Grizzle sat down with Trulieve CEO Kim Rivers for an exclusive interview. We caught up with Kim to hear how she is adapting as Coronavirus cases continue to spike in Florida. Kim also addresses how Trulieve is keeping employees safe from the virus and handling testing, contact tracing and quarantines. Lastly, we talk about the upcoming share unlock and if investors should care. https:\/\/www.youtube.com\/watch?vlSnOjTbt5MY Full Transcript Scott: All right, everyone, welcome back to Grizzle's Interview Series. This is where we try to interview CEOs that are going to bring insight to the cannabis industry. And I'm joined again by one of my favorite people to interview. It's Kim Rivers from Trulieve. She always brings a lot of insight to what's happening on the ground with Trulieve as well as what's happening in the industry. So, she's a great resource for us to talk to and someone you should definitely listen to. So, Kim, thanks for joining us today. Kim: Thanks so much for having me, Scott. It's always a pleasure. Scott: Great. So, I know that some of our viewers saw that we had spoken early April, which is right around when Coronavirus was starting here. What's going on with Trulieve? You know, even though the landscape is changing so quick, your delivery was up 500 percent? Seems like generally things were -- you are benefiting from the Corona virus at that point because of the spike in demand. But now, you know, we're four months in -- case counts were low in Florida and now they're going up. Just would love to hear an update from you on what the operating environment is like. Have you had to change what you're even doing from June versus April? Just an update would be helpful. Kim: Yeah. No, absolutely. I appreciate the question. You know, we are definitely in a marathon, right? Not a sprint. And I think that although because things do change rapidly, there are kind of sprints embedded in the marathon, if you will. And so, you know, as we talked early on into your point, we did see demand increasing. And we saw, you know, again, at our company, along with others, having to pivot in terms of how we were providing access to medication. And as a reminder in Florida. We, along with cannabis companies in general, were deemed essential very early. And so that's been helpful and that we've known that we are expected to stay open and to provide access to medicine for folks. And so really, it's been our job to make sure that we're doing that in a safer way as possible and that we are giving folks options on how they would like to receive their medicine. It's been interesting because in Florida, to your point, you know, early on there was a statewide stay at home order that was passed by the governor. And so that resulted in what we saw as increased demand and not so much basket loading because we saw the frequency remain the same, as we went over in our Q1 earnings call. But really just heightened consumption. And so that was happening during that stay at home order timeframe.\u00a0 Kim: And after that happened then we entered into this phase one reopening. To your point, right? The numbers were supportive of that. At least our governor believed that, that was the right move. And so, we moved into a shift where businesses were reopening. We did see a change in consumer behavior following that reopening activity whereby folks started to come back into a walking pattern in our stores. Now, importantly, and I think that this is interesting, our pickup order and business did stay relatively high. So we sit today at over 50 percent, approximately 50 percent in that rapid pickup place, which is great because we're able to control the flow through our dispensaries and we're able to minimize contact and keeps it from distancing protocols utilizing that channel. Interestingly, though, when the reopening occurred, I think folks just wanted to leave their houses. Honestly. And so, we did see an increase in folks wanting to come back to the stores. And now in recent days, right? We have seen cases increase in Florida certainly within the last week. And that data -- testing data coming out, which we've all heard about. Kim: But, you know, even on the national news channels. And so, we are starting to see a shift back to delivery becoming more prevalent again as well as, again, that steadiness in our pickup channel. And so, we have, of course, all the tools in our toolbox. We've got cars available so that we can handle the increases in delivery. We're also, if you'll remember, as we kind of progressed through the cycle, we did convert stores to pick up only locations. We're looking very seriously at doing that again. We also have curbside pickup available now for folks who need it, but potentially rolling that out in a more robust way also. So, we want to make sure it's a balance, right? Want to make sure that we're listening to patients. We have availability for patients. And as an essential business, we feel like that's our responsibility, but that we are, of course, making sure that we're being very conscientious and safe in