How Kings Garden Rose to the Top of the Cannabis Industry

As with any highly popular industry, the cannabis industry took the world by storm and created a high stakes opportunity that merged changing laws, a complicated black market, and legitimate entrepreneurs who looked to capture an explosive opportunity.

In California specifically, the industry has flourished for decades, as the state was at the forefront of both medicinal legal approval in 1996 and recreational approval in 2016 with Proposition 64. Simply put, the California cannabis market is the most competitive, promising, and renowned market in the world.

At the forefront of the cannabis market in California are entrepreneurs Michael King, Co-Founder, CEO and Chairman of Kings Garden, and Co-Founder and COO, Charlie Kieley. Kings Garden is one of the largest indoor cannabis producers in the state and have developed a strong brand presence on Instagram and in the market . With a dedicated focus on quality and working with state legislators, Kings Garden scaled into 250,000 sq ft of indoor operations consisting of indoor cultivation (3,400 flowering lights), manufacturing, processing, and distribution.

The company is currently producing around 40,000lbs of indoor flower to support their flower line consisting of 1/8th oz jars, 1/4 oz jars, pre-rolls, and grams. In addition to the premium flower line, Kings Garden has an ultra-successful connoisseur concentrate line consisting of shatter, budder, sugar, diamonds, and vape pens. In late 2019, Kings Garden launched their medical product line in a partnership with Avicanna to produce the highest quality medical products consisting of capsules, deep tissue gel, localized cream, tincture and spray. Additionally, a transdermal time release patch will be hitting the market at the end of Q2, 2020.

For those not familiar with the industry, an operation of this scale requires not only deep knowledge, but also financial resources and operational excellence. At this industrial scale, margins for error need to be extremely low, if non-existent. To paint the picture from a financial perspective, in 2019 Kings Garden hit $45 million in revenue (up 50% from 2018) with an EBITDA of over 20%. This is nearly three times higher than the average of the top five publicly traded cannabis companies in the world. Kings Garden is on its way to produce $75 million plus in 2020, and close to $100 million in 2021.

The Q&A below was shared by Michael King and Charlie Kieley, who gave more insight into their start in the industry as well as their success growing Kings Garden:

What was your inspiration behind Kings Garden? How did it all start?

It all started in 2014 with an idea two people had to do something great together in a state and in an industry that operated under some crazy laws and even crazier regulations. This was a time before public companies, public capital, $300+ million raises and everything else we see in the news today. Regardless of all that, the approach was very simple, if we do anything together, we have to do it right and we have to do it big. However, before we do anything, we have to build a model and a foundation which works, can be replicated, and expanded. At the time the goal was to start slow and to build up to a 100-light facility which can generate roughly $2mm gross per year. We knew that if we could build a successful 100-light operation, we could scale it. And so, it began.

After working with the local government and helping them with the licensing process, we were able to acquire one of the first licenses the city made available in 2015. Our first grow room was 16 lights in a 10,000 sq ft facility. We now operate 3,400 lights producing 40,000 pounds of cannabis per year in approximately 250,000 sq ft.

The first project launched 5 years ago to date, which we self-funded along with our partner Ivan Talan, VP of Marketing. Once we realized a working and a profitable model, we began expansion very quickly by locking down opportunities, funding them very quickly and getting operational as fast as possible. Speed was always the number one priority for us because we wanted to get ahead of our competition. We currently operate 12 buildings ranging from 9,000 – 70,000 sq ft, all of which are located in the Coachella Valley – Palm Springs and Cathedral City. The location was always by design. The goal was to have all of our facilities in a concentrated area as opposed to all over the state, thus providing us with operational efficiencies and one of the reasons for a great EBIDTA.

We have been very fortunate to have a lot of great investors who believed in the industry, in the company, and more importantly, who believed in us as people. We owe our investors everything because it was very difficult to raise money at a time of uncertainty and outdated regulations. That on top of a “non-for profit” and “medical” environment, it required complete trust and a vision to understand what a “for profit” business would be like if it actually happens. We raised funds on “per project” basis as the opportunities became available and the raises were anywhere between $2 and $12mm. In all, we were successful in raising $55mm over 3 years – all private through friends and family, and have been able to build Kings Garden together.

