Interview with Mark Wheeler, President and CDO, Nectar
On May 1, 2019, Mark Wheeler, President and CDO of Nectar Cannabis, spoke at Kahner Global's 4th Annual Cannabis Private Investment Summit in Beverly Hills, CA. The event hosted more than 160 industry leaders and investors for a day of education, networking, and collaborations.
1. Mark, tell us a little bit about yourself and your background.
I am a 30-year retail real estate industry veteran. I started my career at Blockbuster Video as a Site Selector in the Central U.S, progressed to serve as the Director of Store Development for the Western United States and lastly as the Director of International Development, opening stores and structuring development plans in 12 different countries. During my time at Blockbuster, we grew from 50 to 4,000 stores worldwide. After Blockbuster sold to Viacom, I left to be part of a new concept, called Boston Chicken (known as Boston Market today). At Boston Chicken, I was the Managing Principal of Boston Chicken Golden Gate, the Northern California area franchisee opening 63 restaurants throughout Northern California. Simultaneously, I participated in the acquisition and operation of over thirty Noah’s Bagels and Einstein’s Bagels. Years later, I decided to implement the experience I learned from Blockbuster and Boston Market in the development industry, where I worked with several national tenants as clients (Starbucks, Walgreens, Kinkos, Petco, 7/11) across the country. In 2008, I saw the dire need to create a full service outsource solution for retailers, helping them solve any development and growth problems as needed. That year, I founded Retail Resource Group and helped several retailers with expansion and consolidation (TGI Friday’s, Blockbuster, Buffalo Wild Wings, Krispy Kreme, Wendy’s, Boston Market, Einstein’s Bagels, 7/11, Jack in the Box, Whataburger and more). Today, I reside in Austin, TX and commute to Portland, OR for my current role at Nectar.
2. What began your pivot into the Cannabis industry?
I began my career in the cannabis industry after my colleague from Blockbuster presented Retail Resource Group with an opportunity to help a retail cannabis chain in Colorado. While assisting them with their real estate needs for several months, I witnessed firsthand the rapid expansion that was taking place in this field right before my eyes. It was very clear that the cannabis industry was growing at an unprecedented rate. At that moment, I knew I wanted to be a part of it. Nectar Cannabis was the second retail cannabis chain Retail Resource Group helped with their growth and development needs. After working for them for nearly a year, in Fall 2018 Nectar asked me to be their Chief Development Officer. Because of the opportunity I saw in the industry, I accepted and joined Nectar full time. In Spring 2019, Nectar asked me to be President of the company. I am very excited about this opportunity – the cannabis industry reminds me of my early days at Blockbuster. If this remains to be true, then I would predict that we are in for an invigorating ride.
3. When and how was Nectar founded?
Nectar was founded in 2014 in Portland, Oregon, by lifelong friends Jeremy Pratt and Jeffrey Johnson. Nectar started as a 1,200-sf medical dispensary. Today, we are one of the largest cannabis companies in Oregon with 17 open stores and 6 more scheduled to open by the end of 2019.
4. What sets Nectar apart from other cannabis companies and dispensaries?
Our stores are created with the customer in mind from start to finish. To start, we create a thorough market plan for each state we enter. We search for the prime positions on the main arterials. We select properties in the desired zone that are easy to access and provide abundant parking. Inside, our stores are designed to be bright, clean, and modern. Each store’s interior design is intended to provide an efficient, easy and pleasant experience. We merchandise our stores with specific inventory that is fitting to the neighborhood it’s located in to better serve that community. In addition to the real estate and design process, we make sure we staff stores with talented, welcoming and passionate employees. Every budtender at Nectar is trained at “Nectar Academy”, where they learn all facets of our inventory and are taught exemplary customer service skills for which we are known. We believe that it’s all about making sure the customer is comfortable when they are in a Nectar store. We believe we are raising the standard in retail cannabis.
