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Vincent Harkiewicz is the co-founder and COO of Grownetics a company building the cannabis grow rooms of tomorrow. Vincent shares why if you are not investing your time, money and energy into a perfectly automated and intelligent grow you are missing out on priceless data about your plants and what they need to thrive.
Learn more at
[0:55] – What is Grownetics
[1:10] – Vincent’s background
[2:59] – Vincent compares and contrasts a typical grow to an optimized grow
[6:11] – Vincent explains how Grownetic sensors work
[8:57] – How much does temperature and humidity affect plants
[9:48] – What are Quantum and Par Sensors
[11:24] – Vincent’s lighting recommendations
[13:40] – What growers like about Grownetics
[15:31] – What do business owners like about Grownetics
[16:36] – Collecting data at a plant level
[17:20] – Is data shared with other Grownetics customers
[17:42] – How does Grownetics help with pests
[19:50] – How does Grownetics help with energy conservation
[21:16] – How is Grownetics unique
[22:29] – Vincent talks about the cost of Grownetics
[27:54] – Vincent answers some personal development questions
[33:42] – Contact details for Grownetics
What are the 5 trends disrupting the cannabis industry?
Find out with this free cheat sheet https://www.cannainsider.com/trends
The cannabis cultivators of 2018 and beyond that embrace emerging technologies to optimize their harvest will be the winners, both in profitability and delighting their customers. Here to tell us all about the latest in grow room technology is Vincent Harkiewcz, Co-Founder of Grownetics. Vincent, welcome to CannaInsider.
Vincent: Hey Matt, thanks for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
Vincent: I am talking you from the sunny Boulder, Colorado.
Matthew: Okay, and what is Grownetics at a very high level for people that haven’t heard of it?
Vincent: Essentially it’s the operating system for indoor farmers and greenhouses. What we’ve built is a way to learn how to grow every plant better.
Matthew: What were you doing before Grownetics? What inspired you to start this business with Eli?
Vincent: So, before Grownetics I was actually living in Shanghi, China. I had a design and sourcing business out there where I was doing manufacturing and industrial design, and quickly realized that most of the way that we build things today is very polluting. A lot of the products I was designing ended up, you know, designed to be for designed obsolescence. Ending up in landfills and whatnot. So, I quickly decided to get out of there plus there was a ton of air pollution, food pollution, water pollution and kind of a sign of things to come. So, I started focusing on sustainable development techniques. Looking at how we could take advanced manufacturing practices from companies like Toyota and applying it to sustainable development.
When I came to Boulder to start a new venture I met Eli, and the two of basically hit it off with his commercial cultivation experience in cannabis and my experience in production and operating systems. Yeah, we decided to build a system that actually learns how to grow ever plant better, and that’s what we’ve done.
Matthew: That’s awesome. So, you and Eli partnered and how long ago was that, when you created Grownetics?
Vincent: We met about two and a half, a little over two and a half years ago now, and the company has been running now for about two years.
Matthew: I think a good way to set the stage here is walk through how a traditional grow that’s not optimized for technology or controls looks and then contrast that to one that would a typical or expected grow room with the latest technology including Grownetics. Would you mind doing that for us?
Vincent: Yeah absolutely. We see a lot of grows, and typically a standard grow without technology is the majority of grows unfortunately. Typically you’d be having typical HPS lights, street lights, inside their growing plants, and you would have everything manually done, hand watered, typically pots on the ground, soil pots on the ground in a warehouse. Basically like you just threw up a warehouse and threw some pots in there and called it a day.
You can still grow very high quality product out of a grow like that, especially with a skilled cultivator with is finger on the pulse of all those plants, but it’s going to be incredibly incredibly inefficient. Essentially that way of cultivating is just not going to last. We’ve already seen it with the price crunch here in Colorado.
Matthew: Tell us about that price crunch a little bit. When did that start, and what’s happening with it?
Vincent: So, I’d say it’s been really going on a little over a year now, maybe a year and a half. The market here is very mature, and that’s one of the things that makes cannabis businesses so successful in Colorado is good regulations and the maturity in the marketplace. What that also brings is competition. We’ve seen a lot of struggle with regulations as they come out. People taking their early investments and investing in essentially what they thought was going to be a cash cow and not planning enough on thinking about operational efficiency. So, not being able to meet that demand and meet that price drop that we’re seeing from a lot of these larger wholesalers and a lot of these larger growers.
