Berner Archives - Green Market Report

This interview was conducted with Brandon Johnson and Daniel Firtel, co-founders of TRP, the operating arm of Berner’s Cookies, in September. It has been edited for length and clarity.

TRP is a vertically integrated cannabis holding and operating company behind Berner’s Cookies, B Real’s Dr. Greenthumb’s and Insane brands, and one of the largest privately held cannabis companies in the U.S.

Since securing one of Florida’s 22 coveted vertical licenses, the quiet purveyor of the Cookies brand opened its first Miami flagship store last month after injecting $100 million into a sprawling 400,000 square-foot facility in Deland, a small city located along the northern outskirts of Orlando in Central Florida.

Brandon Johnson’s journey in cannabis began when he started “investing” in the crop $10 at a time at age 14, he said. With a background in real estate entitlement and development, the Southern California habitant formally entered the space nearly five years ago.

Daniel Flirtel broke into the industry in 2018, bringing with him a background in business development and scaling retailers.

“That’s actually kind of how we launched TRP,” Johnson said, “was the ability to navigate the complexities from a licensing perspective, build out construction execution and build operating companies.”

The two have helped build a burgeoning empire alongside rapper and mogul Gilbert Anthony Milam Jr. – more popularly known as Berner, the first cannabis CEO to grace the front cover of Forbes magazine. TRP has been a driving force behind Cookies becoming the Sunshine State’s first minority-owned medical cannabis dispensary.

The Green Market Report sat down with the two execs to discuss their plans for Cookies and other legacy brands under their umbrella.

So how did Cookies and TRP come together to form this partnership? What made Berner – and in addition B Real – want to partner with y’all more than anyone else?

Brandon Johnson: It’s the understanding that we have, which is we’re (TRP) not trying to build brands. We’re trying to help scale legacy authentic brands and do what we do best, which is go out and gain licenses and permits, capitalize the business, build the business, do the execution, curate and cultivate A+ cannabis – not just passable cannabis. And do that in the California way, not the way where it’s like, “OK, it’s good enough.” No, we’re trying to create really high quality premium cannabis.

For them to align with somebody that has a national footprint and the ability to scale nationwide while also honoring what they’ve done and what they mean to the industry – that’s something that Daniel and I and our entire team talk about every day.

We are trying to be an anti-MSO, not the MSO (monolithic and beholden to shareholders). We’re trying to take these brands that in some cases risked their freedom or risked their lives to create that genetic or to evolve the industry 20 years ago when it was a much different place – and to take that and offer them the opportunity to still have a brand integrity and independence while scaling nationwide.

How does TRP plan on scaling legacy brands like Cookies, DGT or Insane?

Johnson: I think that we would be remiss if we said “Hey, here’s how we’re going to do it.” It’s more of: Here’s what we see as possible options, and what can we do to help you with that? What do you see as your vision for your brand?  Are there particular markets that you want to be in? Particular categories? Particular segmentation?

Then we can either plug it into existing infrastructure, or we might be able to go out and source new opportunities in markets where it’s important.

The key, and one of the hard parts in cannabis, is (that) it’s really hard to build large-scale brand equity when you only have a local footprint. Big markets, like California, you can build some brand equity in, but it’s really hard to build brand equity in smaller states or less mature states. And in order to gain that national footprint, it requires a lot of time, a lot of effort.

Each state has its own licensing framework. Each location has their own supply chain. You know, it’s not millions of dollars, it’s tens – if not hundreds – of millions of dollars in order to build a national footprint. And it’s hard to do that to scale a singular brand.

With us, we can help scale multiple brands off of our infrastructure without trying to replace them as the brand. We’re not trying to build our own brand footprint.

Daniel Flirtel: Every brand has different goals, like Brandon was saying. Certain brands, they don’t want to be retailers; other brands want to be retailers and products. It’s working collaboratively to figure out the best strategy for each brand that wants to grow.

It can differ on a case-by-case basis. With Cookies, they want to be a global brand. They want to have a retail footprint. They want to be in every single possible market.

With Dr. Greenthumb’s, something that’s really important to them is working with legacy cultivators, which is easier in certain states. A state like California or Oregon, Washington, Michigan, those are a bit easier to find those guys that are licensed and cultivating.

It really depends on the brand and what their goals are, and then we kind of make a strategy for that brand.

I’d read that Miami Herald story about Cookies, and you mentioned that Florida should be following Massachusetts’ lead on licensing and social equity. Why is that?

Johnson: There’s a lot more nuance than what made it into the paper, but I think that what you’ll find when it comes to social equity is you have a lot of well-intended goals that manifest in really poor policy and how it’s implemented.