2. Given your experience in real estate and finance, do you have an advantage over competition that might lack “real world” business experience?

I don’t know if we have an “advantage” over others, I just know what we have. We never concerned ourselves with what anyone else is doing, why or how they are doing it. We knew what we had to and still have to do. A horse has blinders on in a race to stay focused and not to be distracted by anyone. Our approach is very similar. Of course, our respective backgrounds gave us a perfect partnership in that Charlie was able to bring an extensive cannabis operations expertise which he has been perfecting over the last 16 years.

With a degree in ornamental horticulture, Charlie’s experience included outdoor, greenhouse, indoor and retail operations. Michael brought his experience on Wall Street, specializing in finance, investments, private equity, real estate, and construction. Together it was a perfect partnership where we could rely on each other’s strengths in order to accomplish our goals. To this day, we operate very similarly – 95% of everything that goes on we are both involved in and make decisions on together, the other 5% we handle ourselves and trust each other to make the right decision.

3. What is the biggest challenge of scaling a cannabis operation as big as Kings Garden?

The biggest challenge has been not to lose sight of the details, to always strive for perfection, and to have the same standards if not higher at this scale. When it was one room or one facility with 1 employee it was easy. When you’re pushing 200 employees and an HR, compliance, and accounting departments, in addition to all the other stuff going, it’s easy to lose sight or stop paying attention to the little things. We just have to stay on top of all aspects of the operation and continue to settle for nothing but operational excellence with drive and determination. We are extremely involved in everything that happens in the business on daily basis and must continue to do so in order to be successful.

4. If you could change one thing about the industry, what would it be?

Nothing! We are where we are because of where the industry came from and because of where its going. The more challenges that get thrown at us the more of an opportunity we have to separate ourselves from the competition. Our approach to running our company is warfare. It’s not supposed to be easy and you’re not supposed to know what’s coming. You have to be prepared at all times for everything and anything that can happen. You have to be able to react instantly, adjust, and continue killing it.

If the industry didn’t have its challenges, we wouldn’t be here. We are excited about the new opportunities with the banking act and possible legalization but at the same time we are laser focused on stay ahead of everything that’s taking place now, and making sure that we are in the best position to take advantage of whatever happens next. We love challenges and difficulties. It keeps your mind sharp and allows you to stay focused.

5. What are your main goals within the next five years?

After 5 years of non-stop construction and expansion, we are 100% operational with all of the capital being reinvested back into the brand. We are laser focused on growing our company and our brand both in and outside of the state. We are currently in discussions reviewing both licensing and management opportunities in key states outside of California. We are very strategic in selecting the right relationships, right opportunities, and will continue to be methodical in everything we do.

We cannot forget what got us here and we can never get ahead of ourselves. As long as we are true to our principals and each other, the company will continue to be a leader in the cannabis industry in the future, whatever that future may bring. With most of the foundational work behind us, we are looking forward to building the company and the brand in the years to come. Kings Garden will continue to lead by example in everything we do.


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Kings Garden Announces Expansion via Licensing and Management Deals

Kings Garden, one of the largest and most successful indoor cannabis producers in California, has announced upcoming licensing and management deals in order to capitalize on its rapid growth since launching in 2015.

Co-Founded by Michael King and Charlie Kieley, Kings Garden’s focus on operational excellence and quality has helped log $45 million in revenue in 2019, up 50% from 2018. The company expects to reach between $75 and $80 million in revenue in 2020 and up to $100 million by 2021, with a consistent EBITDA of 20%+, over triple the average of the top five publicly traded companies.

Kings Garden has scaled to an operational footprint of approximately 250,000 sq ft, consisting of indoor cultivation (3,400 flowering lights), manufacturing, processing, and distribution. The company is currently producing around 40,000lbs of indoor flower to support their flower line consisting of 1/8th oz jars, 1/4 oz jars, pre-rolls, and grams.

