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What is CBD

(Cannabidiol)? What is cbd cannabidiol See more
 

Enjoying CBD in your Coffee?

native jack cbd coffee

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Jason Walsh is co-founder of NativeJack a cold-brewed nitro coffee with CBD. Learn how this food scientist is using his family’s unique recipe to get his coffee on grocery store shelves.

Key Takeaways:
[2:15] – What is Native Jack
[2:31] – Jason talks about how he got into the cannabis space
[4:34] – Jason talks about getting the ingredients right
[6:21] – Jason explains where the name Yummari came from
[7:16] – Jason discusses putting nitro in coffee
[9:05] – The reason some nitro cold brew coffee tastes sour
[10:15] – The ingredients in Native Jack
[10:49] – Jason discusses how he sources his CBD
[14:37] – Jason talks about the hemp market in Colorado
[15:21] – Where is Native Jack sold
[16:45] – What are grocery stores looking for
[18:36] – Letting customers know there’s CBD in the coffee
[20:39] – Jason discusses the manufacturing process
[22:02] – Jason answers some personal development questions
[30:45] – Investment opportunities for Native Jack
[31:39] – Native Jack contact details

Important Update:
What are the five trends that will disrupt the cannabis market in the next five years?Find out with your free guide at: https://www.cannainsider.com/trends

Read Full Transcript

The cannabis conversation is moving out of dispensaries and on to store shelves. I am pleased to welcome Jason Walsh co-founder of Native Jack CBD Coffee onto the show today to tell us all about bringing cannabis and hemp derived products on to grocery store shelves. Jason, welcome to CannaInsider.

Jason: Yeah thank you for having me.

Matthew: Jason give us sense of geography. Where are you today in the world?

Jason: I am in Boulder, Colorado.

Matthew: Okay, and are you originally a Boulder native or where are you from originally?

Jason: No, I am a transplant. So I am from the New York City area. I recently moved to Boulder it will be three years this April.

Matthew: Okay. What’s Native Jack at a high level?

Jason: Native Jack is a nitrogen cold brewed coffee that meets the benefits of CBD oils infused into its product.

Matthew: Okay, and what’s your background? How did you get into the cannabis space and start Native Jack?

Jason: I guess my journey probably started some time in the early 2000s when I worked in the pharmaceutical industry as a graphic designer. So my role was to help the sales team really pitch the products and the new drugs coming onto the market. So I got to gain a big experience learning about types of new molecules that were coming to the market and how they were being presented to customers. After I had my time in the pharmaceutical experience which was great, I really thought about other products in the food category that could be beneficial to consumers just like medicine is as well.

So I researched a ton of different seeds; chia seeds, hemp seeds, hemp hearts and I understood there was great molecules that were undiscovered in these seeds. I thought well if could make a great product that had medical benefits that maybe weren’t tested by the FDA but were understood to be beneficial, I could really start developing great products. From there I quit the pharmaceutical space and launched my first company Yummari which is a hemp derived energy bar and then after six years of running that we were fortunately sold to a larger company here in Boulder and during that time I was experimenting with cold brewed coffees and trying to understand how I can incorporate different levels of benefits into coffee and the help plant again came to my forefront of thought and how can I do this and I guess Native Jack was born out of all these progressions of learning throughout the year.

Matthew: When you were developing the Yummari bar how do you create a formulation that tastes great, has shelf life and then get the distribution for it because it seems like there’s a lot of people that may be able to create a great bar but they don’t get the other components right. Is there any words of wisdom there?

Jason: Yeah you’ve got to be 100% in. So my wife and I worked corporate jobs for just about a year and a half while Yummari was getting launched and we were doing about 120 hours per week and the bulk of that, 60 hours, was basically just into this one food company, the Yummari product, and we were not getting paid. It was something that we wanted and felt passionate about and that I think is an ingredient that most entrepreneurs overlook. How many dark days you’re going to have, how isolating it can be because it’s just going to be you, the product and whoever you’re working with for a long period of time. You’re not going to get a lot of congratulations and way to go.

This is something that you’re going to be buried into and basically your passion is going to get you through those dark times and you have to believe that what you’re doing is necessary and it’s something that you want to really follow and I think that is overlooked by a lot of people thinking they can just jump into the food business and not really understanding it takes a lot of hours and time. If you enjoy it, it doesn’t seem like a big deal, but if you hate it, those early mornings where you’re producing and then you’re selling that afternoon and then you go home and clean up so you’re really not having any breaks or down time or you’re not taking long sleeps anymore, but at the end of the day if you feel this is something that you want to have people experience, it’s definitely worth it. I think it’s a big lesson I’ve learned.

Matthew: So looking at how you spelled Yummari, Y-U-M-M-A-R-I, was it on purpose that the first three letters make the word yum? So kind of set the stage like this tastes good.

Jason: Yes so Yummari actually comes from the tribe of runners in the Copper Canyon in New Mexico. Yummari is a dance to the native culture in the Copper Canyon. They’re called the Raramuri Tribe. They’re known for their long distance of running. So Yumari is their dance for good luck. I was inspired by their culture because of their healthy eating habits and they’re able to run long distances. We incorporated the second “m” into that word to really make it our own and kind of acknowledge that we have this connection to their tribe and respect for their food.

Matthew: Interesting. Let’s talk about cold brew coffee. Nitro coffee is really just getting started in a lot of places but can you describe what nitro is and why people are putting it in coffee?

Jason: Sure. So nitro coffee adds a really great benefit of taste and flavor and texture to coffee. So cold brewed coffee I feel is kind of the first generation that kind of broke out of the standard model, went into the cans and glasses that we see on the shelves at Whole Food. I think nitrogen is the next evolution of coffee where you can actually have this great tasting coffee with silky textures, the nice smooth taste to it. So it just adds another benefit without adding calories or sugar content.

Matthew: Yeah, the head on the cold brew coffee is like a Guinness and that’s what it looks like and kind of tastes like. I have to admit that I’m really in love with nitro coffee, but I haven’t tried the CBD coffee yet. I see all the coffee shops with the taps now. They’re starting to spring up. At first you’re thinking is this beer. What are they having there? When you see a tap now in a café it’s typically because they have a cold brew there that they’re serving of some kind. A lot of times it has nitro in it, but I find that at least half of the ones I try in cafes or coffee shops stink like they’re sour or there’s something going on and then I go to another one and they’re excellent. I was like why is there such a huge disparity between the excellent cold brew nitro and then this crappy stuff? I take a sip and then I have to throw it away. I mean it’s really not good at all. What would you say the reason is there?

Jason: Well I’ve experienced that as well and I was kind of baffled to where the sourness came from and I kind of figured out and learned that it’s actually if the baristas at these coffee shops are not using a properly mixed gas, if they’re using a beer gas which is part CO2 and nitrogen, they will get a sourness to their coffee because the CO2 will incorporate into the coffee faster than nitrogen and spoil the coffee. I would always ask if it’s a clean nitrogen, if it’s 100% nitrogen you should be fine. There should be no issue with it, but if they’re using a beer mixture which is a combination of two gases, the CO2 again will leech into the coffee. It doesn’t ruin the quality. It just ruins the taste. How about that?

Matthew: Okay so there should be no CO2, there should just be nitro?

Jason: Yeah 100% nitrogen. That’s all they should use.

Matthew: Okay that’s good to know.

Jason: Yeah it’s important.

Matthew: So Native Jack has nitro in it and CBD. Can you describe the ingredients in there so we can get a sense?

Jason: Yeah so the first launch of our beverage line is Native Jack and that’s a Thai cold brewed coffee. So this is a Thai coffee if people are familiar with that style. It’s a sweetened condensed milk, cardamom spices, almond extract is something I’ve added to it. Then we use the hemp plant oils. So all that incorporated we have this nice Thai cold brewed coffee that has great benefits of the hemp plant oils.

Matthew: How do you source your CBD?

Jason: I have a local farmer here in Boulder that sources it from Europe. So he has two options. If you want to do local Colorado hemp, obviously I can’t use that hemp because I want to sell this so I bring this across state lines. It has to be European hemp and then from there he actually takes the hemp in the raw form and does his extractions in his facility.

Matthew: There’s a certain amount of THC in hemp but does this satisfy the threshold so it’s legal in all 50 states? Can you tell us about that?

