Matthew: Hi I’m Matthew Kind. Every Monday and Wednesday look for a fresh new episode where I’ll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. Are you an accredited investor looking to be part of some of the most sought after private cannabis investment opportunities? Get on our free private investment alert service at www(dot)cannainsider(dot)com/invest. Once you have subscribed to the investor alert service you will get access to curated opportunities that the public will simply never see. Again that URL is www(dot)cannainsider(dot)com/invest. That’s www(dot)cannainsider(dot)com. Now here’s your program.
Just as Whole Foods created a whole new market segment for discerning shoppers, Flow Kana is now doing the same for cannabis. Providing a higher quality product while also giving customers transparency on where the cannabis they purchased was grown and under what conditions. I’ve invited Michael Steinmetz, Founder of Flow Kana onto the show today to tell us more. Michael welcome to CannaInsider.
Michael: Thank you. Thank you for having me.
Matthew: Michael before we dive into what Flow Kana is can you tell us a little bit about your background and how you got into this industry?
Michael: Sure, of course. I’m originally from Caracas, Venezuela. I was born there, grown up there, and just recently moved up here to the Bay area about three years ago really in pursuit of understanding this industry. Really understanding how the ins and outs worked and who the different players were and really how I could be a part of it and add value to the current industry. I’d always kind of been a passionate advocate about the space. My mother actually used cannabis for really chronic medicinal reasons growing up. So I very closely followed it during my entire youth and early on adult life and I was always kind of very curious and interested to see it kind of evolve in a professional and responsible manner and kind of move away from the reggae and Rastafari and the taboo that’s kind of associated and the negative stigma around it and I kind of being a close advocate back in 2010 when it was the election time here in California and we were so close to getting it approved. I was like wow this is really going to happen in our lifetime.
So I decided to sell my business in Venezuela around three years ago and I moved out here with my wife really to understand the industry and understand the different aspects of it and different facets and see how I could help move the needle and make it become a more responsible and professional industry and just kind leverage and work with a lot of the operators that currently existed. So yeah that’s kind of how I started. Just kind of a passionate young person in the space and just realized it was really going to happen in our lifetime and it was just up to us to really make it happen. So that’s kind of when we decided to move out here and get to it.
Matthew: Great timing getting out of Venezuela by the way.
Matthew: I think sometimes we get stuck in our North American bubble.
Michael: Oh yeah.
Matthew: I’ve spent extensive time in South America and I’m familiar with Hugo Chavez; who he was and now Maderro but can you just give a little overview because Caracas has a lot of natural resources in terms of petroleum but now essentially the economy is somewhat in collapse and could you just talk about what life was like in Venezuela growing up and then the transition to Chavez and where we are today?
Michael: Oh yeah. I mean that’s actually; well that could be an entire interview in itself.
Michael: We could spend the next hour talking about that but sure I can give you a little bit of a glimpse of what my life was like and to be honest it was a very sad and tragic continuous deterioration of the country since I was born there and grown up there. I was born in ’83. Definitely went through different political schemes or different political parties over my youth. None of which were definitely something that the country should have been proud of and definitely what caused us to get to the Chavez regime in ’98. When ’98 Chavez got re-elected. He gets a major, major victory. Majority vote because Venezuela had been poorly run for many years. A very corrupt country. Very dependent on oil money. A very rich nation so it really never took the time to develop industries and develop manufacturing and educate the people because we were just sitting on this one resource that we could all depend on.
I think that is always a blessing and a curse right. It’s a curse of the black gold that they call it right and yeah when Chavez regime came on in ’98 basically he started taking all the private companies and turning them into public institutions and governmentalizing them and that became very slow and bureaucratic and slowly killed entrepreneurships, slowly killed corporations, slowly killed the industry of the country and he wanted the country to depend on the government and when they wanted food they needed to ask the government, when they wanted water they needed to ask the government, when they wanted electricity they needed to ask the government, when they needed money they needed to ask the government. So they created a dependency and in a very Communist/Socialist regime that was disguised as a democracy for so long and nowadays we’re really, really suffering the consequences. I think it’s close to 18, 19 years of this regime.
We have a country that does not have the necessary basic food and it doesn’t have the necessary education and it doesn’t have toilet paper, chicken, or milk and there’s horrible lines. The crime has skyrocketed. The currency has devalued. People don’t really understand how bad it is because when you read about it in the news it sounds so ludicrous that it’s almost unfathomable. It’s unfathomable and the truth is that it’s probably sometimes even worse than what you get to see in the news when it leaks. So I left with my wife actually three years ago because we were lucky to sell our business in a really opportune time but that was really the motivation of it too. We came to a point where we couldn’t import the goods that we needed to produce and basically we had a massive devaluation. In basically three weeks our currency devalued almost 600 percent. So the cost of my product went up 600 percent and it just killed the economy.
Michael: This was a very intentional play from the part of the government. A lot of people say that they just make mistakes and they’re really stupid and they’re really; they don’t know what they’re doing and I actually think it’s the opposite. I think this is really, really well thought out strategy from the Fidel Castro regime and the communist regime and it’s just a little playbook of communism that they’ve just rolled out in our country. And it’s very, very sad. We went from being one of the wealthiest nations in the world where you basically had; I always use the example that says the Cartier store the first store they opened outside of Paris was in Caracas and like you see the Ferragamo Bags and they were in Caracas, New York, London, and Caracas was this mega capital of the world and we were this dominant force in the world and poised to do great things and we just totally misused it. Improperly used our resources. So it’s very sad to see where we’ve gotten to today and hopefully change will come soon.
Matthew: Wow. It’s really interesting to get that firsthand account. I recently read a statistic that 40 percent of the millennials in the United States favor socialism over capitalism.
Michael: Mm-hmm (affirmative).
Matthew: And that really scared me because every country I go to all over the world where they either formally socialist or currently somewhat socialist the economy never feels the same. It’s kind of like this zombie economy and I see kind of the rise of Bernie Sanders and while he does speak a lot of truth at the same time I don’t think he understands what socialism would feel like and you got to see that whole spectrum through your life. I mean and it sounds like you favor more a capitalist society than a socialist.
Michael: I don’t know Matt. I mean certainly I think capitalism and free markets definitely end up resolving themselves out in the end. So I definitely like that system for sure. I don’t have actually anything against socialism. In fact I truly believe in the socialism on principle when it’s actually done properly and truly socialist. I would not say what we have in Venezuela is socialism. I would say we have fascist/communism/dictatorship that’s dressed up as socialism.
Michael: When I think of socialism I think of Norway or Scandinavian countries where they have access to healthcare and they have access to education and they have access to good unemployment and they have access to a lot of services that the basic population should need and I think in principle socialism should work I just don’t think what we have in Venezuela is socialism. But I would agree with you that in general in countries where socialism is in place it hasn’t been the best opportune model for extreme growth I would say.
Matthew: Right and some would argue that Norway’s socialism works so well because they have such a large strategic petroleum reserve.
Matthew: That they can invest in other things.
Michael: Yeah maybe that’s very true and maybe had we used our oil instead of for the pockets for the very few who stole it; to actually use it for the country in education and once you educate the population and you teach them the tools to build their own businesses and build their own ways of income then they don’t depend on the oil right. I feel like we should be using the natural resources of our oil. Every single dollar we get to figure out how we get out of it. You know what I mean?
Michael: A lot of people just sit pretty and comfortable with this kind of oil stream and they build the businesses and they build really strong motes and defensibility around their businesses to continue to move forward in this direction and I just think that doesn’t serve anybody.
Matthew: Yeah. Qatar has done a great job of that. Kind of taking the oil money and reinvesting it in creating other channels for the economy aside just for oil but then there’s Saudi Arabia that really hasn’t done as good a job so.
Matthew: You’re right there’s examples around the world but it sounds like this is a whole separate show Michael. We’ve got to stay on topic here with Cannabis.
Matthew: So tell us about Flow Kana. What is it and why did you start it?
Michael: Perfect. So Flow Kana really what it is it’s the first organic sun grown sustainable cannabis brand and what we do that is very different from most companies is that rather than going down and vertically integrating down our supply chain we actually partner up with master growers that already have been doing it for multiple generations right and our whole brand and our whole ethos and our whole philosophy is to give the small farmer a unified voice and the scalability that they need to compete in the marketplace because as an individual grower, as an individual farmer you produce too little cannabis. You’re forced to do too many of the pieces to go to market. You’re forced to dry, to cure, to trim, to sell, to market, to distribute, and not really allowed to focus on the core of who you are which is a cultivator, which is growing.
So the whole idea with Flow Kana is to give enough small farmers the services and tools that they need to go to market efficiently in a way that’s scalable with their neighboring farmers and that’s kind of what we’re about and I think was that the question or how did I get started? Was that the second part?
Michael: Yeah or why did I get started? So I got started Matt really because after spending a lot of time in the industry working and networking and I volunteered at a dispensary for some time and I streamlined their operations and their management and they got to learn about the ins and out. I found that because of the weird gray area that this industry lies in both legally and with the whole kind of medical card aspect to it and the licensing structure that did exist but doesn’t really exist in California it created a lot of what do you call like market irregularities I would say and one of the pieces that was really suffering under the current scheme in California was the cultivator, was the farmer. Being so far removed from the end consumer they were year after year pushed down and pushed down and pushed down in price and they were not allowed to send their brand downstream and communicate their values and who they were to the customer.
So we basically came in to disrupt both of those things. We came in to basically pay our farmers fairly, get them into competitive rates in the marketplace, and allow them to connect directly with the customer to be able to tell their stories so that we could stop buying moonshine cannabis which is what this industry is all about right. We go from a black market environment where whatever your dealer had is what you got right.
Michael: You didn’t really question anything. You’re dealer came into your home. You want him out of there as quickly as possible. You don’t really ask him to much questions because whatever he has you’re taking and we moved to a world of dispensaries where you have varieties and you have choices and you can ask questions to a bud tender but you still don’t understand who grew it, you still don’t understand what went into it, you still have no idea what chemicals and pesticides were used in a cultivation, and we came in to basically give all that transparency and visibility down to the supply chain and I think that’s super critical to arm consumers with knowledge and to arm them with more information and facts to be able to base their decisions in the future.
Matthew: And what has the response been to Flow Kana to date?
Michael: It’s been amazing. I mean I think we really hit our core with a lot of consumers at large and other industry folks as well that understood kind of the importance of giving credit where credit was due right and giving credit to the farmer that did spend eight months in the full sun cultivating this plant and loving it and taking care of it. Give him the credit for growing and for putting it out to the world. I always make the comparison that growing into a dispensary right now is as if you went to a Bodega or a liquor store and instead of buying Budweiser or Stella or any of the brands that you buy you’re just buying Bodega beer and Bodega wine and that’s not the case right. Every single bottle and every single beer and every wine has a story and it has a process and it has values and it has an identity and that’s being lost right now in the current system, in the current industry.
We’re buying a whole bunch of moonshine cannabis and I think that’s not leading; that’s perpetuating the problem that we created in the black market in prohibition with our dealer and I think one of the things that we’re trying to push as Flow Kana in this industry is to encourage more people to be ultra-transparent in their practices. To really show what goes into what they’re selling and what comes out and I think and I don’t blame the current system the way it is because in their defense we have been operating in the black legal illicit market for a very long time and very unregulated market and there was lives at stake. So a lot of the cultivators didn’t want to get their brand downstream either. So it’s a weird kind of dichotomy between the legal landscape and how the industry is evolving and how the consumers are pushing the industry forward as a more of a consumer goods product, industry. So that’s kind of where we stand.
Matthew: How is the cannabis from Flow Kana presented and packaged because I think you’re doing kind of something interesting here that listeners would like to hear about.
Michael: Totally. So every single one of our packaged jars we call them are co-branded with the farmer okay. Co-branding means every single jar comes with the name of the farmer that grew it and it comes with where it was grown. So it’s the same way that you buy kind of craft coffee nowadays where it says grown by Eddie Barrientos in Guatemala right. So our craft cannabis will have the label of the grower, it will have exactly where they grew it, and if you go back to our site you’ll know exactly; you’ll know more about their farm. You’ll know exactly about their cultivation practices and you can even connect to them. You can send them a message through Facebook or Twitter. So that’s kind of the unique difference between how we package our product and the reason why co-branding is important too is that at the consumer level it’s going to be too hard and too difficult for every consumer to remember or to learn all the different farmer brands on top of all the different strain names.
The whole industry is very complex and confusing right now. So the whole idea with Flow Kana is that we become an umbrella brand where consumers can be like oh this is a Flow Kana jar, this is a Flow Kana product. Let me see who grew it. Let me see who manufactured it and the whole idea is to gain the trust of the consumer through the Flow Kana and then be able to showcase the story of the grower or the manufacturer or whatever product we’re talking about to the customer.
Matthew: And where does most of the flower come from?
