Most Recent Interviews
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- Lindsey PateCreating Award Winning Cannabis Despite Regulatory Challenges – Lindsey Pate
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- Dustin JohnsonCreating a Recognizable Cannabis Flower Brand – Dustin Johnson
How can dispensary owners delight customers to make them repeat customers?
Jeff Harris of SpringBig shares how smart dispensaries are crafting offers via text message to drive business.
[0:57] – What is Spring Big
[1:21] – How did Spring Big come about
[3:00] – Jeff talks about the tools Spring Big offers
[4:23] – Biggest benefit of Spring Big
[5:45] – What are triggers
[7:49] – Jeff talks about the most effective campaigns
[9:53] – How often should you send out an SMS
[11:46] – How do dispensaries measure customer loyalty
[13:14] – Jeff talks about Spring Big analytics
[14:28] – How does Spring Big differ from its competitors
[15:49] – Jeff talks about Spring Big’s pricing structure
[16:45] – Spring Big’s fundraising efforts
[17:29] – Jeff answers some personal development questions
[21:23] – Contact details for Spring Big
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Dispensaries are feeling the competitive pinch and are looking for ways to forge a closer relationship with customers so their eyes don’t wander to competitors. Here to tell us how dispensaries are leveraging technology is Jeff Harris from Spring Big. Jeff, welcome to CannaInsider.
Jeff: Thank you. I’m excited to be here.
Matthew: Give us a sense of geography. Tell us where you are in the world today.
Jeff: I am actually here in rainy Boca Raton, Florida today. So, that’s where our headquarters is located, and I just got back from an end of year break and excited to get started in ’18.
Matthew: Great. What is Spring Big at a high level?
Jeff: Spring Big, we created a loyalty and digital communications platform for cannabis retailers to be able to create and manage their own loyalty programs, as well as to leverage the database that they can build through that program to communicate with customers in a very easy but effective manner.
Matthew: What sparked the idea to start Spring Big? What were you doing before and what led up to it?
Jeff: So, I actually had started a loyalty marketing company by the name of (1.26 unclear), which services large retail chains in the non-cannabis space for loyalty and data driven marketing programs. A couple of years ago we had the idea of creating a platform for smaller businesses to leverage a lot of the technology that we created in (1.44 unclear) and from there we created Spring Big. About a year ago we pivoted into the cannabis space because we saw a big need for our services and our product, as well as a big opportunity in the space.
Matthew: It’s a pretty rich, entrepreneurial environment there in Boca Raton I’d say. I mean, I hear a lot about investors and different businesses being started there. Can you tell us what it’s like there?
Jeff: Yeah, so I think it’s been moving along on that path for a couple of years. I think there’s an excitement around tech startups here. I think it started more in Miami and Ft. Lauderdale, and it’s moving a little bit north to Boca Raton, Florida. There’s another big cannabis technology company in the area, Bio Track THC. It’s located in Ft. Lauderdale as well. And with Florida legalizing medical marijuana about a year ago, I think you’re going to see more and more companies, in this space in particular, both obviously in the growing and retail side but also on the technology side, being here to not only support Florida but support all of the retailers across the country.
Matthew: Well, let’s dig in a little here. Let’s say a dispensary owner decides to integrate Spring Big into their dispensary. What tools do they have in their tool belt now that they’ve integrated it.
Jeff: So, there’s two different ways that they could integrate it. Depending on the point of sale system that you’re using, we can actually allow them to leverage Spring Big right through their point of sale. We’re already integrated with Green Bits and with MJ Freeway and we’re shortly going to be integrated with Flow Hub and Cova and we’re hoping to integrate with Bio Track as well. So, therefore if they’re integrated, they can actually leverage their POS to transfer data into the Spring Big platform, and then they have access to the Spring Big dashboard to do all the things that they would need to do to help them manage their loyalty program, as well as to communicate with their customers through SMS. We offer email as well, but the primary communications tool is SMS.
If they don’t want to leverage the POS integrated solution, we actually have the ability for them to leverage a tablet solution. So, they can either use their tablets or our tablets. Either the customer or the bud tender can enter in the information that is necessary to keep track of the customer’s performance or purchases in the program. And then from there, it works the exact same way. The platform does all the calculations. It keeps track of points. It builds their database and obviously allows them to leverage the dashboard on our platform to communicate with customers.
Matthew: What are the dispensary owners telling you is the biggest benefit?
Jeff: I think, two things. One, let’s focus on the integrative solution first. They love the integrate solution, and we’re actually the only company in the industry that provides that kind of integration that allows us to pull transaction information from the point of sale. So, the biggest benefit I think that they’re seeing is obviously the less clutter on the counter the better. So, they prefer not to have an extra device an extra tablet on the counter. So, using our integrated solution, they can eliminate the need for an extra tablet, which is huge because then they just have their POS system there but they don’t need a second tablet. Again, as I mentioned, we’re the only company in the industry that offers that solution to them, but if they don’t have an integrated solution, having the tablet works just as well. It just provides a little bit more clutter on the counter.
In terms of the biggest benefit, I think our communications platform is probably where are dispensaries are telling us they’re getting the biggest benefit. We have a very easy to use but robust communications platform that really does help them drive business into the store. It really allows them to stay in touch with their customers, allows them to communicate with them whenever they want. It allows them to segment those customers in different ways. So therefore it’s a major benefit for them to be able to very easily but effectively communicate with customers.
Matthew: Okay, tell us about how they can communicate. Can you tell us a little bit about what triggers are and what’s important to know there?
Jeff: Sure. So, triggers are behavior based communications that are triggered when that behavior happens. For example, let’s leverage win back or inactivity. So, a customer has come into the store, but yet they haven’t seen that customer again in a matter of time. Let’s assume it’s two weeks, four weeks, six weeks. They have the ability to create a behavior based trigger that says if I haven’t seen Jeff Harris in X amount of days, send them this message. If I haven’t seen Jeff Harris in Y amount of days, send him this message. Those messages are created one time and then it automatically triggers that communication when the number of days have elapsed where they haven’t seen that customer. So, it’s not like they have to go into the system and do this time and time again. They can go into the system, create it once and then it will run as long as they want it to run until they stop it.
Matthew: Does it get granular? For example, let’s say I know Jeff Harris wants to buy or he typically buys an eighth of an ounce of Blue Dream. Could I say, hey offer a pre-roll if you buy an eighth in the next 48 hours or something like that? Can you get to that level of granularity?
Jeff: You can get to that level, yes you can. You can do that, but in order for us to really know that Jeff Harris bought that eighth, we need to be integrated with the point of sale system, and once we’re integrated with the point of sale system, not only are we pulling in how much the customer spent, but we’re also pulling in what they bought. As long as we have the ability to know what they spent, how much they spent and what they purchased, yes you have the ability to be able to get very granular in your communication.
I think you’re going to see a lot more of an opportunity in that are probably within the next 6 to 12 months as the integrations that we have with POS get a little bit more sophisticated and we have the ability to pull in that information. It’s coming.
Matthew: What are the most effective campaigns in terms of ROI, I mean, anecdotally what do hear dispensary owners saying? Is it the SMS or email triggers? What is it?
Jeff: SMS for sure. Just some general statistics, the open rate for an email on average is somewhere between 15 to 25 percent. So, if you send out 100 emails, 15-25 people are going to open it and then of that, a certain percentage, probably about 10 percent are going to act on it, as compared to SMS where the open rate is about 99 percent. The actual acting on that SMS is probably about 10 times higher in scale than in email. So, there’s no doubt that SMS is a much more effective communication tool. Also it’s faster.
An email normally gets opened up on average within about a two day period of time. An SMS gets opened up on average within four minutes. So, therefore, a lot of our dispensaries use this to drive business that day. So, if they see that they want to drive additional traffic that afternoon, if they send a text message out 11, 12, 1 o’clock in the afternoon, they’ll see actual business coming in from that text message that day. As compared to email where it’s going to be… you have to be thinking about it a lot more in advance because it probably takes a few days for them to open it and until they act on it. So, SMS is for sure provides much higher ROI than email at this point.
Matthew: And then the SMS message you can opt out of each one that goes out so customers don’t get frustrated or anything if they don’t want to receive them?
Jeff: Yeah, absolutely. So, they can definitely opt out if they don’t want to see them. The opt out rates are much lower in this industry than in other industries and I think primarily that’s because they do want to know. Normally when dispensaries sending out or a retailer sending out an SMS message there’s a deal attached to that message, and customers want to know about those deals. So, we actually see a very low opt out rate. Lower than in other industries because of that phenomena.
Matthew: Every day is too much, but is there a sweet spot in terms of how often would be a good rule of thumb in terms of sending SMS out there so you get a good amount of engagement but you’re not frustrating customers with a deluge of too many text messages?
Jeff: Yeah, I think that’s a fair point. I think probably about three times a week is probably a good sweet spot for dispensaries. You do have some dispensaries that are sending out, they have daily deals. If you think about a restaurant or a lunch spot that sends out their daily specials, you actually have some dispensaries that use our daily deals trigger in a similar way where they have a deal that goes out. They don’t necessarily use it for every day of the week, but there are certain days of the week that they automatically set up a daily deal. I would say probably three to four times a week is enough to get, to catch people when you want to catch them, but on the other hand it’s not over bearing in terms of too many text messages.
Matthew: That makes sense. Can you add a picture in an SMS message to show what you’re trying to promote or not yet?
Jeff: No, so actually there’s a couple of ways. We actually are adding on MMS in the next month or two. But in the meantime yes you can definitely send a picture because what you can do is you can attach a link to your message, so therefore the message could have an embedded link and you can just click on that link and then anything that you want to display through that link you can. So, retailers have the ability to send pictures and send YouTube videos, direct them to websites. Any place they want to go they can do that through what they call a mini url or it’s a smaller version of a link that allows you to send it within an SMS message that allows people to take advantage of all those opportunities.
Matthew: That’s good to know. Now this begs a broader question. How does a dispensary owner know if they have loyal customers? They might say well that marketing campaign was great or this one wasn’t so great, but how do they actually know that they have an engaged customer that has a loyalty to that particular dispensary?
Jeff: Yeah, that’s good questions. So, I think from a data driven standpoint the way you’re going to know is by creating a test and control group. So, therefore anecdotally now they kind of have an idea because they can see when they send out messages what the responses versus days that they don’t send out messages. So, there’s a lot of anecdotal evidence, but if you really want hard evidence, the only way to do that is to create a test and control group. Let’s assume you have 2,000 customers in your database. They may send out 1,800 customers the message, but they may hold 200 back. And then they can actually measure the performance of the 1,800 versus the 200. Then they can actually see in very specific terms what the life was by sending out that message and by having them in the loyalty program.
From a loyalty program standpoint, because it’s a self-select process, meaning Jeff Harris walks into the store and I select to join that loyalty program, you can definitely see the difference between loyalty members and non-loyalty members, but the most effective way to do it is with the ongoing communications that they send out to have a test and control group that they can actually measure their performance differences.
Matthew: Looking at Spring Big analytics, what’s the biggest insight your clients get? Particularly when they first are up and running. Is there an aha moment or anything where that you hear the most from them saying, hey this is really helpful?
Jeff: Yeah, you know, in broad terms I think the biggest Aha they get is wow this really really works. I think people kind of believe that if I message my customers it’s going to work, but you really don’t believe it until you see it. When they start building their database and start sending out messages that makes sense for the customer, again that’s a big deal. You need to be thinking about the type of message that you’re sending and what call to action that you’re asking the customer to act upon. As long as they’re being smart about how those messages go out, they see an immediate lift of traffic and immediate lift in sales. We have a retailer in Nevada that tested it out and he tested it on one particular product and he literally sold out of that product in two days. He thought he had a lot more inventory than he needed for two days. He actually felt that wow this thing really drove business, brought people into the store and they bought the product that he was promoting in the message. I think the biggest aha I think they get is wow this thing really really works and they definitely have an engaged customer base that takes advantage of these offers.
Matthew: There’s some other tools out there like Baker which just raised a lot of money. How would you say you differ from a tool like Baker or overlap?
Jeff: I think that’s a fair question. I think Baker does two main things. They have a loyalty and digital communications package and they have an ecommerce platform. I think from our understanding a big focus of Baker’s on their ecommerce platform more so than their loyalty and communications platform. So, they’re providing a wider set of services, but I think by providing a wider set of services they’re not going as deep as they can on the loyalty communication side.