Jason: Yeah so the threshold is .3% so it’s very low. He tests his own batch sheets and he’s been recently getting where his CBD has actually had 0%. This is the first time he said he ever really gotten this low but I think he’s been really developing this method to really protect his customers from any type of litigation from the FDA. So his CBD is high quality and it’s a very low or zero THC and well under the federal allowance of .3%.

Matthew: How much CBD is in each can?

Jason: So it’s 15mg of CBD per can.

Matthew: Okay how does that relate to what people would consider a normal adult dose?

Jason: So under CBD the dosage really varies from 50-100mg a day. It’s really up to the consumer to determine how much is necessary. So the part of the 15 is really just a part of their daily routine. So if they’re doing let’s say 100, they can say alright I’m having maybe two cans a day I’m already at 30 and then I have pills and some supplements that have CBD. So it’s part of their daily routine or their weekly habit of incorporating CBD.

Matthew: Now I recognize the CBD oil taste, but how do you incorporate the CBD oil into the Native Jack can? Do you taste it or do you don’t taste it? How does that work?

Jason: I try to mask it out as much as possible. I think with new users and consumers if they did taste the CBD flavor, they may be off put by thinking maybe the coffee is bad or the dairy went bad. So I use with the condensed milk, since CBD is a bitter product, the best way to mask out bitterness is with sugar and that’s where the condensed milk comes in. It works together with the CBD bringing down the bitterness and kind of leveling it out.

Matthew: Okay I’ve had Vietnamese coffee before and it has condensed milk in it and so the Thai coffee is a little bit more of a spicy coffee would you say?

Jason: Yeah it adds cardamom is the Thai version of the Vietnamese coffee. That’s the biggest difference and cardamom is great for inflammation properties. It has a lot of benefit that I like. I’m part Thai. So my mother grew up in Thailand and we had Thai coffee as a kid all the time. It was more like a dessert and when I was thinking about flavors I was like this could be interesting to incorporate a specialty coffee into a can and it’s not a black coffee on the market. It’s something different.

Matthew: What’s the help market like in Colorado? Is it starting to mature more? I haven’t got an update in a little while. You’re closer to it. What would you say about it?

Jason: I would say it’s pretty much like the whole country. Misinformation is the biggest thing I deal with. People not understanding when they say medical marijuana and CBD hemp they often combine the two and I say once you say marijuana that’s when you’re drawing the line and saying it’s not marijuana. This is hemp. Once you get that out of the people’s minds of how they confuse the two is a challenge and it takes a long conversation to say two different plants for different reasons. One is CBD, one is THC and then go on from there to explain the differences and why this is legal to sell in all 50 states.

Matthew: Where are you selling Native Jack now?

Jason: Right now I did a few test runs or sales in a few grocery stores in Boulder. So it was the first production run we did and it went extremely well and now we’re doing a second production run to kind of improve the actual texture of the coffee and that should go back on shelves into alfalfa stores and Whole Foods here is interested in bringing it in as well, hopefully. I have a call with them in November but it looks promising. I have to say anything can happen. At the last minute they could say no we’re going to move a different direction and not bring in the coffee, but at least I have a meeting so that’s always a positive. We launched on Amazon about a week and a half ago.

Matthew: Okay and do you sell on your website as well?

Jason: Yeah direct to consumers. So both pricing models on Amazon and my site are very competitive. I try to give a little bit better pricing on my site, but with Amazon you get free shipping so there’s kind of a tradeoff.

Matthew: Okay. How do you figure out what the buyers from grocery stores care abouts are? I mean obviously they want the product to sell but what are their other care abouts that you try to address so they help get Native Jack on the shelves?

Jason: Well most of the grocery national stores that I’m selling into have a banned ingredient list and you can look that up on the Whole Foods website, any local grocer will have say you can’t have these ingredients in our store. So that’s a big check box. If I produce this product, I want to make sure I follow the guidelines of let’s Whole Foods is like the master guideline. You can construct a lot of your recipes and guide yourself through the process developing products if you follow their method in how they like things incorporated. And too they like to have local companies in so it helps to be in Colorado and I want to sell in Colorado and then they really like the story of where this product came from and how it helps people and who actually the owners are.

