holder, absolutely, and the benefit is we can drive more foot traffic by building brand awareness for every store.
Howard: Are you also talking about the brick and mortar locations? You'll actually build the building?
Coleman: Well we haven't really built buildings yet, but we certainly have purchased buildings for third parties and leased them back to them. One thing that's very key is to support what is called an economic empowerment program, effectively getting minorities into the market faster than they otherwise would be able to, because the biggest limitation in the market is obviously capital and background that would enable you to raise the capital. We have a really robust pipeline of highly qualified minority applicants that will also become part of our retail network.
Howard: So these stores will end up in minority neighborhoods?
Coleman: Absolutely, in the minority neighborhoods and hopefully started by minorities. They will bring a real economic opportunity to those neighborhoods that might not otherwise see a store in the near-term.
Howard: Now your company, TILT, has already raised quite a bit of money?
Coleman: We have. We’ve raised about $300 million so far.
Howard: How did that happen?
Coleman: There is no infrastructure in any of these states, and you can't transport product across state lines. So if you're going to be an industry participant that actually touches the plant, you need a full-scale operation around cultivation through to the point of sale. The only way that you can do that is invest actual capital on the ground to build up those facilities.
Howard: So your company, it's going live on the Canadian Securities Exchange. Why not go public here in the U.S.? Is that having to do with this country's federal prohibitions when it comes to marijuana?
Coleman: It absolutely does. So at the moment, cannabis is on the FDA list of what's called a Schedule 1 narcotic. Right now, it is illegal federally, but legal on a state-by-state basis to provide marijuana products. Therefore, the U.S. capital markets are closed to us, while the Canadian capital markets are open to us.
Howard: Is it right to say that buying pot right now, it's a cash transaction, because the banks have trouble with holding money that was used to buy something that, under federal law, is illegal?
Coleman: Banks are willing to hold deposits from the sale of medical cannabis products. They cannot do the same for recreational products if they're FDIC insured.
Howard: I think about those two recently opened pot shops here in Massachusetts — was that mostly cash? People must have been walking around with wheelbarrows full of cash.
Coleman: It'll be mostly cash, yes.
Howard: And so at the end of the day, they have to, what? Take wheelbarrows full of cash to the bank?
Coleman: There are some community banks in the Commonwealth of Massachusetts that are willing to hold deposits for recreational marijuana. Those that are FDIC insured have a more challenging time to do so. But yes, absolutely. Many of these companies become very creative with cash management and will build their own safes.
Howard: That's Alex Coleman, CEO of TILT Holdings, the Massachusetts-based marijuana company set to debut on the Canadian Securities Exchange Thursday. This is WGBH’s All Things Considered.