Spring Big on the other hand only provides loyalty and digital communication and we partner with ecommerce companies to provide the ecommerce support when needed. We’re also partnering with POS companies. So, I feel like there is definitely some overlap with Baker. I think probably the big differences are the depth of our product offering as compared to Baker’s are the loyalty communications. And the second is our experience in loyalty. As I mentioned before, I’ve spent 20 years in the loyalty business, so therefore our understanding of loyalty and how it works and how to design the right kind of program to drive the right results are probably unparallel to this industry at this point in time.
Matthew: How does pricing work for clients? What can they expect to pay? A lot of people in this industry have a fixed budget for marketing and software and they kind of want to have a predicable expense. So, what can you tell us about pricing?
Jeff: Our approach to pricing is a bit different. We actually do not charge a monthly platform fee. We give them the ability to leverage the software at no charge, and then we charge them for the messages that they send out. So therefore, depending on the number of messages they send out in a month, that’s what they pay. So therefore, for retailers that are on a fixed budget, they know how many messages they need to send out each month to hit that budget. We can help them do that. For those retailers that are not necessarily focused on okay I have $500 a month to spend for this activity, but they want to leverage it to drive the ROI that they’re looking for, they have a little bit more freedom to send out more messages or send out messages more frequently. Our pricing approach is a bit different. We only charge for the messages that go out. We don’t charge for the software.
Matthew: That’s cool. Where are you in the fundraising process? I know you’ve been out there raising some funds. Can you tell us a little bit about that?
Jeff: Yeah, we just closed our $3.2 million round a couple week ago. So, that round was fully funded around the middle of December so we’re in a good position financially from a capital standpoint to do the things that we need to do this year to continue to move business forward and compete effectively in the marketplace.
Matthew: Are you still looking for investors, or is that chapter closed for now?
Jeff: That chapter’s closed for now.
Matthew: Okay. Let’s pivot to some personal development questions to help listeners get a sense of who you are personally, Jeff. Is there a book that has had a big impact on your life or way of thinking that you’d like to share with listeners?
Jeff: You know, there isn’t a particular book. I do a lot of reading just in terms of general business. So, I spend a lot of time trying to understand what’s happening in the marketplace, in the overall business marketplace. So, spending time with Business Week and Forbes and Fortune, as well as a particular industry publications within the cannabis space probably have more effect on me than a particular book. I’ve been doing this now for about 30 years. Actually my dad was my… I used to work for him when I just got out of college, and I learned a lot of how I behave from a business standpoint by observing him and watching him and working with him. I feel that I continue to try to develop my skills. We always got to continue to develop our skills, but I try to do that by understanding what’s happening in the business marketplace overall and how does that affect me and how do I take advantage of what I’m understanding and what I’m learning.
Matthew: Is there a tool, web-based or otherwise, besides Spring Big that you feel has a great impact on your day-to-day productivity?
Jeff: Yeah, actually it’s a tool that I started using a little while ago. It’s called Mix Max. It’s a tool that connects with Gmail that really allows me… it’s not an email tool, but it really is a tool that allows me to manage my activities and my schedule so I get the most out of every day. I’m a big believer in working hard but working smart. So, it allows me to work a lot smarter, and ever since I used it it’s making a big difference in just how I manage my schedule and how I’m being able to be a lot more productive every day.
Matthew: One other question. Every day I have lots of people email me but I’ve noticed there’s a ton of people in the Millennial category that are really anxious to get into the industry, and they say how do I get in, how do I get in. I always say proactively help a prospective employer get more customers or reduce some expense is always a great way. Is there any helpful hints you would have for people particularly in that age demographic that want to get in but perhaps don’t have a lot of experience that might be helpful to them?
Jeff: Yeah sure, I think there are probably three main areas. I think obviously on the sales front there’s just so many new entrants into this marketplace. There’s so many opportunities for aggressive, smart, young people who want to go out there and help companies build their business. From a sales perspective to get in, I think that’s probably what I’ll call the straightest shot to get into this industry. For example, we’re looking to hire probably six or seven salespeople across different parts of the country right now, whether it be on the West Coast in Southern California or in the Mid Atlantic region. From a sales perspective, that’s a great way to do it.
The other two ways I think from an engineering, from a computer programming standpoint there’s such a high need for computer programmers and so many of those computer programmers are millennial in nature just because of the skills that they have. There’s so much opportunity there, as well as in the analytics front too. There’s a lot of people coming out of school with analytics backgrounds and analytics training, and there’s going to be such a huge need for analytics in this marketplace. So, I think millennials that either have skills in analytics or programming or people that are just smart go getters that are interested in taking advantage and getting into the marketplace, I think sales would be a great opportunity.
Matthew: Thanks for that, Jeff. I just want to let everybody know that isn’t just for millennials. It’s just I’ve gotten a lot of inquiries recently about that. So, I just wanted to make it specific for them, but it is also general. Well, Jeff as we close, how can listeners learn more about Spring Big and also for potential clients or dispensary owners, how can they learn more?
Jeff: Obviously they can go to our website www.springbig.com. They can learn a lot about us there, but obviously when they go to the website we would love to hear from people. We get inquiries on the web all the time and we’re a very high service, high touch organization. We want to connect and help dispensary owners and retailers leverage our toolset to make them better at what they’re doing on the retail side. So, obviously we’d love to hear from them and talk with them and see if what we’re doing here can help them.
Matthew: Well, Jeff Happy New Year to you. I wish you all the best in 2018 and keep us updated on how things go.
Jeff: Thanks Matt, really appreciate and thank you and have a great 2018 as well.
Listen in to hear how this woman’s obsession with evolutionary biology led her to develop the adaptive skills to study her surroundings and the competitive ecosystem to create cannabis plants that have won multiple cannabis awards.
[1:06] – What is Glass House Grown
[1:39] – Lindsey’s background
[2:36] – Glass House Grown’s awards
[4:47] – Lindsey talks about the popularity of rosin
[8:00] – Oregon’s recreational use market
[9:31] – Lindsey talks about her growing environment
[10:44] – Lindsey talks about harvesting
[14:40] – What are right-to-farm laws
[21:54] – Lindsey contrasts at-scale cannabis and craft cannabis
[23:37] – Lindsey talks about how they cure cannabis
[24:37] – Lindsey talks about their plant selection process
[27:27] – Lindsey talks about the popularity of rosin over flower
[30:03] – Lindsey’s ArcView Group experience
[36:39] – Lindsey answers some personal development questions
[40:42] – Contact details for Glass House Grown
Guest: Lindsey Pate, Co-founder of Glass House Grown
Is it possible to create a thriving cannabis business that is profitable, gets interest from investors, and manages the tangled web of government regulations? It is, and here to tell us about it is Lindsey Pate, Co-founder and CEO of Glass House Grown. Lindsey, welcome to CannaInsider.
Lindsey: Yeah, thank you so much for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
Lindsey: Absolutely. So, I’m in beautiful central Oregon, and we are specifically out in Terre Bonne, Oregon, and we’ve got wonderful sunny weather 300 days out of the year.
Matthew: Great. I’m in sunny Mexico today. Tell us, what is Glass House Grown?
Lindsey: Glass House Grown is a 9-time award winning producer and processor of high quality cannabis, and we’ve been around since 2014, and we’re just about to get back into the recreational market after we saw a change in regulations from a medical industry to a rec industry.
Matthew: What’s your background? How did you get into the cannabis industry, and specifically into cultivation and extraction and so forth?
Lindsey: Ever since I was little I have been pretty obsessed with evolutionary biology. So, it wasn’t really a surprised that I studied biology with a focus on comparative physiology. I taught both in a formal classroom. I also found myself teaching in the back country working with at-risk youth. I really didn’t think with that type of background that I would find myself to be a cannabis professional, but the truth of it is that I fell in love with a second generation cannabis grower, and as regulations became more supportive of the industry, we both decided that it was a good opportunity and that our backgrounds science, specifically Chris and engineering, that it was a really good place to be and that’s how we started Glass House Grown.
Matthew: You mentioned you’ve won some awards. Can you tell us a little bit about that?
Lindsey: We’ve won a lot of different awards. When we started Glass House Grown one of the challenges that we found was how do you substantiate a brand and assess quality. After our first [2.53 unclear] for Glass House we entered what was called the Oregon Medical Cannabis Cup in 2015, and we won the first place Indica for our Shishkaberry flower. Since then we’ve won Highest THC Award for our Blackberry Cream at the Cannabis Classic. Recently we just won two very exciting awards for our flower. We were invited to participate in something called the Grow Classic. That was a competition in which Oregon’s elite growers were invited to grow the same cultivar or strain and with our unique methods. We received Highest THC and Highest Terpenes for our flower entry.
Matthew: Okay, very cool. What about your extracts?
Lindsey: We used to make BHO pretty heavily. We started personally making a solventless concentrated called Rosin, which is a concentrated form of cannabis that uses heat and pressure to extract the cannabinoids and the terpenes. We started personally using that over the BHO, and we decided to put it into a competition. We won a first place award at the Oregon Concentrate Challenge in 2015 for our Shishkaberry Rosin Entry. What was neat about that is that we actually received the highest THC out of all of the entries in the competition, which really validated the methodology. Since then we have won Best Rosin two years in a row now at the Oregon Dope Cup.
Matthew: That’s interesting. Why do you think rosin is popular among cannabis enthusiasts? Is it the terpene preservation or the terpene profiles. What can you tell us about that?
Lindsey: I mean, I think two things come to mind. From a connoisseur at home who grows high quality cannabis but likes to use concentrates, if you have good methodology and good starting product. Rosin is a wonderful type of product that a consumer can use. That’s one aspect, that it’s accessible to you at home. From a commercial perspective, from a market driven perspective, having a solventless product that’s made well, that preserves the terpenes is a really nice option for people with lung issues. I personally have had asthma and bronchitis my whole life. I really enjoy cannabis and I really should not smoke flower, so rosin works quite well for me.
Matthew: I’m sure there’s a lot of growers out there that are saying, wow, you’ve won some awards here, that’s pretty interesting. There’s obviously something more to it than luck if you’re winning multiple times, but what do you attribute that to? You got to have good product, but are you playing to what the specifications of the contest is, or how do you frame getting into these contests and winning these awards? What’s it all about?
Lindsey: I’m a girl who definitely knows how to do her research. Our first competition was not so much that. I was just, okay we’re doing this, are we good at what we do, so we entered a competition. We didn’t think too much about it. Since then I have really taken the time to understand each competition, who is entering, what that landscape looks like. Is this a competition that is fair, meaning there are some competitions that if you have a lot of resources behind you, you could probably walk away with a couple of awards. That’s never been the case for us. We’ve always received awards because of the products we put in, and we make sure to do our due diligence in making sure that that is a fair competition for us to compete in.
Matthew: So, you’re selective about what competitions you enter into, and then when you enter into it you know exactly what they’re judging on. That makes sense.
Lindsey: Yeah, and another piece to it is in order to be compliant with regulations in Oregon we only participate in competitions that are in our state, because competing elsewhere doesn’t quite work for the regulations. So, that’s another really important factor to us is that we’re able to be transparent and compliant when we compete in these competitions.
Matthew: I know you said you’re transitioning from a medical to a rec environment there in Oregon. Maybe you can tell us a little bit, for someone that’s just not paying attention at all to what’s happening in Oregon, how would you frame where Oregon is in terms of cannabis legalization and the market there and how it affects you being in the business and so forth.
Lindsey: Oregon has done a lot of good work in terms of our regulations. It should be noted right off the bat that I’m sitting here talking about recreational licensing and transitioning from medical. That being said, in 2017 we did see a big shift in where sales were and the licensing in the market was dominated with recreational licensing. Unfortunately for us, our local jurisdiction opted out for over a year, and that caused any business here locally to be very late coming into the game. It took us about two and a half years total to finally be in a position of me saying here and now that we are approved for building permits and we are approved for recreational licensing pending a final site inspection. Whereas other folks in the state were able to very quickly move forward because those localities recognized the opportunity in cannabis right away and already had rules developed before the market shifted.
Matthew: I know you mentioned you’re transitioning from medical to rec, but maybe you can tell us about historically what your growing environment has been like. How big it is and how much yield you’ve got in the past and what you’re expecting in the future.
