“This is my life,” says cannnabis industry CEO Adam Berk. And it is true: Berk is in fact passionate about his job. He has always been.
Last year, the vertically-integrated cannabis company he headed, Stem Holdings, acquired Driven Deliveries, the world's first publicly-owned cannabis delivery company. The resulting corporation, Driven by Stem STMH, boasts a market cap of more than $85 million, with sales projected to hit $75 million in 2021.
“My thesis is that people are never going to go back to any type of retail the way they did before. People got used to ease and convenience, and they love getting stuff delivered to their doorstep,” declares Berk.
“When there was no legal cannabis market, the consumers had things delivered to their house, right? It was the only way. It took years to train them to go to a dispensary. Well, guess what? Now people are just going back to their rooms, getting it delivered again. It’s a seamless transaction.”
Food For Thought
Berk earned a degree in finance and hospitality management from Cornell University, and an MBA from the University of Miami School of Business. After school, he started working with his father-in-law in Berkeley Caterers, one of the oldest corporate catering companies in New York City.
Capitalizing on the opportunity, he raised some money and started the first patented online food ordering company in the U.S.: Osmio. Later on, Osmio would become GrubHub, a company Berk likes to define as “The 8000 pound gorilla.”
The entrepreneur then moved to South Florida and started an artisanal men's grooming company called HYD For Men. Once again, the venture would be very successful.
“I really loved the men's grooming space. I learned a ton about consumer packaged goods, building a brand, packaging, third party logistics, product development plans… In short: everything from start to finish,” he voices.
After three years, Berk sold HYD For Men to a private equity fund.
In his constant search for new challenges, Berk realized that the cannabis industry held a tremendous potential that was being overlooked by traditional investors. Stigma still personified the industry. But that would be no deterrant for Berk.
“I created Stem Holdings, raised the initial capital from some high-net-worth individuals and some family offices, and then started deploying the capital. Right from the beginning, I really believe that good inputs give you good output,” Berk claims.
Initially, the group was considering operating near their headquarters in Florida. But they ultimately decided that Oregon would be the best state to launch their operations and deploy investment capital, strategically, to fund production partners.
“We really fell in love with TJ’s Gardens. The operator was founded by Travis and James. Travis' wife, Cham, had gotten into a car accident and she had a debilitating brain injury. She used their proprietary CBD and THC tincture to wean her off of the opioids and the medications, and allow her to function day in and day out,” Adam recalls.
But it was not just the emotional aspect that impressed Berk’s team. Travis and James grew their cannabis-using fully organic, no-till living soil. And that did not go unnoticed: the results were mind-blowing.
“If you look at Driven by Stem, it takes into account delivery and consumer packaged goods,” Berk states, pointing out how the venture combines two of his top areas of expertise. This has been crucial for Stem’s growth.
“The first thing is to understand consumer behavior,” he explains. “The second one is logistics: we put in very important key performance indicators to make sure we have inventory on hand. We also learned the right types of branding and packaging that's friendly to the customer. And then, the piece that dovetails on top of that is being able to market and promote it in a clever way.”
Beyond products and their delivery, Berk believes in the importance of hard work.
“I think one of the things I learned the most is you got to work seven days a week, 20 hours a day. And you have to have your entire team have that mindset. You need a lot of elbow grease in this industry,” he voices.
Nowadays, Driven by Stem has over 100 plants growing at Cornell University, which has one of the largest hemp programs in America.
“We work very closely with Professor Lawrence Smart. They’ve utilized our TJ CBD genetics as the F1 phenotype to do their field crosses and we’re the most stable they’ve seen. Also, there’s a gene inside our strain which is resistant to mildew,” the CEO explains.
Curiously, only 10% of the product sold at its dispensaries is made by the company. Berk explains this is due to one simple thing: consumers want choice.
“Consumers are coming because they trust that we are giving them the best. It's curated for them. It's the best mix, the best combination, a nice variety of extracts, topicals and top-shelf products.”
Franca Quarneti contributed to this report.
Encuentra nuestro contenido en Español en El Planteo:
- Uruguay: Evalúan Permitir Delivery de Marihuana para Proteger Identidad de Consumidores
- EEUU: Cómo Comprar Marihuana Legal por Internet
This article was originally published on Forbes and appears here with permission.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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