terms of how we're providing those products to folks. Scott: So it sounds like from a demand perspective, demand is still growing as it has for you guys quarter after quarter. So that's why even though there may have been less delivery, less pickup at the door, that has kind of stayed flat because overall demand is still going up. Kim: Yeah, I mean, just a couple of stats on that, that I pulled. I mean, I think it's important to look at kind of a couple of things. So, the first thing to look at that we look at very closely as new patients coming into the program. So really, if you look at new patient growth, so in that kind of a halt, at the height of the stay at home orders, new patients dropped off a bit because non-essential and also elective procedures, medical etc. closed. And so, a lot of doctors\u2019 offices actually weren't open. But since the reopening, if you will, new patients have actually increased to over -- this past week we had five thousand -- almost five thousand five hundred new patients enter the system in Florida, whereas pre-Covid we were at about two thousand at twenty five hundred patients per week. So, it's been almost a doubling of new patients entering the program. The second thing is when you look at overall trends across, you know, the OMMU data, which we all know and love. If you look at the beginning of the year and virtually, we started the year at between selling on a weekly basis between 30 and 40, about 40 million milligrams of oil and about nine thousand ounces of flour. Kim: And this past 30 days, just to kind of give you a comparison on a weekly basis. We're selling approximately 60 to 70 million milligrams and about 20,000 ounces of flour. So, you can also see the growth just from as we enter 2020 to now. And then you layer on obviously Covid on top of that. And, you know, it creates a kind of interesting, I'll say, environment for cannabis in the state of Florida. Scott: Those are my questions about that. You know, you said that people were buying more oil in April. It sounds like oil demand is still strong in this environment. Kim: Absolutely. Scott: Interesting. And also, I was reading that edibles are going to roll out sometime in the future in Florida. Could you give us an update? When do you think that you might be able to carry those in Trulieve dispensaries? Kim: A crystal ball question. And so, you know, I will say that, you know, and for those of you who heard me talk about this, I apologize for a little bit of the broken record. I do believe edibles are coming in this year in 2020. And there were three basically rules that needed to happen prior to edibles being released. So, waste disposal, testing protocols. And then finally packaging, which all have an edibles component to them, which is why it was important for them to be released. So, we are through two of those. Testing procedures actually went into place about two and a half or three weeks ago. And now I will say that, that is causing -- because of the differences in the new testing regulations, it is causing a little bit of a delay in getting inventory to market. So, you may see across the board a program this week. It'll be interesting to watch in the numbers -- across all of the companies whether or not that has been -- that has had any impact on numbers. Kim: But everyone's playing catch up. And so, it should rectify itself within, I would call it a week's time or so, on that front. So, we now are just waiting on packaging. My understanding is that rule has been drafted and is ready to be released. Obviously, with the swing back and attention to Covid, I'm not sure if we'll see that. Well, we were really hopeful that we would see that sometime in July, but it may get pushed a bit. And then after that's released and, you know, the next one up would be edibles. So, for Trulieve's perspective, we have all of our approvals for our kitchen from the Department of Agriculture, completed. Our asset plans, our food safety plans, et cetera. So, we really are just waiting on, again, those rules to be passed by the Department of Health. We do think that it is going to be a catalyst for this market. And we know that there is a pent-up demand for edible products in Florida. Scott: Okay. So, you seem -- like there's a very good chance you think that by the end of the year you should have something? Kim: That's I mean, all signals point to that. I mean, obviously, we don't control the macro forces that are at play here. And with the Department of Health being our regulator. But I do know that the director of the program does and has stated that that he's definitely -- it's on his goal list to get edibles to market. Definitely. Prior to session next year in 2021. Scott: Well, that'll be an exciting next step in the state, I think. Kim: For sure. Scott: OK, so there's one question I want to ask you. This is very topical. I saw over the weekend there were some Reddit threads going around with some employees voicing their concerns. Seems like the main concern was around whether you're protecting them adequately against