Ep 341 – Social Equity Initiatives Spark a Cannabis Incubator in N. California…

amber senter breeze distro

The Congo Club is one of the only places that carry the Red Congolese, an heirloom strain of cannabis that provides an electrifying, thought-provoking, and optimistic high. Here to tell us more about it is Amber Senter, founder of The Congo Club, Breeze Distro, and EquityWorks! Incubator.

Learn more at https://www.breezedistro.com

Key Takeaways:

[1:11] An inside look at The Congo Club and Breeze Distro, a distributor of high-quality cannabis products in California

[2:31] Amber’s background and how she got into the cannabis space

[5:18] Unique characteristics of the Red Congolese strain and why it’s gained so much popularity

[11:04] Why California’s regulated market is struggling to compete with the unregulated market and what it will take to change that

[15:04] Amber’s latest venture EquityWorks! Incubator, one of Oakland’s first publicly-funded social equity manufacturing facilities

[19:23] The many different cannabis licenses required in California and the challenges they pose to everyone from cultivators to distributors

[25:40] How Amber sees the California cannabis landscape evolving over the next 3-5 years

Click Here to Read Full Transcript

Matthew Kind: Hi, I’m Matthew Kind. Every Monday, look for a fresh new episode where I take you behind the scenes and interview the insiders that are shaping the rapidly-evolving cannabis industry. Learn more at cannainsider.com. That’s C-A-N-N-A insider dot com. Now, here’s your program.

Today, we’re going to hear from Amber Senter, founder of the Congo Club. The Congo Club is one of the few places that carry the Red Congolese. An heirloom strain of cannabis which provides an electrifying thought-provoking and optimistic high. We’re going to hear more about that and also what Amber is doing with Breeze Distro, a distributor of high-quality cannabis products. Amber, welcome to CannaInsider.

Amber Senter: Thanks for having me today, really excited about our conversation.

Matthew: Me too. Give us a sense of geography, where are you sitting today?

Amber: I am in Oakland, California right now. A bit chilly than it usually is, it’s 48 degrees.

Matthew: That is pretty chilly.

[laughter]

Amber: Yes. It’s 35 this morning when I woke up, like, “Oh my gosh, this is not what I moved to California for.”

[laughter]

Matthew: Tell us what is the Congo Club and Breeze Distro.

Amber: The Congo Club is a cannabis brand, a brand of African land raised sativa genetics. We’re dedicated to really bring in some of the highest-quality African cultivars that we find as well as crosses that we make. Really bringing those, as you mentioned the electrifying type of sativas to the market which there’s a gap because people don’t really want to dedicate that all that time that goes into growing sativas. That’s what we do with the Congo Club and Breeze Distro.

Breeze is about creating an inclusive supply chain for black and brown cannabis brands. We source the highest quality, really black and brown cannabis brands and products throughout the state and make sure that they have visibility on retail shelves.

Matthew: Can you share a little bit about your background and journey and how you got into the cannabis space and started the Congo Club and Breeze Distro?

Amber: Yes, sure. I moved to California from Chicago in February of 2014. Moved out here and got a job working for an edibles company. I moved here because I was suffering from lupus. Those winters in California are extremely harsh. [crosstalk]

Matthew: You mean the winters in Chicago are harsh.

Amber: Yes, in Chicago, that’ what I meant. We were experiencing one of those polar vortex winters where it was like-- [laughs] [crosstalk]

Matthew: Oh my God. That sounds like something that’s made up in a comic book movie or something.

Amber: Right, The Day After Tomorrow type of stuff. That winter, we had wind chills of 40, 50 below zero and I just couldn’t take it anymore. I moved to California, I got a job working as a sales and marketing director for an edibles company. Really, worked very hard. At the time, when I was brought on, we had four accounts and by the time I left, we had over 50 accounts. Really hustled throughout the state to expand our business, but at the same time, I was also really building up my network. That’s how I got to meet so many people in cannabis.