Michael: So most of our flower actually comes from up north from the Emerald Triangle. Particularly the Mendocino area. I think Mendocino is poised to be amongst the quality capitol of cannabis for sure. I think the biggest producing area in the world as most of your listeners know is the Emerald Triangle. You have the region of Humboldt county which is up north and you have the region of Mendocino and Trinity right. Those are the three counties that form the triangle. Out of those three I think Mendocino and Humboldt are kind of the biggest and most evolved and Humboldt while they’ve been focused on volume and scaling and production and that’s kind of what they’re known for. Mendocino is actually been known much more for quality right. They’ve had even more restrictions on how many plants they can grow and how big they can grow them and so the farmers in Mendocino they’ve only been able to grow 25 plants so for them they’ve had to get really, really, really good at growing 25 plants to be able to survive and to depend on that market.
Matthew: Are they huge plants or like the size of trees?
Michael: Yeah. They are massive actually. You’d be surprised. The first time I went to a; the real reason I kind of started Flow Kana was in part of my research when I stumbled onto Happy Day Farms and I went up north and I saw their farm and I saw their entire farm eco system where they not only grew cannabis but they grew other vegetables for the community. So you had your patch of cabbage and carrots and sunflowers and then you had your cannabis plant right next to it and it was such a beautiful eco system and the plants that I saw; this plant must have been 14 feet high. It was twice; a little bit more than twice the size of me and it was massive and you know I’m used to seeing small stressed out plants under LED’s in the indoor and seeing a full, full spectrum and full light. Full eight months cycle underneath the sun to me was really kind of changed how I understand the growing; the cultivation aspect of the industry for sure.
Matthew: Now it sounds like there is a strong tradition of growing cannabis well in that area, in northern California. Obviously ideal temperatures and things like that but what about the characteristics of the growers themselves. They kind of seem like they’ve really gone deep. Like these are the Jedi growers up there. Would you say that’s true?
Michael: A 100 percent. I mean these are; when we say master growers we don’t say this loosely and I think they have I would say 95 percent of our farmers are multi-generational farmers so these are second and third generation cannabis farmers. So this is people that have been working on the land for decades and not only working on the land but really getting good at picking the right genetics for their plot of land. One of the things that’s really interesting that’s coming out in cannabis that has been kept under wraps and under prohibition is the whole idea of Appalachians. The same concept of Appalachians with wine of Sonoma or wine of Bordeaux is that every single cannabis plant and every cannabis seeds is very particular to the environment in which it is grown in. So a farmer that grows in a southern facing wall has totally different sun exposure than a farmer that has an eastern facing wall and someone that is at 1,000 feet is totally different than someone who’s at 300 feet and then there’s the fog line.
So how close you are to the coast has more salt water or less salt in the air. So the humidity is different. So all these different aspects play a huge part in the cultivation. So for instance one of our farmers actually told me this story this weekend which I thought was really interesting is that he finally upgraded and he bought a different plot of land which was only I think he said 600 yards away from his previous plot of land where he had been living for forty years and he said that last year when he planted the same genetics and the same grow cycle, the same everything that he’s always done in this plot of land that just only 600 yards away the yield was terrible. It was totally off. Nothing worked out and he was fascinated that of course he knew this already going into it that it would be different but not that much so and I think that’s what we’re going to start seeing in cannabis and that’s what’s so unique about the strains that we have in Flow Kana is that the strains that we carry are very boutique genetics; a very rare genetics that the farmers have been handling for decades.
So they’ve really mastered it and perfected it between the soil and the angle of the sun and how much water it gets and what you get is a strain that won’t grow anywhere else in the world except there with those same conditions to turn out exactly the best that it does and I think that part of the cannabis plant is fascinating.
Matthew: So with Flow Kana you get this beautiful glass jar, this great presentation and you’re holding it in your hand and you get to learn about the farmer and the region it came from. You’re getting more benefit and you’re paying a higher price I assume.
Michael: Mm-hmm (affirmative).
Matthew: On a program basis how does it compare to say like the median gram of cannabis flower in California?
Michael: Right. So actually we price our ace at forty dollars an eighth. I would say that for better or for worse dispensaries have created a bottom shelf, a mid tier, and a high end cannabis category. That’s usually what you see in a dispensary when you walk in is three general categories low end, medium, and high end and within there the price ranges a lot. So I would say the high end cannabis ranges from between forty dollars to sixty-five dollars and eighth is probably where you see the top end cannabis and we chose to position our cannabis on the low end of the high end cannabis if that makes any sense. So forty dollars being the low end of that category and that’s kind of just a personal belief of ours that I’ve always kind of hated in the world really why it is that you’re going to pay for something organic and the organic one has to be more expensive than the chemical one that was processed in the lab.
