Neil Patel

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Mitchell Kahn is the co-founder and CEO of Grassroots Cannabis which is a grower, processor, and dispenser, of medical cannabis in over four states including Maryland. The company raised over $230 million and was recently acquired in a reported $875 million deal. 

In this episode you will learn:

  • Why missing out on their first grow license was actually a good thing
  • How they decided to merge with Curaleaf
  • The truth about business plans
  • How to identify new markets with great potential


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About Mitchell Kahn:

Over his thirty-year career, Mitchell Kahn has demonstrated a successful track record of business management and entrepreneurship.

In 2014, after Illinois passed its medical cannabis program, Mitchell Kahn co-founded Grassroots Cannabis (“GR”), a company that grows, processes and sells cannabis through its vertically integrated business model in order to provide safe and efficacious cannabinoid products to consumers.

With Mitchell Kahn in the role of CEO, the company has grown to have operations in eleven states with more than 61 licenses and more than 600 employees, making it the largest private multi-state operator in the United States.

Grassroots continues to rapidly expand its footprint and develop the company’s portfolio to address the key medical, wellness and adult-use market sectors.

Mitchell Kahn also serves as Co-Founder and Chairman of Frontline Real Estate Partners, a Chicago-based real estate investment and advisory company with expertise in the acquisition, development, management, disposition, and leasing of commercial real estate properties throughout the United States with a focus on the Midwest.

Founded in 2010, Frontline invests in value-add properties and provides transactional and advisory services to banks, financial institutions and owners with a focus on the real estate restructuring industry.

The company has acquired properties valued at more than $125,000,000 and has built a successful brokerage and property management business currently managing more than two million square feet of properties.

Prior to forming Frontline, Mitchell Kahn co-founded and served as President and CEO of Hilco Real Estate, one of the country’s leading real estate restructuring, disposition valuation and appraisal firms.

During his tenure, Mitchell Kahn grew Hilco Real Estate from a startup subsidiary of the Hilco Organization into a company with more than 30 employees and annual revenues in excess of $15,000,000.

Prior to joining Hilco, Mitchell Kahn served as Senior Vice President of Sportmart, a retail sporting goods chain. During his tenure, Sportmart grew from 20 stores to 70 retail locations throughout the United States and Canada before the company merged with Gart Sports.

Mitchell Kahn graduated from the University of Wisconsin and Northwestern University Law School. Mitchell Kahn is actively involved in the Les Turner ALS Foundation and ORT America, in addition to several other charitable organizations.

Connect with Mitchell Kahn:

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Alejandro: Hello, everyone and welcome to the DealMakers show. Today we have a very interesting founder. He knows about building and scaling companies in heavily regulated spaces. I think that we’re going to learn a ton about the cannabis industry, but without further ado, I’d like to welcome our guest today. Mitchell Kahn, welcome to the show.

Mitchell Kahn: Thank you, Alejandro. Glad to be here.

Alejandro: Mitch, originally, you were born and raised in Milwaukee in a middle-class family. I know that you guys never had a ton of money, and obviously, I’m sure that this developed who you are today. But how was that time for you growing up there and being raised in an environment of that nature?

Mitchell Kahn: I had a great childhood. I have to admit I have a hard time thinking about anything that wasn’t a good memory as a kid. We had a great life. We grew up in a very nice middle-class suburb, and I think it was terrific. Milwaukee is a wonderful place to grow up and a great place to raise kids. I think in between, it may not be such a great place for most people, but it’s really a nice place. What it did ultimately for me, Alejandro, was help me understand that as I grew up and went to college and law school — we’ll talk about some of that, I assume — it was clear to me that whatever I wanted to achieve in my life, I was going to need to achieve on my own with tremendous support from my parents and my family, but emotional support, which was terrific and important. I couldn’t have asked for a better childhood.

Alejandro: Very cool. I understand, as well, that your father had the entrepreneurial spirit. One thing that I see in a lot of founders is that they absorb or acquire that desire of doing something on their own in their future when they see that in their family, as well, early on.

