The incoming CEO of the largest US cannabis company explains why he's going all in on New York and the Northeast

  • Curaleaf, the largest US cannabis company by market cap, will have a new CEO on January 1 — Joseph Bayern is taking over for Joseph Lusardi.
  • Bayern told Business Insider that he's focused on expanding Curaleaf's presence in Northeastern states like New Jersey, Massachusetts, and New York.
  • New York could be "could be one of the most compelling markets in the US in the next couple of years," Bayern said.
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Curaleaf, the largest US cannabis company by market value, has a new Joseph taking the reins as CEO.

Curaleaf President Joseph Bayern, who joined the company in December of 2019, will be taking over from Joseph Lusardi effective on January 1. Lusardi will remain on as executive vice-chairman of Curaleaf's board. 

Bayern told Business Insider in a Wednesday afternoon interview that he's expecting to have his hands full in the coming months as the company looks to continue delivering on what analysts say are impressive financial results.

Read more: The world's largest cannabis company is angling to jump into the US marijuana market after Biden's win

"We believe the US cannabis industry is at a tipping point and the scales are tipping in our favor," Bayern said, following Curaleaf's Q3 earnings. "We think 2021 is going to be a pivotal year for us and for the cannabis industry in the US."

The company posted $193.2 million in revenue for the quarter, up 55% from the preceding quarter, and a $9.3 million net loss.

Cowen analyst Vivien Azer said Curaleaf is the leading revenue generator among the US cannabis companies and upped her price target on the stock to $15 from $12 in a Wednesday note. The stock closed at $9.78 on Thursday.

New York could be 'one of the most compelling' cannabis markets in the US

After four states including New Jersey and Arizona voted to legalize recreational cannabis during November's elections (and Mississippians voted to legalize medical marijuana), companies like Curaleaf have started to build up capacity in an effort to dominate new markets as they come online.

Bayern, for his part, says that Curaleaf's strong presence in the Northeast — in states like Massachusetts and New Jersey — is what sets it apart from competitors.

Curaleaf, headquartered in Massachusetts, operates a 51,000-square-foot cultivation facility in New Jersey as well as one of the state's largest medical cannabis dispensaries, among other assets.

While New Jersey presents a big opportunity on its own, with its proximity to Philadelphia and New York City, Bayern says the state will serve as a sort of "lynchpin" for neighboring states like New York and Pennsylvania to legalize marijuana.

Read more: Here's why a Biden administration will be good for the US cannabis industry, even though it's unlikely he'll legalize marijuana federally

"Personally I think New York could be one of the most compelling markets in the US in the next couple of years," Bayern said. He pointed out that the state has a relatively restrictive medical marijuana program which means a lot of consumers are sitting on the sidelines — at least, of the legal industry.

That, coupled with the population density, and the relative purchasing power of New York state residents versus other states, means there is a lot of money to be made for cannabis companies.

A senior aide to Governor Andrew Cuomo said earlier this month that lawmakers are planning on including legalization in the state budget before April — specifically to help plug budget shortfalls due to the pandemic — though previous attempts to legalize marijuana in the state have fallen flat two years in a row.

Bayern continues the trend of the CPG-ification of cannabis 

Bayern, like other cannabis CEOs before him, jumped into the industry after a long career in the consumer packaged goods business. He was previously CEO at VOSS, a Norwegian beverage company, and served in senior executive roles at Cadbury Schweppes and Snapple Beverage Company.

He says that the CEO transition is part of Curaleaf's long-term succession planning "at the board level."

"It was a long-term decision, and we think this is the perfect time for the transition with the major acquisitions behind us," Bayern said.

Over the past two years, Curaleaf closed an $830 million deal to buy Grassroots Cannabis, and spent $949 million on West Coast cannabis company Cura Partners, building up the biggest cannabis company in the US under the leadership of Lusardi.

Bayern led the integration of both companies into Curaleaf, the company said in a statement.

Coming off the acquisitions, Bayern said his role is now about execution and "scaling up" the broader business.

"That's kind of what my background is," Bayern said. "So it's a natural time to step in."

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