In this episode I interview JJ Walker and Danny Schaefer of my420tours.com the first cannabis tourism company in North America. JJ and Danny go over all the fun and educational activities explored on the tours, including: cannabis cooking classes, dispensary tours, investor tours and more. 420 Tours has even partnered with cannabis-friendly hotels to make sure your tour is fun and stress-free.
My420Tours.com was kind enough to offer a discount code of 15% off any package purchased online when you use the code: cannainsider
Again that coupon code from 420 Tours for 15% off is: cannainsider
Matthew Kind: Hi, I'm Matthew Kind. Each week I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at CannaInsider.com. That's C-A-N-N-A Insider.com. Now let's get started with the interview.
Matthew Kind: What is it like to be at ground zero of the recreational cannabis industry in Denver, Colorado, helping tourists experience all that legalization has to offer? We are going to find out the answer to that question today with our guests, J.J. Walker and Danny Schafer from My 420 Tours. Welcome, guys.
J.J. Walker: Hey, man. How are you?
Danny Schafer: Hey.
Matthew Kind: Good to have you on the show. For our listeners that haven't heard of My 420 Tours, can you tell us a little bit about your business?
J.J. Walker: Sure. We are the nation's first cannabis tourism company that offers a wide range of services from cannabis-friendly hotel rooms, all-inclusive vacation packages that include a number of different activities and events and things like cannabis cooking classes, grow and dispensary tours, investor tours, rent a vaporizer, things like that. As people come into Colorado, they want to experience the industry for their own purposes and everything from entertainment to looking at the industry on a business standpoint. We are here to provide any services that they need for that.
Matthew Kind: That's great. And I know there's a lot of demand for that. Can you tell, for people that might not be familiar with what "420" means, can you just give a little background on that?
J.J. Walker: The word "420" is, I guess, the nationally known time of day at which people consume cannabis. 4:20 p.m. has become this phenomena of getting together and consuming cannabis and then they say now, once a year on April 20th, 4/20, is the national holiday celebrating the legalization and things like that of cannabis.
Matthew Kind: Great. Great. And how did you get started in this business?
J.J. Walker: This is J.J. by the way, and I got started back in 2009 when things just started changing on a federal level. Obama comes into office and says that federally they're not going to start prosecuting people with medical marijuana states that are interested in running their business and things like that according to state law. So we opened up one of the very first dispensaries in Colorado, one of the first 20 dispensaries. And we did it with a very small amount of money. At that time there were no rules, regulations, guidelines, anything about how to run a business in marijuana. And so we were fortunate enough to be a part of the early adopters and built our business for a few years and ended up selling my first dispensary in late 2011.
Matthew Kind: Oh, great.
J.J. Walker: And in the industry, we were part of the rulemaking and just a lot of the progression of medical marijuana which then was turned into recreational marijuana and then we started the tours of the company.
Matthew Kind: Gosh! It sounds like the Wild West. The regulations aren't really being formed, all these moving parts. Was it kind of a crazy time when that was going on?
J.J. Walker: It was as crazy as it could be. The Wild West is definitely a good description of sort of what it was. Each and every day, each and every week and month, there were new things that were getting thrown at us, new types of government officials and regulators that were trying to get into the mix. And not having any education about the marijuana industry, not having any rules or laws or regulations in how to actually make the dispensaries run in a way that both satisfied the government and the people that pass the laws initially. So it was a long process of just sort of working with our government as closely as we could and trying to stay up with their strong demands of what they wanted to do as far as regulating our industry. Early on it was so easy to get in that, like us, we started with $10,000 and today you can't even start with almost a million dollars, but that's when they said that there were more dispensaries in Starbucks and things like that and they had opened up all over. So part of the regulation process was trying to weed out the guys that weren't doing it right. So part of the process that we had to deal with was as things got regulated, we had to keep up with every single rule and law in very short amounts and periods of time and had to come up with different large sums of cash to be able to facilitate the different rule changes and things like that. So it was a pretty crazy time, but I think the speed-up of the process really allowed us to get to the recreational side of things, which are all benefiting them, today.
Matthew Kind: Yeah, I agree. Would you say from the compliance standpoint, it sounds like it's definitely more expensive to get involved in a dispensary now, but would you say, aside from cost, is it easier or harder? Do you think the burdens are greater or lesser apart from the cost of getting into it now?
Danny Schafer: Yeah, from the operational perspective, in the Wild West days it was things were changing rapidly as J.J.'s mentioned. There's a new compliance regulation that comes out with a very short period of notice and it requires the small business owners to implement new processes, procedures, resources, tools, technologies or otherwise to remain in compliance.
