Gage Cannabis Inc. has been one of the leading “high-end” licensed producers in Canada for the last ten years, producing award-winning flower. In a recent interview, CEO Fabian Monaco discusses the challenges faced by the medical sector of the cannabis industry, and why he believes cannabis is the key to the future of health.

I’ve been meaning to post my chat with Fabian Monaco, CEO of Gage Cannabis, for some time. I found Fabian via their website,, which is a very impressive company.  In the chat, Fabian tells me about Gage, the plans for the future, and the challenges they’ve faced so far.

The legalization of marijuana and cannabis-derived products has been a hot topic in the news lately, and not just because the topic has come to the forefront of politics once again. The legal cannabis industry is a booming one, too, with more than 24 states allowing medical marijuana, and six states and the District of Columbia also allowing recreational use. And as more states consider legalization, the cannabis industry, with its taxes and opportunities for new jobs, shows little sign of slowing down.

In this series of Flower-Side Chats, Green talks to integrated cannabis companies and flower brands that are bringing unique business models to the industry. Particular attention will be paid to how these companies are integrating innovative practices to navigate a rapidly changing regulatory landscape, supply chain and consumer demand. Michigan’s cannabis market is keeping pace with the big players like California (#1) and Colorado (#2). In the first quarter of 2021, combined cannabis sales in Michigan totaled nearly $360 million. At this rate, Michigan’s cumulative revenue could reach $1.4 billion, far more than the $984 million in 2020. Gage is the exclusive producer and retailer of the world’s leading cannabis brands, including Cookies, Lemonnade, Runtz, Grandiflora, SLANG Worldwide, OG Raskal, as well as Gage’s own portfolio of brands in Michigan. The company recently received a $50 million investment in a new funding round, including a $20 million investment from JW Asset Management. We spoke with Fabian Monaco, CEO of Gage Cannabis. Fabian founded Gage in 2017 after meeting with his operating partners in Michigan. Prior to joining Gage, Fabian was an investment banker and completed a number of landmark financings and M&A deals in the cannabis sector. Flower-Side Chats Part 6: A Q&A with Fabian Monaco, CEO of Gage Cannabis Aaron Green: Tell us how you got into the cannabis industry. Fabian Monaco: I work in investment banking – specifically, 10 years of experience in capital markets. I was fortunate to be part of the original team that brought Tweed, now Canopy Growth, to the stock market. I have been involved in many industry firsts: the first acquisition, the first $100 million financing, the first IPO in the industry. Shortly after, I moved to XIB Financial, which co-founded Canopy Rivers with Canopy Growth. I was working on it when I came across these two phenomenal operators. I visited over 100 of these grow facilities during that time, and they were some of the best operators in the industry. This led me to found Gage in 2017. Green: Where is Gage currently on a mission? Fabian Monaco, CEO of Gage Cannabis Flower-Side Chats Part 6: A Q&A with Fabian Monaco, CEO of Gage Cannabis Monaco: In the United States we operate exclusively in the state of Michigan. We have a licensing agreement with a small manufacturer in Canada, so you will see the brand there. Green: Tell us about your decision to start a business in Michigan first? Monaco: If Michigan is considered a historic cannabis market, for nearly a decade it was the second largest cannabis market in terms of health card holders, behind California. This was probably the case until 2019, when they switched to adult use. So we knew that this medical base would be a great platform to enter the huge market of apps for adults. And we’re already seeing $154 million in revenue in April, for a total of more than $1.8 billion. This is the third highest rate in the country, behind California and Colorado. Green: What makes Michigan different? You’ve already mentioned medicinal cannabis. Is there anything else about Michigan’s demographic or consumer base that makes Michigan special in this regard? Monaco: In Michigan, more than 70% of the population is of drinking age. So when you look at the percentage of the population that is 21 and older, the overall market in Michigan is huge compared to other markets. Second, if you look at consumption patterns, especially with respect to flowers, Michigan is one of the states with the highest per capita consumption. These two statistics created a scenario in which we predicted market potential. Frankly, the market has exceeded our expectations. We didn’t think he would be so strong so soon. Current projections are that the state will be a $3 billion market by 2024 – and that could easily become more. Green: Are there any plans to expand outside of Michigan? Monaco: We have been in eight different states over the last 60 to 75 days, trying to look at the licensing structure, the markets and the key players in those markets. What are some of the costs associated with acquisitions? We look forward to expanding the Gage brand to other states. Here’s the thing: We believe in the model Trulieve used. They are really focused on being number one in a very, very large market. Trulieve, for example, is clearly one of the big players in Florida. We are trying to emulate that strategy. Trulieve dominates Florida market Flower-Side Chats Part 6: A Q&A with Fabian Monaco, CEO of Gage Cannabis Once we reach that kind of market penetration, that kind of market share, then we go to other states. But why go to another state when you’re already in the third largest market in the country? Green: Are there any criteria you consider when choosing a potential state for expansion? Monaco: We study consumption patterns. We need states with the same demographics as Michigan. The proximity of the states also allows us to travel quickly from one state to another without having to take a multi-hour flight. We are looking at states in the Northeast and Midwest, such as Illinois, Pennsylvania, Ohio, New Jersey, Massachusetts and Maryland. Green: What consumer trends are you seeing in Michigan in terms of merchandise? Monaco: The flower continues to dominate. In a market like Michigan, we have one of the highest per capita flower consumption rates in the country. We specialize in colors and only colors, so it was the perfect scenario for our brand to evolve quickly in terms of