Lindsey: When we first started in 2014 we were operating in total of about 5,000 square feet of canopy under medical regulations. My husband and I built that from the ground up, and by 2015 it became clear as the regulations were developing that by purchasing our own farmland we would have the autonomy to meet our core values which are integrity, excellence, service and transparency. That was very important to us, but also that we would be protected by right to farm laws, because of the zoning we would purchase. Little did I know how long it would take to get everything up and running. So, we have been approved now for about 5,000 square feet of flowering canopy with an additional 2,500 square feet of vegetative space, and we’ve got another 2,000 square feet of ancillary processing structure that we were able to get approval for.
Matthew: You have an interesting approach to harvesting in terms of doing it all the time. Can you tell us a little bit about that?
Lindsey: Going back to when I was little I was pretty obsessed with evolution and science.
Matthew: That’s a pretty [10.55 unclear] to be obsessed with as a kid by the way, Lindsey. I just want to let you know. You were nerdy a little bit young there.
Lindsey: For sure, so was Chris. We both were. I asked myself this question, when it came to what should a cannabis farm be to be successful ten years from now? That led to us saying well for one thing it’s got to be as efficient as possible, which is why we settled on combining environmentally controlled greenhouses that essentially mimic a warehouse but take advantage of external environments and air flow and sun to minimize the expenses. On top of that we’re recirculating deep water culture hydroponic systems into these greenhouse, and that equates to a lot of efficiency in terms of keeping your costs down.
The other thing that I asked myself was I know that things change. I know that organisms that are successful adapt to change quickly. So, we asked ourselves how does a business adapt to change? How does a manufacturing plant adapt to change, and we fell on the idea of wanting to have many opportunities to adjust not only cultivars or strains that are growing in the greenhouse, but also the products that we make from the concentrated rosin. So, we fell on having two harvests per week, which gives us this very fast adaptability. From a consumer perspective, that’s great because we can adapt to what consumers want, but perhaps more importantly ten years from now we are able to focus on new technologies that arise. Because like I said, we used to make BHO, really great BHO. When rosin tech came out we acknowledged this new process and we had to change some of our thinking, but it turned out to be a great opportunity to embrace new technology. So, by having these quick turnovers we focus on that and stay in a state of continual improvement.
Matthew: I like the way you say that. You’re essentially comparing, which is the right way to do it, we’re in this ecosystem and we’re competing just with other animals essentially. We’re primates in this ecosystem competing for rewards, but it’s just not like other animals do it. It’s a more evolved game, but it’s really the same thing. You’re talking about looking at how the environment changes and that had me thinking that I talk to a lot of entrepreneurs and the ones that view failure as an event instead of an identity seem to really do better. Because when you say I tried that and that failed, you’re not saying I’m a failure. I tried something that just didn’t work and now I’m trying something else, until I get these right variables in line where things are working. I think that can’t be underscored enough because people think they’re a failure if they make a mistake or they don’t respond appropriately to a market. It just means you got to pivot again. It’s that simple. You just got to keep on pivoting until you give the market what it wants.
Lindsey: Yeah, absolutely.
Matthew: Tell us some more. You mentioned the right to farm laws and for a lot of people they might be hearing that for the first time or they’ve heard about it before, but they don’t know exactly what that means. So, can you shed some light on that?
Lindsey: I think the first place to start is I never would have thought ten years that I would be so fluent on right to farm, but part of being a business owner in cannabis means that you have to keep progressing the legislation, and the way I know to do that is to understand our laws, to understand how they protect the cannabis industry, and when it’s not being protected I let my legislators know based off of that research.
Right to farm became this thing to me that is really the reason I have these building permits and this approval. Right to farm laws essentially protect farming as an industry. In my mind a good comparison is how we protect natural resources in terms of national monuments and state parks. I couldn’t say this at a better time because right now in the new we’re seeing that there are some national monuments that maybe losing some of that protection that we view to be unalienable. That’s a great parallel to getting right back into Oregon.
Oregon is a right to farm state. We designate certain land for farming and we protect that through the right to farm law. Any production of crops that have been defined in our statutes as an agricultural commodity or technology are protected by right to farm in the zoning that has been designated to be farming. In Oregon we specifically have rules that protect unknown new technologies that may become available to us. So, when we passed recreational laws for cannabis production Oregon immediately designated cannabis to be an acceptable agricultural practice, which meant it was protected by right to farm.
When we bought our property we bought what’s called exclusive farm use land and buying that we assumed were buying these unalienable farming rights. Unfortunately the challenge became, as we moved forward as a state, is how do we balance getting local jurisdictions’ autonomy in rules and regulations for cannabis business specifically on farmland while honoring right to farm. At the time we passed a right to farm carve out around cannabis specifically, and that was last year. That essentially allowed local jurisdictions to put the word reasonable time, place and manner restrictions on cannabis farming. Unfortunately my county, Deschutes County, has become somewhat of the poster child of that word reasonable not working out, or at least in many people’s eyes it doesn’t seem to be working out.
Matthew: How are they interpreting the word reasonable in such a way that it affects you negatively?
Lindsey: Our counting is definitely in the position of listening to both the cannabis business professionals, such as myself, who want to move forward with licensing, but they also have to hear local residents who are seeing changes in what farmland looks like and how farmland is being used. So, specifically in Deschutes County we’re seeing certain rules that make it very challenging to get approval, specifically land use. To be a little bit more specific about that, some of those hardships include neighbor notification, which can trigger really lengthy public hearings, and from a business perspective, especially with farming plant, that is a challenge to have an eight month process to be able to put plants in the ground.
We see a lot of other things such as acreage requirements that restrict canopy. We’re seeing that the growing of outdoor cannabis is outright prohibited, and this is all happening on exclusive farm use land, which is essentially industrial zoning. So, we have to understand that we have to assess if a land use is proper for the zoning, but when that process is really prohibitive in a way that prevents cannabis businesses from operating transparently we start to have issues with forward movement on the legalization of cannabis into a right market.
Matthew: Yeah, that sounds like a real cluster there because you’re getting hit from all sides. People can attack you and challenge what would be reasonable, redefine that. Are other counties in Oregon similar at all, or is the one you’re in the most onerous in this regard?
Lindsey: Yeah, our county has some things that make it very unique. We have some discretionary pieces into our county code that from a scientific perspective it’s great to have analytical evidence that you either check a box or don’t check a box, and we don’t see that in Deschutes County in our code. Furthermore, I wasn’t joking when I say that I live in beautiful central Oregon. It is a wonderful place to live. A lot of people come to retire here, and people find that the farmland is a great place to put a very nice home with big windows. Right to farm law says that if a new technology happens to allow farming to take place on farmland, then that can happen regardless of whether or not somebody has a beautiful, wonderful home right next to that farmland.
I really look at it from both sides, and I understand it from both sides. I grew up in a very beautiful home right next to farmland, and I enjoyed those views quite a bit, but now I’m in the position of wanting to use farmland to create economic value. Furthermore, as the wife of a second generation grower, I personally really recognize the value and the genetics that come from pre-existing cannabis operators, and it’s really important to have rules that encourage transparency in moving forward, versus making it more challenging.
Matthew: Wow, I really hope that works out for you, and I’ll be watching updates to see what happens there. I mean, that definitely sounds like a challenging environment, so I wish you the best with that. Pivoting back to cannabis and smaller grows and so forth, maybe you can tell us what craft cannabis means to you exactly and why that’s important that we should be thinking in those terms at times. Because there’s at-scale cannabis, which is really as cheap as you can get for the price and then there’s craft. How would you contrast those two?
Lindsey: I’ve had the pleasure of working with a lot of business owners in some of the political work that we do, and there’s a place for all different types of businesses in this industry. There will always be consumers that are going to the store. They need the most bang for their buck, and that’s what drives their purchases. There will also always be consumers who want to have excellent products, and they want those products, at the end of the day, they want those products to celebrate an exciting event, a wedding, a birthday. Whether that excellent product is craft beer, top shelf liquor, old growth estate wines or these days craft cannabis, there’s a huge desire for that.
More and more as prohibited laws fall away surrounding cannabis, craft cannabis will be that select group of products in which quality is always the priority. I think it does take a very special business with strong values to prioritize the decision making that ensures the quality behind the products versus looking at two cultivars and saying, well this one yields twice as much so let’s fill the greenhouse with that, when the other one smells unbelievable in a way that a consumer is just driven to it.
Matthew: Good point. In terms of curing cannabis, do you do anything special there?
Lindsey: Yeah, absolutely. I think that taking the time to cure cannabis is really important in terms of quality. We cure with a focus on preserving cannabinoids and terpenes. Truly depending on the endpoint product, we actually have different methods for curing. For example, we used a very long cold cure process for our rosin entry that won us Highest THC, and that’s because that type of curing specifically worked very well for dry sift methodology that was then pressed into rosin. By knowing that we could preserve the terpene content but get really high pure sift by using that cure method, it gave us a very competitive product for that particular competition.
Matthew: How do you and your husband select plants in order to get the best possible outcomes?
Lindsey: So, we have only ever used a phenol hunting process to acquire new genetics. Above all we are absolutely looking for unique terpene profiles. The exception to what I just said is the grow classic, because for the grow classic we did take in our very first clone. A clone, for anybody listening who is not hearing what I’m saying, is essentially an exact genetic copy from the plant that it was cut from. Going back to your phenol hunting process, we start with a batch of genetically unique seeds that come from a propagation event or sex between a male and a female cannabis plant.
Usually we’re getting our seeds from reputable and well-known breeders in the cannabis space, but we are also incredibly lucky to have a stash of seeds that are over 20 years old that we’re really looking forward to getting into phenol hunting. After we germinate our seeds we start to take a lot of data points on those plants. We look at things like how do they root, how do they grow, how do they smell, and we continue to take data points all the way up to how they process into cannabis infused products. That can take us anywhere from six months to a year to determine if a cultivar or a strain is a good fit for our model.
Matthew: When do you know it’s a good fit? Is there certain characteristics where you say hey this is a good fit?
Lindsey: Yeah. Earlier you had asked about yields and a lot of times people say what are your yields for your plants. We’ll say, it really depends on cultivar. We vary per light right now between one to two pounds, depending on a cultivar. I’ll tell you that I would argue that what’s more important to us is the yield that comes from the flower in our concentration process. So, we typically are looking for a cultivar that can yield anywhere between 20-30 percent when we do our rosin pressing and that works well for our model because for our recreational production a lot of our sales are truly coming from cannabis infused products over flower.
Matthew: Yeah, it seems like the market is turning there. Any thought on why that is? People are just looking for other options besides combusting flower. They want to try different things and they’re liking the fact that they don’t have to smoke or are they using extracts and they just prefer that because they don’t have to consume as much as quickly. What do you think the reason is?
Lindsey: I mean, I like to think I’m a great example of a typical cannabis consumer. I want efficiency in my life and I want things to be easy. So, for me a vape pen is just the best thing in the world. I mean, I don’t want my coffee table to look like there’s an ashtray with a pipe. So, I think it’s just as those prohibitive laws break down and as the stigma starts to go away, we start to see cannabis consumers that are switching towards more technological ways of consuming. It’s just kind of the evolution of seeing that infiltration of professionals and technology into a space that 15-20 years ago you didn’t see professionals saying hey have you tried this vaping technology.
Matthew: Right. Where are you in the capital raising process, and how’s that been?
Lindsey: It’s very challenging. It’s taken us a very long time to get approved for those building permits and that licensing, etc., and we really considered those pieces to be a prerequisite for us to fundraise, especially as a cannabis farm. Just because the risk associated with cannabis farming is interpreted to be pretty high. No pun intended. That was certainly a challenge to get those prerequisites handled. In terms of fundraising, we have found that many investors are still pretty timid to invest in direct sales businesses, and you really cannot get more direct in sales than farming and processing.
So, there’s certainly a big educational piece to our fundraising in the cannabis space in general. Because there’s so much interest in cannabis, people love to talk about cannabis. The biggest challenge for us has been how do we filter through the interest that comes in to see who is really somebody who is aligned with our core values, actually wants to invest in the money and really wants to move forward with it.
Matthew: You pitched at the ArcView Group. That’s an angel investing conference. What was that like? Do you have any suggestions for people that go through that?
Lindsey: So, I was really happy to be invited to present at the ArcView Group. As I said, it can be really hard to filter through the interest that you’re getting to try to determine who is really a good solid investor who can pass a background check. For example, in Oregon when it comes to financially interested parties in your business. ArcView does a really great job of bringing about this environment that is great not only to network specifically in terms of fundraising, but to really get connected with some incredible resources.
So, before ArcView we struggled quite a bit on how to speak to the value of our company. For example, how do you put value on nine Cannabis Cups? I don’t know. After going to ArcView I learned a lot more about how to speak to that in terms of bringing value to our company, and more specifically how to simplify our message. I think that as entrepreneurs, and perhaps I will just speak for myself here, I get so focused on how I’m doing something and why it will work, and coming from a science background, I have no problem talking tech and getting into our historical yields and how we substantiate our model. That’s too much sometimes, and ArcView really helped us to simplify that.
We were also able to just get connected with people to really validate our model and our value. That was probably one of the best things that came out of ArcView, in addition to the networking. Advice for folks who are considering ArcView or are going to be going through one of those forums, I think certainly having an open mind is really important because there’s so much that you can learn at those events. Making sure to really take the time to meet as many people as you can and understand how they can bring value into your business.
Matthew: Back to your earlier point is that you do more of a general presentation to appeal to the widest audience and then you go deep on the aspects that specific investors are interested in one-on-one based on their needs.
Lindsey: Yeah, absolutely. I think when we first had our idea of what our pitch would be it was very complex and the nice thing about ArcView is the process to get through ArcView is not quick. You actually have quite a bit of time to take in the feedback you’re getting, make adjustments and you have a lot of resources right off the bat to try to understand who the audience is and how to best translate what your business is to that audience.
Matthew: The cannabis industry, even though it’s young, when it was still in the shadows was primarily male dominated. I would say it’s much less so than a lot of other industries now. How do you feel being a woman, particularly you’re a young woman in the industry. Do you mind me asking how old you are? Gosh, I can’t believe I’m going to do that, but I’m going to.
Lindsey: No, I’m all about transparency. I’m 31.
Matthew: Okay, so you’re a young woman in this industry. Have you found any unique challenges or opportunities? Has there been struggles? Has it been different than you expected? What are you seeing? What are your thoughts around that?
Lindsey: I was raised by a very strong business leader for a mom. I never really thought twice about being a leader or demanding respect as a woman. I never ever thought about it when I was younger. I never ran into issues teaching. I didn’t ever run into issues at all. It truly wasn’t until I became more of a business leader that I did start to realize that there were many conversations in which I was the only woman, and I started to become a lot more aware of that. In terms of cannabis, I think that our industry is really unique. We as an industry have come from shadows. So, a lot of us are just thankful to be progressing the way we are, and diversity is really a strength when you problem solve and that’s what we do as an industry. We’re problem solving to get our rights to produce transparently.
I feel like for the most part the professionals in the cannabis space are incredibly welcoming to female leadership and truly recognize the value that not only women can bring but diversity in general can bring. I think there’s a lot of open mindedness, which is very refreshing. Obviously there’s always bad apples in the bunch, and the nice thing about our industry is that we for the most part do support women. So, when I have run into challenges I find a lot of support from the people that surround me. As an emerging transparent industry, we definitely have an opportunity to role model what it looks like to have diversity on our boards, to have diversity in executive leadership.
Matthew: Great points. I’m in I think my ninth country this year, and I can definitely see the diversity in the way people problem solve, particularly in certain countries. For example, some countries are tremendously bureaucratic. If there is somebody that’s from a certain country just deals with that in and out in their everyday life and they’re used to that, they would be a good person to help with paperwork and regulations and so forth just because their day-to-day background has been that their entire life. It’s kind of in their DNA. I see exactly what you’re saying there because people have different strengths, different points of view from looking at things from how they were raise, to the environment they were raised in; big city, country. There’s a lot of opportunity for that. I’m glad you pointed that out. I’d like to shift now to some personal development questions to help the audience get to know you a little bit better. Is there a book that has had a big impact on your life or your way of thinking that you’d like to share?
Lindsey: You totally nailed it. I’ve sort of been a little bit of a science nerd from a young age. I’ve always been kind of anxious, a little bit of an over achiever, raised in a very Type A household. Both my parents are surgeons. So, when I read this book called Good Life, Good Death, I’m going to butcher his first name, so I’ll just say the last name, which is Rimpoche. I read this towards the end of high school, and it opened up my world. It opened up how we choose to view things. Specifically for me it really opened my eyes up to what does balance mean in life. What’s great is now as an entrepreneur who still sort of tends towards over achieving, this book is still a really good guiding tool for me to sort of every now and then take a step back and say, you need to take a couple of hours to enjoy the fact that you live right next to Smith Rocks and go enjoy it. Enjoy your life a little.
Matthew: Yeah, I know exactly what you mean. There’s a tendency to focus on what’s next. What’s next. What’s next. What do I have to do tomorrow. What do I have to do next week. It’s addictive in a way, and you get caught in that treadmill and that’s well said. Is there a tool web-based or otherwise that you consider really helpful to your productivity that you would like to share?
Lindsey: Yeah, if you would have asked me this probably three years ago, I would have told you that it was a paper planner that’s bound and huge, and I would have carried it around with me everywhere, but I like to think I’m highly evolved now and that I’ve come into the digital age. So, now I’m just totally addicted to an app called Trello. Trello really just organizes everything in my life. It keeps me on track for work. It keeps me on track in my personal life. I really like it because when you go away from physically having a planner and seeing it there and penciling it in it takes a little bit of a leap of faith to know that you can transfer all of that into a digital concept and it will work. I’m just so thrilled that Trello was easy to learn. It syncs with certain calendar applications so you can see everything that’s going on. It really evolves with your needs too. In cannabis things are always changing. There’s always new problems we have to solve, and it lets me address new projects really quickly and keep them organized.
Matthew: I think I’ve seen Trello once working with a software developer. I think that’s a popular tool among software developers. Is it kind of like you’re visualizing your tasks like they’re cards on a table in front of you and each card has the name.
Lindsey: Yeah. I like to think of it as a combination of somewhat of a gant chart meets Facebook meets Pinterest. In that a gant chart keeps you going. Pinterest, you’re pinning this in these different boards and you know where that information is and then the Facebook portion is that you can actually communicate with either family members, if that served you, or in my case with my team, and you have time stamps as to when those communications occurred. You have checklists and all of these things to sort of let you allocate tasks to people. Those people can get back to you and you can really see and track the progress.
Matthew: Okay. Very cool, that’s a good one. Lindsey, as we close tell us how we can learn more about Glass House Grown and find you online and all that good stuff.
Lindsey: So, the best way to reach out to us is through our website which is www.glasshousegrown.com. One of my personal hobbies is photography, so you should definitely check out our Instagram page, which is @glasshousegrown, especially if you like looking at awesome cannabis photography.
Matthew: You do have some good stuff on there. I follow you on Instagram. So, I can vouch for that. Lindsey, thanks so much for joining us on the show today and educating us. Good luck with everything you’re doing in Oregon and take care.
David Hua is the co-founder of Getmeadow.com an online cannabis delivery platform in California. David talks about how Meadow is expanding into the dispensary to help business owners manage their business and get more customers
[2:02] – What is Meadow
[3:23] – David talks about being part of Y Combinator
[7:11] – More about Meadow
[9:25] – Meadow’s most popular delivered items and time of day
[11:26] – David talks about the medical market
[13:27] – What makes Meadow unique
[14:44] – David talks about the dispensary management software
[16:08] – What does the software do
[20:32] – Are there tech skills involved in implementing Meadow
[23:37] – David talks about online ordering with Meadow
[26:16] – David answers some personal development questions
[31:28] – Contact details for Meadow
What are the five trends disrupting the cannabis industry?
Find out with your free cheatsheet at https://www.cannainsider.com/trends
Most startup business pivot because their original idea is not working out so well. Meadow is a different story. They stared out as a cannabis delivery service in California and still do this, but they are expanding into dispensary software and winning customers. Here to tell us all about it is David Hua, better known as just Hua. Hua, welcome to CannaInsider, or welcome back to CannaInsider.
David: Yeah, woot, woot. Good to be back.
Matthew: Tell us where you are today. You’re not in your usual locale. Let’s hear.
David: I’m not. I’m in Las Vegas, Nevada.
Matthew: Cool, are you going to try out for Cirque du Soleil, or what’s going on there?
David: We’re actually here for ArcView Meet-up, and then later on this week there will be MJ Biz Con, which is a big conference where everybody gets together and talks about cannabis across the country and across the world. It’s great, there’s a lot of people that come by.
Matthew: Yeah, that is a massive event. Normally I go there. It is the place to be.
David: A lot of information sharing, it’s great.
Matthew: Did you find it overwhelming? Do you have to go back into your room and get in the fetal position just to recover from all the social activity?
David: This is my fourth year here, so I kind of know what to expect. Hydration, keeping tea, keeping the throat clear for all the talking and pacing. Some people just don’t know how to pace. It’s good. I’m okay.
Matthew: Remind us again at a very high level what Meadow is.
David: Sure, Meadow is an all-in-one platform that powering the California cannabis industry.
Matthew: What’s changed since the first time we had you on the show? I can’t remember, a year or two ago now?
David: I think it’s been a couple of years. Let’s see, I’m a father, that’s changed.
David: Thanks. I’m a father of a 19-month-old. I’m also a father of this startup Meadow. I think also, I mean, by focusing in California, we’ve been through so many legislative sessions where now the Medical and Adult Use Cannabis Regulation and Safety Act, also known as, MAUCRSA, also known as, The Act, will be going live Jan 1, 2018. So, there’s been a lot of talk about change and figuring out implementation is going to be next year.
Matthew: I just want to hear a little bit, you were part of the famous startup accelerator, Y Combinator. You probably get a lot of questions about this, but I’m just curious. What was that like being part of Y Combinator and then how much currency does that give you in terms of investors wanting to talk to you and be able to build relationships and so on and so forth?
David: It’s been actually really great. I think Y Combinator as a brand, as an accelerator is pretty well-know. When people see that it’s a stamp of approval. I think being the first cannabis company to come out of there was a little bit more unorthodox for them, but what’s cool is it’s paving the way for more cannabis companies to go through. So, we got Confident Cannabis that came through. There’s a gene company that came through last batch. There’s another one coming though next. It’s good. They’re seeing the opportunity and the potential. When talking to other investors, they realize that when you’re part of technology and Y Combinator that it’s a really good sign.
Matthew: What about just networking with Paula Graham or even other alumni from Y Combinator? For people who haven’t heard of Y Combinator, can you throw out just a couple of the more famous alumni of that program?
David: Let’s see, Dropbox, Airbnb, Weebly, Reddit, Stripe, Justin TV, which then became Twitch. That was bought by Amazon for a billion dollars. Cruise, the self-driving car company. Meadow. There’s a lot. I think what’s cool about the people and hanging out with everyone, everyone is just super hungry to affect change in the world within their own sense of control and bringing people aboard, and everyone’s really helpful in sharing what’s worked for, what hasn’t worked for them in hopes you can glean some of that experience and then apply it to whatever you’re doing in whatever field you’re working in.
Matthew: They say you’re the average of the five people you hang around with the most. I definitely could see where you’re hanging around with people that are in Y Combinator who went through that, who are alumni, who are kind of in Paula Graham’s orbit, changes your whole world view of what’s possible. Different than if you grew up in Omaha. Sorry to pick on Omaha, but your sense of what’s possible in how big you want to dream is probably entirely different.
David: Yeah, I think that we get so much exposure, especially with some of the partners at Y Combinator. They see so many slices of innovation across the spectrum of possibility. Anything from AI to machine learning or a smart luggage company like Blue Smart, or a company that specializes in tap water, Give Me Tap. Just trying to figure out ways to make things efficient, or an LGBT company. They have so much perspective of what’s out there. When you are able to talk specifically about my field or cannabis, you can pull in a lot of inspiration from other industries that you can learn from. Being at the start of this movement, we have a lot of opportunity to take the best from other industries and not necessarily focus on things that didn’t work and apply it to where cannabis could be with all those learnings and leverage and best practices.
Matthew: Let’s dig into more of what Meadow is doing here. You mentioned California. Is Meadow operating just in California right now?
David: Yeah, just in California.
Matthew: That’s a big enough economy where you can do that, no problem. I would speculate it’s probably Northern California and Southern California is 80 percent of the business. There’s not much happening in the middle or am I totally wrong on that?