Really since then, I’ve just been hustling, working. I had a job working for a consulting company, writing, winning applications for different groups really throughout the United States. Also, worked for a little while at a West Oakland Dispensary as a COO for a couple of years and got my experience and running multi-million dollar retail operation.

From there, my experience really at the dispensary taught me a lot about customers and customer trends, products and really what products do well in the dispensaries and what people are looking for. After I left the dispensary, I started Breeze, manufacturing products, making products and distributing them.

Matthew: What do you think it is about this particular strain with the Congo Club? We talked about it being electrifying, thought-provoking, optimistic high, but what is it that’s really captured people’s imagination?

Amber: It’s a unique strain, it’s spicy, it’s cheesy, it’s very clear-headed kind of high, but at the same time, there’s no paranoia. People really like that. Some folks love Jack Herer’s and Trainwreck’s and those type of cultivars, but those tend to really get your heart rate going, maybe give you heart palpitations. I know it does that for me. I’m very sensitive to cultivars and things like that, any kind of stimulant whatsoever. I can’t even drink coffee. I would really love to enjoy the buzz and the kick that you get from those kinds of things.

That’s really what’s very unique about the Red Congo is that you get that energetic feeling without the jitteriness and the heart palpitations. That’s really due to the myrcene content.

Matthew: Talk about the myrcene a little bit. Could you just mention what myrcene is first?

Amber: Yes, sure. It’s a terpene that’s found in cannabis, a number of different cannabis strains, primarily found in indica-dominant strains or strains that are really relaxing. It’s more of a sedative type of property that’s found in cannabis. It’s found in a number of different plants, thyme, mangoes, lemongrass, but also, found in a number of cannabis strains, Granddaddy Purp, Blue Dream, OG Kush also has a pretty high myrcene content, not very common that it’s found in sativa type of strains.

Matthew: It’s really calming, it really tempers that paranoia and heart palpitations, which who doesn’t want that on a Saturday night, extreme paranoia and heart palpitations.

[laughter]

Just heavy myrcene and that tempers that and offsets it so you get a more pleasant high without those things?

Amber: Yes.

Matthew: I’m always curious how people get their product into dispensaries the first time and then how do they grow the network of dispensaries that will create demand for your brand?

Amber: That wasn’t the easiest thing. It’s also a very big challenge for really black and brown brands to get shelf space. We just don’t really have the networks a lot of time, the connections, and can’t make that connection to get on the shelves. We got out first big break with the Congo Club through Harborside. Harborside has carried the Red Congolese for a very long time. They actually worked with our cultivator.

Once our cultivator got licensed, he was really trying to figure out his way and just wanted to focus on growing. We partnered up. He’d known me before, I had helped him with a previous brand that he was associated with. We were really looking to continue to build a relationship together.

I had an idea of creating a brand that centered African genetics and African cultivars and he loved the idea. We partnered up together and we approached Harborside, had a meeting, let them know what we were up to and what this new brand, what’s focus and represented and they loved it. They brought it on and they’ve really been in our corner ever since then.

The market share and visibility that we got from Harborside, just really reverberated across the California cannabis scene to other places. Now we’re in a serious demand really across the state. Harborside was really where we got our first big jump off.

Matthew: It’s the sales and marketing background that you had when you first came to California. It sounds like you leverage that skillset to get meetings and things like that.

Amber: Absolutely, definitely.

Matthew: I think people underestimate the midwestern hustle. I’ve got the midwestern hustle too, where we’re like, silently just going at it and it’s underestimated, I think.

Amber: You’re absolutely right. We have a very, very strong work ethic in the midwest. Very blue collar, just get it done. I definitely applied that out here.

Matthew: [laughs] That’s great. With a large unregulated market side by side, with the regulated and tax market, I know different communities are being served here, but how does that when you have that lens on, you’re looking at the landscape of California’s cannabis market, and you’re saying, “Hey, there’s an unregulated market,” and they don’t get taxed. They don’t have the same regulations. They don’t have all these lab tests. They have to pass all these things. Then I’m involved in the regulated taxed market.