Matthew Kind: Right.
Danny Schafer: So very frustrating and costly, but as it stands today the state has been great in laying down more of those rules and regulations. So coming into it right now, especially as it progresses across the state using Colorado as a model, I think it won't be less expensive or easier by any means, but at least more streamlined in the sense that there are some guidelines in place, which will definitely help just ensure the success of whether it be the entrepreneurs or the states that allow it in moving forward.
Matthew Kind: Okay. So what's been the most surprising aspect about the marijuana business? Being on the inside where you thought it was going to be one thing, good or bad and then you got on the inside and you said, "Oh, this is really much different than I anticipated."
Danny Schafer: The evolving technology has been very impressive. Being a consumer of the industry for 15 plus years, to see what has come out in the last couple of months is inspiring. You have different ways to consume; different ways to determine what is in your product that you're consuming, just a lot of very innovative technology that's necessary. This is a medicine for a lot of people and it's no longer this underground black-market product. So with that, as industry gets into it, watching just how it's progressed in such a short period of time is absolutely inspiring.
Matthew Kind: It is. It seems like it's changing every day. It's crazy. Is there one technology that you could throw out there that you're saying, "Wow, this is really pretty cool. This is moving the market forward and I'm interested in this technology"? Is there anything recently you've looked at that kind of sparks your interest in that way, even from a consumer point of view?
Danny Schafer: Yeah, the extraction technologies and how they can derive the different C.B.D.s and T.H.C. components from the cannabis plant and then how the kind of genetics or chemistry can be derived to make a consumable product for children to help treat their cerebral palsy and things of that extent. It's nothing short of amazing.
Matthew Kind: Yeah, I hear about owners of dispensaries getting letters all the time from people out of state saying, "My child could benefit from some of these medicinal benefits of cannabis, can you send us some?" And they're like, "No, I can't." But they feel compassion for these people. I hope that changes for the rest of the states pretty quickly. Circling back to 420 Tours, what aspect of the tours do you think people like the most or you get the most feedback on? Like, "Hey, this was awesome, we weren't expecting this and this really was fun."
J.J. Walker: I would definitely say it's with the educational piece of our business and when people come in and just to understand the depth of how advanced we are with the plant and with our industry and the business-savvy entrepreneurs that are a part of the business. So for a lot of these people, it's really, I would say the people that come and do our all-inclusive vacation package, they can really get a full range of the experience and really see so many layers of this business, both on the educational standpoint, on entertainment, on the medicine side, and the business side. It's pretty incredible and when people come experience that multi-day experience, they tend to leave with something that they didn't expect to actually leave with, a lot more education and just a new re-found respect for the industry.
Matthew Kind: Yeah. So you take them inside to see the plants, grow houses, things like that?
J.J. Walker: Yeah, part of the experience is we have one of our days is a dispensary and grow tour and we take them to one of the top state's industrial growth facilities and the head grower, the owner of the company, actually walks them through and shows them all the technology and the way that they do the plants and shows these massive grow rooms and these processing areas to obviously process the cannabis after it's grown. So yeah, it's really eye-popping for people to actually walk in and see that live.
Matthew Kind: See and smell it too, right?
Danny Schafer: Yeah, they have actually two different sides of their grow operation and within a large building I think it's 50 to 75,000 square feet. Half of their space is the original grow, which is plywood walls and handmade shelves and things to that extent versus their newer I think it's a 40,000 square foot grow operation, which is state of the art. Crack units, aluminum walls, treated water, things of this extent that really show how fast these operations have had to evolve in such a short period of time to not only meet the demand, but of course the state regulations of food quality standards and things of that extent.
Matthew Kind: Right. There are just a lot of details people don't think about, me included, the humidity in the air. It is interesting to see how the growers force the plants to bud by simulating sundown. There's just so much to it, it's fascinating. It's very interesting. I can see why people walk away from it saying, "Wow!" You mentioned the cooking classes. Can you tell me a little bit more about that? What actually is being cooked? Is it pastries, dishes, entrees, or what exactly people are cooking?
Danny Schafer: Yeah, you name it. We're fortunate in the sense we have a culinary arts chef that's got years of training in being a pastry chef as well as a head chef at some of the more prestigious restaurants in Denver. We've got a strategic relationship with a cooking school that has a phenomenal facility for these types of cooking classes. And our class, call it curriculum, goes all the way through how to extract the oils and bases used for cooking from the cannabis plant all the way through different recipes of how to make cream cheese frosting that's infused with cannabis. So things like trail mix, pastries, filet mignon, different recipes that consumers can actually cook at home and then with the education piece on the extraction and call it dosage, how they can safely infuse their products with, again, knowledge.