David: It’s all over. We cover about 80 percent of California in the available areas that participate in the cannabis industry, but a lot of our partnerships are definitely more NorCal focused, since that’s our back yard, but we’ve been expanding into SoCal.
Matthew: What’s the game plan in terms of expanding to other geographies. Do you feel like you still have so much room to grow in California that you’re not really thinking about that yet or is there a roadmap?
David: Yes, so we’re really focused on California. We have major cities like L.A., San Francisco, San Jose. We’re looking into, we have Modesto, Santa Cruz. California is just a beautiful state. There’s still so much opportunity for these cities and counties to get onboard. A lot of local municipalities still haven’t really created their regulatory framework yet and their licensing framework. So we’re going to continue to help work with regulators and operators at these places in order to hopefully give them guidance on what the framework is in the state so that they can match up. What’s great is there’s places in our back yard like Berkley that’s really thinking about delivery and how that impacts them, but they’ve also been forward thinking in going with adult use.
There’s still a lot of counties that haven’t necessarily authorized adult use yet. So, there’s a lot of work to be done in California, and because all these laws are different, there’s a lot of flexibility that needs to be built in our software to accommodate these different formulations and how they’re going to regulate their respected industry in their local municipality.
Matthew: What’s the most popular items that are currently delivered through Meadow?
David: I guess you’re seeing similar trends to what’s going on in California and Washington and Oregon where concentrates and vaporizers are on the rise. Edibles are on the rise. Flowers are relatively still on the rise. We expect that to come down eventually, next year. Who knows. With adult use, it’s still a mixed bag on what could be happening. Popular products, you have a lot of pre-rolls and vapes. Edibles, my favorites are Mallows. They’re my wife’s marshmallows. I think they’re going to be perfect for next year because they’re low-dose, 5 mg. It’s still fragmented. There’s so many products that there’s still a lot of room for products to get on the shelf.
Matthew: In terms of time of day, you look at Uber, it surges when it’s raining or rush hour. Is there a rush hour for cannabis orders or cannabis related orders?
David: Yeah, typically we see evenings between Thursday and Sunday, to be pretty popular. Now that we’re pretty spread out, there’s different behaviors in different cities. Some people order during the day, and they’re okay with that. Some people schedule mainly for the day. So, they’ll take orders from the evening and schedule all through the day and then be done so they’re off the road by 5 o’clock. So, it just varies.
Matthew: Since on January 1st there will no longer be a requirement to be medical, do you see the medical dropping off in terms of people getting cards? Is that really starting to wane quickly?
David: I don’t know. We’re still very bullish on the medical program. I think because we Meadow MD, we really see the number of conditions that people are trying to treat for this. I think whether it’s sleep or chronic pain, there’s a lot of upside in getting a card next year because you can get a tax savings. So, people that are really trying to sleep, they’re guying edibles every week, or migraines, they’re buying every month. So, it adds up and they’re going to get some savings on it because the prices of cannabis are expected to rise and a recommendation isn’t that costly. So, if you’re spending more than $300-$400 a year on cannabis, which a lot of people in my circles do, it’s worth it to get.
Matthew: What about the average delivery time? I know that’s different in different places, but what can you tell us about that?
David: So, www.getmeadow.com it’s about an hour or less. Our average time is around 23 minutes. We also work with a lot of other dispensaries by powering their own site. So, places like [12.53 unclear] or Spark, where they need to have an online ordering presence there. So, what’s great is their delivery times are oftentimes the same than what we’re getting on the directory. Mainly because we want to keep improving the toolset so that they can deliver efficiently.
Matthew: There’s a couple other cannabis delivery companies on the scene. What would you say your unique selling proposition is? Is it the fact that you’re integrating with dispensaries now, or how would you define that?
David: Yeah, I mean I think we stand out because we’re really an all-in-one system. I think you’ll find that there are a lot of companies out there that use a Frankenstein approach to different software. So, they’ll patch up a bunch of different systems and try to use those. Some are more sophisticated and have some API integrations, which make it a little bit easier. I think for us, because we’ve specialized in delivery first and last mile, we’ve been able to build up the supply chain while the laws are being formulated. So, it’s really customer for the laws of California and the sophistication of the operator. As they scale the tools get better. I think we just spend a lot of time on the rules and working closely with the people that are on the ground and managing this thing.
Matthew: I didn’t even formally get the reason why you started the dispensary management software, because the last time we had you on the show it was just www.getmeadow.com delivery. What was the spark there? What was the genesis of why you came up with that?
David: What ended up happening was we started with the directory and then as we’ve built out these tools, a lot of dispensary owners were like, hey can we do this on our site. Yeah, sure. So, we started building out online menus for their sites, and that evolved into our inventory program and that involved into our reporting and analytics. A lot of the dispensaries we’re working with are doing delivery also had a brick and mortar retail location. They’re like, can you help power our check-in? Can you help power our point-of-sale? I guess we just kept saying yes, and we’re like sure, I guess we can do that. It’s been brick by brick. We just keep building on top.
What’s cool is whether you are a small operator or a large operator, you’re using the same software. Whether you are a brick and mortar or a delivery service, you’re using the same software. If you do all of it, you’re using the same software. I think what’s been really great for them is they’re realizing efficiencies across the board from not having to context switch to different applications.
Matthew: If I were looking over your shoulder right now, and you were walking me through what it’s like to look at the dispensary software, what would you show me? What are the buckets of things you can do?
David: Within the store, we have an iPad app. So, we build IoS apps as well. Our team is really good at mobile apps. The tools within the app range from point of sale, member intake, member processing, label printing, inventory cycle counts, shift management. In terms of their drawers and how much is in there. It’s a pretty nice Swiss Army Knife of tools within the app, and what’s cool is it’s getting better.
Matthew: We certainly don’t like to highlight other POS companies’ failures because we’ve all had our failures, but have you seen surge of interest as other software management tool have kind of had troubles recently?
David: Yeah, we have. I think people are just looking for stability, security and something that’s a little bit more dialed in to their needs and with usability. Yeah, we’ve been seeing some more interest. A lot of it’s been inbound. We’re not necessarily going outbound and reaching out. That’s not our style, but yeah we have had some inbound.
Matthew: Do you ever talk about feature bloat internally, because I’ve noticed over the years there are software tools that I love, and then I love them less and less over time because they decide they want to be a Swiss Army Knife and have 40 extension on the knife instead of just doing 12 things incredibly well, simply and elegantly. Do you ever talk about that with your team?
David: Yeah, absolutely. I think feature bloats could be a symptom of not properly teaching people the tools, or it could be a symptom of not talking to your customers to understand that that’s something you should have built. It’s something that’s very prevalent when teams get larger or their scale gets bigger and they’re like, well we got to keep making more things instead of improving on the things that they have. I would recommend, for companies who are doing that, to stay close to their partners. Talk with them a little bit more about what their true needs are, and then sometimes think about the idea of not necessarily what tool they need, but the problem they are trying to solve and then maybe improving some of the tools or workflows that you have that ends up solving for that.
Matthew: Are most of your new customer for the dispensary software, do they have no other software before or are they migrating from another vendor?
David: Both. We have people that are still pen and paper. We have people that have pretty sophisticated systems that aren’t necessarily cannabis specific. They’re moving over. It’s all over.
Matthew: I’ve seen people come up with some pretty crazy duct tape solutions. I mean they’re wildly inventive, but I mean it’s just a carnival. I have written these scripts that pull reports from Quckbooks, downloads it into a text file and parses it. You get 100 on resourcefulness, but it’s crazy. It’s crazy that you’re doing that.
David: It’s what people have had to do when they had to they realize as soon as you hit even 20 deliveries a day, all that manualness is really tough. When you have a 100 people visiting your store every day and you’re still photocopying everything and putting all that into manila folders into a file cabinet, it blows my mind on how much there still is left to do, but I think it’s going to change really quickly as people adopt newer technologies that make them more efficient and more competitive in their industry.
Matthew: Speaking of adoption. In terms of implementing the dispensary software and getting up and running with it, what kind of tech skills do you need to do that?
David: Tech skills, I mean, not much. A really good wi-fi is nice.
Matthew: I’m not going to be configuring a router and doing a telenet session or anything like that?
David: No, a lot of our work is in the Cloud and we use really secure hosting. Literally we come in, we help them with… first we really go through what they’re currently doing just to understand their workflows. Our system is really flexible. We can kind of cater to a lot of different workflows. So, once we have their ideal workflow from what they currently do and what we believe they should do, we match them up and show them what that can look like. From there, we do I guess you would call SOP development to help then show the process because most stores, most delivery companies have multiple people on staff and they might not be there the day that we’re there. So, we help them develop little guides.
We implement through getting them logins and putting our software either on the floor or in the front desk or in their dispatch back office and we simulate orders and how that goes and run through a demo environment and how that works, and then we go live when all the inventory and their menus are up to date.
Matthew: When someone finally gets the full power of they’re looking on their iPad at a dashboard is there one thing that they really love more than anything else? Seeing everything at a glance or the online ordering? What’s the thing you hear, I f-ing love this?
David: We hear that it’s so nice. We hear that often. “Wow, this is so nice.”
Matthew: I think I know what they mean by that. Your UX, your user interface is very simple and clean. You probably don’t even realize it, like fish don’t realize they’re swimming in water. Being in the Bay Area in the tech scene, it’s unacceptable to have a user interface that’s clunky. It’s very clean and easy to look at. Well organized. For you, you’re probably like I don’t see what… I’m glad they’re saying that, but I don’t know how I would even do it.
David: Yeah, you’re almost like, well that’s par for the course. I appreciate that. I think we often think a lot about how to reduce as much friction as possible and I think that’s part of the nice, but yeah, we’re flattered every time. It’s great.
Matthew: Tell us a little bit about the online ordering and how that connects with the Meadow service and the loyalty program to help dispensaries drive sales, because that’s what they’re interested in. That’s the big one.
David: Yeah, they’re great. What’s great about the online ordering is it adds a whole other line of revenue into a connected system. Usually we’ve seen dispensaries not take online orders or they take them over the phone or they’re using an outdated or somewhat clunky manusystem that was an extension. Online orders have helped them either process delivery orders or pickup and that time that would have been spent on those calls or answering an email is now just doing a pick list from that order and sending it out. It’s really streamlined on both sides in the sense, all right now they’re making more money and now they’re also saving time on their overhead. The speed in which people are ordering is really interesting.
Once they get through their first order, that first time, the repeat ordering is sometime less than a minute. That’s what people are looking for; convenience and speed and all that information right there for them to see without necessarily have to ask a lot of questions.
Matthew: Is there a surge to get this done before adult use becomes legal here in 2018?
David: There’s definitely a sense of urgency, but we’ve also I think, having been around the block for a little bit, sometimes urgency isn’t necessarily the best formula for a partner, if they’re all over the place. So, I think there’s more importantly they understand the value of technology and how it can help them and their organization. Once we align on that we can move really quickly. Yeah, there’s still a lot to be done. It’s not going to be everyone’s going to be ready to go by January 1. There’s going to be a lot of people afterwards that are going to try and interpret the laws and the regulations. We’re still, as of now, we don’t have the emergency regulations for California yet, and that’s what’s going to define how we operate next year.
Matthew: Pivoting to some personal development questions, is there a book that has had a powerful impact on your life or way of thinking that you’d like to share?
David: More recently I read, or I listened to, the Book of Joy. It’s an interview with Desmond Tutu and the Dalai Lama where they talk about what it’s like to live a joyful life. I think a lot of what they say in terms of compassion for one another, care and all those things that allow you to be a little bit more outward thinking, not so much internal, then brings back that gratitude that ends up making you happier.
Matthew: That’s good. I’ve read, I think, the Art of Happiness or something like that from the Dalai Lama of long time ago. I found that really insightful. Just very solid, practical ideas in there. So, thanks for that.
David: Yeah I think compassion, what’s really great about how they talk about compassion is it’s kind of what the cannabis industry was built on. When you look at the start of Prop 215 it was about helping the HIV community in San Francisco get access to medical cannabis because of the pain that they were enduring. It was because Nurse Brownie Mary was making brownies for patients. I think as we’ve visited a lot of different shops, there’s still a very strong correlation of compassion into how they treat their patients. There’s wellness services. There’s meditation. There’s free cannabis, free samples for people that need it. It’s in the DNA of this industry, in this movement and it was really nice to see it from their eyes. If we can apply those practices to this industry, then I think we’re going to create something totally different that’s going to be more value add than just the capital that it generates.