5. All your employees are put through “Nectar Academy.” How did that get started and what does that look like for new employees?
Nectar Academy is our dynamic employee training program. We started the Academy because we wanted Nectar to be known for offering world class service in the industry. For this reason, all new employees are required to participate in two full days of classroom training led by our Academy Director. He has his master’s in education and over 15 years of experience in teaching and the cannabis industry. Before the employee can graduate to the next part of training, they must ace a written test over policy, product knowledge and customer service. Training continues in store where new hires learn everything about the transaction before beginning their career as a Nectarine budtender. At the end of the first month of employment, the Nectarine meets with their Store Manager and District Manager to discuss their performance receiving feedback and, in some cases, if they are excelling, a raise. We believe in an extensive training process for our budtenders because they are the face of Nectar to the community.
6. Unlike many retailers, you are not focusing on the East Coast markets but rather, markets in Oregon, California and Colorado which have established, legal adult recreational cannabis programs. Why has this strategy worked for you?
This strategy works for us because we thrive on competition. Most of the publicly traded cannabis retailers are focused on East Coast and Midwest markets where tight regulations limit competition, but also caps total revenue. Per Capita sales in Oregon and Colorado are over 100x what is seen in many East Coast states. For example, New York saw per capita sales in 2018 of only $2, while Colorado and Oregon had per capita sales of over $230. We recognize the undeniable trend towards lighter regulation nationwide. We are focusing our growth in major state markets that offer abundant opportunity for expansion, such as Oregon, Colorado, and California.
7. When do you see Nectar expanding to the major East Coast cities?
We want to expand in a methodical fashion by finishing all West Coast expansion first before considering the East Coast. We are hoping that by the time we are mature in our expansion into Colorado, California, Nevada, Arizona, and Washington some of the regulation on the East Coast will have relaxed, making it a perfect time for Nectar to enter the market.
8. As more companies enter and dominate the market, mergers & acquisitions are inevitable. What is Nectar’s strategy here?
We see the importance of mergers and acquisitions in the cannabis industry. Because of this, we have formed a Mergers & Acquisitions department and hire talented employees that have experience in contract negotiation, expansion, real estate and finance. Nectar realizes that one of the ways we will need to grow is by merging with or acquiring solid operators in great trade areas. We are prepared to do so and welcome all opportunities. At least ten of our stores in our portfolio today have been acquired and we have managed to increase sales in those stores by an average of 145%!
9. What do you see in store for the future of the cannabis industry?
I believe the cannabis industry will continue to expand at an unprecedented rate. Recreational cannabis will continue to be legalized state by state. The medical marijuana industry will continue to grow as research continues- the potential of the pharmaceutical cannabis industry is larger than we can even imagine. That’s being proven everyday as more studies are being started in other countries showing the capabilities of medical marijuana. In the next few months, we can expect some news on the Safe Banking Act, hopefully with it passing, which will drastically improve financial services available to all of us.
10. What’s next for Nectar?
We are continuing to expand throughout the state of Oregon with 6 more stores set to open in 2019. By next year, we plan to grow to 50 stores by filling out Oregon, entering Colorado and California. With 50 stores open, we expect to reach a run rate of $100 million dollars. At this point, we will consider going public or seek to continue growing as one of the largest private cannabis companies. Please feel free to contact me with any specific questions. We are always looking for strategic partnerships and thrive by collaborating. Whether you would like to invest in Nectar or be a part of our success, we welcome your contact.
If you would like any information about Nectar, please contact our Director of Finance, James Stachelek, at (512) 420- 7918 or email@example.com.
The Cannabis Private Investment Summit showcases the best and brightest cannabis entrepreneurs and is the premiere summit for institutional investors, family offices, and ultra high net worth investors. For additional information, please visit www.cannabrunch.net or email us at firstname.lastname@example.org.
To sign up for Kahner Global’s 5th Annual Cannabis Private Investment Summit New York City, being held on September 17 2019 , click here.