Mitchell Kahn: Yeah. My dad had a number of jobs as I was growing up. He was an accountant originally, and then ran a number of businesses for some other folks, and moved around a little bit — moved to Salt Lake City, Utah at one point to run a consulting business. But he always did that and was tinkering with ideas and entrepreneurial thoughts literally up until the day just about three years ago when we lost him.

Alejandro: Wow. And I know for you, as well, you studied accounting. Why accounting?

Mitchell Kahn: It’s a great question. I’m not sure I know the answer. It was probably a combination of a couple of things. I always liked and was good at math as a kid, and there was probably some deep-seated thought to follow some of what my dad was doing. I always thought it was a good background to build and not necessarily anything to practice. I’ve never actually practiced it, but I think it has given me an appreciation for numbers and financials and those kinds of things that might have been hard to accomplish other than that.

Alejandro: Definitely, very equipped, I would say, because you’ve got the number side and you’ve also got the legal side. So, no messing around with Mitch when it comes to doing deals. Mitch, what happened there because I know that you decided to go to Chicago and go to law school. So, what triggered that?

Mitchell Kahn: I always did well in school, Alejandro. I won’t say it came easily to me, but as long as I worked hard, the results were always good. It just felt like the next logical step, and I was almost on a path to get through school, the accounting degree, the CPA certificate, and then go to law school. I had no complaints. I was young, and we had the beginning of a great life. I think, though, as I practiced law for a few years, it became clear to me that I had more entrepreneurial desires in me.

Alejandro: Got it. After the seven or eight years doing that real state and corporate practice as an attorney, then you went into the business side. What happened there?

Mitchell Kahn: I’d always said, at least for the last three or four years for sure practicing law, I said to anybody, “Any dummy who ever asked me that I’d rather be in the business side.” I’m not sure that I actually meant it, but I said it. Then one day, somebody called my bluff, and some folks offered me the opportunity to leave the practice of law and come inhouse in a retail company and run legal real estate and construction and help expand the business nationally around the country, which was terrific.

Alejandro: And from there, you went from 25 stores to 75 stores. Then you went to 50, so you were able to see the growth phase and some of the logistics. But then, also, you were ultimately involved with the actual transaction, the acquisition of the business. When you were able to see those different cycles at a business level, I’m sure that you got some major takeaways. What would you say were your top three takeaways from this experience?

Mitchell Kahn: I think as I look back on that, and you’re absolutely right, I saw a couple of cycles in the seven or eight years that I was there. As I came in, we were expanding like crazy all over the country. The single biggest takeaway that I took from this is that as you’re expanding businesses, first of all, speed is oftentimes very significantly important. But you have to balance that against making sure what you’re doing is financially intelligent. It doesn’t mean you have to make money instantly, but you’ve got to make sure that you have the capital available to do what you need to do to grow the business. One of the things that happened to us in the sporting goods business is there were a couple of other folks around the country also taking big-box chains and expanding them in the sporting good business. It became a capital-markets race. Even though I, to this day, think our store was better than one of the other guy’s stores who ultimately won if you will, they beat us — both of the other groups I’m talking about — beat us to the capital market’s game, beat us in the capital market’s game and were able to raise capital in a much more effective way, a much more efficient way. At the end of the day, that’s been an enormous lesson that we’ve carried through to this business too. I think as you look at businesses, and you try to understand businesses, making sure you have the capital side figured out no matter how good your idea is, no matter how good the business plan is, and even no matter how good the people are. If you don’t have the capital to build it and continual capital to expand it at the right cost structure, you just can’t win.

Alejandro: Makes total sense. Then this, for you, was a really nice segue because you started a real estate company that morphed into starting the division of a bigger company. You grew that for about ten years, and then you left with the two key partners to start Frontline Real Estate, which is more oriented towards the stress type of real estate. I guess that was a really nice segue into where you are today. Tell us about this experience as a real estate entrepreneur.