Matthew: Is there a tool, web-based or otherwise, that you consider vital to your day-to-day or business productivity?
David: Yeah, I use audible for my audio books. Having a daughter, you’re often pushing a stroller. Having those on the phone have been great. On the computer or on the phone I often use a lot of web-based tools like Quip for documents. We use Front for shared inboxes. Slack for internal communication. One of our core values is transparency through over communication. Having these tools allows us to look at what everyone is doing when it’s needed, and operate quite efficiently with our team of ten people.
Matthew: Tell us more about Quip and Front. I’m not familiar with those two tools. What do they do?
David: Quip is, for people who are familiar with Google Docs, Quip is very similar. What I like about Quip is that it’s more like a living document. Kind of like how Word has track changes, you can see what’s going on with a document within an activity bar. You’re able to comment people in. You can highlight different things, due dates. It’s a pretty seamless documentation portal for us. Front is another Y Combinator company. They’re great because you can create a shared inbox, and that shared inbox allows you and your other team members to manage it. For instance, we have firstname.lastname@example.org, so a bunch of us have access to that. Whoever is available can answer support. We don’t have a dedicated support team. We all do support so that we can improve the product and understand where the pain points are.
Matthew: Very cool. One more last question, just because I’m curious in your answer, if we waved a magic wand and you couldn’t be involved in cannabis delivery or any kind of point of sale software or dispensary software, what would be doing? What would your career be? What would you want to focus on?
David: I’m going to live the Matthew Kind Digital explorer life, extraordinaire. I’m going to interview people and take my family out across the world. That’s sounds pretty appealing to me right now.
Matthew: Okay, that’s good. Fair enough, I like that. Well, tell us where we can find you online, where listeners can find you if they’re interested and they want to get software for their dispensary, they want to themselves purchase some cannabis, some edibles or whatever it might be in California. How do they find you?
David: Yeah go to www.getmeadow.com. We have everything there. Whether it’s the directory or links to our MD program or links to our dispensary software, or if you want to just reach out directly, you can reach out to email@example.com or even my personal email firstname.lastname@example.org or email@example.com. Whatever you want. I’m pretty accessible.
Matthew: All right, thanks Hua.
David: I appreciate the time. This was awesome.
Dustin Johnson is the founder of Adakai Holdings. Adakai owns Monarch dispensary, Huxton Brands (Flower and Vape Pens) and Omaha Farms. Listen in as Dustin discusses how he created a recognizable brand of cannabis flower.
[0:58] – What is Adakai Holdings
[1:23] – How Dustin got started in the cannabis space
[4:40] – Dustin talks about doctors these days
[6:23] – Arizona’s cannabis market
[7:40] – Dustin talks about Adakai’s brands
[10:13] – Omaha Farms size
[12:21] – Dustin talks about raising capital for Adakai’s brands
[14:11] – Products available at Dustin’s dispensary
[15:36] – Partnering with other brands
[17:23] – Dustin’s biggest problem in running a dispensary
[20:29] – Dustin’s automation that has helped him with his business
[22:29] – Dustin talks about his Huxton Brand
[25:47] – How do you build brand experience
[31:58] – Dustin talks about terpenes
[33:47] – Which of the Huxton flowers is the most popular
[35:33] – Dustin talks about Adakai expanding over the next five years
[38:29] – Advice Dustin would give to younger Dustin
[40:04] – Dustin answers some personal development questions
[45:59] – Dustin’s contact details
Learn more at:
Matthew Kind evolved the idea of the MacGyver Quotient from this investor’s thesis around The MacGyver Factor
Matthew: As cannabis prohibition ends across the world, consumers will pivot from buying any cannabis they can get their hands on to carefully selecting a brand that fills their needs and reflects their lifestyle. Here to help us understand how to nurture and build a cannabis brand is Dustin Johnson from Adakai Holdings. Dustin, welcome to "CannaInsider."
Dustin: Thanks, Matt. Thanks for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
Dustin: I'm currently in Phoenix, Arizona.
Matthew: Okay, great. And I am in Valencia, Spain today. And what is Adakai Holdings at a high-level?
Dustin: Well, Adakai is basically just a forward facing representation of the folks behind the unique brands that we're building in the cannabis space.
Matthew: Okay. Tell us a little bit about your background, and how you got started in the cannabis space? Did you just wake up one day and say, "That's it. Boom. I wanna be in cannabis. Changing my life now."
Dustin: Certainly did not, no. I had actually moved back from college. I'd gone out to school...I went to school at Pepperdine University in California.
Dustin: Go, Waves. And was at home in Arizona working in the real estate business, and my mother had been in a boating accident about 15 years ago, 15-20 years ago, shattered her kneecap, had had multiple surgeries to repair it, and had ended up with a residual nerve pain called RSD. And so through the course of her treatment, her doctors had prescribed her all kinds of different narcotics, Vicodin, Oxycontin, Fentanyl, and then she was, you know, taking a host of other drugs to combat the side effects of all those narcotics, and that had been going on for over 15 years.
So she was at a point where, you know, she was really dealing with some serious pain. She has been heavily drugged by her doctors, and we were looking for some alternative treatments for her, and that was right about the time that Prop 203 passed here in Arizona. So I sat her down, I said, "Mom, I've been, you know, looking into cannabis. And I think that there might be some real options here for you. Let's give it a shot."
And, at that point, she was happy to try anything to see if she could find some relief and got her her card, started making some butter that she was putting in her tea in the mornings, and within about nine months of using cannabis, she was able to get off all her narcotics entirely, and has been for...going on for five years now. So it was really just a revealing moment for myself and for my family as to the power of the plant.
What it could do to change peoples lives. She became a whole new person. I mean, in my opinion, it literally saved her life, and just, kind of, brought back all that vibrancy and love of life that she had lost in the haze of all the narcotics she was taking. So, at the time, there were no good options for her to go and find the product, and get an education on what products shall be useful for her. And so I decided to set down the path, and see if I could provide that service myself.
Matthew: You really mention a good point there. I feel like the doctors have become...they're like the... You ever watched watch Star Trek and you ever heard of the Borg? Like, the Borg infects, like, whatever culture it touches, and they become part of the Borg?
Mattew: I feel like that's what doctors have become to the pharmaceutical industry to the point...now, I don't go to doctors anymore. I just get blood tests done because every time I go in they're just like, " How about this? How about...?" It's like all these drugs. I'm like, "Wait a second. I haven't even told you I have a problem and you're suggesting drugs to me." And I was like...it's like, "What is going on here?" I feel like I'm being peppered by commission-only salespeople.
It's like going to Best Buy or something like, "Get this. Get this. Get this." And, at least, in the United States, it's just a really unfortunate state of affairs that they're always just pushing drugs down you instead of looking for root causes. That's why I'm, kind of, looking more at integrative medicine now, and holistic doctors just because it's become a racket. It's no other way to describe it.
Dustin: You're right and, you know, I think, that during this process, I mean, we sat down with some of her pain management physicians, and had some conversations with them and said, "Look, I think, that this is an unhealthy path to take and, you know, you've been recommending these narcotics to her for quite some time, and she's just following her doctor's orders." And, you know, we're always taught to put faith in our physicians and, you know, kind of follow their direction. But when we told them that this was leading to a bad place, they weren't really willing to give us any alternative options.
And it felt like they just didn't have the knowledge base to do so, and it felt like they also didn't have any financial incentive to do so. So we were, you know, went out looking for something on our own. And they had threatened, you know, some of the doctors she had spoken to, they had threatened to stop giving her narcotics if she was using cannabis, and that was something that was very scary for her because she needed...you know, she felt that she needed those to manage her pain. But she's a brave woman, and, I think, that taking that leap was a difficult move for her, but it has certainly paid off in spades and we're happy to have our mother back.
Matthew: Oh, that's great. That's a good...there's a happy ending to that story. I'm glad you made the effort to, you know, help her try cannabis. So that's good. Now, give us a high-level overview of what's going on in Arizona. I mean, it is a big state geographically, but we just don't hear much about Arizona, especially with Colorado and California overshadowing Arizona to some extent. Can you just give us just an introduction of where it's at, and maybe how it's a little different than some of the other big states?
Dustin: Sure. So Arizona passed our medical law back in 2010. It was implemented in 2012 after some legal challenges put forth by our governor at the time. We currently have, I'd say, approximately 100 or so dispensaries that are operational. We're about 120,000 patient-based population. One of the most, I would consider, well-regulated and well-governed programs as far as medical goes.
We have the department of health services here that's done a great job of implementing the rules and providing oversight, and really allowing the operators in this space to have some confidence that they have some stable footing with which to build their businesses from. So it's a great place to do business. We did have a [inaudible 00:07:14] use measure proposed in 2016 that was not successful. We were the only one in the country that year that didn't get it done, but we're looking forward to some future efforts, and hopefully getting Arizona in line with the movement we're seeing in the rest of the country.
Matthew: Okay. And tell us just at high-level what your brands are Monarch, Huxton, and Omaha Farm, so we can get a general sense of what those are.
Dustin: Sure. So Monarch is our retail dispensary. We're located here in Scottsdale. Opened in in 2013. Just celebrated our four-year anniversary...
Dustin: Thank you. So we've really designed that to be a patient-focused friendly environment where the patients here in Arizona can come in and get a curated selection of products, accompanied by friendly staff that are incredibly knowledgeable. We have a head of patient services that will sit down with folks and, you know, do 45-minute to an hour long consultations about what might be the best path for them when starting on their journeys with cannabis.
Also, all of our sales associates are very well-educated as to the different nuances of the products. Can help guide folks through dosing. We really, you know, wanted to build that on a foundation, again, based around giving folks like my mother, and other folks that might be new to the cannabis world, a good understanding of what products they're getting, and how those products can affect them.
And then we have...all of the licensing here in Arizona is fully vertically integrated. So along with the retail licensing, that license grants you ability to do cultivation, a kitchen facility, as well as manufacturing and distribution. So we have a cultivation facility that we've kind of dubbed the Omaha Farms, and that is where we are producing all of the products that we make and distribute to Monarch as well as to other dispensaries here in the state. We currently produce our own Huxton brand out of that facility.
We are the licensed producer-distributor for Kiva Confections, a great chocolate company that I know that you're familiar with and have had on the show based out of California. And then just recently, also signed a licensing production distribution agreement from Mirth Provisions.
Matthew: Sure. Yeah, exactly. Have that one, too.
Dustin: Yeah, yeah. You sure have. So we're looking to kind of really expand through that facility noble brands in the space that we think that would have a great impact, and provide a great service for the patients here in Arizona.
Matthew: Okay. Wow, you're busy. You got a lot going on.
Dustin: Yeah, sure are, sure are.
Matthew: So how big is your grow for...you Omaha farms grown then? How many square feet it that, roughly?
Dustin: Yeah, so that facility is 20,000 square feet.
Matthew: Twenty thousand.
Dustin: We're, you know, with all of the Huxton products and the flower brand that we're producing out of there, we've, kind of, dedicated a small batch production, so it's not one of the larger facilities here in the state. We've kinda divided that. So we're at about 14,000 feet of canopy. So between our propagation, vegetation, and flower rooms, we're just a little over 14,000 square feet, and then the rest of the facility is dedicated to extraction, kitchen, manufacturing, and distribution.
Matthew: So when you get that license, it's obviously a big cause for celebration, but also where you're like, "Holy cow, there's a lot of stuff I have to learn here with growing, you know, retail, all of these different things." I mean, that's a lot, but it's also you got all the freedom to be successful. Did it seem overwhelming at first?
Dustin: It did, yes. You know, I don't have a retail background. I do not have a green thumb. I'm very capable of killing any live plant that you put in my hands, but, you know, having a good business background, I was a business major at Pepperdine, and having run some small businesses prior to coming into this industry, I think, what has really made us successful is the ability to attract some really smart folks.
You know, we have a really talented team out at Monarch, really talented team out of Omaha. You know, a great mix of chemists and biologists, and folks that are far smarter than me and understand all the logistical operations and requirements that a facility like that entails. A great team here at Adakai, you know, continuing to build iconic cannabis brands, and come up with unique concepts. So, you know, I really just try to stay out of the way, and let our folks do what they do.
Matthew: Did it require going out and raising capital? Was that part of the process of creating Adakai and Monarch and all your brands?
