Former Cara boss sees big pot picture

Don Robinson says he’s bringing the “best of bigbusiness practice” to just about the last place investors would think to look for it: the marijuana sector.

“We’re a marriage of industry experts who don’t have corporate experience with corporate grey-hair adult supervision,” he said of his new company, Golden Leaf Holdings Ltd. “That marriage is really critical.”

Robinson, 61, has been in the food business for more than 30 years, most recently as chief executive of Toronto-based Cara Operations Ltd. Now he’s running Golden Leaf, which began trading on the Canadian Securities Exchange on Wednesday. With revenues of more than US$1 million a month and growing, its sales already dwarf nearly all the licensed medicalmarijuana producers in Canada.

After leaving Cara in 2013, Robinson worked briefly on licensing applications for medical pot in Canada. He decided that was going nowhere, so he moved on to what he thinks is a much bigger opportunity in the U.S. market.

Golden Leaf ’s operations are based in Oregon, where recreational marijuana just became legal on Oct. 1. The company manufactures and packages cannabis oils under a variety of brand names, and is starting to get into edibles as well.

Recreational pot is an increasingly crowded space in the U.S., but Robinson said his firm has a big competitive advantage over competitors through management experience, intellectual property and basic economies of scale.

“Cannabis is a global startup and it’s changing all the time. You need the best and brightest to succeed here,” he said.

Robinson believes his firm is the largest extractor of oils in North America, and it still isn’t nearly big enough. He said Golden Leaf is selling everything it can make, thus adding capacity as fast as possible. He doesn’t think any of his U.S. rivals will be able to scale up as quickly as Golden Leaf, noting there are compliance challenges in different states. Golden Leaf is also studying expansions in other states.

Recreational pot is still a very new idea in the U.S., so it’s impossible to know how big the market could become. Only four states have legalized it outright (Oregon, Colorado, Washington and Alaska), while many others are considering legalization. It remains illegal under federal law.

Not surprisingly, Robinson is among the believers that further legalization is inevitable. And that’s where the big opportunity lies. Golden Leaf cited research that suggested the U.S. pot industry could be worth more than US$10 billion by 2019. That’s extremely speculative. But if more states follow the legalization path, it’s possible to place almost any value on the industry.

“It’s going to be a massive industry and I wanted to play a part in shaping it,” he said, comparing it to the end of Prohibition.