Mitchell Kahn: I can tell you one of the things that the real estate entrepreneurial business we’ve been about has solidified for me and helped me understand is as we’ve grown this business is that whatever you think the plan is, it changes. And it changes all the time. What we originally started out to do in our real estate business changed very quickly and very dramatically multiple times. I think that’s one of the key lessons I’ve learned through the whole real estate business is that we’ve obviously taken to heart in this business is that first, you need to figure out your plan and execute to get there. But you have to be flexible enough and smart enough and self-assured enough to be able to constantly look at where you are and readjust and reorient the business and focus on different things. But to do that, you have to do it in a way that’s intelligent and not just Monday morning quarterback every decision you make. I think that’s been the single biggest lesson out of the real estate business for it. One of the other things that we saw in our real estate business before we started the Frontline business was that matching short-term business with short-term capital and long-term business with long-term capital is very important because, otherwise, you can end up in a position where you have long-term assets with short-term capital and if things ever hiccup, you have a serious, serious problem. We’ve seen exactly that situation play out in the cannabis business here over the last 12 to 18 months. Thankfully, we’ve been in a position where we have sufficient asset base and capital-raising capabilities to make sure that we’ve been able to withstand that very carefully. That’s been one of the significant things that has helped us.

Alejandro: Talking about cannabis, what happened that day when one of your partners went into your office and [0:11:52]?

Mitchell Kahn: One of my two partners in the real estate business, a fellow by the name of Matt Darin. The three of us are still partners today. In late 2013, Matt walked in my office and said, “They just passed this law in Illinois allowing cannabis. We should do this.” I don’t remember the exact words, but I can’t repeat them on this probably. I think the gest of it was I asked him if he had completely lost his mind. People were, at that point and time, getting arrested in California. There were raids on facilities in California. I think it’s hard for anybody involved in the cannabis business to turn their brain back to what the world was like seven years ago. Cannabis was not nearly as accepted as it is today, obviously. It was still very much in-the-clouds, so to speak. It was not something that people were excited about talking about. I can tell you that my getting involved in this business has cost me some friendships from a number of years ago, people who just didn’t think it was a good thing to be involved in and, therefore, have disassociated themselves with my family. It was a very different world then than it is today.

Alejandro: I know you also had a very serious sitting down with your father. You guys discussed what was going on with cannabis, and your father was always very much about following the rules and the law. What happened during that discussion?

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Mitchell Kahn: You’re right, Alejandro. He was a rule-follower supreme. That’s how he lived every part of his life, which I think in many respects is a great thing. I got a lot of great skills and attributes from my dad. Being a perfect rule-follower might not have been one of them. I sat down with my dad. To give you some context, I grew up in a house where — mostly because it was law, he looked at me at one point when I was early on in high school and said, “You don’t ever have to worry about the cops finding marijuana if you happen to have any (back then it was marijuana, not cannabis) because if I find it, I’m calling the cops myself.” I’m not sure. I never was a big user of the product, and what little I might have done at that point and time, I’m not even sure I ever had it in my house, so I’m not sure there was anything for him to find, but I believed he would have called them if he had found it. To this day, I believe that. I sat down with him, as you mentioned, and talked to him about what we were looking at and what we were thinking about, and we had done some research. We went to Colorado, California. I sat down with him to ask him what he thought, and he looked at me, and he said, “You know, if you can find me some product that will help my arthritis, I’ll take it. I’m in.” It was really, for me, a significant moment in time where I looked at it and said, “If he was going to change his view,” — he was a real rule-follower and very against drugs. I’m not sure he ever saw cannabis as medicine necessarily, although I think he was getting there. If he was going to change his view, I think everybody was going to change their views. I think it was one of the things that propelled us to jump into the business and try to win some licenses and try to put a business together. I think about that conversation every day. Unfortunately, he passed away about three years ago, and it is truly one of my biggest regrets in many regards that he’s not here to see what we’ve been able to build.

Alejandro: I’m sure that he’s looking down and is very proud of what you’ve done, Mitch. Yeah. So, let me ask you what happened after this individual came into your office, your partner, and you thought it was a terrible idea. At what point did you guys get aligned and say, “Okay. Let’s do this.” What was that process of the incubation of the idea and going at it as a team?

