Going Rogue in Cannabis
My Interview with Grown Rogue's CEO Obie Strickler
Warning: The following interview and post is about a microcap company. Microcaps by definition can be illiquid and experience wild gyrations. It is important to do your own due diligence, rely on your own research and understand that microcaps can be very volatile. Please proceed reading using your highest levels of caution.
I’m fascinated by companies that are not only outperforming in the difficult environment of cannabis, but also by the people running those companies who are so obviously doing something different. And I can think of no person that personifies this better than Obie Strickler, CEO of Grown Rogue (Canada: GRIN).
In December, I wrote an explanation as to why I invested in Grown Rogue. Here is what I said:
Oregon is one of the toughest cannabis markets. How do you deal with seemingly unlimited competition, plunging flower prices, an entrenched legacy market and a sophisticated, discerning consumer? In Oregon, if flower isn’t great quality, priced at a low price, it doesn’t sell.
Yet amidst these tough conditions, one company is thriving while also generating the most elusive thing in cannabis: Free Cash Flow. Let me reiterate that a cannabis operator in Oregon is generating free cash flow in a state where the average selling prices have been $700-$800 a pound for indoor flower and $250-$300 a pound for outdoor flower.
That company was Grown Rogue and I believe the company and management are worth study and attention from the investment community. I recently had a chance to chat with CEO/Founder Obie Strickler.
Here is what you will learn in my interview:
Why are so many large MSOs struggling in competitive states?
Why does Grown Rogue view cost efficiency as a durable competitive advantage (the company produces high-quality indoor flower that consumers love for an all-in cost of less than $600 a pound)?
The importance of focus and why Grown Rogue just produces flower.
There is a demand spike happening right now in Oregon and prices might be headed higher after a tough 2022 for pricing.
Grown Rogue is planning to grow into up to four new markets this year, making this a potentially breakout year for the company.
Here is the interview and I hope you enjoy it:
Here is the transcript of the interview as well:
Here is also a more detailed report on the company: