A Conversation With … Skip Motsenbocker

What is Floris Capital Management?
Floris Capital Management is a private equity fund that specifically invests in the cannabis industry, really in all sectors of cannabis from seed to sale. I met [Floris co-founder] Will [Senn] about five years ago, and I just happened to have a building at the right place at the right time. We had a vision … and now that’s the No. 1 store in California based on sales, Urbn (sic) Leaf in San Diego.

Why did you want to get involved in the marijuana industry?
It’s an incredible opportunity. The industry already exists whether or not people want to acknowledge it or recognize it. The black market – it’s out there. It’s probably $60 billion right now. There’s 29 states it’s legal medically; there’s nine states it’s legal adult use, including Washington, D.C., ironically. That transition is occurring, and as an investment, it’s a great opportunity.

What are the investment opportunities?
Anything that ties in vertical integration. In this business, it’s cultivation to manufacturing and brands into retail. If you can control the retail and the brands that are in the marketplace long term, then you own market share.

What do sales and the customer base look like at Urbn Leaf Dispensary?
Sales are incredibly high. I don’t mean that as a pun. Average customer counts each day: 1,100. Average sales per ticket: $97.21. You’re talking about a single store that’s doing nearly $40 million in excess of what a typical Home Depot or Lowe’s store does, and it’s 2,100 square feet. Sales are continuing to go up. Honestly, if you go there on a Sunday, it will look like people went from church to brunch to the weed store. It’s a surreal experience.

Neither medical nor recreational marijuana use is legal in Missouri. With several initiatives approved for the November ballot, do you see that changing?
I see a ballot initiative being offered by New Approach Missouri this November that will likely get ratified. [Editor’s note: Motsenbocker is a New Approach Missouri campaign contributor and at least one board member of New Approach Missouri is on Floris Capital’s advisory board.] Just based upon the polling numbers that are out there and based upon voter sentiment, this is the least polarizing topic in the United States. I don’t think there’s anybody who is going to deny somebody pain relief with the use of cannabis when it’s not going to kill them.

Will opening the doors to medical marijuana make it that much easier for recreational marijuana to come through?
I think it’s a forgone conclusion but mostly because of the taxation. This year, the estimates are $1.8 billion are going to be collected though excise and sales tax by the states collectively.

If voters approve a marijuana ballot initiative in November, will you be involved in bringing a dispensary to this area? And how soon could we see that?
Possibly. Normally, if an initiative gets ratified in, let’s say, this November, you likely wouldn’t see state or municipal guidelines for, generally speaking, about an eight- to 14-month period. I honestly think that 10 years from now, certainly 20 years, people will look back and they will think, this is a plant that is creating a cure for these causes and ailments, and people are getting medical relief. They’re going to look back sort of befuddled on how it was ever illegal. Kind of how we look at the ’20s and think, ‘Really, you just couldn’t go down and buy beer?’

Skip Motsenbocker can be reached at sm@florisfunds.com.