Photo: Christina Winter/Unsplash
Robert Beasley is the CEO of Fluent (Cansortium Inc.), a multi-state operator (MSO) in the Florida and Pennsylvania medical cannabis markets that also has its sights on Texas. His road to Fluent is paved by an environmental science undergraduate degree and a law degree. After first helping Floridians through the state’s medical cannabis licensing process, Beasley went on to advise cannabis clients in Oregon, California, and Washington, D.C.
After advising Fluent on how to remain solvent in 2020, he became CEO of the firm and took a hard look at the business’ far-flung ventures. Beasley noted the firm was, at one point, “asset heavy and revenue depleted.” He set about fixing what could be fixed and cut losses on ill-timed or overly expensive operations. He closed down operations in Brazil, mothballed operations in Colombia, canceled plans for a start-up in Australia, and shuttered the firm’s Michigan facility that was struggling under local opposition amid falling cannabis prices. The firm’s Puerto Rico operation was “taken by the storm.”
Beasley asked himself, “what’s making us money, and what’s not?” He then cast his business acumen on the Florida operation and began changing the culture within the firm from the “green rush” period to one more suited to the realities of the present-day cannabis business. Fluent now has 30 stores in Florida and will open two more this year. They also have three dispensaries in Pennsylvania and Beasley is currently working with Texas officials to open an outlet in Houston. Fluent has opened 14 stores since Beasley became CEO and he refers to his work as “growing through contraction.”
Beasley is forthcoming on the business environment in different state markets. Regarding Fluent’s Pennsylvania business, Beasley said, “I love the market,” with its “high blue collar population that really embraces” the medical cannabis program. He is circumspect about the company’s Pennsylvania presence, however, noting his firm buys wholesale from a cultivator in the state that “has a retail outlet right down the street.” The company has three retail locations in Pennsylvania, but Beasley said Fluent “has to go vertical in the state with bigger MSOs coming into the state and buying up production and stores.”
Fluent’s Florida business is “not all indoor,” but “the cost of production is pretty high,” even as they also grow in a greenhouse and outdoors. He pointed out that 42% of the firm’s Florida business is flower and “you have to grow ‘A’ flower indoors,” which is expensive in the state. Fluent’s greenhouse and outdoor production go into making cannabis oil for their many other products.
“Flower is not just one thing,” Beasley said, but there’s a limited number of flower products, while “oil can be many things.” He noted consuming flower “has to be discreet,” whereas vapes and other products do not require as much discretion. In other words, if consumers don’t have to smoke the product, they can use it in more places. He also noted that younger and newer users are more likely to try extracted and manufactured products than longtime cannabis smokers, suggesting natural demand for flower will fall as new consumers enter the market.
Beasley said the Michigan Cannabis Regulatory Agency was “not doing its job” in policing illegal cannabis imports in the state. He believes “your [state cannabis] regulator is your partner and you depend on them to keep everyone else in line.” He saw “the big guys were getting Michigan indoor [growing] up and running” as Fluent was entering the state and “the market split for quality,” between “indoor and lower quality” product – namely hoop house and outdoor grown.
Fluent calculates for seasonal price losses due to Croptober, said Beasley, but “Michigan prices fell seven times as much as the company predicted because of supply coming into the state from the West.” Beasley also noted that Michigan licenses were “$400,000 and only good for a year,” meaning there was no residual value, so no market for existing licenses. Fluent is no longer in the state.
Beasley praised Texas’ Department of Public Safety (DPS), which opened their license application window for medical cannabis businesses in January 2023, saying “DPS was very supportive” in the licensing process. Fluent is focused on the Houston market in particular with a vertically integrated business model. Beasley explained the company won’t focus on Texas as a whole, but “will own Houston.”
Beasley has consulted in many states in the Southeast and said those states, generally, “are going to start very limited and tight in medical and then you have limited licenses, some verticals and some independent retails, which are the real opportunity for social equity programs.” He elaborated, “it’s not a real social equity program if you give someone a license for retail but they still need another $70,000 to support it.”
Beasley is a supporter of social equity programs, but when he looks to the north, he is of the view that the programs “are not well thought out.” He’s pushing for license rollout schemes in which licenses are allocated by regions in states, as in Pennsylvania. Beasley explained, “it’s not a bad thing to be the only retail in a small town, otherwise businesses will cluster in the big cities. Forcing that diversity of coverage is good for the patients and good for the states.”
Does Beasley support legalization of adult use in Florida? ”Fluent is not yet in the production state for us to go recreational,” he acknowledged. “We’d like to be better positioned.” Beasley warned, “We are very quickly getting to where we are going to follow some of these other states where you have 20 existing cannabis companies and you let 20 more in and we only have 800,000 cannabis patients.” In his view, “The next move by the state, letting more licenses in, I think the economics of the business in Florida will suffer if we do not go recreational.”
Fluent has a large and growing presence in Florida and is bullish on Pennsylvania and Texas. Its current leadership has been through a business cycle – overbuilding, cutting back, finding new opportunity, and pushing forward through the tough times – and weathered all of it while expanding in selected markets and honing strategy along the way. Beasley has been through tough times, made the hard decisions, and advised other states on how they might move forward. He’s got his eye on the future of the industry and plans to get there.