With growing operations in Oregon and Michigan as well as expansion plans in Missouri and Massachusetts, Ann Arbor-based C3 Industries announced this week that it has raised $45 million from a network of individual and boutique investors.
The company, founded in 2017 by brothers and University of Michigan alumni Ankur and Vishal Rungta, along with their childhood friend and Cannabis Cup holder Joel Ruggiero, operates 36,000 square foot cultivation centers in Webberville, Michigan and Portland, Oregon and owns five High Profile Boutique Cannabis locations in Michigan. Additionally, C3 recently acquired a dispensary in Oregon.
“We are willing to compete anywhere,” co-founder Vishal Rungta told Grown In, “and we don’t simply pick markets to enter because of limited licenses. We cut our teeth in Oregon, which is the most competitive market in the world. I would go toe-to-toe with anyone.”
Rungta’s upcoming plans include building an additional 70,000 square foot cultivation site in Webberville, opening five dispensaries and one manufacturing facility in Missouri, and opening a 37,000 square foot cultivation facility and at least one dispensary in Massachusetts.
While venture capital and the public markets are currently rewarding cannabis companies with significant holdings in limited license markets including Illinois, Florida, and New Jersey, Rungta says he likes his company’s chances of succeeding in states regardless of how the competitive landscape is constructed.
Ruggiero in 2012 became the head grower for The Green Solution in Colorado, where he built out a 50,000 square foot facility at the onset of recreational sales in the state. He now oversees C3’s Cloud Cover Cannabis brand that is sold in 175 dispensaries in Oregon, where the company won a 2019 Cannabis Cup for “Best Sativa Flower”.
The Rungta brothers and Ruggiero grew up together in Buffalo, New York and bonded over their mutual admiration of the plant.
“In some fashion I’ve been in weed my entire life,” Rungta said.
The brothers, with private equity, law, and finance backgrounds, raised initial funding from friends and family to start a cannabis company in their college town. As operations grew, a wider set of investors, which include New York-based Madison Square Park Capital, began to write checks. Rungta said the company became profitable earlier this year and today has approximately 210 employees.
Despite its ascent, C3 has kept a low profile in its home state, where it plans to open seven additional dispensaries by the end of the year. Rungta is bullish on Michigan, and what he anticipates will become a $2.5 billion market in the coming years.
“We have deep roots, a dozen stores, and a strong ground game there,” he said.
In Missouri, C3 is connected to QPS Missouri Holdings LLC, which has licenses to operate dispensaries in St. Louis, Columbia, St. Charles, St. Robert, and Cape Girardeau.
“Given our footprint, Missouri will be a meaningful state for us,” he said, “As at 70,000 medical customers, [Missouri] enthusiasm is through the roof.”
Although Massachusetts is a limited license market, Rungta acknowledged that operating there “requires stamina” given the difficulties of opening up cannabis businesses in the state. At the end of a “long” process, however, he expects C3 will have a significant cultivation space as well as three dispensaries, which is the maximum number of stores allowed by the state.
“There is not enough product nor is there enough high-quality product in-market in Massachusetts,” he said.