Mitchell Kahn: As I said, we traveled a few times to California, met with a handful of people in the business, went to Colorado, Denver, in particular, two or three times. We met with a whole host of the folks in the business, including the inevitable collection of consultants. Ultimately, based on a lot of those initial conversations and an opportunity that we saw, quite frankly, to make money, I think our view at that time, Alejandro, wasn’t — a lot of people got in the business for very personal reasons about how it helped somebody in their family. It wasn’t that for us at all. We just saw an opportunity that we thought was a great business opportunity. Quite honestly, the medical side of it, which was the focus then through most of the country, I’m not sure we believed it was real. If you would have asked us then, we thought it was a construct that people created to get people comfortable with it. What we have come to learn and what we saw as we began to open the stores (and we can talk about that a little later) is that it absolutely is a medicine and it absolutely helps people. It’s been an eye-opening experience for us on the medical side in particular. We went through that experience, met with a lot of people, and I think our ultimate conclusion was, this was a once-in-a-lifetime opportunity, not to just start a business, but really start an entire industry from the ground floor. We’ve been able to do that, and it’s been a remarkable ride for six years or so.

Alejandro: What was the business model of Grassroots?

Mitchell Kahn: Grassroots was not even necessarily a thought in our mind at that point in time, but we applied originally to — each state, as you may or may not know that’s gone through this process has had a competitive application process to determine who would get those limited licenses that it would pass out in those states. I think our perspective and one of the things that we were focused on is, originally, medical states, not recreational and limited license opportunities where if we could use the skills we had in the team, we had to win some licenses those limited licenses would become very valuable. That was our initial business proposition. We applied for five dispensary licenses and one grow and process license in the state of Illinois where we live. We were fortunate enough, and unfortunate, both. We won three dispensary licenses but did not win the grow and process license. I can tell you that our investors were very unhappy. They were happy we won something, but they all thought the growing license was the holy grail, and the dispensary licenses were like the booby prize if you will. I think it’s actually not how it’s played out at all. Retail licenses have been at least as valuable and important as the growing licenses have been over the last few years, but I think the most important thing for us is it gave us an opportunity to focus on one part of the business for the first year or two in a way that allowed us to understand the business. My partner and I, one of us was in every store every day. We lived every part of the business. We were actually behind the counter the first few months selling product to people. And I, to this day, apologize to our poor customers and patients who had to deal with my partner and me because we’re not the guys that should have been behind the counter. But I think being able to focus only on one part of the business gave us a real opportunity to understand it and figure out what we thought the game plan was from there.

Alejandro: Got it. Then, how did you guys finance the operation because you guys raised quite a bit of money for this? How much money have you guys raised to date?

Mitchell Kahn: The initial raise for the three dispensaries in Illinois was something in the magnitude of 4 or 5 million dollars, I think, for the first time. We’ve gone through subsequent raises as we’ve gone state-to-state. As you may know or not know, we are in 11 states today with 60-some licenses, retail, grow and process. We are fully vertical, and I want to say seven of those 11 states soon to be eight and nine. We have raised a total of 165 million dollars of debt and equity capital. Then, recently, an additional 65 million dollars of [0:21:49] financing capital. So, if you look at it all together, it’s about 225 or 30 million dollars of capital to date.

Alejandro: Scaling the operation and all the different locations, I’m sure that it was quite a beast of a challenge. You had some specific stories like one of your places in Pennsylvania ran out of money halfway through. What was that like?

Mitchell Kahn: This is not a story I think I’ve ever told out loud before, but in the middle of construction of our large grow facility in Pennsylvania, we ran out of capital. It was a moment in time when raising capital for cannabis because very difficult. One of the things you may understand about this business, like every business, there are cycles to raising capital. There are moments in the course of a year or multiple years where capital is very available and then moments where the markets shut down, and it’s very hard to raise capital. Unfortunately, for us, as we approached running out of money in Pennsylvania to build that facility, capital was not available. We spent almost two months knocking on every door we could knock on very quietly because we never wanted anybody to know that, in fact, we had run out of money. None of our employees knew, and mostly, none of our investors knew, with a couple of very small exceptions. We were able to find some investors who ultimately funded the rest of the capital we needed to get that process going. It set us back a little bit in Pennsylvania, but that was one of a whole bunch of moments, but one of the moments that was scary for the business. If we hadn’t been able to find the investors we did, we could be in a very different place today. But we were able to get it done, which is great. 