Matthew: Yes, it’s something I’ve been talking about for a couple of years now that this is another commodity in a sense. Some people are kind of craft, small batch and they have a narrative or fans around their particular style of growing, but most people don’t fall into that bucket, and they want just cheap, good, high quality buds. So, there’s going to be a problem for people that don’t have a unique selling proposition or have really invested in the technology. Some people say, everybody will invest in the technology and it won’t be in an advantage, but in my experience most people don’t. They’re always lagging. If you just make the commitment of saying, I want to be in the top 10 percent or 20 percent of people that are investing in technology and my operations and controls, you’ll be in good shape, because most people don’t have that level of commitment.
Vincent: Hundred percent, hundred percent. It takes that operational mindset and the idea of where do you want to be in three years or five years. Are you still going to be growing in your 10,000 square foot or are you going to have a whole plan to have an R&D facility in that 10,000 square foot and then scale this thing up to multiple facilities, highly efficiently.
Matthew: I want to talk a little bit about sensors, because Grownetics is largely about data and using data, but how do you accumulate that data? It’s through sensors and different means. Where are the sensors placed in a grow, and what should we know about those?
Vincent: Essentially what we built to gather that data, you know, data is the most important thing for us. High quality, qualified data, and that’s why we focus on the enterprise and not consumers to begin with is that we could be providing real recommendations based on the highest quality data, but what we found was that it was prohibitive before we started. It as prohibitive to get high quality data because the sensors that people were deploying were just too expensive to really deploy at scale.
So, what we did was we started by building an open sensor platform. What that means is we can integrate any number of sensors that are on the market. This comes from my experience in China where essentially sensors are an off-the-shelf commodity. It’s all the middle men that jack up the price. We decided to create an open sensor platform and then quickly realized there was not a temperature, humidity and CO2 sensor or an atmospheric chemistry sensor that was cheap enough that we could really deploy at scale. So, what we built was our own high resolution sensor array. This is the key to the base sensor platform for a Grownetics enabled facility. That’s our 3-D Microclimate Sensors.
Essentially what it is is a five sensor array, and we have one combo temperature/humidity sensor that goes at the soil level. Then we have a combo temperature/humidity and CO2 sensor that goes at the mid to top of canopy level. These are typically mounted on the vertical stanchions on the rolling benches. They can also be suspended from the lighting supports. We can mount them any number of ways. Essentially that gives us a real good idea of what the 3-D Microclimates are in these cultivations room, so we can give you essentially an indoor weather map of your grow. Then with all that ocean of data, it’s not valuable unless it’s actually correlated to batches and plants and that’s the magic of the Grownetics system is we actually automatically correlate every single microclimate to the individual plants that are in that microclimate.
Matthew: The microclimates you’re mentioning are kind of stratifications, I guess, you’re looking at vertically of different temperatures. If you’re not aware of how much the temperature and humidity can stratify, how big a difference are we talking about here and how much does that affect plants?
Vincent: So, for a typical grow, not a vertical grow it can be dramatic. Essentially what you’d be finding is any issues with your airflow in the room. So, when you have a stratified room essentially what you have is pockets of really high heat air right between the light and the plants, and this could be due to light level. It could be to the position of the oscillating fans. It can be due to the position of the HVAC system, the inlets and outlets. So, there’s any number of reasons why you could have issues with the microclimates in your room and airflow. So, this really allows us to give you an x-ray vision to see what’s actually going on in a three dimensional fashion in that room.
Matthew: Give us a little background. What is Quantum and PAR sensors? What are those two terms and why are they important?
Vincent: Essentially a PAR sensor, PAR stands for Photosynthetic Active Radiation. So, essentially what photons, what kind of energy level the plants are actually receiving to do their photo synthesis. Quantum sensor is another name for a PAR sensor. Essentially it’s giving us the amount of particles and waves that are hitting a particular point from the sun. So, we use PAR sensors to really get a sense of are our lights functioning optimally in an indoor environment? Are we getting that even amount of micromoles hitting the surface of the plants? Then when we’re doing any kind of supplemental lighting or dimming or spectral control we always want to be using PAR sensors to be giving us that baseline to make sure we’re hitting the numbers were expecting. We’re actually seeing the way the plant sees, because our human vision only sees a very narrow band of visible light, where the plant actually sees a very wide spectrum of light. We want to make sure we’re capturing all of that that the human eye cannot see.
