Why Nitin Khanna’s Cura Could be Oregon's First Cannabis Unicorn?

Disruptions might be rolling through Oregon cannabis, but you would not know it visiting Cura Cannabis Solutions’ bustling headquarters in the Central Eastside Industrial District.

On one side of the huge space, close to the gently psychedelic mural that extends 123 feet wide and 23 feet high across one wall, four or five employees tap away at laptops, undeterred by the background music. On the opposite side, in the midst of shipping containers, stacked boxes and shelves of filled canisters, different crews package items. More employees quietly work upstairs in an uncluttered loft office. This is Oregon’s biggest cannabis company — California’s too, now, according to the founders. Nevada might be next on its list.

With a dedication to cannabis oil production and products, Cura says it had sales of $40.5 million in 2017. It recently closed a $12.8 million funding round, based on a $200 million valuation and that’s very much a moving target: Revenue is projected to rise to $120 million this year, and CEO Nitin Khanna said a new investment round — perhaps $5 million to $10 million — could soon double the valuation to $400 million.

The goal is to become the country's first $1 billion cannabis company, a global leader, “the Nike of cannabis,” as its leadership duo puts it.

“Wouldn’t that be great for Oregon?” asked Cameron Forni, Cura’s itinerant president, who bounces apparently nonstop between Portland and Cura's outposts in California and Nevada like a child stuck on a trampoline.

It is a question that is raised. The company has a hard-charging style that — off the record — rubs some in the we are-all-in-this-together Oregon cannabis industry the wrong way.

“Some people can misinterpret focus for aggression,” Forni responded when asked about that, adding that "having a big market share of course makes you a big target."

Khanna said the industry benefits from having a “strong, profitable player” who can do things like extend payment terms to retailers and guarantee steady income to processor partners. Plus, he argued, in the way beer distributors can afford to tote a few cases of a craft beer all around the state because Anheuser Busch has loaded the truck with Bud and Michelob, Cura’s mass products can boost the viability of boutique cannabis brands.

The company is the product of an April 2016 merger of cannabis enterprises born around the time Oregonians voted for legalization in November 2014.

Forni had created Select Oil, a vape cartridge brand, and built it into a $100,000 a month business with his wife out of their Pearl District living room. Khanna, who with his brother sold the software company Saber Corp. for $420 million in 2007, was heading up a small venture that “had a retail store, a grow under development and a CO2 extraction machine.”

The two came together believing that cannabis oils — not flower, and not a vertically integrated company — were the best growth opportunity.

Manufactured in various forms and by a number of processes, these cannabis concentrates are widely used in vaping, but also in edibles, beverages and an ever-increasing array of products. Cura’s biggest seller is a cartridge called Select Elite, which costs about $60 at retail and provides around 250 puffs.

The company got a toehold in the market in 2016 with what it said was an intense focus on building a “clean” supply chain heading into the fall, when pesticide testing regulations temporarily derailed nearly all its competitors. It kept growing with a business model that, in addition to its own production, includes partnering with processors who take Cura-sourced cannabis and follow Cura protocols.

“What you see today, this juggernaut is as much a function of supply as it is how we do selling,” Khanna said. He credits Ken White, the director of manufacturing who joined the company a year ago, with bringing in “technology and methodology that allowed us to become the highest-volume, lowest-cost producer instantly.”

Citing BDS Analytics data, the company leadership said it has 43 percent of the Oregon consumer market, and a larger share of the wholesale oils market. And those markets have been growing: According to BDS, concentrates and edibles, combined, made up 40 percent of Oregon retail sales in November 2017 by dollar value, up from 29 percent a year earlier, as flower gave up ground.

Having conquered Oregon, Cura began building operations in California early last year in the medical market, and sales there were on a steep upward trajectory — rising from $1.4 million in November to $3.2 million in December — even before the recreational side opened up this month. It expanded into Nevada a few months after California.

To both drive and keep up with the growth, Cura has been hiring at a frantic pace — it ballooned from 200 to 285 employees in the past month alone. Included among the new hires: a CFO, a vice president of brands and a California general manager, all based in Portland.

Along with mining the California and Nevada markets, the company has its eye on Washington and Arizona, Khanna said, in its march toward unicorn status.

“In Oregon we’ve got athletic apparel, we’ve got Silicon Forest, we’ve got the craft wine and beer industries,” he said. “But I think we have a chance to show that an Oregon cannabis company can expand and dominate other states.”