It’s kind of like the incentives are totally off in the way that we’ve built the world that we incentivize one cent when all these big corporations to continue to grow under poor conditions and we charge farmers that are growing organically; we force them to pay for a permit so they can get organic certified so that makes their product more expensive. So I’ve always felt that to be backwards in the world. So our hope with the cannabis is that we can do it with Flow Kana is that we can actually show that hey we can produce incredible high grade sun grown organic cannabis. Probably the best quality you’ll find in California and actually make it at an affordable price.
Matthew: I think it would be easy to change the whole market towards organic if we got rid of the organic term and just called organic regular, and then we call the other extra chemical or doused in chemicals and pesticides. No one would want that.
Michael: That’s exactly right Matt. I mean I’ve always felt that was upside in our world. You should put a label on the ones that have the chemicals and like hey this has wax and this has whatever; poisonous gas that was used in World War II whatever.
Michael: That should be notified. That should be told to the consumers. We should just live in a world where we just assume everything was done with organic and love and care but we don’t unfortunately. So yeah that’s kind of the reality and hopefully with cannabis it can be a little bit different.
Matthew: Now tell us about your app and the ordering experience.
Michael: Yeah perfect. So a lot of people actually confuse Flow Kana as a delivery service right because I would say that our go to market strategy was a delivery service. We always wanted to be a cannabis brand and always be known for that but when we tried to take our brand and put it in dispensaries really early on in the project I would say about a year and a half ago, two years ago we were a little bit ahead of our time. Dispensaries were not used to prepackaged flower. So they were like you’re crazy. I’d buy my cannabis by the pound and I put it in my own bags why am I going to be your prepackaged flower? So we were like okay screw it dispensaries won’t take our product let’s just start a delivery service. Let’s showcase the value of our farmers. Let’s tell their stories. Let’s showcase the quality of the medicine and let’s build our brand direct to consumer first and then see if we can then back into selling to dispensaries and doing wholesale.
So that’s exactly what’s happened now two years afterwards where we’ve built kind of a little bit of a name for ourselves and a reputation for ourselves and now dispensaries are excited to work with us and partner with us for our prepackaged flowers and we’re super excited to work with them as well. So your question was what is our app and our delivery service? We still continue to do a direct to consumer aspect to our business but we’re not a regular delivery service like anything you would find in WeedMaps. We don’t have a bunch of edibles and topicals and creams and tinctures and all these other products. We just focus on our one product that we do really, really well which is flower. So we started off a year and a half ago with the delivery service and it’s a web app based service.
So you basically go to www.flowkana.com, you browse through our menu. With a few simple clicks you’ve uploaded your medical card, you’ve uploaded your license, and you place your order and we verify; for the first time user we’ll verify you as a patient. Once you’re cleared from that verification process then within 19 minutes we get a delivery to your door. So it’s basically on demand cannabis delivery. Our average delivery time is around 19 minutes.
Matthew: Okay so in California exclusively right now?
Michael: That’s exclusive I would say our delivery service is exclusively actually to the northern California area, to the Bay area.
Michael: We only deliver in San Francisco and the East Bay right now and we’re doing wholesale. So you can find our Flow Kana flower in dispensaries all over the Bay area and also in LA; Los Angeles. So in Los Angeles you can find us in dispensaries down there and our; it’s funny because our delivery service was kind of our go to market strategy. We actually built a really, really incredible customer service team and incredible driving team and we actually have a really kind of exceptional service so now in this moment and time we’re actually deciding what to do with both. We’re kind of having a wholesale program in placed and a direct to consumer in place. So we’ll probably maintain those as long as the laws permit and as they evolve over time over these next couple years.
Matthew: And what have been the most popular (28:37 unclear)?
