The cannabis industry is a market for trailblazers and while such people traditionally go their own way, 4Front Advisors and MJardin are converging paths in an attempt to achieve greater success for themselves and their clients. In an exclusive interview with MJINews, 4Front Advisors and MJardin revealed that they are entering into a strategic alliance to bring MJardin’s turnkey cultivation model to 4Front’s clients.
Growers and dispensary owners often struggle with piecemeal solutions sold by multiple service providers. Additionally, they have to navigate intricate state and federal regulations. MJardin teaches clients how to cultivate premium cannabis. 4Front works with dispensaries to establish policies and procedures that maintain compliant operations. These two service providers naturally complement each other’s businesses, making this strategic alliance a cohesive solution for growers and dispensary owners looking to enter the industry.
4Front Runs the Front of the House
In February 2011, Josh Rosen, Co-founder and CEO, and Kris Krane, Co-founder and Managing Partner, founded 4Front Advisors. The company helps clients apply for producer, processor and operator licenses in states with legal cannabis. Once its clients are awarded licenses, 4Front Advisors helps them implement policies and procedures for running a successful and professional retail operation. To further enhance its offerings, the leaders behind 4Front Advisors formed 4Front Ventures in 2014 to house 4Front Advisors, 4Front Capital and 4Front Publishing.
4Front’s goals go beyond self-interest for the greater good of the industry. Kris Krane, 4Front’s Co-founder and Managing Partner, said, “Our core business objective, number one at the macro level, is to defeat prohibition through sensible regulation and that means having well-run and well-operated legal markets. Everything that we do is guided by that mission, so that means holding ourselves to an extremely high standard when it comes to developing our operating model and protocols.”
Within these standards, it naturally follows that 4Front is invested in helping clients maintain best practices for a sustainable business model. Krane said, “Our business is set up not so much for short-term financial gain; in fact, our fees are structured so that we’re paid very little up front, we really get paid back if we can make our clients successful. It’s really important to us that we’re able to set up highly professional, highly successful operations, that’s key to our business, it’s all about our clients’ long-term success.”
MJardin Runs the Back of the House
In 2012, Adam Cohen, James Lowe and John Fritzel founded MJardin, a provider of turnkey cultivation and processing management services. The company provides clients with professional facility design services, licensing support and the operational management needed to consistently produce premium cannabis and related products for a large-scale operation.
In the fall of 2014, MJardin formed MJAR Holdings, the parent company that holds an intellectual property portfolio it received from MJardin, containing industry information on retail operations, license acquisition and cannabis cultivation. MJAR Holdings monetized its IP portfolio by licensing it back to MJardin Management to impart its knowledge to clients. This IP portfolio can also be licensed to companies outside of MJardin Management.
“We recognized that there was a distinction between the management services and operating company, and the development and deployment of the intellectual property under-girding the management company. Separating these two activities allows the companies to focus on their core competencies,” Cohen said.
4Front and MJardin will work with MJAR’s intellectual property portfolio as a means of promoting its proprietary methods for cultivating premium cannabis.
Most cannabis consumers want a product that they can trust every time. MJAR’s intellectual property paired with MJardin’s skill in cultivation management puts the power in the cultivator’s hands.
The cannabis industry’s major players normally have a working knowledge of each other and often cross paths, whether by design or happenstance. “We operated within the same industry circles and clients would often mention [4Front],” Cohen said.
Ultimately, those circles overlapped. “We had some mutual friends out of Colorado and we wound up working together with a mutual client, ” Krane added.
That client is CWNevada, a company awarded multiple licenses in Nevada for cultivation, production and dispensing, as well as being the exclusive provider of Charlotte’s Web for the state.
Cohen recalled, “One of our clients in Las Vegas, CWNevada, was seeking to put together a team of industry professionals to assist them with the licensure process and the creation of a successful operating business. It was through this mutual engagement that 4Front and MJardin really had the opportunity to roll-up our sleeves and work together, both in the preparation of application materials and then in post-licensure operations planning.”
According to Krane, while collaborating with MJardin, “It was apparent very quickly that their approach to this industry was very similar to ours in terms of really trying to elevate the image, to professionalize and standardize operations. They seem to have a really good understanding not just of cultivation, but the business around it.”
CWNevada provided the initial opportunity for 4Front and MJardin to collaborate, and the relationship progressed from there. “We’ve had the opportunity to work together on some projects around the country so this really happened very organically,” Krane said.
There was no need for 4Front or MJardin to force the relationship; their services were already successfully complementing each other. “The idea of a strategic partnership with 4Front evolved over time; it felt like a natural next step for us and we’re very excited and proud to be aligned with them moving forward,” Cohen said.
Business relationships often have vague names with ambiguous definitions, but this gives companies room to move within the terminology to create a uniquely defined path. 4Front and MJardin both see value in the other’s operation and the promise of a mutually beneficial relationship.
“We’re doing this now as a strategic alliance. We’re going to refer more of our clients their way and they’re going to do the same,” Krane said. Essentially, 4Front will show its clients the value of MJardin’s cultivation management systems, while MJardin will show its clients the value of 4Front’s model for running a successful retail operation.
Cohen said, “There are many circumstances where our clients are in need of the services that 4Front provides, specifically with licensure support and on dispensary design and systems implementation. We understand that the same holds true on their end, where some of their clients are in need of professional cultivation services. So, it’s a natural fit, as it allows both companies to better serve our existing and prospective clients.”
This should provide 4Front and MJardin with greater market strength and access. “We do expect that this strategic partnership will make us more competitive within the industry, as we will reach a broader base of clientele across the country and collectively deliver a broader array of critical services,” Cohen said.
As a strategic alliance, the terms are fairly informal. According to Krane, there is no formal governance between the two companies. Each company has its own group of client managers that will be in constant communication with each other to ensure consistent client experiences.
With no definitive point person managing the alliance at this stage in the relationship, communication will be key. Krane said, “Ultimately, when it comes down to it, if our clients are going to have a contract with us and our clients are going to have a contract with them, we need to be constantly communicating with one another to mitigate those risks and work through any potential conflicts as they arise.”
Krane did not disclose the specific financial terms of the relationship; however, he did note, “We’re going to help bring them more business and they’re going to help bring us more business and we’ll make sure that we’re both properly incentivized to do so.”
For a strategic alliance to work, companies not only have to partner with those that add value to their operations, but they have to respect the pursuits of those partners. In speaking with Kris Krane and Adam Cohen, it is clear they each admire what the other is doing for the benefit of the industry.
“MJardin is a breath of fresh air in that they share our philosophy and the way that they approach the business and the protocols that they’ve developed are up to the standards that we hold ourselves to,” Krane said.
“There is no question that 4Front is one of the most knowledgeable and professional groups in the industry. This is true at the company level and it is true of the individuals that comprise 4Front from their executive team to their ground-level operations teams,” Cohen said.
The simple act of forming a strategic alliance is not an automatic recipe for success; however, if 4Front and MJardin can execute a plan to harness each other’s expertise as a means of achieving meaningful growth, it bodes well for the professionalization of their companies as well as the industry.