Do you just accept it or are you looking for ways to get the Sacramento to be more adaptive and how they deal with the regulated market? What are your general thoughts here?

Amber: It would be great if we had less taxes, obviously, taxes are killing regulated operators. It’s quite extremely burdensome, really hard to navigate, really hard to deal with. Especially here in Oakland, we have some of the highest cannabis tax rates in the state, if not the highest, I believe we are actually the highest at 10%, which is unbelievable for a city tax on top of all the other taxes.

We’ve been working really hard to advocate for lower taxes at both the city level and at the state level. We were successful at the city level here. The tax rate has been lowered and will continue to go lower over the next couple of years from 10% down to-- It’s all dependent on revenue and also your status if you’re an equity operator or not. Equity operators pay as little as 0.12% city tax. If they generate that. [crosstalk]

Matthew: What’s that? Because I don’t know what an equity operator is.

Amber: Oh, yes. Social equity programs were designed to lower barriers of entry for communities that have been disproportionately affected by the war on drugs. There’s parameters that you have to qualify for in order to qualify for this program.

When you do there’s a number of different incentives and different types of breaks and programs that you’re able to be involved in. One is a special tax program for social equity operators here in Oakland, where if they generate 1.5 million in revenue or less, they’re put in a special tax bracket of 0.12%, which is quite different from 10%. It’s there to help people create a sustainable business, give them some runway to allow them to get on their feet and generate some revenue.

These types of programs or actually what would be quite helpful in helping folks transition from the unregulated market to the regulated market. A lot of the unregulated operators and traditional market operators don’t want to cross over because of the taxes. I can’t say that I blame them because taxes make it really hard to run a sustainable business. I think the state looking at programs like that, which Oakland has implemented would be the way to go about it versus enforcement. We can’t do enforcement, we’ve got to figure out pathways in which to get folks licensed.

Matthew: Amber, can you talk a little bit about what you’re doing with EquityWorks! Incubator? What that is and what you have going on there?

Amber: Yes, sure. EquityWorks! Incubator is a publicly funded, shared social equity of manufacturing facility located here in Oakland. It is a first of its kind in the country. What we do is we help social equity operators. We currently have six in the incubator, we help them create products really that makes sense for the market, for the cannabis market.

We’re doing things like analyzing data, we’re helping folks come up with formulations, helping them do R&D, we’re helping them look at branding, helping them create and build their brand and create a brand story. Then, me, as a distributor, we’re distributing it to retailers throughout the state here. It’s really very much a mentorship program helping people from concept to the shelf.

Matthew: That is super helpful. You said there’s six startups in there right now?

Amber: Yes.

Matthew: I can imagine, just getting some words of wisdom like, “This doesn’t work and this does work.” [laughs] You just don’t know when you’re getting started and it’s like, “Yes, I’ll tell you why.” It was like, “Wow, that just saved me months of banging my head against the wall.”

Amber: Especially as a manufacturer, getting into these products and making a product that might be off compliance wise or the dosing is not right, the formulations not right, that’s costly. Not only is it costing you money by going and getting these things tested, but it’s costing you time. I’m really happy that we’re able to assist operators like this really, just bringing in our knowledge, our backgrounds, our experience, and helping folks mitigate some of these pitfalls.

Matthew: You make introductions then for distribution and imagine these alumni, once they’re alumni will probably help each other too.

Amber: That is the goal. Once you make it, you reach back and you help others that were in the position that you were in. We definitely not just make introductions, we’re actually distributing these products, and we’re doing it to some of the largest retailers in the state, MedMen, East, Harborside really the big guys.

Matthew: Wow, that’s great. Of the six startups, how does it break down and what they’re interested in making specifically product wise? Are they still working that out?

Amber: Yes, they’re still working it out, but a lot of them have their concepts created and it’s been really exciting to be a part and watch and give feedback. We’ve got folks, making gummies and really also bringing in their cultural backgrounds, influencing the flavor profiles of products, and really also even the choices of the products.