the virus. Also, maybe there -- it seems like they had a lack of communication around how you do contact tracing, how you test everything like that. So, my question for you is, what is Trulieve's policies on Covid-19. And do you think changes need to be made to address those concerns? Kim: Yeah. So, you know, first I'll say, oh, Reddit. Let's start there. But look, I mean, I think that it's always good to have opportunity for feedback and opportunity to be able to take a look at what we're doing and if there are changes that need to be made. You know, I want to make sure that, look, we can talk about what we're doing in response to Covid for the next hour. But I'll try and kind of stick to the highlights. You know, the first thing that I will say is that I absolutely feel like it is our responsibility to make sure that we are keeping our employees as absolutely safe as possible. So that's a hard stop and I think that we maybe have communicated primarily to employees via email outlets and maybe some channels that not everyone checks on a regular basis. So, one thing that we have done is we've upped our communication, commitment to our employees. And I actually just finished over the weekend a series of town hall meetings with all of our retail employees to kind of give them the lay of the land, make sure that, again, we're communicating all that we are doing. I mean, we actually had our facilities toured by both the CDC and the Department of Health, and we're called out for having industry leading practices. Kim: So I do know that we are doing a lot to make sure that employees are safe. And I think that the statistic that highlights that most importantly, is that we have had zero percent of employee to employee spread of Covid-19. So, you know, that's really important. And that has, I think, been accomplished by a number of important things that we do actively. The first thing that we've done is we've required masks for not only all of our employees, but also for anyone who's entering our facilities. We did that really early and that turned out to be very beneficial, of course, in making sure that we did not have any type of community spread within our facilities. Right? In addition, we've implemented and installed medical grade HEPA air filtration systems in all of our dispensaries. And again, as science kind of keeps up or catches up. And we realized that, again, that recirculated air can be a major factor for transmission. That's something else that we do. The third thing that we do is we are cleaning all of the town. And so, I think that there was some confusion around that. And every single one of our dispensaries are sanitized via a decontamination firm every single week. So once a week, every dispensary is being deep cleaned. Kim: Then in addition, if we have someone who's symptomatic or someone who does test positive, we're immediately deep cleaning that facility, then we're also contact tracing. And so, we're contacting that employee, doing extensive interviews and then also watching camera footage to see who would be considered an at-risk employee, contacting those employees and having them tested as well. Importantly, I think it's important for folks to know that we are supporting those employees throughout that testing procedure. So, we're not only helping them get tested. We are also continuing to pay them while they're out for testing. In addition, we have salary continuation that if an employee is deemed to be positive, they are able to continue to receive compensation. We want to make sure that this is you know -- obviously there's a financial element to all of this and that folks are supported during this time. I think that most importantly, though, in terms of an update to folks earlier this week, we were able to successfully negotiate increased health insurance coverage for our employees as well. And so, we'll be in a position to offer at this next open enrollment, health insurance at no policy premiums. So, no cost coming out of employees\u2019 paychecks so that we can ensure that anyone who qualifies for health insurance with us can get health insurance. So, I want to make sure that you want to see a doctor, you can see a doctor, and it's not financially detrimental to you. Kim: In terms of coming out of your paycheck and then with that service, folks will be able to access CVS minute clinics free of charge, as well as have access to Teladocs. And so, again, I think just being proactive in ensuring that folks have access to medical care is really important. In terms of overall numbers, now, I do want to make sure that I give this stat. Scott: Yeah, that would be helpful. Kim: Yeah, we have thirty-four hundred employees. Fifty-two, most recently opened yesterday. Fifty-two locations across the state of Florida. And we have had throughout the entire kind of run of Covid -- so since April, 17 retail employees test positive. That is less than one half of one percent of our workforce. And again, zero percent employee to employee spread. So, as I tell my employees, you know, we can't control your