Especially this is important for greenhouses where we’re doing supplemental lighting and special control with either dimming or with LED lights so that we can say, okay you’re plants are getting this consistent level of PAR throughout the day, throughout their lifecycle.
Matthew: So many people are curious about lights. How do you evaluate lights and what are your favorite kinds now? What do you advise clients in terms of lights?
Vincent: So, double-ended is the norm and very efficient innovation on the traditional HPS bulbs, and very cost effective. So, for production facilities HPS double-ended is really a great solution. Just make sure you’re dimming those based on any incoming sunlight. You have a really efficient lighting system there. Now it is going to be pretty hot. The future is really going to be LEDs. The research being done, besides the medical research being done in the industry, is lighting research. A lot of discoveries are coming out almost, it seems like, monthly on different lighting wavelengths and how they affect resin production or the cannabinoid production in the plant.
So, one of the things that we discovered through our lighting studies was that if you use the far red LED on, let’s say, heliospectra light, two weeks into the flower cycle you can actually shorten that flower cycle. You don’t need to have that LED on for the entire lifecycle of the plant, therefore saving energy. You turn that sucker on two weeks into flower and all of a sudden you get heightened resin production. It kind of tricks the plant into thinking it’s Fall. You get a lot higher quality product, and that’s only the beginning. There’s a lot more room in lighting research to be done. When it comes to that point LED will start to become the norm in these grows, because we can do spectral control of LEDs, and we can also do… it’s much more efficient. We’re just waiting for that price drop to come.
Matthew: Yeah, a lot of promise there with the LEDs. I’ll be curious to see what happens over the next year or two. Let’s look at two different roles here; the business owner and the grower. A lot of times that’s the same person, but let’s just assume it’s two different roles. What does the grower like best about Grownetics? Where does it help them the most? What’s their feedback in terms of Grownetics really helps me with X the most? Where do they really light up when you provide them with information or what it does for their business?
Vincent: So, I’d say for the grower it would absolutely be the peace of mind for the alerting system, because essentially we can monitor everything in a facility, and monitor all the circuits related to all the major cultivation systems. If your chiller goes out, you get a phone call and a text message and an email. So, it will actually wake you up in the middle of the night instead of just a text message, which you might ignore. That would be number one for sure is peace of mind through our open controls and sensing platform.
Number two would be it’s kind of like x-ray vision for growers. Instead of needing to run around and basically deal with looking at all these little thermometers all around that they’ve hung up, essentially it lets them monitor a much larger square footage or amount of plants in a very intuitive and easy way. So, they can see what exactly is actually going on in the room. Whereas previously you basically would take a thermostat , and if you’re lucky a smart temperature sensor and basically over the course of a few days move it to different parts of the room to try to get a sense of what’s actually going on. Of course it’s a very poor way to get a sense of all those changes going on in there throughout the day. Our sensor system allows you log every ten seconds. So, it allows you to even see if someone opened a door.
Matthew: Okay, so it’s the peace of mind. Obviously getting rid of the things or mitigating the things that could destroy your whole business first. Got that taken care of. Let’s dial in all the other benefits. That makes sense. What about the business owner? What does he or she get the most out of Grownetics when they look at it for the first time or looking at the dashboard? What would you say their top one or two benefits are?
Vincent: Well I’d say for the business owner, with that operational mindset, it’s going to be for the first time you actually have a tool to run your whole cultivation business. It’s finally I have a tool to bring together all the different aspects of growing into one interface where I can start to create reports based on what’s actually working across batches, looking at my batch archives. Also it helps them actually get the grower’s notes out of their notebook and into a centralized system that can be used across multiple facilities. So, the owners really like this because they can say, okay if one grower cracks the code in this facility for a particular variety or strain, I can now just push that recipe over to this other facility and give it to this other grower, and we can continually optimize not only one site, but multiple sites.
Matthew: Very interesting. Can you collect data on a plant level? We talked about microclimates and zones and so forth, but is it possible to get to that level of granularity?
Vincent: We already do. All data goes down to every individual plant in the facility. Now the way that we do that, you’re right, it’s a little challenging to say, we’re going to stick a sensor in every plant. We do that for research customer, but it’s not practical for a production facility. So, what we do is for production facilities we say okay, let’s say what microclimate is this plant in, and then we say, what sensors are in that locale and then let’s link that sensor data to that individual plant. That’s where individual plant tracking enables us to do.