In addition to the premium flower line, Kings Garden has an ultra-successful connoisseur concentrate line consisting of shatter, budder, sugar, diamonds, and vape pens. In late 2019, Kings Garden launched their medical product line in a partnership with Avicanna to produce the highest quality medical products consisting of capsules, deep tissue gel, localized cream, tincture and spray. Additionally, a transdermal time release patch will be hitting the market at the end of Q2, 2020.

With an annual growth rate of 21%, the cannabis industry has grown to a $23 billion industry ($5 billion in California alone), attracting some of the most prominent investors in the world. Kings Garden has taken advantage of this opportunity by leveraging their experience, focus on compliance, transparency, and quality to become the number one brand in sales for all indoor flower and a top five brand when compared to the much larger greenhouse and outdoor segments.

Co-Founder, CEO and Chairman Michael King explains, “Kings Garden has created an extremely profitable business and loyal following by doing things the right way. We hold just under two dozen licenses in California alone with over 500 retailers in our distribution chain. Our team is comprised of some of the best experts in the industry who are devoted to providing top quality products and best-in-class production facilities.”

Co-Founder and COO Charlie Kieley stated, “Our focus on operational excellence and our state-of-the-art cultivation and manufacturing facilities has resulted in Kings Garden being one of the top brands in California, the most difficult market of all. Now it’s time to explore options for growth in other markets through licensing and management contracts.”

Ivan Talan, Co-Founder and VP of Marketing, stated, “In today’s extremely competitive market it is very difficult to establish a reputation and brand presence due to the restrictions placed on marketing and advertising opportunities in the cannabis industry. Kings Garden is able to provide its customers with the highest quality consistent product at large scale, thus establishing a successful brand identity with strong brand loyalty which continues to gain market share daily.”

Lauri Kibby, Co-Founder and CFO, added, “In a constantly changing regulatory and consumer environment, flexibility without forsaking commitment to profitability has supported the dramatic expansion of Kings Garden.”

About Kings Garden:

Based in Coachella Valley, Kings Garden Inc. is California’s predominant cannabis cultivation, processing and manufacturing company, specializing in the world of premium grade boutique products at an unsurpassed commercial scale. Now one of the largest producers in California, Kings Garden prides itself on having organized highly experienced cannabis management and operations team, while being fully compliant and licensed across the state of California.

From its inception, Kings Garden has held unwavering values focused on superior quality of end products, its team of management and employees who are considered family, giving back to local communities, and the advancement of the cannabis industry as a whole.

Website: https://kingsgarden.com/
Instagram: https://www.instagram.com/kingsgarden.ca/

View source version on businesswire.com: https://www.businesswire.com/news/home/20200312005814/en/

SOURCE: Kings Garden Inc.

Tommy Kieley, Chief Marketing Officer
Email: Info@KingsGardenInc.com
Phone: 760-799-4396
Location: Coachella Valley, California

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Profitable California Cannabis Cultivator Kings Garden Is Paying Dividends to Its Investors

Exclusive Interview with Kings Garden Co-Founders Michael King and Charlie Kieley

Kings Garden started five years ago in the Coachella Valley region of California. Since then, it has grown into a profitable cultivation company backed by the funding of friends and family. Founders CEO Michael King and COO Charlie Kieley spoke with New Cannabis Ventures about their company’s California presence, their approach to distribution and their thoughts on the commoditization of cultivation.

The Team

King comes from a background in finance, beginning his career on Wall Street and then moving into real estate. He moved into the cannabis space approximately seven years ago. Kieley has spent the past 15 years in cannabis, owning and operating retail dispensaries and facilities. He was working in northern California but had roots in the Palm Springs and Coachella Valley area. As soon as Palm Springs began licensing commercial cannabis facilities, he came home.

King, with his financial background, and Kieley, with his operations experience, have complementary skill sets. They lead the company along with other key players including CFO Lauri Kibby, Vice President of Operations Gary LaSalle, Head of Cultivation Tyler Geld, Vice President of Distribution Jeffrey Fellbaum, Vice President of Processing/Packaging Cameron Magallanes  , Chief Marketing Officer Tommy Kieley, and Vice President of Marketing Ivan Talan.