Matthew Kind: I'm really glad you brought up dosage because I've talked to a lot of family members that don't live here in Colorado and their concern is always, "How do I get the appropriate dosage?" Maybe you can kind of assuage some of those concerns and tell people how the dosage system works so people aren't worried about, you know, you eat something and you take too much, that type of thing.
Danny Schafer: Yeah, it's important in the sense that a lot of people come with the same kind of expectations as alcohol. Whether you drink one glass of wine and one beer or one shot of whiskey, you get roughly the same alcohol content. With cannabis that is definitely not true. So paying attention to the labeling, that's been some of the recent state regulations on edibles. What's the milligram dosage? I believe the state of Colorado recommends 10 milligrams and some of the original edibles, a cookie, for instance, could have had up to 100 milligrams of cannabis in that product. So some of the initial growing pains were people would come from out of state and would consume an entire cookie, taking 10 times the recommended dosage.
Matthew Kind: Then they would blast off.
Danny Schafer: You can imagine the blast-off effect. So that's one thing the state has definitely helped curb through regulations and making different requirements of edible companies to clearly mark their packaging and make it safer for the uninformed adult to consume.
Matthew Kind: Sure. That makes sense. And I notice that on your website that you said that you provide a Silver Surfer vaporizer. Now, what's that like, using something like that, and why do you prefer the Silver Surfer?
Danny Schafer: Yeah, the Silver Surfer, they're actually number one, a great local company. We love supporting other local entities that are helping grow this industry. But Silver Surfers specifically, there's no shortage of vaporizers on the market, the reason we like working with them is the technology and they make a handmade base station that uses a coil heating system that has a clay exterior. So the concept there is it heats up the coil enough to pass hot air through a glass tube, where you fill it with your cannabis, but it burns it at such a specific temperature that it merely burns the trichomes off of the plant to give you the effects, but it does not burn the plant so much so where the carcinogen count is substantially higher than when you're just smoking it.
Matthew Kind: Yeah. Very, cool. And for someone that's never seen it before, it's really just amazing to watch how that works. It looks like something from Star Trek. It's pretty cool.
Danny Schafer: As part of our services, we've even started renting them to different consumers and of course we include them with our hotel-only guests. So although all hotels, or at least the majority of hotels, are no-smoking zones, we actually have strategic partnerships here in town that will allow vaporizing in the room as it does not leave the scent and does not pass the carcinogens for secondhand smoking concerns.
Matthew Kind: And do you run into anybody saying, "Hey, this is hard to use." Or pretty much everybody can figure it out right away, all age groups?
Danny Schafer: Yeah, they do need some assistance in some cases. We've got some online video references and then of course our staff is happy to even stop by the hotel and show them in person how to use it.
Matthew Kind: What a great job that would be, to help people. Okay. You know, I was in a dispensary the other day and I was talking to a woman and she told me, this bud-tender told me that the average age of the people coming in the dispensary was 61 and I was shocked by that. I don't know if I should be or not. Maybe it's the baby boomers circling back and saying, "Hey, now's our time, it's legal." But what is the demographic? Is it all over the board for people to go on the tours or are you noticing there's a certain kind of demographic that you're seeing? What's it like?
Danny Schafer: Yeah, our demographic I'd say is right in line with that. 45 to 65 is the average age of our tour participants. Definitely, the baby boomers coming back around and finally getting to enjoy their newly found civil liberties. I think they're specifically interested in the tour in the aspect that the industry has obviously evolved substantially since they were smoking joints at Woodstock. The technology and the cannabis has changed so rapidly that I would say that the most fulfilling piece of the tour for us, is the opportunity to sit down with these, in a lot of cases, elderly people, people with different health issues or otherwise and really educate them, take them by the hand, walk them through this industry as a guide. Show them the common pitfalls, you know, "Be careful how much edibles you consume." And explain these different things because when they come here, they're definitely gun-shy and a little bit nervous about just the industry in general and when they leave, a lot of times it's hugs or tears or handwritten two-page "thank you so much" letters just for enlightening them on what this industry really is.
Matthew Kind: That's great to hear. Where do you think the tourism industry is going to be headed in the next five years or so? Is it evolving or is it kind of settling down into certain patterns? Where do you see it going?