I’ll use Illinois as an example, where you’ve launched recreational and you, in theory, created social equity licenses. Well, we’re now two years into recreational and not one of those social equity licenses is open. They were just issued after litigation, maybe a month ago? And you’re probably looking at another 12 months in order to get through local land use approval, build out operations, construction.

A lot of states say, “Hey, this is social equity. You may not have the money, you may not have the experience – now run the hardest industry in the world to run. Go.”

What we try to do is say, “Look, we have a lot of tools and resources. We can help on the accounting side, we can help on the payroll side, we can help on the infrastructure, the HR, the legal…” We want to coach people up. That’s something that the industry is lacking.

At a federal level, you’ve got a lot of people that that are really fighting for civil justice and rights as part of a federal legalization conversation. But in many ways, they’re actually harming the people they’re trying to help. Because every day that goes by, the big get bigger and the small gets smaller because they don’t have access to capital. They don’t have access to banking. By holding up safe banking and those other things, it’s really harming the small guy and minority entrepreneurs that can’t go to the SBA (Small Business Association) and get a loan and do those sorts of things.

So, it’s a really complicated issue that every state is going to have to solve in their own way, and in some cases, it’s city by city.

I guess I’m just clarifying. I am not saying that Massachusetts is perfect. I don’t think any place is perfect. But I do think that creating opportunities…we need to figure out the best way to do that.

Flirtel: Yeah, I agree with Brandon. I’m not sure that anyone’s really nailed it. I mean, there are a few lucky breadwinners that benefit, but I don’t think they’re tackling like the systemic problem.

So, in my mind, it should be a lot more higher level of like, “OK, well, let’s throw a tax in a fund, and whatever it is, it all should just go towards high-level stuff of like freeing prisoners or donating money to an area that was like disproportionately affected.”

But instead, they kind of reward one-off people, which works, but in a lot of cases, those people might be relatives of people that were affected. It’s not very cut and dry (on) who gets that benefit. And it’s just kind of helping a few people versus really making systemic change.

Johnson: It’s masking the symptom, not creating a solution.

What would you say has been the most difficult or complicated part about navigating the Florida market so far?

Johnson: Florida is unique in terms of the mandatory vertical structure, which other states don’t have. I know that there’s a lot of things that people might not like about it. For us, it gives us the best opportunity to deliver exceptionally high-quality products, because there is no outside distribution, outside packaging, different wholesale.

I’m not saying that it doesn’t have the difficult parts. It took us two years to identify a property, get permits, build cultivation, build manufacturing, build distro packaging, open stores. It’s a long process that is very capital intensive, very time intensive and laborious. If you were in a different market, you could open a store in three months versus having to build it all out.

The one thing I always tell people is we think that the cannabis we’re putting on the shelves in Florida is the best that we have anywhere in the world right now. I know every single thing that went into that. I know every person that touched it. I know the exact timing of what plant it came off of. I actually know that when it was chopped, what dry room it went into. And I know that by the time I get it to my customers, it’s the freshest cannabis I can deliver anywhere in the world, because everywhere else, it has to go through other checkpoints that we don’t have in Florida.

Cookies is a really recognizable brand. Do you think that the Cookies stores can kind of sustain the hype long term?

Flirtel: It’s an excellent question. Cookies is a platform, but it’s really about what you do with it. I think that it definitely hits certain demographics, and certain other demographics might feel alienated from from the customer experience or the products or the look and feel or the music that is played when you come in.

It really is a good challenge for us to try and broaden our consumer base, whether that be bringing in other outside brands that we sell on those shelves or produce, genetics or branding wise.

There’s really nowhere else in the world or any Cookies store where you only find Cookies products. It’s really going to be up to us to get the right mix to really broaden the consumer base in Florida.

And that is something that we’re really excited about. We’ve seen good examples of that already with dropping (Black-owned) GasHouse. We’ve got other brands like Compound Genetics and a few others that we’re gonna be bringing down to the state. So, we feel really good about the different groups that we’re talking to. Not all of them are focused on the same demographics.

Johnson: To add to what Dan said, Cookies, what it represents, is something that is honoring the legacy traditions of the industry in the market. And that focuses on creating innovative genetics and exceptional quality products, and trying to make those attainable. We want to continue to make them more broadly available in more markets.

There is this element that Cookies is this lifestyle brand that has become so broadly known. But it’s not just about Cookies as a brand. It’s “What does Cookies as a brand represent?” And I think what it represents is something that a lot of other brands also agree with.

But your question about, how does Cookies as a brand or somebody like Dr. Greenthumb’s as a brand continue to exist? It’s about the message, not the messenger.