The leadership team oversees the approximately 200 employees at Kings Garden. Over the past five years, the company has been continuously building, but construction is now complete. The company may increase its personnel by 10 percent to accommodate increased production, but the team likely won’t need to grow much more, according to King.

Cultivation at the Core

At its heart, Kings Garden is a cultivation company. It produces premium, indoor flower meant for consumption in its raw form, according to Kieley. In July 2018, the company launched its first SKU: a packaged eighth jar. Now, Kings Garden has 16 SKUs, all produced in-house.

Kings Garden Team Members at Work

The company owns and operates approximately 215,000 square feet of licensed space in the Coachella Valley. The location is ideal for Kings Garden not only because of Kieley’s connection to the region but also because of the lower cost of operation compared to areas like Los Angeles and San Francisco. The company has more than 3000 cultivation lights and did more than 20,000 pounds last year.

The Kings Garden leadership team never had any intention of launching its own distribution operations. Instead, the team vetted the distribution players capable of handling the volume and scale their company was targeting. The list was relatively small, and Origin House was an easy selection to make, according to Kieley. He and the team see Origin House’s longstanding history of supporting brands and getting products to market, a major factor in its leading position as a distribution platform and as a strong acquisition for Cresco Labs.

Origin House handles all accounting, placing a link of separation between Kings Garden and its retailers. King and Kieley have heard about retailers struggling to pay, but they haven’t experienced it themselves.

Ramping Up

Kings Garden is increasing its production by approximately 30 percent, which will result in a small increase in expenses and a significant increase in revenue, according to King. Additionally, the company is increasing its manufacturing by 400 to 500 percent.

Kings Garden Manufactures Different SKUs, Including Concentrates.

Previously, the company has done significant wholesale business, but now it is shifting its resources to focus on its own branded products.

Last year, the company did $45 million with significant EBITDA, according to King. Kings Garden is targeting $70 to $80 million with an even stronger EBITDA this year. By 2021, the company is expected to be doing approximately $100 million. Those projections are rooted in the company’s now-completed infrastructure. Additional lights have increased cultivation capacity, and the significant increase in manufacturing is being driven by upgraded SOPs and equipment.

The Potential for Expansion

Kings Garden is taking a cautious approach to expansion. Over the past year and a half, the team has vetted opportunities in different states but none have been the right fit yet. If the company does pursue multi-state expansion, it likely will not take the form of building operations from the ground up. Instead, management contracts or licensing may be an option. At this point, King and Kieley want to enjoy the infrastructure they’ve built in California.

The company considered going public in the past, going so far as to travel to Canada and begin discussions. Ultimately, Kings Garden halted the go-public process, deciding it was the wrong decision. The company has no plans to list on a Canadian exchange, but it will consider the possibility of listing on the NYSE or NASDAQ when the time comes. For now, the company is happy to remain private, according to King.

Funding and Capital Allocation

In the beginning, King and Kieley put their own money into the company–five years ago, a 10,000-square-foot facility. They wanted to prove to themselves that they had a working model. Once they did, the pair began to make calls to friends and family and pick up more space. Kings Garden has raised a total of $55 million from friends and family. One of the company’s largest investors has put in approximately $13 million, while one of the smallest has put in about $20,000, according to King. Today, the company is profitable with no debt and has begun paying dividends to its investors, according to King.

Kings Garden carefully tracks its monthly expenses (the largest being rent, electricity, and payroll) and ensures it has enough to cover those. Over the last few years, the company has also been able to invest money it has made back into its infrastructure.

The Commoditization Question

The commoditization of cannabis is a big topic of discussion in the industry, but not one that worries the Kings Garden team. Outdoor and greenhouse products grown as biomass that will ultimately be used for manufactured goods likely will become commoditized, according to Kieley. But, that is not the kind of cannabis Kings Garden grows. It produces premium, indoor cannabis for consumption by connoisseurs, and Kieley does not anticipate commoditization affecting that kind of product.