colors. Now that we have brand equity and brand power, we may move into other categories, including extract-based products such as carts, vapes and concentrates. We hear about these new drinks, but we don’t see them spreading in this market as much as we think. The flower is still at the top, and we really hope it stays there for a long time. Green: Tell us about your vertical integration strategy. Monaco: We are currently one of the largest retail portfolios in Michigan. We have 13 branches. Nine of them are active. So we are in an excellent position in terms of the size of our platform – one of the largest – and frankly in one of the largest markets in the country. Flagship Dispensary The Cookies in Detroit, Michigan. Flower-Side Chats Part 6: A Q&A with Fabian Monaco, CEO of Gage Cannabis We actually have a somewhat unique scenario in terms of culture. We have three production facilities that will produce an average of about 1,000 pounds of product in the next few months when they are running at full capacity. In fact, we are responsible for the growth of many plants. Cultivation takes time and is also very, very expensive to set up. Fortunately for us, we are an established and strong brand. We had the opportunity to have a growing contract. So we have 10 different contractual growth partners. They are phenomenal growers, again one of the best in the state. They grow the Gage and Cookies brand products for us. From a financial standpoint, we have a great escape route. We share the revenue with them on a 50/50 basis. You also pay a little for packaging and testing. So basically, for $0, we have a product on the shelf where we get 50% more gross margin. From two breeding facilities in the second half of last year, we’ve gone to eight different facilities, and by the end of this year there will be 13. As for recycling, we are in the process of completing our recycling lab. We expect to begin production of extract-based products in the third quarter. We are very excited to have our own line of extract-based products. For now, we plan to focus on shopping carts – this is a very popular category in Michigan retail. Green: Are all these plants grown indoors? Monaco: Yes, we are big fans of house flowers. This allows us to check the quality of the taste and the consistency of the varieties, as they are grown in-house. There is a very high demand from our consumers for high quality local products. Green: What sets Gage Company apart from its other competitors in Michigan? Monaco: I’m thinking of concentration. We concentrated on our flower. We focused on the post-production process. We dry everything on a rack, cut by hand and pack by hand. It takes a little longer. It’s a little more expensive. But all these efforts are reflected in the final product, which is the deciding factor. Many people think you just grow a good product, cut it, dry it, put it in a bag, and it will be great. You really have to pay attention to the details, especially in a large consumer market like Michigan, because again, these are sophisticated consumers. They’re looking for the best. They have been eating the best produce in the country for years. That is why we have developed a meticulous process for the production of the flowers, not only in the area of cultivation, but also up to the end of the process after production. Flower-Side Chats Part 6: A Q&A with Fabian Monaco, CEO of Gage Cannabis In addition to the cultivation process, we also constantly offer the consumer new flavours in the field of flowers. What makes the successful California brands so special is that they are constantly searching for phenotypes and coming to market with new flavors. It’s like in the wine industry, where the best wineries release a new variety or blend, and consumers get excited and rush out to buy a half dozen or a dozen bottles. A very similar scenario in the cannabis industry. I hate it when people say cannabis is a commodity industry. This is far from the truth. Look at brands like us or Cookies, Jungle Boyz and you see their constant innovation, their constant drive. They always bring something new for consumers to try. This is what really sets the best brands apart. Green: What are the three most important criteria you look for in a growth partner? Monaco: Someone who has a similar culture to our company. Of course the quality of the culture medium itself is also important. We carefully examine each contracted manufacturer. It was indeed an arduous process that took months. First we bought products in bulk from these partners, then we gave them some cuttings of our clones and watched them produce small batches. When we saw that, we got to know them personally, saw what they could produce with our own genetics, and then we said: Okay, do you want to join this program? Flower-Side Chats Part 6: A Q&A with Fabian Monaco, CEO of Gage Cannabis The program is in high demand. At this stage we have limited the number to 10. In time, we will be able to grow. We can conclude that these manufacturers produce products of excellent quality. Green: What have you noticed about the cannabis industry? What would you like to know more about? Monaco: I’m always intrigued by new ways of consuming. All over the United States and in mature markets like California and Colorado, you see all these new ways to consume the product. They have patches, sublingual strips, etc. There are so many unique options. I am currently observing their development. Are they a fad? Do people come and admire them first and then go back to their shopping carts, pens and flowery, mostly dried prerolls? I’m always trying to educate myself to know what’s out there. What’s new? Who’s got a new drink? How does it work? Do people care? Plus, I’m constantly discovering new brands that appear. There are so many new small brands out there that don’t necessarily have the size or capital to really grow, but are making some of the best products in the country in cool, unique packaging, etc. Green: Okay, great. That’s the end of the interview! Monaco: Thank you, Aaron.If you’ve been following my blog posts, you know that I’ve been having conversations with cannabis industry leaders about how they’re going to get to where they want to go. As part of that process, I’m posting all of these Q&A’s on the site. My reason for doing this is simple—I want to share my thoughts with the readers of highyields and get them thinking about the future of cannabis. I hope you enjoy the dialogue as much as I have!. Read more about fireside chats purpose and let us know what you think.

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