Michael: Popular flower strains on our menu? I mean I think that varies Matt. I mean I think the whole basis around our company is that they’re all small batched okay. So unlike I think what some of the more commercial industry is moving towards which is producing 1,000 pounds of OG or producing a 1,000 pounds of Sour Diesel. We really want to focus on small batch, small lots, and allowing the person to really learn about the farmer and find the farmer that they like. Traditionally what we’ve seen is that people that like a certain farmer they’ll really enjoy all their strains and people that try a farmer that they don’t like say it’s too strong or too potent or giving them too much anxiety most of the strains from that farmer are that way as well and the reason being most farmers kind of grow what they like to consume and obviously it has the energy and intention of the farmer during the growing process.
So more than being kind of strain specific in terms of what strains have been doing well in our platform I think certain farmers have found their niche customers that really like their product.
Matthew: Okay so you’re buying more the farmer and the region than you are the strain in this case.
Michael: Yeah I think so and I think like I actually hope over time that I think the whole strain naming thing is a little bit of a nonsense to be honest right. There’s zero accountability. If someone says this is Sour Diesel there’s really not a way to know if that’s Sour Diesel or if it’s something else.
Matthew: Right, right.
Michael: There’s thousands and thousands of names and it’s very, very confusing. We actually have a very kind of talented design team in house so we’re trying to figure out a way how to reclassify cannabis in a very digestible way. The same way that you have IPA’s and you have pilsners and you have the porters and whatever else that you have. I think something like that needs to happen in cannabis where we reclassify it in a way that's a little bit more understandable and digestible and sure each strain has an enormous variability with the genetic code but there is some sort of classification of that very high level that we can all kind of agree on as an industry to make it easy for customers right. Like someone coming into the industry that has never tried cannabis before especially an elderly person they’re probably not going to like to try green crack or under enough amount to swear and the program Thunder F something else.
I don’t know it’s funny because I actually read an interesting book called “The Last Call” and it was a story kind of about prohibition; the alcohol prohibition and you know during the alcohol times and under prohibition it was a very, very similar landscape right. You needed to have a medical card to buy medical grade alcohol from medical licensed dispensaries and those names back then it was just like whoever built that barrel in the basement got to name the barrel whatever they wanted right. So it was more of like the farmers right now they name the strains whatever they think they want. Some of them keep genetic lineage in place but I think the naming convention is very confusing to customers. So I don’t know how that’s evolve over time but I’m excited to see how it does.
Matthew: And where do you see Flow Kana evolving over the next couple years?
Michael: Yeah so I mean I think as the industry, I think as industries evolve and mature what usually tends to happen is that there’s a great big degree of consolidation. There’s a lot, a lot of noise right now in the industry. There’s a lot, a lot of brands out there. There’s a lot of people because of the regulatory system has been not so robust since 1996 when they kind of put in place the Compassionate Care Act here in California when cannabis first became legal. The legal system was kind of left for the market to kind of evolve and it’s kind of done some great things and it’s done some not so great things as well.
So I see Flow Kana kind of being really true to its core and really being true to being a brand that people can recognize and can trust and we see ourselves moving into other categories not just flower and having Flow Kana some sort of edibles and topicals and tinctures because the whole idea is that as the industry matures and more people come in what are those people going to look for? What brands are they going to trust? What are they going to look for in a product and I think the easier it is and the deeper connection they can form with one brand or several brands the better it will be for them. So kind of staying true to our core and just kind of becoming much more of a recognized brand and a trusted brand in the industry.
Matthew: So a lot of people listening don’t always get to hear of all the difficulties in starting a business. They think that’s it’s all you wave a magic wand and you’ve got this successful business. What have been some of the difficulties in getting Flow Kana going? Is there some setbacks or times where you’ve had to pivot and try different things?
Michael: Yeah absolutely. I mean I think what you said is very correct. I think building a business and starting a business is a very challenging task and it’s something that you really, really have to love what you’re doing and be extremely passionate about it and be very convinced of your path and the decision you took to embark in entrepreneurship because the truth is it’s so hard and you get so many problems and so many obstacles along the way that you have to have that passion and that love and that intensity and that connection to really overcome that and in Flow Kana I would say it was no different. I mean I think we’ve been moments where right between fund raising where the cash is getting close to the end and you’re struggling to figure out how to pay the bills and then oh the cash comes in and then you can breathe.
Then there’s times where the team doesn’t work out and you bring on people and you test them out for a while and some people the paths don’t align and you’re unable to move on. So for us as a company especially in this really nascent industry that’s being formed. I think the real, real thing that we kind of stated hard is to stay very nimble and adaptable and stay very just quick to decisions because one thing that we know for sure is that this industry is going to change dramatically over the next coming years and I would even say months. From the way the industry looked January 1st to the looks of today is totally different in my lens and the truth is this is not we’re inventing the personal computer and we’re going to figure out if people like it or don’t like it. This is just like we know that there is a demand right. People love cannabis.