Alejandro: I can imagine. I know that your space is not an easy one. Not only are you dealing with scaling up a business, which is you’re dealing with the uncertainty of the zone, but then also with all the regulatory burden. All of that stuff is double the uncertainty. When you have all these problems, issues, or fires coming at you — and this is something that may serve as well for the founders that are currently listening — how do you avoid panicking and letting yourself go with all of the voices and the what-ifs that you get in your head? How do you filter through that so you can get out there and execute?

Mitchell Kahn: I could make some jokes like I do yoga every day, but the truth is, about three years ago, I started doing yoga a couple of times a week, and it’s actually helped me a lot.

Alejandro: I can imagine.

Mitchell Kahn: But that’s not really the answer to the question. Everybody has to find their own way to deal with those kinds of issues. This is a business, as you said, that literally on a daily basis — I joke, we literally walk through pools of alligators on a daily basis. It’s not a question of if we’re going to get bitten, it’s a question of which one is going to come up and bite us and where they’re going to bite us that day. I think the companies that are successful in this space, as they are in many businesses, it’s not about whether you can avoid those things because you can’t. It’s about how you deal with them, and how you bring an organization together, and how you build a team to deal with those issues. One of the things I talk about all the time in our business, and I do a fair amount of speaking about it, is that the single most important thing by far in our business and every business, in my opinion, is people. One of the real challenges, Alejandro, as we started this business, and again back to six or seven years ago, the only folks who wanted to come work for us seven years ago were life-long, flag-waving cannabis enthusiasts and cannabis activists, which was great because they were passionate and really challenging in other respects because you can imagine that group of folks comes, oftentimes, with some challenges. 

Alejandro: Yeah.

Mitchell Kahn: One of the things which has been a tremendous change over the last 24 months is the ability to attract superior talent in almost every part of the business. We’ve been able to bring in a CMO who came from Kimberly-Clark; a head of Capital Markets who spent a whole bunch of years in a bunch very well-known hedge funds and private equity businesses; a head of retail that came from Abercrombie & Fitch among some other very well-known retail brands. I like to joke that a year before they joined us, they wouldn’t have had a cup of coffee with me, let alone come to work with us. That’s the single, biggest benefit and the single most important thing that allows us to deal with every issue. We’ve just gone through, here in Illinois, as I’m sure you know, conversion January 1st to recreational cannabis. So, we have a number of our stores that are available for both medical and recreational and more coming over the next year. It happened very quickly based on how Illinois changed the law when they did. We never could have pulled it off; we never could have been ready; we never could have had the seamless transition we did and be able to serve as many people as we did the first couple of days if we didn’t have a great team that’s been put together over the last few years. If it was about my partner and me, just us, we would have had no chance. So, it’s about the people, as I think it is in all businesses.

Alejandro: 100%. Tell us about the acquisition because that’s a big, big milestone. I would say now, especially for you as an entrepreneur, now you’re definitely the full cycle from beginning to the end, and it’s not the end; it’s a new chapter. How does this acquisition happen? Did you receive inbound interest, or what was that process like? 