Dustin: Yeah, so, obviously, in order to be successful in this space, you need to be well-capitalized, and I think that that was one of our number one priorities. We wanted to make sure that, you know, we were giving all of our staff, and all of the people that...all the stakeholders in the process, a really good foundation to build from, and a good company to be a part of. So we wanted to make sure that from the get-go, we were well capitalized and, you know, going forward that's something is very important to us.
Matthew: Was it hard on your first few pitches to investors to, you know, answer the questions in a way that, you know, made them happy to invest, or was that a learning curve, or what can you say about it?
Dustin: Yeah, I mean, I think that there is a lot of excitement about this space. You know, right now, I think ,it's a little bit different. I think that folks are a little bit more willing to participate. Back then it was a little bit trickier. You know, there was a bit of a different feel as to where the industry was at. We were still at, you know, in a time period where there were folks in California getting rated.
You know, there was a lot of consternation about where the industry was going, but, I think, that most of those concerns have been alleviated, and, I think, that folks are realizing that while there still is quite a few challenges regarding the space, and regarding a lot of, you know, the luxuries they afforded folks that are engaging in federally legal businesses, there's a ton of excitement too, and I think that people see where this is going and, you know, are really excited about participating in it.
Matthew: Okay. Tell us what you have available at your dispensary, and compared to other states, do you have everything, flowers, edibles, vape pens, concentrates?
Dustin: We do. Yeah, we have a pretty wide array of offerings. So, again, what we've really, kind of, dedicated ourselves to is understanding the brands and the products that we're putting on the shelf, making sure that we're really spending a lot of time with the producers of those brands, understanding their techniques and, you know, basically their theory behind how they're producing those products. But we, you know, we're dedicated to offering the patients of Arizona a wide array of products, so that they can come in and find something that services their specific needs. So flower, vape pen products, concentrates, edibles, drink products, topicals, tinctures, all of the above.
Matthew: Now, you have a kind of an interesting model because you have your own brand, Huxton, your own branded flower, but then you've also partnered with Kiva Confections and Mirth Provisions that makes drinks. And Kiva makes small candies and chocolate, and they both are very strong brands that have very strong product market fit on the West Coast, and what is kind of the thought process there?
It's like, "Hey, they have such a good reputation with people, and they've already done all the hard work. I have my own brands, but I just wanna bring in some other brands, and let them do the heavy lifting of familiarizing themselves with customers they already have the name recognition." What's kind of the thought process there?
Dustin: Yeah, so kinda like you mentioned before with that fully vertically integrated license there, you know, there's an overwhelming number of things that you are able to do. I think that our perspective has been, just because we are able to do them doesn't necessarily mean that we should. And we really wanted to focus our energy and efforts on our Huxton brand, understanding, you know, really the nuance and detail of creating a branded flower and vape pen line.
And really wanted to leave, you know, some of the other opportunities around the table for us up to the folks that had spent a lot of energy and effort, and had already built great foundations for bringing those brands into the space. So it just seemed like kinda natural progression for us to go out instead of trying to build it all from scratch. Find some really great partners and folks that kinda shared our same vision and ethos and, you know, facilitate those brands into the areas on a marketplace. And, I think, that the relationship we've had with Kiva has been fantastic.
Scott Kristi out there, phenomenal folks, and their whole team has been great. So been really excited about what we've done those guys, and what we can continue to do with Kiva here in Arizona, and really looking forward to getting the Mirth products out there. Adam and that team are obviously spectacular, as you know as well. So just really looking forward to continuing to kind of elevate the industry here in Arizona by bringing those noble brands to the state, and getting patients access to them.
Matthew: Now, obviously there's a lot of different tactical things you need to do to run a dispensary, so I just wanna ask, kind of, an off-the-wall question. If you could wave a magic wand to get rid of your biggest problem in running a dispensary, what would you choose?
Dustin: Oh, man, I think, that that's a pretty easy one. I guess I would choose full federal legalization so that we are able to operate a business on the same playing field with, you know, any other retail business in the space. You know, there's a host of challenges, right. So we're super fortunate in the fact that we have a great banking relationship here in Arizona through some other businesses we've run.
We've got some relationships with the local bank here that has taken us through the front door after a long, kind of, inspection and audit period, and that's been fantastic. But, obviously, you know, not being able to take credit cards, and having to operate in an all-cash environment is a little bit tricky. And, I think, that, you know, the biggest challenge that has really caused me consternation in this space is being able to give confidence to your employees.
You know, about stable footing, and really helping them to understand the nuances of the industry, and make sure that they're aware of the risk that they're taking, and that's something we take very seriously. You know, we look around and we got a great team, and a lot of families that we're feeding, and so we just wanna make sure that we're able to stay true to our commitments to those folks.
Matthew: How do you see running a dispensary changing in the next three to five years? Is it gonna be pretty much the same, or with just maybe some different items to offer, customers, or do you see it changing in any fundamental ways?
Dustin: Yeah, I mean, I think, this industry is poised for hyper-growth, hyper change. We are, obviously, you know, right in the middle of shifting sands. There are all kinds of external factors that, I think, could affect how those dispensaries operate and function. You know, the biggest change, I think, you're gonna see is a lot more of the traditional...I shouldn't say traditional, the more common style of retail purchasing, which exists largely online now.
So as the industry advances, I think, you'll see a lot more folks looking for delivery options, availability of products that they can have brought directly to them at their homes. I just see that as, kind of, you know, the next evolution if you're tracking what's going on in just the retail world in general. Obviously, that's where things seem to be heading. So, I think, that will be something that will be a unique challenge if this industry is gonna be dealing with considering, again, the restrictive nature and a lot of the compliance requirements that states are putting in place around the operations of these facilities.
Matthew: Zooming in on Omaha farms and your grow, is there any automation or optimization that you've done over time since you started that has really helped you get a better handle on, you know, just growing well, or maybe more data, or just doing it better than when you started?
Dustin: Sure. Yeah, I think, that as far as the actual cultivation process itself, we've kind off taken a hybrid model of using just some old school techniques, and really then try to combine that with a lot of great data around plant health, genetic performance, understanding cannabinoid, and terpene profile, and been able to identify, you know, genetic drift. But our cultivation team out there is a really talented group.
You know, we started off from the very beginning wanted to be focused on all organic techniques and methodologies. All of our flowers grow naturally. You know, again, we do everything in small batch format. And so we're really, kind of, using I wouldn't say necessarily a lot of modern technology in that cultivation [inaudible 00:21:24] kinda trying to go back to the roots of cannabis cultivation. And, you know, really trying to have our folks looking at those plants, monitoring plant health personally, checking life cycles, checking soil, you know, checking water and nutrient feeds just to make sure that we have educated smart people that are not getting too read upon technology and automation to operate that facility.
But we've also then coupled that with, you know, with some great reporting, some really great data input so that we can go in and look and see which of our genetics are performing well in the marketplace. Trying to schedule out our production cycles. As you probably know, it's not easy to bring new products to market, and especially on the branded flower side. You know, to get a new genetic in, and get it into your system, and see how it performs is a lengthy process. So really trying to do a lot of forecasting and predicting, and really understanding the marketplace and what it looks like.
Matthew: Well, it's a good time to talk about your flower brand and your vape pen brand Huxton. Let's turn to that. Why did you decide to create your own brand there, and why did you choose flower and vape pens to be the thing you wanted to brand?
Dustin: Sure. So we really had a unique opportunity, I think, in running that retail facility at Monarch, and being able to spend some time understanding what the needs of the patients really were here in Arizona, and what folks are really asking for. And the one thing that we identified, and that we started to pick up on was the number one question that folks were asking when they're purchasing flower was, "How is this gonna make me feel?"
They wanted to know if it was gonna give them an uplifting effect, or a relaxing effect and we had just, you know, kind of followed the industry norms of saying whether if it's a sativa, it's gonna give you an uplifting effect, if it's an indica it's gonna give you a mellow and relaxing effect. We wanted to just kinda question that theory and really try to understand if that was true, A, and, B, if the genetics we were producing were really categorized correctly because there's a lot of different names out there.
There's a lot of different websites and resources that can kinda give you an indication of how a genetic is gonna perform or make you feel, but different cultivation practices, different cuts to that particular genetic, all can have a wide range of effect. So what we wanted to do is really understand our products and how they worked. So we spent about a year and a half, did thousands of focus group tests with friends and family that were patients, staff that were patients, some loyal customers at Monarch, and really we're able to get a real good foundation of understanding of how our genetics actually worked.
And so with that information, we then wanted to say, "How do we make the selection of smokable flower vape pens really simple, really unique, and really accessible for folks that may or may not have a good understanding of cannabinoid content and terpene profile?" And a lot of the industry nuances that are a little bit difficult to navigate through if you're not familiar with.
So what we did is we then took all of that information, and we categorized all of our products in three very simple series. So all of our series are designed around whatever your desire vibe is. So we have Arise series that's gonna be a little bit more focused, a little bit more of an energetic feel. We have our High 5 series, which is gonna provide a little bit more of that creative, uplifting euphoric effect, and then we have our Zen series which is, obviously, gonna be more of a mellow, relaxing vibe. And so really wanted to give folks the ability to select a product based on a simple version of how they wanted to feel.
Matthew: Okay. That makes sense. And how do you create a brand experience, or build that brand equity and packaging, and marketing and labeling, and all those things to reinforce the simplicity you're trying to bring forward of experience? How do you do that?
Dustin: Yeah, so that's a great question. I think that that was one of the things that we started with in addition to wanting to provide some consistency and some simplicity in the selection process for folks. We also really wanted to create what we like to call "Experiential Authenticity." So we really wanted to identify with our consumer. We are consumers ourselves. We understand, you know, some of the unique issues that exist and really wanted to build a brand that was devoted to the nuance of the craft.
And so every little detail, you know, we've really tried to think through it as far as putting a book of matches in our preroll tins so that people always have fire. I'm always fumbling for a lighter. Always asking for somebody if they got one, so we thought that, you know, giving folks the ability to always have fire with them was a great call. We sell a circular tin that's...it's an eight to flower, again, it's all based on experience, and we design that around kind of our middle canopy or smaller sized buds.
The industry kind of gravitates to these real large, big flower products, which you then have to go and break up and have a grinder, and have a lot of tools in order to get to a format that's smokable. We wanted to be able to design something for the consumer on the go that was discreet. Folks that were going over to their friend's house, going to a concert, going to be out doing something where they didn't have all that available to them, that they could easily just pinch it out of their pack of vaporizer, pack of one hitter, whatever they were using to consume that product with.
So just really trying to be thoughtful in all of the things that we're doing. We also wanted to design the brand to be discreet, so that folks can, you know, potentially take it with them into situations where they don't necessarily want people to know that they are carrying a cannabis product. So we wanted to provide that little bit of the anonymity, too. And that's why you'll see most of the stuff we do is really, kind of, devoid of anything that would indicate that Huxton is a cannabis brand. And that was intentional to a degree.
Matthew: That makes sense. Now, how important is packaging, and how do you arrive at your polished looking packaging? Is that kind of a journey where you're just trying out different things and looking at different fonts, and how did you do that and how long did it take?
Dustin: Yeah, that took some time. I mean, I think, that, again, we wanted to be incredibly thoughtful in all of the touch points, and all of the details of everything we were doing. And packaging is huge, and a it's a big piece of this industry that, I think, is often overlooked. That is, you know, very often the customer's first interaction with the product is to see it sitting on a shelf, to put it in their hand and get a little bit of a tactile feel for it. And most of the packaging that we had seen out there was pretty basic, and, kind of, pitched to that traditional stereotype.
And what we wanted to do was create a concept that allowed folks to pick up our products, be able to take them home, put them on their coffee table, leave them on their bar, wherever they might store it at, and feel good about, you know, having those products in their home. One of the tag lines we use is "enjoy proudly." We want folks to, you know, to be able to be excited about their cannabis use, and be able to show their products to their friends, and be excited about the way they look and feel.
So that was really important to us, and I think that we were able to find a great, creative agency here, Kitchen Sink Studios, that helped us out with a lot of the design. Like you mentioned, a lot of the font selection, color palettes, brand theming, all that stuff was about a six to eight-month process that we spent working through all the nuance and details. And I would say that just continues to be a process that we're working on. So it's not something that ever ends once we finished it. It's like the Golden Gate Bridge, once you get it painted, you got to start back over and go the other direction.