Matthew: Now, is the data shared with other Grownetics customers? Is anatomized and shared or how does that work?
Vincent: Absolutely not. All the data is private, very highly secured and kept to each individual customer. We absolutely never share cultivation data across customers whatsoever and that’s part of our service agreement.
Matthew: How about pests? We talked about things that can destroy your business. How about pests? How does Grownetics help with those?
Vincent: So, that’s one of the biggest challenges. In pest management you have integrated pest management. IPM as it’s known. In its most simplest way, the way it was described to me is you can think of IPM as a triangle. In order for a pest to be in a grow room, it’s going to need one of three things. It’s going to need either the food that it eats. It’s going to need a conducive environment to exist and reproduce, and it’s going to need the pest itself. So, the pest has to actually get there. Of those three things what we can already do is say, is the environment conducive to these pests and start to give alerts based on microclimates that do become conducive to harboring these pests.
So, that’s one way we can already do pest mitigation in a preventative kind of fashion. So, you can make sure your environments are constantly dialed in to prevent that from even occurring. Now once it has occurred, then what you’re going to want to do is do your traditional IPM measures, and then continue to monitor during that time. If that environment goes back into being conducive for that pest. As a tool it’s just a much higher resolution way of seeing what’s going on in all your plants.
Matthew: What pests do you see the most? What was the most common environment that’s being created for a pest?
Vincent: Well, thankfully a lot of the grows we go into our customers don’t have too much of an issue with that. They have good IPM protocols and Grownetics. So, not too many pests that I see, but when I do I’d say it would be spider mites and powdery mildew would be the most common.
Matthew: Now we talked a little bit about energy with LEDs and so forth, but how does Grownetics help in monitoring or understanding energy use, because obviously that’s a huge input cost that weighs on a business’s profitability. How does Grownetics help with that?
Vincent: Right, so, from day one we’re trying to make facilities more efficient, and in order to do that it’s important that we not only spec in the most efficient equipment and systems, but also monitor to see that they’re actually meeting those expectations. And so, we install CT sensors, which are essentially, you know, every circuit that’s related to cultivating we’ll put these CT sensors on, and we can start to do things. Not only efficiency metrics but also do predictive maintenance. So, we can say is this piece of equipment acting like it was when it was new, or is it all of a sudden drawing and abnormal amount of power. You need to get eyes on it before it fails.
So, that’s one element of the energy monitoring besides just the efficiency gains and efficiency modeling. Essentially at the end of the year you want to know how your facility did, and we’re involved the Resource Innovation Institute as well to help to create an efficiency model for cultivators. For them to not only understand what are the most impactful parts of their business and operations, but how they compare against other cultivators across the country.
Matthew: How would you say Grownetics compares with some other solutions out there? Say Smart Bee or any others.
Vincent: Smart Bee is essentially smart sensing and thermostats with some logging. There’s LaCrosse is a famous one as well where you can get basically an app for a thermometer. Essentially Grownetics is dramatically different. So, on the sensor side we do have our own sensors, but we also integrate third party sensors. Essentially the difference here is that Grownetics actually correlates data to every individual plant for you, thus helping you take your data and actually make it valuable. Beyond all the other things we spoke about in terms of control systems, in terms of efficiency management, in terms of operational management, workflow management, task management, any number of other things related to operating a cultivation facility.
Matthew: Let’s try to understand cost here, for people that are listening. Like, oh great I like Grownetics, but what’s it going to cost me. Will I be able to afford it. So, let’s talk about the cost and maybe savings, or how it can help optimize looking at say a 10,000 square foot grow and a 50,000 square foot grow. How much would you say… what are the different options in terms of price packages to get into Grownetics?
Vincent: So, for 10,000 square feet it would be anywhere from $30k to $50k, depending on how many sensors you wanted to deploy. Obviously an R&D facility is going to deploy a lot more sensors than a production facility. Now I do want to talk a little bit about how quickly this is changing though. Facility design as we know it today is changing very quickly. The research that we’ve done over the past few years has shown us that the current cultivation models are incredibly inefficient compared to what’s actually possible with other technologies that’s already existing. So, when I say that that’s based on, those pricing models are based on deploying sensors and control systems.