We’ve got some folks making gummies, we’ve got some folks making tinctures, some interesting topicals too. One of our manufacturers is making a hair oil, but very specific to course hair. Black hair certain Afro-Latina hair, so really, really interesting stuff coming out of there. I’m really excited to see what else folks come up with, someone’s got hibiscus type of lemonade. Really exciting things coming out.

Matthew: There’s a lot of different kinds of licenses in California. People in California are familiar with it, but can you just go through a few of the licenses of the big kinds, because it’s quite a few compared to other States anyway?

Amber: Yes. Let’s see, you’ve got a number of different cultivation licenses. There’s indoor cultivation, there’s outdoor cultivation. There’s even mixed-like cultivation, greenhouse cultivation. All the different types of cultivation licenses.

Then you’ve got your distributor licenses, which there’s even different kinds there. There’s a transport only license where you just literally logistics and moving things around the supply chain by transport.

There’s the overall arching distribution license where you can distribute your own products, and other people’s products and actually take them to the retailer. You also serve as quality assurance by being the one that’s in charge of collecting the taxes and testing. I feel a lot of liability falls on distributors.

Then there is the self-distribution license. Then there’s a few different types of processing or we call it here manufacturing licenses, there is a type six license, which is nonvolatile. There is a type seven which is volatile. Then there are a few others that are very specific, there is a packaging license, there is an infusion license. Really, really interesting there. Then, of course, you’ve got your testing license, and then your retail licenses, which there is a few categories there. You have storefront and your non-store front which would be delivery licenses.

Matthew: What do you think, here, some of these be consolidated or do you think it’s helpful having it fragmented like this?

Amber: Tricky question. I was operational prior to legalization. I was a manufacturer that self-distributed my own products. Since legalization I’ve had to-- obviously, I’m a manufacturer, but then now I’ve taken it a step further and had to get my distribution license. I did like the way it was before, where manufacturers and cultivators could go straight to retailers to sell products, and really just do business however they wanted.

Now with the framework, it does make it a lot more costly, because now not only do we have the taxes and everything to deal with, we’ve got all these licensing fees, and different licenses that we have to have. Then, of course, the cost of compliance around each of these licenses. It’s made it quite burdensome with all these different license types, and the hoops that we have to jump through to stay compliant.

Matthew: In California right now, there’s roll-up of the industry. There is a lot of mergers and acquisitions going on, what do you think about that? Can social equity companies participate in that?

Amber: M&A activity is high right now, all over the industry, especially here in California. The cost of compliance has been a lot and people are seeing this looming hopefully the scheduling that’s going to be happening in the next few years. Folks are starting to prepare for that, and kind of coming together like Voltron. [laughs] It is one of the ways in which to really get a leg up on the flood of capital that’s going to happen when some descheduling happens.

I think the mergers and acquisitions are great. They make a lot of sense. I’m really glad to see people coming together because they’re realizing that they can’t get as big as they want to on their own, and they’ve got to consolidate in order to really have a presence, and make an impact, and gain market share.

There is a group that’s being left out, and that is social equity operators. It’s a huge problem because we’re seeing all these companies around us being able to come together and form much bigger entities, whereas, the social equity operators are forced to stay small. Really, how can they compete against companies that are merging when they don’t have that option? That’s something really that the regulators are going to have to fix as quickly as possible.

Matthew: Are they getting feedback on that or they’re not in touch with it?

Amber: Yes, we’ve been giving them quite a bit of feedback, but really, we’ve been giving them feedback since they came out with the rules and regulations around which ownership is defined in social equity businesses. This has been a looming problem, and now that the M&A activity is really up it’s becoming amplified.

A lot of these smaller operators-- that’s what you do, you come together so you can be bigger. The fact that that’s being blocked because the definition of a social equity business is compromised at that point, it’s just not okay. It’s really limiting the ability of these businesses to grow.