Matthew: Right. Well, I mean, people probably think about Huxton, and then they say, "Well, I have something in my head when hear that word. And then when I see what it looks like in pictures, is it congruent with what I thought of the name. And then as I experienced the product, are all three things aligned? You know, what I originally pictured what, you know, the packaging kinda says, and then how I experienced the product." So it's tougher than one might think to get those things all dialed in correctly. So I understand what's there.
Dustin: It is. Yeah, it's tricky and it just takes a lot of devotion. It takes a lot of time and energy, and really it just takes a lot of feedback from your consumers. And when we spend a ton of effort and energy on engaging our consumers, understanding what it is that they want, getting feedback from them as to, you know, how Huxton fits into their lifestyle. We're really trying to be a little bit bigger than just a cannabis brand.
We're starting on a really unique set of apparel that will be coming out later this year. Launching some cool accessory items all the way from, you know, just some smoking items that are gonna give folks kind of some assistance in that area, all the way down to home goods like candles that pair well with certain genetics that we're putting out. So just really trying to be thoughtful, and engaging that consumer where they live, understanding all the other different pieces of their lifestyle that we can help support.
Matthew: Now, I've been getting much more of just terpenes this last year and trying to understand them. And, you know, everybody thinks, "Oh, I want the highest THC. The highest THC." And then maybe, " I want some..." then they say, "Well, maybe I want some CABD, too." But they're not really thinking about how the terpenes, you know, really dramatically, dramatically impact their experience. How do you think about terpenes and terpene profile, and the moods that you follow and vape pens evoke?
Dustin: Yeah, so I think that, obviously, incredibly important, right? So we're doing some unique work on the vape pen side. All the products that we release so far are full flower extractions. So we're taking our best flower, putting it through a CO2 extraction process. We like to call it an advanced live resin, so it's a little bit different than from what most folks are doing. It's a slow 24-hour extraction process, 24-hour distillation process, really designed to do nothing other than just reflect that plant in it's purest format in an oil version.
So, again, not adding any terpenes to it. Not adding any PG, any PEG, any MCT. We're really just trying, to kind of, gently pull out that plant as it exists in Mother Nature, and then offer that to our consumer in a vape pen product. And what I think what's that allowed us to do is really capture those terpenes as they exist in the cannabis flower. And, I think, that that's a hugely important piece that we'll start to find out as this industry matures.
Like you mentioned, it's not just about THC, it's about all of those different cannabinoids and components working together. I think that those terpenes play a huge part in that. And I think as the testing side of the business matures and we start to get a little bit more understanding of exactly how that works, we'll really start to find out that, you know, just finding the most potent product out there is not gonna deliver the best experience. It's really trying to find the most rounded, you know, most representative of what this plant looks like in its purest format is the best direction to go.
Matthew: Which of the flowers, Huxton flowers, is the most popular?
Dustin: That's a great question. So we have a couple of genetics, so we do a, kind of, a unique different variety of flower products. So we do the preroll tins, we do our circular tins, and then we also do single origin genetics, still sold by series, but classified by that particular strain. And we have a couple award winners in that particular class, but generally, any thing in our High 5 series has seemed to be really popular. Our Green Crack has been a first time...our first place Earl Cup winner here a couple of years in a row.
Our Durban Poison does really well. But, again, that High 5 series is, kind of, on the top of the list, followed very closely by both our Zen and our Arise series. We're finding that you know folks are starting now to understand that they can use cannabis at different points in the day, or in different settings and use it differently. And so if they're going to a concert, they're doing something that's active, or they're looking to be creative, anything in our High 5 series flower or vape pens is a great fit.
But then those same folks might also be, you know, looking to unwind after a long day, looking to sit on their back patio and take in a sunset, and so anything in our Zen series is a good fit as well. So we're starting to see, kind of, this balance of the three sets as people start to understand how they fit cannabis into their lives.
Matthew: Okay. You're building an interesting, kind of, Swiss Army knife, cannabis Swiss Army knife of businesses, and skill sets under one roof with Adakai. How do you see that, kind of, rounding out, or expanding over the next five years or so?
Dustin: Yeah, that's a great question, too. I mean, again, so much of this industry is still uncertain. I feel like we're just kind of in the infancy of something that's gonna be incredibly impactful going forward. We're really just trying, like you said, to build as many skills, and have as much knowledge as possible. Really have a foundation of understanding for all parts of the industry. Really, you know, the main thing that we're really focused on, and what we've realized is gonna be key for any successful business in this space moving forward, is the power of brand.
You look at any other consumable product, and brand wins hands down time after time. So, I think, that, you know, we're really in a space where a lot of these cultivators and activists, and folks that are fostered this industry and brought it to where it was, you know, folks that I have a ton of respect for, have been disincentivized from letting people know who they were because they were in an environment where, you know, that could get them into some legal trouble.
And as that changes, now, a lot of this folks are starting to be able to come out of the closet and start to put their names on the products they are producing. And, I think, that really, you know, spending a lot of time and focus and energy on crafting that brand, whatever that might be, is gonna be one of the, you know, the biggest keys to our success moving forward.
Matthew: Right, because if there's no brand or there's no other way to have a unique value proposition, then people just compare on price, and then it's a race to the bottom and everybody loses.
Dustin: Certainly. Certainly, and, I think, that, you know, brands exist for a reason, and they allow consumers to make selections based on previous experiences. They provide a level of consistency, and that was the one thing that we saw that was really lacking in the flower space was the ability for consumers to get a consistent experience. You know, Huxton was the first flower brand here in Arizona that could be bought in multiple locations.
You've seen a lot of folks now doing that across the country, and, I think, as we move, kind of, from this model of bulk wholesale to retails, then repackage that flower under their retail name and move more towards brands, I think, that the consumer just becomes more aware of who is behind these products. They're able to make qualified selective decisions on the products that they're purchasing. And, ultimately, I think, that that just really, you know, raises the tide here across the industry.
Matthew: So you said you just celebrated your fourth anniversary, I think you said. So if you could go back four years and give some candid advise four-year younger Dustin, what would you say to him, so he could thrive and get through this with minimal stress?
Dustin: Yeah, great question. You know, I think, that if I could have gone back and done it all over again, I think, the only thing I would have told myself was, "Get started sooner and hustle harder." You know, it's been an incredible journey. I can't really describe what it's like to be on the forefront of an industry that has so much opportunity, is emerging, you know, kind of, out of this haze, and really starting to change minds, and really people are starting to understand what cannabis can do, and how much social impact it can create. And, I think, that if I can go back four years ago, I would tell myself to start six years before.
Matthew: Gosh, you know, everybody I've met from Pepperdine is always, like...I don't know if I would have left Pepperdine. You have a beautiful campus there in Southern California, the ocean, and it's just, you know, it makes me think about that movie "Old School." Like, if I went to Pepperdine, I might just like find a way to stay there and be, like, a 40-year-old college student somehow.
Dustin: Yeah, yeah, I made the big mistake of leaving right after I was finished, and that would be the other thing I probably would do is go back and challenge that decision.
Matthew: Well, let's put there just some personal development questions. Is there a book that has had a big impact on your life or way of thinking that you'd like to share with listeners?
Dustin: Yeah, absolutely. I mean, I'm a big reader, you know, I have been most of my life. The one that I picked up recently that I would recommend to anybody is a book called "Extreme Ownership." And it's a book written by two ex-navy seals, and taking a lot of lessons that they've learned in their deployments, and applying them to business. Really, just a great, kind of, central theme about understanding that there's a lot of things that can happen to you in life, and a lot of things that can be put, you know, on your plate.
You can't control external circumstances, but you can control yourself. You can control how you react to them. And at the end of the day, you know, your destiny is really in your own hands. So I thought that there was just some really great lessons and some super interesting stories from those guys. So I would highly recommend picking that one up.
Matthew: Is there anything that you picked from that book that you turned around and implemented into your business and you'd like to share, like, one bullet point?
Dustin: Yeah, you know, I think that really what we've done is just try to impart that same belief on all of our staff. I think that if you can build a culture where everybody, you know, is you know, slow to point fingers at external circumstances that are causing difficulty and willing to take a look in a mirror and say, "What can I do to affect this?"
I think that you know that just creates a really strong bond and, you know, a unique foundation for creating a successful company. So just really try to encourage everybody, you know, in our organization to constantly be challenging themselves, constantly be challenging me, constantly be challenging each other, and really, you know, take on that idea of extreme ownership and saying, you know, "This is our future to build. Let's get after it."
Matthew: I've coined a term that I call "The MacGyver Quotient," and that is how do you solve that you don't know how to solve. And that's what I call "The MacGyver Quotient." Like, how are you gonna do something you don't know how to do? Like, you just have to figure it out. You know, I didn't know how to start a podcast. I didn't know anybody in the cannabis business when I started this. Just like how are you gonna do this? You know, you gotta develop, you gotta nurture and get some kindling out, and just kind of start your MacGyver Quotient until it turns into a raging fire. And I don't know if you remember that show "MacGyver"? But...
Dustin: Oh, loved it.
Matthew: Yeah, he's always thrown into this situations, and he's got like a fishing hook, some dental floss, and a contact lens and he has to, like, disable a nuclear bomb with just that. He's like, "What do I..." but he just figures it out, like, at the last second and makes it happen. But he's not saying, like, "Well, I have to wait for someone that tells me how to do this." You know, he's always just figuring it out as he goes. And sometimes it's messy, but that's okay. You know, you can clean up the finer details later.
Dustin: No doubt. I think that, you know, in addition to all those tools, he had a pretty incredible mullet that really helped him.
Matthew: He did. And I, you know, I've come to realize...I've been educated that there's more than just one kind of mullet haircut. There's the Kentucky waterfall. There's the ape drape, and there's a few others. It's not just one. It's a broad category of mullets, so you can Google different mullet types if you got to learn about that. My favorite is the ape drape, but we'll move on.
Dustin: Yeah, sounds like the rest of my morning is all set. I'm gonna be taking a look.
Matthew: Is there a tool, web-based or otherwise, that you consider vital to your productivity that you'd like to share?
Dustin: Sure. Yeah, I mean, you mentioned books and, you know, being as busy as I am and doing as much as we're doing, I really don't have time to read anymore, so I really appreciated the Audible app. I've been using that a lot to be able to listen to books while I'm, you know, finding some time to get to the gym, or driving in my car, you know, have a couple of minutes to kinda wind down. That's been great.
The other tool that I've really appreciated is the Headspace app. And, again, I think, that we're all busy, and we got a lot going on at work. And everybody is, you know, trying to build something unique, and we're all kinda running pretty hard but, you know, I like to try to make sure I'm framing my perspective in a way that is creating an abundance of wealth. And that, you know, includes being able to come home, and, kind of, turn my head off and focus on my family.
And I got a three-year-old and a one-year-old daughter that command a lot of attention. So just trying to make sure that I'm focused, and present when I'm around them. And that Headspace app, you know, doing little 10-minute meditations before I walk into the door are really useful to allowing you to, kind of, shut off all that clutter, and all that noise that is in the back of your mind. So I really appreciated that one as well.
Matthew: And just released this week, the founder of Digg, Kevin Rose, who's also a big Silicon Valley investor, released an app called "Oak Meditation" that's only available on iPhone, but I think android is coming soon. And it's very similar to Headspace but free. So for people that don't wanna spend, what, over $3 month that is for Headspace, he just did that as kind of a public service because he's gotten so much out of meditation.
As you mentioned, a lot of the benefits that you just went through. So that's another one I'd like to through out there. I'm glad you put that out there. The guy from Headspace is a very soothing English accent as he gets you to visualize all these different things makes meditation very accessible, so I totally agree with that one.
Dustin: Yeah, absolutely.
Matthew: Well, as we close, Dustin, tell listeners how they can engage with you, follow your brand on Instagram, find your website, and come to your dispensary?
Dustin: Absolutely. Yeah, we're Huxtons on Instagram. We're @HuxtonUSA. You find us on the web at huxtonusa.com. Monarch, again, on the web at monarchaz.org, and we're here opened seven days a week in Scottsdale, Arizona. For all of our local folks listening, we'd love to have you come through. I think that, you know, we're excited about continuing to build those brands, and carry them into the future, and looking forward to continuing the hustle.
Matthew: Well, Dustin, thank you so much for coming on, and sharing your journey with us. We really appreciate it and good luck to you.
Dustin: Thank you. Thanks so much for having me.