The demand exists. We don’t have a demand; we’re not demand constrained. That’s not our biggest problem that we’re trying to solve. We’re not trying this fight for market share or education. What we’re really trying to solve is what’s going to happen to the legal landscape? What’s going to happen when new consumers come online right? I feel like in a way the illegal, legal market and the trends and the patterns that we see in dispensaries in buying behaviors and purchasing behaviors they’re very, very skewed because I actually believe the majority of the market but in the 90 plus percent hasn’t even entered yet to the legal landscape.
So what’s going to happen when all these new consumers come in and when other demographic comes in and older people come in and baby boomers come in? So it’s like this industry is going to change a lot both in what the consumers want, what the legal landscape is going to be, and I think for us being adaptive and nimble and definitely pivoting along the way has been critical. I think the biggest pivot we’ve done to date has definitely been refocusing our business from direct to consumer to wholesale; selling to dispensaries and that was kind of a challenge to overcome in itself and figuring out how do we adapt the team that we currently have to the new kind of set of products and services. So yeah I mean you’re spot on with that question.
Matthew: How do you get the dispensaries to care about your product? I mean they’re getting a lot of pitches all the time and they have a lot of different things to show and there’s limited counter space and retail space. So how do you get them to care about you and to make sure they show customers that walk in Flow Kana?
Michael: Well I think to be successful in business and really in life Matt you really have to take care of your relationships. You really have to foster deeper and more meaningful relationships and with our dispensaries we don’t really just treat them as a vendor relationship. To us we see them as partners. It’s like how do we allow; how do we get Flow Kana to grow in your dispensary and how do we take you to grow with us? So a lot of what we do is we actually spend a lot of time with our marketing team and our sales team with each client figuring out what are those strategies that will help you reach your goals and help us reach our goals at the same time and I think I firmly believe that business is about win/win and I think if you build; if you win at someone else’s expense then you really haven’t created any value. You just created kind of a zero sum game and I think unfortunately to this date because cannabis has been in this black market and has been under prohibition a lot of people have put those short term gains over the long term because there’s been no clarity, there’s been no visibility to what the long term is going to look like and I think now that we get into a more regulated marketplace and a more stable marketplace I think it’s really important for people to start switching that mindset from the short term to the long term. And how do we build the relationship that I don’t just sell a couple of jars of Flow Kana to you today? How do I sell a couple jars to you from Flow Kana for the next ten years?
Michael: So I think when you go into a relationship with the intent of being a long term win/win it really changes the game and that’s kind of how we approach our partner dispensaries.
Matthew: Michael I want to transition to a couple personal development questions if we can.
Michael: Perfect, yeah.
Matthew: Is there a book that stands out in your mind as having a big impact on your life that you’d like to share with listeners?
Michael: Yeah absolutely. I mean I think personal development is something that I’ve taken very deep to heart from very early on in my life. I was very lucky that my mother was a life coach. So when I was growing up as a little kid I was twelve or thirteen and I was reading Deepak Chopra and Wayne Dyer and Tony Robbins and all these personal development life coaches and learning the tools and the strategies to grow yourself because I think it’s really funny because human beings are the one species in this planet that really have the choice to grow right. Every single object and every single thing on this planet has always; it’s unlimited right. A tree will grow as tall as it possibly can. The branch on the tree will grow as tall as it possibly can. The leaf on that plant will grow as tall as it possibly can to reach more sunlight and I think growing and expanding is always like a principle or the universe and human beings are the one element of it that really have the choice to even continue to grow as fast as you can or as long as you can or you could settle for something less.
So personal development is something that I really, really spent a lot of time with and I purposely leave a lot of time during my day to growth and in terms of books yeah well I could name my heroes really. The way that I approach my personal growth was I pinpointed in life the leaders and the people that I most greatly admire and the people and the leader that I would love to kind of be or be known as or called like and I think when you pick those people that you admire and you like then you study them like it’s the only thing you need to do. You go and you read all of their books. You watch all their You Tube interviews. You ask them questions online if they can; if they can answer and identifying those people that you want to be gives you a vision for how you can prepare for yourself and to be honest success leaves clues right and you can actually; there’s no secret mystery to how Steve Jobs got to where he got or Richard Branson got to where he got or Warren Buffet got to he wanted.
