Parallel Chairman & CEO Beau Wrigley Talks CPG, R&D and Market Expansion

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Multi-state, vertically integrated cannabis operator Parallel—run by the former CEO and namesake of the Wrigley Company William “Beau” Wrigley Jr.—made headlines earlier this year after announcing the company would combine with special purpose acquisition company Ceres Acquisition Corp. in a $1.9-billion deal expected to close this summer. The merger would allow Parallel’s team to make a public offering while continuing to grow the business through mergers and acquisitions.

Wrigley outlines the benefits of the deal, Parallel’s market expansion strategy, the company’s clinical research partnership with the University of Pittsburgh School of Medicine, as well as why he believes there’s still “a ways to go” before cannabis can become a true consumer packaged goods (CPG) industry.

Editor’s note: A condensed version of this article originally appeared in April 2021 issue of Cannabis Business Times. It has been updated to include details from the company’s Windy City Cannabis acquisition in Illinois, as well as the recent termination of Kim Napoli, Parallel’s former senior director of corporate social responsibility. This interview has been edited for length and clarity. 

 

Cassie Neiden Tomaselli: What enticed you to participate in this industry, and how do you see cannabis evolving as a consumer packaged good (CPG)?

Beau Wrigley: What got me into it was health and wellness. When I really started to understand cannabis—going back a couple years—I realized that it really has the potential to truly improve people’s quality of life. And obviously I’ve been successful and fortunate to run a couple different businesses. But when you can have a business that brings that to people, potentially all over the world, it’s a pretty high calling. And it’s pretty great to be involved with the foundational aspects of an industry that’s new.

On the CPG side, it’s interesting. Obviously, that’s my background; I spent many years in CPG. There are parallels, pun intended, to CPG with this, but I think it’s going to be a while before this really looks like a CPG business. You’ve got a highly regulated environment, and I think a lot of people get overly optimistic about legislative changes that are going to change things dramatically in the near future. I think it’s a little further out. Things like being able to sell outside of regulated stores is a big issue, and that doesn’t necessarily match up with your traditional CPG. A retail environment and what you do with a retail environment does match up with CPG, but you’ve got regulations on packaging and you can’t ship products across state borders. And then every state has a different regulatory environment, so you don’t have any consistency for mass marketing. So, there’s still a ways to go from a CPG standpoint.

 

CNT: While the industry is continuing to advance, what ways can Parallel enter the mainstream, drawing on the experience that you have with the legacy Wrigley brands?

BW: I think what we bring to the party is legitimacy because, frankly, my name and reputation for quality, consistency, efficacy, doing the right thing in terms of building companies, taking care of employees, developing great cultures. Our intent is to create a gold standard in this industry. We’re not necessarily trying to be the biggest, but our intent is trying to be best from a compliance standpoint. So I think we can set the table in that regard, and then that will give people more confidence in the industry as a whole. Then the way we approach it in our retail stores is very much one of education, and that’s just a matter of time—to educate people on these amazing benefits of cannabis.

 

CNT: Parallel’s expansion strategy seems to be that you go very deep into the states that you’re in (Florida, Massachusetts, Nevada, Pennsylvania, Texas), instead of rapidly moving into multiple states. How do you think your focus will help the Parallel company over the long term?

BW: I feel strongly about this: Businesses are more successful when they’re focused. Now, you need to be focusing on the right things, and that’s what sometimes trips other businesses up. And I love our footprint. We are in high population markets with a relatively limited number of licenses on a comparable basis. We’re always looking at different markets, and we have applications in for licenses in a couple different states. But to go out and really add to that footprint, [whereas] we could do so much with our existing footprint—it’s like, why would you open up another front? I think it will serve us in terms of the depth of our customer base and the ability to build a strong business and be more competitive longer-term.

 

CNT: Parallel recently acquired Windy City Cannabis, which will give the company a significant presence in Illinois’ medical and adult-use market. What made Windy City specifically most attractive to Parallel as a point of entry to the state?