Matthew: Nos, how do you see the California cannabis landscape changing in the next three to five years?

Amber: It’s a great question. I see the M&A activity continuing. I see a flood of capital coming in hopefully from descheduling.

I see if interstate commerce becomes a thing which hopefully it will. I see California cannabis being king as it has been, and will continue to be. California being, which it already is this jewel in the United States, but that just being amplified with interstate commerce.

I’m really excited to see what’s in store for California. We continue to be trendsetters here with products and infusion techniques, and all these things. I see us continuing to be that leader, and not just in the United States but in the world, and very excited to see what’s to come here in the cannabis scene in the next five years.

Matthew: Me too. Amber, I want to move to some personal development questions, to help our listeners get a better sense of who you are personally. Is there a book that’s had a big impact on your life or your way of thinking that you would like to share?

Amber: Definitely, I don’t get a whole lot of time to read for pleasure I should say. A lot of my reading is professional development, personal development. I went to school to be a meteorologist. I went to school for physics. Now, I’m business role and [laughs] I really needed to step my game up there.

I read a book called The Personal MBA. It’s lengthy but so worth it. I read it several years ago, five, six years ago. This book helped me out tremendously on the business side of things, and really helped me with my crash course in business school, navigating running a business in cannabis.

Matthew: What do you think the most interesting thing going on the cannabis field apart from what you’re doing?

Amber: Social equity programs have been really fascinating. I’m so glad that it’s a topic of conversation because it deserves to be. We have to give opportunities to those that came before us and really paved the way for this to be an industry as it is today. I really appreciate what has happened around that. Also, I’m really fascinated about beverages, in the beverage category. I was always very skeptical being an operator that operated since 2015, 2014. I’ve always really been like, “Oh, drinks, no, I don’t know about that.”

Really the technology around it, the bioavailability that they have been able to really create with an absorption rates with beverages and edibles even has been so interesting, where we can really now create these fast onsets, instead of waiting an hour for an edible to kick in, it kicks-in, in 15 minutes. The [unintelligible [00:29:55] is short-lived but strong.

This has been fascinating to me. I’m really, really excited to see how far the envelope gets pushed there. How much they can tweak it? Very exciting to me.

Matthew: In fact, it was the drink manufacturer that introduced us, Luke, from Cann. [crosstalk] Those are very popular, Luke. Well done if you’re listening.

Amber: I love Luke. Luke is an incredible human being and a really awesome person and he’s made an amazing beverage and its awesome branding. I just love it. Everything about it.

Matthew: Luke, you can just record that and put it on loop, whenever you’re feeling down.

[laughter]

Amber, what one song immediately comes to mind that makes you sing along as soon as you hear it?

Amber: This was a funny question. Most of the music I listen to is rap. Lots of rap and hip-hop, so very much not safe for work. [laughs] That’s my answer. A lot of the music that I love, not safe for work, but one of my favorite artists did win a Grammy on Sunday night, Megan Thee Stallion. [laughs]

Matthew: Amber, as we close, can you tell listeners how they can follow you and connect online and learn about all the different businesses and projects you’re a part of?

Amber: Yes, definitely. You can actually go to my website, amberesenter.com. You can find Breeze Distro on the web as well at breezedistro.com. You can find us on Instagram as well or look me up on LinkedIn.

Matthew: Amber, best of luck to you. You got a lot of exciting things going on and I hope we can check in again soon.

Amber: Yes. Thank you so much, Matt. Thanks for having me on today. I really enjoyed this conversation.

[music]

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guests to you. Learn more at cannainsider.com/iTunes.

What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider. Simply send us an email at feedback at cannainsider.com.

We’d love to hear from you. Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis for using it for medical treatments. Promotional consideration may be provided by selected guests, advertisers, or companies featured in CannaInsider.

Lastly, the host or guests on CannaInsider may or may not invest in the companies, entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions.

Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care, bye-bye.

[music]

[00:33:35] [END OF AUDIO]