Danny Schafer: Rapidly evolving. We're fortunate in the sense that Colorado obviously already has a successful tourism industry. We're adding the cannabis component, which has been very successful. And the states that, as they come online, the same I think will apply to those different states. Obviously Washington is in its infancy stages, but as it scales up, people that plan to travel there for different events in their lives that want to add cannabis as a component, we plan to be there to walk them through that industry and that state. Areas like Nevada, obviously already successful in tourism, and by adding the cannabis component we see it scaling straight across the nation as the states reevaluate if they want to take advantage of this industry.
Matthew Kind: Cool. Yeah, Nevada really could explode quickly, especially with a state government that seems like they want to help more than hinder. That could really come on board quick. Is that what you're thinking?
Danny Schafer: Absolutely. Especially with the numbers shown in Denver, kind of it being the beta for the entire nation. Jobs up, tax revenue up, crime rate down. I mean all good indicators that we believe will be used to help roll out the different industries across the nation as the different states embrace it.
Matthew Kind: Okay. Aside from the dosages, which we covered a little bit, is there any kind of preconceived notions that someone coming to Colorado that wanted to go on a tour, you can help walk them through? I mean I imagine the dosages. Is there anything else? Any kind of top questions they have where you hear it a lot?
Danny Schafer: Yeah, just like any other industry, whether it be restaurants or otherwise, they're not all created equally. There are definitely leaders in the dispensaries, in the quality of product they're producing and things of that extent and you want to be cautious or aware of who's doing it right. So I'd say that's one of the primary concerns is, "Where should we get our cannabis?" And then depending on their education level, "What type of cannabis should I get for these types of things?" I like the indicas for relaxing; I like the sativas for more of a cerebral high. The industry has progressed so far that it's, depending on strain, comparable to even pharmaceutical drugs where it's not the old cannabis being imported from Mexico, where it was seedy and lots of stems. This is engineered for different types of highs. So I'd say that's probably one of the other most pressing questions.
Matthew Kind: That's a great point, so different strains, different moods, and a lot of factors. It's good to have a Sherpa over your shoulder helping you make those decisions if you're not familiar with it.
Danny Schafer: Absolutely.
Matthew Kind: And you mentioned earlier in the interview about investor tours. Can you tell us a little bit more about that?
Danny Schafer: Yeah, we've been fortunate in the sense, being the nation's first, we definitely have a strong foothold in the industry and have the leading partnerships with different grow and dispensary companies. So we were fortunate to do a 225-person tour for an outfit called ArcView, who's one of the nation's leading investment groups in the cannabis industry. They had their annual summit here in town that was just before the N.C.I.A. Expo that was here in town as well. But we were fortunate to take 225 accredited investors on an entire tour of the industry, just to show them what dispensaries look like, what are some of the needs of the dispensaries, different technologies that are being rolled out, and just to kind of paint the picture of the multiple different areas that this industry needs capital in to continue to grow. So that was probably one of our best and most enjoyable tours so far.
Matthew Kind: Yeah. And for listeners out there that may be wondering how big this industry could be, there are a lot of analysts out there that are saying it could be as big as the alcohol industry in 20 years. So to go from where it is now to anywhere in that ballpark, it's going to just have massive mushrooming growth for decades so there is this huge potential there. And there are a lot of people outside of Colorado that were wondering how to get into it and so I think an investment tour might be a good place to start.
Danny Schafer: Absolutely, yeah. It's nice to be able to meet the, as J.J. had mentioned, the head grower that can paint the picture of what his growing challenges have been and leaves an amazing space for different creative individuals, entrepreneurs in all walks of life. This is comparable to the alcohol industry. However, different in the sense that it's already a multiple billion dollar a year industry, but as we take it from gray market to white market, you can imagine all the different aspects of any emerging industry in the United States and it's top down. They need marketing, consulting, sales, customer service, technical support, technology, and products. I mean all aspects of these different industries obviously apply to cannabis as well.
Matthew Kind: Yes, compliance, too, as you talked about earlier. This is a huge job creator. I mean, could you just kind of go over where you see the jobs being created? You have growers. Who else is in the ecosystem that is creating jobs here in Colorado and eventually wherever else it's going to be legal?