BW: I would say several things. One, it has four stores up and running and a viable ongoing business, so it’s not starting from scratch. Two, they have two more stores, which will be opening shortly, so it will be a total of six against the cap in Illinois currently of 10. So it’s a significant store count for us with significant revenue that is anticipated to flow through those stores very quickly. Three, I like where the stores are because they’re dispersed throughout the state in places where, in many cases, there’s less competition. I think sometimes that’s overlooked. [Being] in the middle of the city can be good, and there can be volume and traffic there, but there also can be a lot of competition from that. It gives us a foothold continue to expand our business and expand our brand. [And] we were able to acquire this company, pending approval [from the Illinois Department of Financial and Professional Regulation], at the right price.

CNT: Could you share more details about the Ceres business combination announcement? How does this set you up for your upcoming public offering?

BW: We’re very pleased with the relationship with the Ceres folks. They’re knowledgeable about cannabis, which is really great. And they do bring a network and a certain expertise in media and entertainment, which is highly relevant, not from a licensing standpoint necessarily, but more from the challenge that I think every company, whether it’s CPG or otherwise, faces today which is: How do you reach your consumers? And in our case, we have multi-generational consumers who are 21 to 80 [years old], and it’s all about really unlocking the code to how do you do that.

And I think they can be very helpful for the company in that overall relationship. Obviously the transaction will put more cash in the piggy bank, so to speak, so it allows us to keep investing in a whole host of meaningful initiatives that we have as a company. And the timing is right now because people are beginning to take a harder look at the fundamentals on what makes a good company in this business. In the early days it was, “If it’s a weed stock, I want in. I want to say I own a piece of that.” But now people are starting to say, “OK, wait a minute, there are differences between these companies.” There’s differences in the boards of the companies, there’s differences in the footprint. Another difference for us, for example, is our intense focus on R&D and innovation, and we invest a lot in that. There are a lot of other companies that aren’t really doing that to the same degree.

 

CNT: The Boston Globe and MassLive reported that Senior Director of Corporate Social Responsibility Kim Napoli was recently terminated as a result of a breach in Parallel’s conflict-of-interest policy—because Napoli’s husband, Jonathan, had acquired a license to sell cannabis in the state of Massachusetts. Can you confirm these reports?

BW: Yes, this is 100% a significant conflict of interest. We have had a clear and strict policy, and that policy is that you cannot be employed by us and be in a competing business. It’s not about an individual, it’s not about social equity. If someone was working at your donut shop and opened a donut shop next door, or frankly, anywhere—and you had intellectual property, you had plans, products, would you want them in your donut shop when they’re going to be in competition with you? It’s a policy that protects the company and it also protects our associates.

I have great respect for Kim, she’s done a lot for the company. We promoted her within the organization when we purchased [New England Treatment Centers (NETA)].

Editor’s note: Cannabis Business Times/Cannabis Dispensaryreached out to Kim Napoli regarding her termination from Parallel. Napoli declined to comment on the record.

 

CNT: There are reports of some fallout from the decision. How are you communicating this decision to your social equity partners as well as your employees and your other stakeholders?

BW: It’s a tricky one, it’s a fair . I am not aware of significant fallout. I think that’s sensationalized media. We have had conversations with anyone who wants to raise it. We have had general communications within our organization and others. We also believe in, to the degree possible, respecting people’s privacy within the company, so we’ve tried to navigate that territory as carefully as possible.

 

CNT: Is there a plan now to fill the position of senior director of corporate responsibility?

BW: Absolutely, there’s a plan to backfill to continue to add to all of our efforts across the entire company in every market we function in. I am a huge, huge supporter [of corporate social responsibility]. That’s why we have all the policies in place that we do, and all the benefit programs. And we’re taking action. It’s not about writing a check. It’s not about saying things. It’s about doing things.

 

CNT: What are some of the Corporate Social Responsibility (CSR) initiatives that the company is taking?

BW: We kind of have a three-pronged approach. We have an external approach to it with our partners out there, and that can be Cannaclusive, or CultivatED, or Minority Cannabis Business [Association]. We have an internal aspect, where we have Employee Resource Groups: we have Black Empowerment Network; we have a Pride group [Pride at Parallel]; we’re launching shortly a women’s initiative throughout the company [Women Impact Network]; we have Parallel Cares, where we match donations that people want to direct in certain ways. And we have an employee relief fund, so if someone needs help at a critical time, we’re there as a company to stand by. So we have a lot going on, and it’s very deep and thorough. I think people are going to start looking into companies like ours and saying, “Wow, OK, they really get it and they’re really doing the right thing in spades.” That’s what differentiates us as a company.

