Controlling The Cannabis Supply Chain: How Vertical Companies Rose To Success

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Submitted by Vertical Companies

When Vertical Companies founder and CEO, Todd Kaplan, started his California cannabis company in 2015, he set out with a plan to build the largest legal cannabis company in the largest cannabis market in the world. Now, nearly 6 years later, Vertical stands as one of the largest cannabis operations in the state with unparalleled cultivation, extraction, branding, distribution, and retail abilities.

In the cannabis industry, companies are constantly working against low margins, not stemming from rising production costs, but instead from heavy tax burdens and administrative costs of adhering to "seed to sale" reporting as required by the state. To combat these issues, successful operators must own or control their entire supply chain.

Mr. Kaplan's Vertical Companies solves these issues by controlling and owning the entire cannabis supply chain. A massive state-of-the-art indoor cultivation facility in Needles, California, spans across 2 large pharma-grade buildings, housing over 1,800 grow lights in 30 rooms that produce 3 harvests a week and more than 1,000 lbs. of highly valued cannabis flower.

Next door to that is their state-of-the-art manufacturing and extraction facility that produces thousands of grams of premium concentrates each month that go into Vertical's array of different branded THC products. Right across the street is the company's distribution center, ensuring that the product spends the minimum amount of time being transported and remains as fresh as possible while awaiting shipment to its final destination.

For more information on Vertical and investing opportunities click here.

The final piece of the chain is getting the branded cannabis products to the consumers through retail outlets and mobile delivery services. While Vertical does sell its products to 3rd party retailers and distributors to maximize consumer's access to high-quality legal cannabis, it's primary focus is on expanding its retail presence thereby controlling every step of the supply chain. Vertical already owns and operates a rapidly growing mobile delivery service in the most populous areas including LA and East Bay locations.

This direct-to-consumer model is highly scalable, and one of the most important growth areas of the industry. Vertical is awaiting final approval for a retail dispensary in the highly trafficked AZ/CA/NV border town of Needles, where its main facilities are just a stone's throw away. Vertical intends to continue growing and scaling its retail operations with more dispensaries and delivery services expected under the company in the near future.

The retail component is the final piece Vertical needs to complete its fully vertically-integrated supply chain and will undoubtedly be a tremendous value driver for the company as the cannabis industry continues to grow and develop.

With the cannabis-friendly Democrats now in office, the macro environment for federal cannabis prohibition repeal is very favorable.  M&A is sweeping the industry.  Vertical's next plans are to complete an IPO as soon as allowed or to be acquired by one of the large publicly traded cannabis companies, accelerating additional rapid growth.                                                      

For more information on Vertical and investing opportunities with them click here 

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.