Danny Schafer: Yeah, interesting fact, I think up through June I believe the state of Colorado estimated anywhere from 7,500 to 10,000 jobs have been created by the industry so far. And, again, it's top down. It's not only the producers, grow operators, people that clip the cannabis specific to ensuring that the product is of a certain quality, the compliance aspect for any legal-oriented folks, the technology that's used to cultivate it, again, simulating Mother Nature in a closely controlled environment definitely leaves a great opportunity for technology, electricians, you name it. Customer service-oriented people, bud-tenders. It's the grand scale of employment opportunities. Important to note the actual CannaSearch is going on, I forget the dates off the top of my head, but it is the industry recruiting job fair that'll be going on here in town I believe next Monday or Tuesday, so a great opportunity for those folks who are either unemployed or are looking to get into the industry. A great area to meet the different leaders, drop off a resume, and even guys like us are looking to recruit additional staff.
Matthew Kind: Great. I will put some information about that in the show notes for anybody that's interested. Just getting to some more personal questions, what's your favorite edible? I mean, if there's someone out there that are just like, they have never even experienced an edible before, and it's something foreign to them. If they put their toe in the water, get maybe one of Dixie Elixirs' or is there any out there that you feel like, "Hey, this is a good place to start and just try one of these." What would you suggest?
Danny Schafer: Yeah, I definitely like Dixie just covering the range of different products, whether it be mints or drinks or offering multiple areas of kind of discreet consumption. Auntie Dolores, I'm not sure they're in total footprint, but I really like them for the baked goods. There have been some of the chews; some of them have been kind of controversial just based on their dosages. I can't personally say I'm a big edible guy, but I would just encourage people that like the edibles to obviously pay attention to the labeling and the dosage being one of the most important components.
Matthew Kind: Right, right. And kind of the standard, we're not recommending any dosage levels here at all but kind of the standard that was mentioned already is kind of a 10 milligram is kind of a single serving. Is that generally right?
Danny Schafer: Definitely, yeah. I'd say that's a good place to start and then it's about the time between consumption as well. As it is edible, going through digestive tract, there is a time component as to when you can fully realize the effects. So leaving a wide window between consuming, whether it be the chews or the cookie, you want to leave at least I'd say probably 90 minutes just from personal experience as a good time to really see the effects before you continue to consume, and then again, small dosages. Even things like eating additional food will actually intensify the effects. Mango and grapefruit, some of the citrus-y fruits are known to intensify the effects, so lots to be considered on the edibles.
Matthew Kind: That's great information. As far as supply and demand coming together right now, there's a lot of talk about where supply is. Do you feel like dispensaries are producing less than they need to right now for demand? I know that's kind of a tricky thing to say, but where do you feel like, at least in the Denver area, supply and demand is meeting up?
Danny Schafer: Yeah, I think just for the dispensaries in general, it was obviously the first few months in ramping up things, there was definitely more of a demand than there was supply. However, just in the dispensaries that we visit, I would say they're right at line and have kind of a perfect match so far. If anything, we've scaled up rapidly and are definitely looking forward to more demand. So hopefully the states and federal government bridge some gaps as these different states come on-board that will allow companies like Dixie Elixirs, as an example, that have a very good business model and have proved their ability to scale, that they will open up the ability for wholesale markets and things to that extent. If that doesn't take place then exactly as we see in Washington right now, where the single dispensary that's in Seattle, is constantly out of product. So just a major need for that in more of the wholesale market and hopefully there are some plans to address that.
Matthew Kind: Cool. Now, here's kind of a fun question. If you could clone yourself and do something entirely different but still in the marijuana industry, what would it be?
Danny Schafer: I really like the chemistry piece of it. Again, the importance of different strains, whether it be indexing those strains or otherwise, to standardize some of the different strains that are on the market, actually, that being a very important component, again, more along the lines of pharmaceutical medication. Just because between the T.H.C. and C.B.D. counts as well as different strains with different effects, there is such a wide spectrum of how this plant can be beneficial to society. So I really like the science behind it and standardizing the different consumption options for consumers that are definitely diverse and looking for a range of different products to either treat their ailments or empower their recreational activities.
Matthew Kind: Awesome. Awesome. Well, thanks so much for this interview. If there's anybody that wants to reach out and get a hold of you or go on a tour, what's the best way they can do that?
Danny Schafer: Definitely through our website. We're all fully web-based. We also have people obviously standing by for any inquiries, whether they by phone or email. But anyone coming by way of CannaInsider can actually use CannaInsider as a discount code. We'll honor a 15% discount on any services booked through our site using that promo code.
Matthew Kind: Oh great! That's great. And your website, again, is My420Tours.com, correct?
Danny Schafer: That's correct.
Matthew Kind: All right. Well, thanks so much again. And if anybody has any questions at all, you can leave it in the comments on CannaInsider.com and we'll try to address those. Thanks again so much to Danny and J.J. at My420Tours.
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