lives outside of Trulieve. And, you know, unfortunately, folks are going to -- there are going to be positive cases. And that's just, I think, a reality of where we are in the state of Florida. But what we can do is we can make sure that you're cared for in the event that you are symptomatic and that you are testing positive and that also we can keep your fellow employees as safe as possible. Kim: The final thing that I'll point out that I'm just really excited about is we are implementing an onsite testing program. And so just this morning at one of our locations, we piloted it with two locations last week and we had the third location this week. We're actually bringing nurses onsite and offering to our employees free testing at a dispensary location so they can get tested if they want to get tested. It's great peace of mind just to level set everyone that they are clear. One hundred percent of those results have come back negative. So again. You know, it's just about -- it's about testing, it's about communication. It's about doing everything that we can in our locations to ensure safety. And I will just mention that as we continue through this, you know, if you are a Truliever, if you are a patient, just to keep up to date with us, because, you know, we may be moving to pick up only. We may be implementing additional curb side. And certainly, obviously, delivery is always available for folks. So, we want to make sure that folks can get their medicine in a safe way, but that also we're continuing to provide that access for them. Scott: Okay. Yes, very good to hear, actually, because, you know, coming from investors who are effective, the most important thing for me is that you have a process in place to deal with cases, to deal with testing. And so, it sounds like you're pretty confident you have these processes in place that you can deal with whatever this virus is going to throw at you at this point? Kim: Yeah. No, absolutely. I mean, obviously, it's changing all the time. I think for us it's to just try and get ahead of it and to make sure that our employees have the best resources and best information possible. And I think that, you know, what we can do as a company and this was really brought to light -- is to make sure that we're being very transparent, real time with our employees as well. And so we implemented, for example, if there is a positive case in your store, we're going to text the entire employee base immediately to let them know that we're going to text people and let them know after contact tracing is done so that they know -- okay I haven't been identified. So, I'm OK. Right? Or oh, I have been. Then also just making sure that they have access to HR, your human resources -- human resources' resources, because this isn't only a physical situation. Right? It's also a stressful and emotional -- emotionally taxing situation. And so just making sure that also folks feel supported throughout this, because we're all going through it and we all need to make sure that we're checking in. And just making sure that folks are doing OK.\u00a0 Scott: Yeah. I mean, I'm sure you agree that your Trulievers, your superfans, they're not just the customers. They're employees as well?\u00a0 Kim: 100 percent. 100 percent. And a lot -- look our employees, a good portion of our employee base, certainly at the store levels, they are patients. And so, they are literally truly versed in terms of the fact that they also utilize our products.\u00a0 Scott: Okay. It's great to hear. More communication is always better than less.\u00a0 Kim: For sure. For sure.\u00a0 Scott: Great. Well, now we've covered that. Maybe we can just go into some of your other assets\u2019 updates and where kind of the future of Trulieve is, because that's what I think is most on the mind of investors. You've become a juggernaut in Florida. You've set the tone for how I think dispensaries will be run and rolled out as legalization spreads. So, as I look at Massachusetts, is Massachusetts kind of the frontier for Trulieve? Is that the state you're -- outside of Florida you're most excited about?\u00a0 Kim: Yeah, I think so. I mean, you know, I think we've made a commitment to get Massachusetts launched in a very meaningful way. I mean, it also, I think will be -- it's exciting for us because we've also had the opportunity in Massachusetts to also launch our wholesale platform, which we've been working a lot on behind the scenes. So, we're very excited and anxious to get that rolled out as well and be able to showcase. Right? Not only our retail strengths, which I think folks are fairly familiar with at this point, but also what I know will be a really strong second revenue stream for us through that wholesale channel. Scott: Okay. Now, just as we compare and contrast Florida, and Massachusetts -- is the permitting environment in Massachusetts just a bit slower than Florida? As we try to plan what's going to come down the road for you guys?