Kings Garden Focuses on Producing High-Quality Products.

Of course, the company faces other challenges common across the industry, from strict regulation to the burden of taxes. But, there is also an upside. With profitability becoming increasingly vital and capital funds drying up, bad operators will begin to fail–leaving behind a legitimate industry. “At the end of this, we are going to have the industry we always wanted,” said Kieley.

To learn more, visit the Kings Garden website. Listen to the entire interview:

Exclusive article by Carrie Pallardy

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Carrie Pallardy, a Chicago-based writer and editor, began her career covering the healthcare industry and now writes, edits and interviews subject matter experts across multiple industries. As a published writer, Carrie continues to tell compelling, undiscovered stories to her network of readers. For more information contact us.


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Origin House Strengthens Partnership with Top-Selling California Cannabis Brand, Kings Garden, Through Exclusive Distribution Agreement

OTTAWA, Dec. 30, 2019 (Canada NewsWire via COMTEX) — Kings Garden produces top-quality, boutique cannabis products and is consistently ranked as one of California’s top brands across product categories.

CannaRoyalty Corp. d/b/a Origin House (OH) (otcqx:ORHOF) (“Origin House” or the “Company”), a North American cannabis products and brands company today announced that its California distribution division, Continuum, has entered into a distribution agreement (the “Agreement”) with California-based boutique cannabis brand Kings Garden Inc. (“Kings Garden”) to be the exclusive distributor of all Kings Garden products in California. In Q3 2019, Kings Garden was ranked as one of the leading flower brands in California, recording the second highest unit sales growth from Q1 to Q3 2019 in the state(1).

“Kings Garden is one of the state’s most prominent cannabis companies with a reputation for craft premium cannabis products,” stated Marc Lustig, Chairman and CEO of Origin House. “The Kings Garden brand has been one of Continuum’s top sellers across its state-wide distribution platform. We look forward to continuing to strengthen our partnership on an exclusive basis. This Agreement is aligned with our stated strategy to build and support category winners, solidifying Kings Garden within our house of brands.”

Pursuant to the Agreement, Continuum will be the exclusive distributor of all Kings Garden branded products, for an initial term of one year, across California, and will further have the exclusive right to distribute any new branded products introduced by Kings Garden. With Continuum’s statewide reach, it is best positioned to launch Kings Garden’s Rho Phyto(TM) line of proprietary cannabis-based phyto-therapeutics in Q1 2020.

Michael King, Chairman and CEO of Kings Garden commented, “We have been working with the team at Origin House and Continuum for the past year and a half and are excited to advance this partnership through today’s announcement. The Agreement will accelerate growth of our boutique product assortment, allowing us to reach more consumers in California, increase market share, and position the company for future expansion.”

“We are excited to formalize our relationship with Continuum and Origin House for the distribution of all branded Kings Garden products. Our large-scale production paired with their wide reach and best-in-class distribution platform will help excel growth for all involved and guarantee product availability throughout the entire state of California,” added Charlie Kieley, Co-Founder and COO of Kings Garden.

Based in Coachella Valley, Kings Garden is a leading cannabis cultivation, processing and manufacturing company, specializing in boutique products such as premium flower, concentrates and vape cartridges. Kings Garden also recently entered into an agreement to manufacture, distribute and sell Rho Phyto(TM) line of therapeutic cannabis products, expanding into the topicals and tinctures product segments. With a total of 11 facilities in California with over 200k sq.ft. and a highly experienced cannabis management and operations teams, it has grown to become one of the most recognizable brands in the California market.