We’re starting to see a demand for whole facility design. So, that’s something we’re already participating in a well is helping to spec out really what the grow facility of future is going to look like, with Grownetics as essentially the nervous system for that.
Matthew: Yeah, I mean, I could see it seems like more states are becoming open to greenhouse growing. At first they want to lock it down in an underground bunker like it’s plutonium, but then it’s like, hey maybe it’s not the best use of our electricity resources to be doing that. Are you thinking it’s going to be more natural-like coming into grows?
Vincent: Yeah, whether it’s natural light in a greenhouse or bringing in supplemental sunlight into an indoor grow, there’s any number of ways that we can already dramatically reduce energy usage. I mean, the research we’ve done has shown that we can reduce energy usage over 90 percent compared to a traditional inefficient, indoor grow just by using existing technology off the shelf. That is incredibly dramatic and people are still unaware and uninformed about this stuff. So, that’s what we’re going to be trying to do is help to inform people there’s much more efficient ways to be growing the highest quality cannabis, and we have the systems and technology to do it.
In terms of greenhouse, I do understand the concerns, the smell concerns some municipalities might have. So, the direction we really want to take with greenhouses is towards the hybrid greenhouse model. The reason I say this, even for areas where you can grow with traditional greenhouses is something I learned from my time in China. I did a lot of study into air pollution and air quality. I did a lot of sourcing in filtration, air filtration and any number of filtration systems. Now, even if you have a beautiful organic crop in a greenhouse, if it’s next to a highway, you’re going to have heavy metals in that crop. This is something that people don’t really talk about or acknowledge. It turns out a lot of the beautiful organic produce that we consume is contaminated with heavy metals from exhaust fumes.
You can look at another example with northern California with the wildfires. Greenhouse cultivators up north, if they didn’t have a sealed environment, are dealing with massive pollution, smoke pollution of their crops. So, this is why I think moving forward really the norm should be a hybrid style greenhouses with air filtration in a controlled environment.
Matthew: Yeah, that was quite a situation with the fires up there. Oh my gosh. That’s crazy.
Vincent: It was so devastating and then Los Angeles as well. California’s been really in a bad place this year from the natural environment side of things.
Matthew: I think it’s important to not only talk about what’s possible now, but even to just have mental exercises about what’s possible in terms of just daydreaming. What would an ideal grow look like? If you could wave a magic wand and create a technology that doesn’t yet exist for the grow room, what technology would you create?
Vincent: So, I will tell you that we are already creating those technologies and I can’t really talk about them. I will tell you it has to do with the greenhouse space.
Matthew: Okay. Once that gets created, you’ll have to come back on and tell us what it is. You gave us the promise then ripped it away.
Vincent: Well expect it in the next few months here.
Matthew: Does it involve unicorns. Don’t answer that. Where are you in the capital raising process now? I mean, where were you and where are you now?
Vincent: Well, I can’t really speak to that either. I can say that we are talking to some very prominent groups, and that we’re getting ready to meet a lot of demand and to meet that demand we need to scale. If you’d like to get in touch with us and get more information about that, you can definitely reach out to us at our founder’s email, which is firstname.lastname@example.org and we’ll get that spelt at the end of the show.
Matthew: Let’s pivot to a few personal development questions to help listeners get a sense of who you are as a person outside a business. 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? It doesn’t need to be about cannabis at all.
Vincent: If I could, there’s two I’d like to share.
Matthew: Yeah, two, give them.
Vincent: All right, so, the first one is The Toyota Way by Jeffrey Liker. I forget what his last name is, but The Toyota Way really changed how I thought about production and large-scale production. It’s also a very famous book and kind of describes how Toyota really came be producing the highest quality, cheapest cars. Then the second book is a book called Cradle to Cradle by Michael Braungart.
Matthew: I’ve read that. It’s great.
Vincent: Yeah, it really helped me understand how to think in a new way to understand systems design and product development in a non-traditional sense.
Matthew: That is an excellent book, and even the book itself is not even on paper. It’s made of a recyclable plastic. It has a tactile sensation that is pleasing to hold, even though it’s not paper, but it can be repurposed into something else after you read it.
Vincent: And it’s waterproof. You can read it in the tub. You don’t have to worry about ruining your book. It’s written by an architect and I think also a chemical engineer. It was just a brilliant book and really inspired a lot of my thinking when I switched to sustainable development.