\u00a0 Kim: Yeah, it's not just the permitting process. It's also, you know, the approval process through the CCC. So, the regulating body in Massachusetts is -- certainly has a very different protocol and timeline than our regulating body here in Florida. Right? And so, I think that's probably the primary difference. And along with, you know, there have been some differences with just respect to approaches and inspection timing. Certainly, a little bit on the permitting side, but I would say in general, it's more on the regulatory side if I were to point out the main difference.\u00a0 Scott: Okay. So, as we think of how you're going to target your resources outside of Florida, next would be Massachusetts. And then on the California side, like, why did you decide to get into California? Was it you just want access optionality to the biggest cannabis market in the U.S.? Is that basically what it was?\u00a0 Kim: Yeah, that's absolutely a perfect way to put it. And in addition, you know, we really think about California as that cannabis frontier to brands and really understanding what the newest and greatest and latest brands are. I'm certainly in California where a lot of innovation happens, and a lot of trends are set. And so having a window into that, we felt like was really important and has proven, quite frankly, to be instructive as we think about how our shelf space will look within Florida, but then also outside of Florida as we continue to expand the Trulieve concept across different markets.\u00a0 Scott: Okay. So, do you think of it -- is California one of the most mature markets outside of, say, Colorado that can help you figure out what these East Coast states are going to look like down the road?\u00a0 Kim: Absolutely. And I think that it also gives us an opportunity to interface with a different customer base. Right? Like customers who are very, you know, have had access to cannabis for a very long time. And what preferences look like? How those may shift over time. Right? And also, price sensitivities. And again, I can't underestimate innovation. So, a lot of new products that come out, new form factors start. You know, we see those come out and hit the market in California. So, it's interesting -- interesting data.\u00a0 Kim: And it's also interesting for us to bring and be able to test products in that market or test form factors in that market to see adoption rates and how well those will play vis-a-vis, maybe East Coast customers.\u00a0 Scott: Okay, great. This has been really helpful. Before we go, I just want to ask you one question on the mind of all the investors. I see this a lot on Twitter and social media. You have a share unlock coming up. I'm just curious, kind of how do you think about share unlocks? Because I know you guys have pushed it in the past, which is generally just saying you're very confident in the future of the company. So, I mean, is this just kind of for you a non-event because you're operating through it? Or how do you think about -- how should investors think about share unlocks with Trulieve?\u00a0 Kim: Yeah. Sure. So, I mean, I think that look -- I've said publicly, and I will continue to say that, and I think I've shown over time. Right? I'm investing in the company, so I'm a buyer and I'm not a seller and that will continue to hold true. I think that when you look at the history of particularly the boards -- so when you look at the Trulieve unlocks, really the vast majority of shares are held by insider board members that are remaining board members. And so, you know, I would just overlay the specifics and it's different from company to company. I think it's important for folks to be aware of it. Right? And I think it's important for folks to understand who those holders are and, you know, potential motivations. But I mean, I think that overall, what I can say is that, you know, look, this is a -- and I believe a once in a lifetime industry opportunity for us to all participate in. And, you know, I think that we've operated well. I think we're going to continue to operate well. The best is yet to come. As far as we're concerned, in the Trulieve story and, you know, we just look forward to future growth. So, you know, it is what it is to a certain extent. But I think that we've shown that there's going to be you know, it's been very managed in the past. I don't think that there's any, you know, any reason to think that it wouldn't be managed regardless of whether there's an official lockup or not. Right? In the future. So, that's what I would say.\u00a0 Scott: So from your point of view, you still think it's early days in the cannabis market. There's a lot of opportunity?\u00a0 Kim: Oh, my gosh. Absolutely. Absolutely.\u00a0 Scott: Yeah, we share that view as well.\u00a0 Kim: For sure.\u00a0 Scott: All right, Kim. It was great to have you on. Always love catching up. Hopefully, you know, we look forward to seeing what Trulieve is going to do. This environment is as dynamic as they come. So, it will be great to catch up down the road and see how you're managing later in 2020. So, thank you. Kim: Yeah, absolutely. Thanks again for reaching out. And always great to talk to you.