It has been a productive month for SLANG Worldwide (CSE: SLNG) as they finally closed on the acquisition of ACG. This week, SLANG also announced it has entered into an agreement to acquire High Fidelity, Vermont’s largest medical cannabis company. We’re pleased to welcome CEO Chris Driessen back to our table to discuss what this merger with High Fidelity means for SLANG, and what other opportunities might be coming down the road.
Here’s some highlights from the interview.
High Fidelity has “a stranglehold” on the Vermont Market
The acquisition of High Fidelity brings 70% of the registered patients using cannabis in Vermont to SLANG Worldwide’s hands, says Driessan. He says this is because they’re great people, they do a great job, and they have four operating dispensaries. One of these four dispensaries is in Burlington, the population center of the state. And Driessan adds that it’s the only dispensary there.
For those who may be unaware about the quirks of the Vermont cannabis market, the current medical cannabis licenses are vertically integrated – and currently there’s only five of them. “There’s just 5 tickets to play, and we just bought two of ‘em,” says Driessan, explaining that High Fidelity is in possession of two of the five licenses.
Vermont: going rec in 2022
Driessan says that everyone at SLANG is stoked about the opportunity that Vermont represents, because the bill to go recreational has just passed. The pool of players in Vermont is already strictly limited and there’s a five-month moratorium on the issuing of new licenses from the state.
High Fidelity brings SLANG Into Retail – but Driessen says this wasn’t the point of the acquisition
Driessen acknowledges that there was an outsized opportunity with the adult use bill to expand SLANG’s market share in Vermont, and this is the primary reason for the merger with High Fidelity. But High Fidelity also brings a distribution network of about 1200 convenience shops and alternative stores throughout New England. “We wanted to own that consumer relationship,” he says, “and retail in this instance was a natural fit for that.”
Retail comes with High Fidelity in Vermont, but SLANG doesn’t have ambition to compete in brick and mortar
When asked about how this affects relationships and competing with other MSOs in the space, Driessen downplayed the impact that this would have. High Fidelity sells to the other MSOs in Vermont already, he points out, and there’s only three other competing licenses in the state, so there’s already a tight-knit relationship.
“I’m not trying to upset anybody by being in retail,” says Driessen. “It’s Vermont, it’s vertical, it just comes with the territory. We don’t have the ambitions to do that [other places].”