Mitchell Kahn: As stated earlier, we are in 11 states with 60-some licenses. To date, we are still the largest private multi-state operator in the cannabis space. As we looked around and we looked at our options, Alejandro, we absolutely could have lined up to do to go public, and we were lined up to go public. We could have executed that fairly easily, but as we looked around, there were a number of guys already public in the space. There had been a year of seven, eight, or ten of the multi-state operators going public, of which we were bigger than a handful of them already anyway. We looked at it and said, “What’s the best thing for our shareholders and our employees? Ultimately, our conclusion was either put our head down and run our business ourselves, or see if there’s a partner that we have the right strategic fit with in terms of assets, states, and licenses. But more importantly, with strategic thought in the business, the right kind of people, the right kind of partners, and the right philosophy in the business because ultimately, the great majority of the deal that we did as stock and you’d better believe that the combined business is the right answer. To answer your specific question, it’s a very, very small industry is the best way I can tell you, and I think to say that everybody’s talking to everybody all the time is a fairly true statement although I didn’t know the two most senior folks at Curaleaf, who we have agreed now to merge with. I knew a lot of people who knew them, and we spent the better part of 2019 first raising capital. We raised about 165 million dollars in a round that we completed in early 2019. Then we spent a few months exploring options. People introduced us to certain people. We reached out to other people, and quite honestly, none of them were very interesting. None of them felt like they were the right fit for us in many regards. Someone introduced us to the folks at Curaleaf. We had an initial meeting. My partner and I walked away and said, “This is the first thing that actually makes sense. More importantly, the business philosophy of the two most senior folks we met with really jived with our thought process. As I’ve said many times, as it evolved, the only reason not to do a deal would have been if we cared at what seats we sat at and what jobs we had. My job has been to run the business and be a steward for our employees and for all of our investors’ capital and not to worry about what job I have. We feel really good about the deal we’ve done.

Alejandro: Very nice. It was reported at 875 million, so definitely building a business to that level, I think that you should be very proud and your team, as well. Well done on that, Mitch. One of the questions that I typically ask the guests that come on the show is, knowing what you know now — here you are, the Swiss army knife with the accounting, legal, and now all this experience building and scaling businesses, if you had the opportunity to go back in time and have a conversation with perhaps that younger Mitch that was starting to think about launching your own business, what would you tell that younger Mitch if you had a chat over coffee. What would be that one piece of business advice that you would give to your younger self knowing what you know now before launching a company and why?

Mitchell Kahn: As I talked about a couple of minutes ago, what I’m not sure I fully understood until going through this process and what I would absolutely tell myself if I could go back seven years, maybe even earlier than that is find the way to raise a little more capital, even if it means you give a little more of the business away day one. Maybe you do it with debt. Maybe you’d do it differently. Maybe you don’t have to give up equity, but find a way to raise more capital and bring in the best possible talent you can bring in every key spot you need to. Part of this is wishful thinking because most of the folks who fit those bills wouldn’t come work with us anyway. But had we been able to build out our executive senior team faster and with more talent early on in the process rather than two or three years in, I think we could have even grown faster than we did and grown in a way that would have been even better for our investors? But I think the single biggest lesson and I’ve talked to people all the time, it’s about people, and you have to make sure that you have the best talent around you, and you set up the incentives for that talent to make sure everybody’s pulling the same way, and I think that’s a huge thing. One of the other things along the same line, when we started our real estate business, a very important advisor to me, who is to this day an advised lawyer and very close to us and has been involved with us in this business said to me as I brought my two younger and other partners into our real estate business who are my partners today in this cannabis business as well, said, “Whatever you do,” — every other advisor said to me, “Give them a tiny piece of equity. You’re putting up all the money. Give them a small piece of equity, but don’t make them your equal partners.” I had a different view then. I’m not sure I understood why, but we created a true partnership where our incentives were perfectly aligned with each other. We committed to each other that any other investments of any kind, we would run by each other and agree we would offer them to each other before we ever did anything with anybody else. That has enabled us to grow in the real estate business and, more importantly, this cannabis business in a way that it might not have been so easy to do had we not done that. I think alignment of interest and focus on the long-term, not the short-term are just critical things, which I think a lot of people don’t understand.

Alejandro: Yeah. I couldn’t agree more with you. Mitch, for the folks that are listening, what is the best way for them to reach out and say hi?

Mitchell Kahn: I am You can find us on the website. You can find my personal email there. Please feel free to email me anytime. It’s mkahn @ I’m happy to connect with anybody who’s interested in talking about business opportunities.

Alejandro: Amazing, Mitch. Thank you so much for being on the DealMakers show today.

Mitchell Kahn: My pleasure, Alejandro. Thank you very much for your time.


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