About Kings Garden

Kings Garden is California’s predominant cannabis cultivation, processing and manufacturing company, specializing in the world of top shelf, boutique products at an unsurpassed commercial scale. In an emerging industry filled with many newcomers, Kings Garden prides itself on having organized highly experienced cannabis management and operations teams and being one of the largest and most profitable cannabis companies.KingsGarden.comInstagram: KingsGarden.CA

About Origin House

Origin House is a growing cannabis brands and distribution company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. Origin House’s California brand development platform is operated out of six licensed facilities located across California, and provides distribution, manufacturing, cultivation and marketing services for its brand partners. Origin House is actively developing infrastructure to support the proliferation of its brands internationally, initially in Canada through its acquisition of Canadian retailer 180 Smoke. Origin House’s shares trade on the CSE under the symbol “OH” and on the OTCQX under the symbol “ORHOF”. Origin House is the registered business name of CannaRoyalty Corp. For more information, visit www.originhouse.com.

Forward Looking Statements

Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in Origin House’s periodic filings with Canadian securities regulators. When used in this news release, words such as “will, could, plan, estimate, expect, intend, may, potential, believe, should,” and similar expressions, are forward- looking statements.

Forward-looking statements may include, without limitation, the future performance of King’s Garden branded products, the Company’s future growth, and other statements.

Although the Company has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects that are engaged in activities currently considered illegal under US federal law; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.

There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.

Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. The Company disclaims any intention or obligation to update or revise such information, except as required by applicable law, and the Company does not assume any liability for disclosure relating to any other company mentioned herein.

 _____________________________ (1) According to BDS Analytics, 2019

SOURCE Origin House

View original content: http://www.newswire.ca/en/releases/archive/December2019/30/c2448.html


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Kings Garden, Inc. Announces Agreement to Launch RHO Phyto Branded Products in California

Kings Garden to be first US company to manufacture and sell RHO Phyto line of therapeutic cannabis products developed though industry leading research.

PALM SPRINGS, CA, Dec. 5, 2019 /PRNewswire/ – Kings Garden, Inc. (“Kings Garden“) has entered into a sublicense agreement (the “Agreement“) with LC2019 CA, Inc. to license the Rho PhytoTM branded products created by Avicanna Inc. for manufacturing, distribution and sale in the state of California.

The Agreement will allow Kings Garden to manufacture the Rho Phyto line of proprietary cannabis-based phyto-therapeutic products to be co-branded with Kings Garden for sale in the state of California. The initial line of research-backed products will include topical creams, oil tinctures, topical gels, oral tablets, sublingual sprays and topical gels. Kings Garden expects the products to be available in over 400 dispensaries before the end of 2020. The Agreement is for an initial term of three years and contemplates the expansion into additional states throughout the US via the exclusive ROFR.

“We are thrilled to be able to offer California consumers a line of cannabis-based phyto-therapeutic products that have been developed through industry leading research. These products will provide Californians with reliable products that have undergone extensive testing through scientific studies at world-class institutions and have been manufactured in accordance with Kings Garden standards.”
Michael King, Chief Executive Officer of Kings Garden.

“We are excited to be partnering with RHO to provide California with the best, most effective and consistent medical cannabis line offered in the nation. RHO’s dedication to research and development combined with Kings Garden’s state of the art facilities and excellent operational experience make for an ideal partnership.” Charles Kieley, Chief Operating Officer of Kings Garden.

About Rho PhytoTM
Rho Phyto is a line of plant-derived cannabinoid-based therapies developed by Avicanna Inc. The formulations undergo rigorous in vitro analysis to ensure product stability, precise delivery and consistency. Formulations are then further validated and optimized post pre-clinical pharmacokinetic studies through partnerships with some of the leading academic institutions in the world.

About Kings Garden
Kings Garden is California’s predominant cannabis cultivation, processing and manufacturing company, specializing in the world of top shelf, boutique products at an unsurpassed commercial scale. In an emerging industry filled with many newcomers, Kings Garden prides itself on having organized highly experienced cannabis management and operations teams and being one of the largest and most profitable cannabis companies.
KingsGarden.com
Instagram: KingsGarden.CA

Counsel
In connection with the Agreement, Jeffrey Welsh and Sahar Ayinehsazian of Vicente Sederberg LLP were instrumental in effectuating the deal, and acted as counsel to Kings Garden.

SOURCE Kings Garden, Inc.


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