 

CNT: Why do you believe it’s so important for the cannabis industry in particular to take on these initiatives like you’ve just outlined?

BW: It’s important for two reasons. One: it’s a young, newly developing industry; it’s always good to start with the right kind of foundation—and not do something and try to convert later. And I think it’s important again to set the example because there are a lot of people who haven’t run companies who are in the cannabis business, so I think it’s important for them to start thinking about these things. And then there’s social history with regards to cannabis, [such as] incarceration of people for past offenses during different times. All of this is not saying we can go back and change history; we can’t, but we can do things right going forward. But doing things right going forward is in a holistic approach, not just trying to solve for one thing, [for example,] expungement. Great idea, but let’s be holistic and make sure we develop a workforce that’s inclusive. 

 

CNT: Can you talk a little about the partnership with the University of Pittsburgh School of Medicine for clinical studies on sickle cell disease, and why you’re focusing there?

BW: We’re excited about our relationship there because something the industry has lacked for many, many years is legitimate research to prove out many of the things that people already know and feel. Even though it’s anecdotal, it’s improving their quality of life, so it will be nice to substantiate some of that over time. Sickle cell is the tip of the iceberg, we’ve got lots of things we want to do with [the University of Pittsburgh School of Medicine] over time. It’s a good place to start, primarily because [sickle cell disease is] something that afflicts a disproportionately high number of African Americans. And African Americans have been disadvantaged by the whole cannabis industry, and that’s something that has to be acknowledged. Maybe we can come back and really help that particular population with one of the first initiatives. But there will be other studies addressing different [ailments] as well. 

 

CNT: What about your in-house R&D? Are there any other products or delivery methods that you’re particularly excited about?

BW: I would say beverage is very exciting. And we have in-house technology on beverage, which I think is very good, [that] allows us to basically emulsify cannabinoids in liquids—some with mild taste effects and others that are actually tasteless. So we feel that in the coming months here we’ll be able to launch some products and differentiative in a very good way in that category.

 

CNT: What about running a vertically integrated cannabis company keeps you up at a night?

BW: What keeps me up at night I would say is regulatory uncertainty. The number of regulatory bodies, and in some cases, their propensity to change the rules. It’s very difficult to run any business when the rules are changing all the time and when you’re really highly restricted. It’s an education process, but unfortunately in many cases, it takes quite a while to educate regulators on benefits of doing things certain ways. It’s not the industry trying to take advantage, it’s just, [they’ve] got to understand: the beliefs of the 1960s don’t hold muster anymore, and we must move into the next century here. And as such, we need to think about the economic benefits and the employment benefits, and work more hand-in-hand with the industry. I would say the other thing that keeps me up at night is the possibility that maybe a less sophisticated operator will cut corners and do something that could be detrimental to the industry that we’re trying to create the gold standard for in terms of compliance, relationships and the like.

 

CNT: What helps you sleep at night then?

BW: I have a very supportive family, which is No. 1, and that’s pretty awesome. And it’s just experience dealing with these sort of things. I’ve seen a lot in my years and career and so don’t tend to get too flustered by things, and [I] know what we can’t control and how we are going to find our way through it. Every day in this business you wake up and the landscape has changed to a certain degree, so you just have to look at it and say, “OK gosh, I thought we were going to go here, but we’re going to have to maneuver a little because now there’s a mountain in the way.” It really comes down to your attitude and approach and your experience I think, so I sleep pretty well.

 

CNT: Where do you see Parallel in the next five years?

BW: Lots of growth. We’re going to continue to innovate, diversify our portfolio. Beverage is part of that. Rare cannabinoids is part of that, and that’s the individualized cannabinoids a lot of people don’t really know much about—things to address sleep, to disrupt healthcare—three to five years for sure we’re going to see things like that in the marketplace, and I think we will see continued behavioral change and adoption in numerous states. We’ll be focused, but we will continue to grow our footprint to some degree. I think you’ll see some loosening of restrictions at a federal level, but I’m not convinced we’re going to see massive legalization change in the near term.

 

Cassie Neiden Tomaselli is a contributing editor to Cannabis Business Times and its sister publications Cannabis Dispensary and Hemp Grower. 

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