RED BANK – Beth Stavola had retired from Wall Street to focus on raising her six children in 2012 when she got an offer to invest $1 million in an Arizona marijuana business.
It was a lot of money. It was in an industry that was still illegal in most of the country. But what really concerned her was … what would she tell her parents?
„We were kind of saying, 'Oh, we’re just buying commercial real estate,'” Stavola said. „That was true. We were buying commercial real estate. But it was actually to grow marijuana plants in. I don’t know that my parents were thrilled about it initially.”
Seven years later, Stavola is a powerhouse in the cannabis industry, her fingerprints on everything from legal weed in Nevada to a medical marijuana dispensary in Atlantic City set to open by the end of the year.
And her initial investment has a chance to pay off big. A cannabidiol company she started was sold last month for $10.4 million in stock and moved into a spiffy new office in Red Bank.
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Stavola is trying to reinvent the cannabis industry, taking it from an outcast that couldn’t attract banks to a sophisticated operation that is no different than any other health or beauty product.
It is a painstaking process. Stavola convinced her sister, Julie Winter, to leave her own Wall Street career to join her. Their parents eventually came around.
It turned out to be good practice: With the campaign for legal weed stalled in the New Jersey Legislature and her company’s stock depressed, it looks like voters will ultimately decide the fate of legal weed in the Garden State.
Stavola and Winter „are part of the reason cannabis is ceasing to be considered a dirty word, ceasing to be viewed as an underground, hippy-dippy kind of thing,” said Hugh O’Beirne, president of the New Jersey Cannabis Industry Association, a trade group whose board includes the sisters.
„And it’s because of the fact they operate so well and with such attention to consumers and to the integrity of the process,” he said.
You can do anything, but does it have to be marijuana?
Stavola, 49, lives in Middletown with her husband, Jack. She has six children, ages 11 to 23, the two oldest of which are from a previous marriage.
Stavola grew up in Ocean Township, the oldest of seven children, and credited her mother, Kathie Deggans, with raising her to believe she could do whatever she wanted, although it sounded like Deggans didn’t have the marijuana business in mind.
After Stavola graduated from Monmouth University in West Long Branch, she went to Wall Street, eventually landing at Jefferies and Co. and selling stocks to institutional investors.
She left Jefferies after a decade to raise her children. She kept a toe in the business world by managing her family’s investments. She said she wasn’t a marijuana user herself, but when a broker approached her to see if she wanted to invest in a cannabis operation in Arizona, she jumped.
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What started as an investment turned into a passion. Stavola opened four medical marijuana dispensaries in Arizona called Health For Life, and she said she saw the benefit weed had on children suffering from seizures and veterans addicted to opioids.
She just needed to convince her parents it was a legitimate business.
„When Beth first got into the business, my parents would call me and would whisper on the phone that Beth was selling marijuana, she was selling weed,” Winter said. „And I’m like, yes, legally she is, but they couldn’t quite wrap their heads around it.”
Deggins said: „We were a little concerned. What are you are getting into? It really was not acceptable everywhere and maybe this is not a good path to go down. But (Beth) said, 'No, this is the wave of the future.'”
Stavola designed the dispensaries to look no different than, say, an Apple store.
And she began making connections and expanding, both beyond Arizona and beyond dispensaries. She and business partner Jason Gully in 2014 created Melting Point Extracts, called MPX, to sell cannabis oils and concentrates, according to a profile in Cannabis Business Executive.
As states inched ahead on legalizing forms of marijuana, she applied for and won licenses in Maryland, Nevada, California, Massachusetts and New Jersey, eventually taking the marijuana company public, trading on the stock exchange in Canada, where weed is legal.
Meanwhile, she convinced Winter to leave her Wall Street job in 2015 to operate CBD For Life, selling creams and tinctures that were made from hemp but didn’t include the THC ingredient that produces marijuana’s high.
„I was inspired by what she was doing,” Winter, 34, of Little Silver, said.
More big-money deals were to come. iAnthus, a New York-based company that owns cannabis processing operations and dispensaries nationwide, bought MPX earlier this year for stock that at the time was valued at $845 million. It then acquired CBD For Life in June for $10.4 million in stock.
Stavola’s official title is chief strategy officer and director of iAnthus. Winter is chief operating officer of CBD For Life.
If anyone could use weed, it’s weed operators
Stavola and Winter met with the Asbury Park Press recently at CBD For Life’s new office in Red Bank, juggling an interview with talking to banks on the phone, visiting with consultants from their Arizona dispensaries, welcoming two new employees and eating lunch.
They are faced with the question: Will marijuana go mainstream, following the path in New Jersey of craft breweries and sports betting?
Not long ago, the answer looked like a yes. Both New Jersey and New York were on a path to legal marijuana, giving iAnthus a giant new market. And Congress voted to change the federal law and legalize hemp.
For its part, CBD For Life took advantage. It sells its CBD products not only to pharmacies and health food stores, but also to old-school retailers like Dillard’s department stores.
Consumers have been giving CBD a try to help with sleep, anxiety and pain, said Robert Cioffi, a pharmacist at Colts Neck Pharmacy, which carries CBD For Life and other brands.
„I would say about seven out of 10 people say it does work for them, and they keep coming back for it,” Cioffi said.
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The truth is, it isn’t easy to operate a business that the federal government says is illegal.
Stavola said one bank wouldn’t keep her money for her daughter’s communion because she was listed as the trustee. She said landlords drive up the rent. And she said she recently had trouble getting a vendor to make polo shirts for her staff.
New Jersey and New York didn’t legalize recreational marijuana. iAnthus’ stock price, at $6 a share in February, closed at $2.76 on Friday.
Stavola thinks New Jersey at least will wind up putting the issue to voters in 2020.
It leaves Stavola and Winter to continue their campaign to bring cannabis mainstream. They organized a trip by New Jersey lawmakers to Nevada in 2018 for a tour. The lobbying effort ultimately fell short.
But since then, CBD is sold at Dillard’s and new retailers are lining up. New Jersey expanded its medical marijuana program. And their mother is fully supportive.
„It was disappointing we didn’t get there, but two years from now it will be a totally different landscape,’ Stavola said. „But you’ve got to be ready to move. You’ve got to be ready to change gears.”
Michael L. Diamond is a business reporter who has been writing about the New Jersey economy for 20 years. He can be reached at 732-643-4038; mdiamond@gannettnj.com; and on Twitter @mdiamondapp.