You can actually study what they did and you can actually learn from what they did and you can choose to make the same decisions that they did and at the end of the day life is about sacrifices. It’s about choosing what you’re going to specialize in and in terms of books yeah so one of my favorite business guru’s is Jim Collins. He’s got two books that are my cornerstone for business which are “Good to Grade” and “Built to Last.”
Matthew: Oh yeah.
Michael: Those are my two favorite books. I love “Think and Grow Rich” by Napoleon Hill. An amazing personal development book. “How to Win Friends and Influence People.”
Matthew: Oh yeah that’s a great one too.
Michael: (41:40 unclear) that’s one of my favorite books. I’ve also; I like marketing myself it’s kind of like my area that I really, really enjoy. So another person I really admire is Simon Sinek. He’s got a fabulous couple books. Obviously Steve Jobs also is a known marketing hero. I think more than; I think there’s definitely not a one size fits all recipe for like let me find a book that’s going to change your life. I think that decision is very personal. I think you have to choose who you want to be and or who you’d like to be. What skills you’d like to have, what characteristics as a person you’d like to possess, and then figure out the books that match that in the long way and you’ll figure it out. That’s kind of what my philosophy is around books.
Matthew: Is there a tool web based or otherwise that you consider indispensable to your everyday business or productivity?
Michael: Hmm interesting. Well internally in our company we use several productivity tools. I think probably amongst my favorite would be Slack.
Michael: Slack is an internal messaging tool for companies and you can very easily make groups and you can make channels. So you can have a marketing department channel group, you can have a sales department channel group, you can have a logistics channel group, you can have an everyone channel group. So I think Slack has been a really, really great tool to actually communicate internally with the company and it’s actually made I think my life much easier. That’s kind of one of my favorites right now for sure.
Matthew: What tool did Slack replace for you? Were you using something else and you transitioned to Slack?
Michael: That’s interesting.
Matthew: And you liked it better. I mean is it replacing instant Messenger or does it replace like a project management tool for you?
Michael: That’s really interesting because it’s like internally in the company we did not use a messaging service before Slack. So it’s kind of weird it’s like now I don’t see how I ran my company before without Slack you know.
Matthew: Okay so it’s in addition too it’s not a replacement.
Michael: It’s an addition. I mean I guess there are some competitors like Hip Chat is a competitor and we definitely used just email a lot so I think Slack replaces a lot of email definitely and we use Instant Message on the Iphone and what’s that but this was designed from the needs of a company inside and that’s been; and the product really shows for that.
Matthew: Well Michael as we close how can listeners find out more about Flow Kana online?
Michael: Okay so I mean there’s I guess the main source of information would be www.flowkana.com. Also definitely look us up on Facebook. We are constantly putting out original content usually around the lifestyles of our farmers and the people that we work with. Showcasing a little bit about their life. So yeah I invite you guys to kind of follow us on Facebook and really just read about us online. I think that’s kind of the best way to kind of stay in touch.
Matthew: Michael best of luck on Flow Kana and thanks so much for coming on and educating us today. We appreciate it.
Michael: Thank you Matt. I really appreciate it and I look forward to working more in the future.
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Michael Steinmetz is the founder of Flow Kana. Flow Kana is looking to be the Whole Foods of the cannabis market. Learn why cannabis enthusiasts are increasingly wanting to know where their cannabis comes from, who grew it, and under what conditions. Imagine being able to communicate with the grower of your cannabis to ask questions, with Flow Kana you can.
Learn more at:
[1:29] – Michael’s background and how he got into the cannabis space
[3:52] – Michael talks about what life was life in Venezuela
[10:44] – What is Flow Kana
[14:13] – Michael talks about the response to Flow Kana
[16:16] – Flow Kana’s packaging
[20:12] – The characteristics of the growers
[23:02] – The cost of Flow Kana compared to medium grade flower
[25:30] – Michael talks about Flow Kana app and ordering experience
[28:28] – Popular Flower strains
[32:05] – Where Flow Kana is going in the next couple of years
[33:48] – The difficulties in starting a business like Flow Kana
[37:10] – Michael talks about how he pitches to dispensaries
[38:59] – Michael’s book and tool recommendations
[44:14] – Contact details for Flow Kana
What are the 5 Trends That will Disrupt The Cannabis Industry?
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