Matthew: That is such a great book. I’m glad you brought that one up. It’s one of the few books that I think about often, even though I read it years ago. I think gosh I would like to read that again because the way he frames it is that most problems we experience in our day-to-day life is a design probably that only needs to be reimagined and then redesigned. He goes through examples after examples. For example, when a dye facility or a textile facility has an output of dirty water that’s a design problem and it just needs to be fixed and reimagined. He talks about how he went, I think it’s a dye facility or a fabric facility, in Switzerland that had pollutant waters coming out and how he re-engineered the whole thing that by the end of it you could drink the water that was coming out of the facility. Examples like that, but he just does it in such a creative way that it can re-engineer our mind. Definitely I think Shanghai could implement some of those solutions.
Shanghai, you mentioned some of the problems there, but in some other ways it’s kind of like the Emerald City from the Wizard of Oz and that they’re way ahead technologically. I mean, were you there when everybody is using the 10 cent pay app or the Ollie Pay? Was that going on when you were there, or was that not yet implemented?
Vincent: No, that was definitely going on. They’ve absolutely had the… I guess it would be the luck of developing after a lot of these new technologies have become the norm in some Western countries. So, they really did get to leapfrog in a lot of ways. Now it’s just unfortunate that every country that industrializes goes through the same hurdles and the same challenges. Once they ramp up industrialization, there’s a lot of pollution, and I would have hoped that they would have learned from England when the Industrial Revolution began in the United States with LA in the 70s, 60s. All of these countries that have already gone through these problems, but thankfully now they’ve really woken up to the issues and they’re throwing a lot of money at solving these problems.
Matthew: Yeah, I’ve seen pictures on high pollution days. It looks like people are on a moon of Saturn or something where they’re covering their mouth and their face and you can’t see the sun. It’s unbelievable, but I think that’s going to go away soon. I know it’s a big priority to get fixed.
Vincent: Exactly right.
Matthew: I mean, since China’s somewhat like a technocracy or dictatorship in some ways, they don’t have to wait for a congress to approve things. They just do it.
Vincent: That’s one of the most impressive things is how quickly they can move. I mean, they’re a systems culture and they really can move quick.
Matthew: Is there a tool, web-based or otherwise, that you consider vital to your productivity?
Vincent: Yeah. I have two things on that, maybe a couple of things for that. So, I’m totally a productivity nerd so I’m obsessed with this stuff. So, I’d say number one would be my smart notebook. It’s made by a company called Live Scribe, and essentially it’s pen that digitizes everything I write in my notebook. So that would be number one, so I can check my notes even if I don’t have my notebook. I can just pull up Ever Note and get all my written notes OCR’ed in there. Then for our company it would be Git Lab, which is an open source development tool that allows us to actually do collaborative development and remote development from anywhere in the world. Lastly, for my personal organization I’ve been using this new tool, which is actually built by my partner and our CTO Nick Busey, which is called Bullet Notes. Essentially it’s a super simple list and organizing tool, and I’ve been testing that out for my own productivity.
Matthew: Cool. Those are some good ones. It sounds like you’re a productivity nerd. I love it. In closing Vince, tell us how people can learn more about Grownetics, how to connect with you. You already mentioned how investors, who are probably only accredited investors can reach out to you, but how can people that are interested in becoming clients or learning to see if Grownetics is a fit for their grow reach out to you?
Vincent: So, we’ve got two ways. If you’re ready to go and you want to get an idea of what Grownetics would look like for your facility, you can go to our website and apply for a consultation. That form will actually pull up any number of things like your square footage, your licensed plant count and those things to help us get started with that. You can also email us directly at email@example.com . I would also subscribe to our newsletter because we’re going to be releasing a couple new webinars on the latest greenhouse technologies and it’s where we do our big product announcements. That’s all on our website at www.grownetics.co.
Matthew: Okay now can you say, she sells seashells on the seashore three times really fast.
Vincent: Oh, that’s going to be a tough one.
Matthew: Well, Vince, thanks so much for coming on the show today and educating us. We really appreciate it and here’s to a prosperous 2018 for you.
Vincent: Thanks so much Matt and I really really enjoy these podcasts that you’re doing and keep up the good work getting the good message out.
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
Learn more at:
What are the five trends disrupting the cannabis industry?
Find out with your free report at https://www.cannainsider.com/trends
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.