I think the last one is if you can support the brand. So you go there into the store and demo the product, discuss any type of questions you have with consumers and help them feel more comfortable about the product. Again since this is coffee it’s a little bit different from the market. There were a lot of questions that initially came in asking different types like how can you sell this, will I get drug tested. So I’m there to really calm people down and educate them at the same time. If you work with them, so all those components together, right ingredients, supporting the brand and having a story to sell to the buyer, you should be good to sell.

Matthew: Okay. People are looking at cans of coffee on the shelves. How do you quickly display to them that there is CBD in this coffee? Do you make that larger somehow? How do you get that across when they’re just glancing?

Jason: I really call it hemp because not everyone knows what CBD is. So I call it as a hemp plant oil. One, I think just the term hemp gets people interested. Wow, this is hemp and then they dig a little deeper and they can read about the benefits. So I don’t hit them over the head with new terms that might take a little longer for them to digest, but if I say this is a nitro, my label is a nitro hemp coffee. And if (19.08 unclear) just a cold brew black coffee right there I’m a little bit different. I’m a little more interesting and they can pick it up. Most consumers understand what hemp, but they don’t get the finer points and that’s why I try to be a little broad with my labeling.

Matthew: Yeah you hit on something there. More unique, that’s back to having a unique selling proposition. I get emails all the time from listeners that are creating kind of a “me too” product and I try to encourage them. Do something different here or else you have no special sauce. So you’ve got the hemp infused nitro coffee plus the cardamom flavors that’s unique in a few different ways. So I think that’s compelling.

Jason: Yeah, no, I think the more you can offer a consumer within a category that’s been understood, so coffee obviously is a huge category. If you go to Starbucks people are putting spices on their coffee, whip cream. So people do like combinations of flavors in their coffee. Not everyone loves black, bitter coffee. I prefer it black myself, but I understand that 90% of the country is into flavored style coffees and this is something that is it better for you product and it has different options as well.

Matthew: What is it like producing a drink like this on a commercial scale? Do you have a machine to do this or contract partners? How does that work?

Jason: It’s kind of a mixture of two. I am considered I guess the brew master for the coffee line. So I have a facility where I can produce about 600 cans at each run which isn’t a huge production. It’s a good start. Then after it’s been produced I have a mobile canning company meet me at my facility and they actually hook up all my kegs onto their canning line and they actually fill cans for me. So it’s a two-part operation.

Matthew: Wow that’s pretty clever. Clever business on their part as well.

Jason: Yeah because it helps me with overhead. I don’t have to spend money investing in equipment but I can lease it from them technically for a few hours and they will can everything perfectly and I know I have a safe can on the market. It’s clean and I can go out and sell it.

Matthew: How long does it take when the mobile canner arrives to get 600 done?

Jason: Just roughly under three hours depending on how efficient everything is.

Matthew: Very good.

Jason: Yeah not a lot of time.

Matthew: Jason I like to ask some personal development questions to give listeners a sense of who you are. Is there a book that has had a big impact on your life or way of thinking that you would like to share with listeners?

Jason: Yeah I think there are a few books. I’m a big fan of nonfiction. I read a lot of biographies of people from the past. I read from Jefferson to basically all the founding fathers. I kind of respect them. I’ve read all their bios. Currently I read the Mark Cuban bio and Sam Walton for Walmart. I think that’s a great one. That kind of really changed the way I thought about a lot of different things because everyone knows the Walton family being the richest family I think in the world. Sam Walton, he came from nothing and he started his empire of really trying to get pricing and be more efficient in helping the end consumer. So I thought his book is great.

A few of them I recommend to anyone starting out is one that’s called the Myth of the Robber Barons and they talk about basically the capitalist families in the early part of the century of industry. You’ve got the Vanderbilts and the Whitneys and Morgans. They come off really poorly in history but what they did for this country of really consolidating railroads and oil and gas and really producing lower cost products but at really high quality and be more efficient. Then after time of their retirement they’ve donated basically billions of dollars back into the community. I think it’s a good model for a lot of people. I think you can see that today with Facebook and Warren Buffet and the guys today are actually going back to that model of making their billions and then giving it back. These guys did this before it was popular.

So I kind of thought that was interesting. The last one is I, Pencil is a good book. It’s about how you actually build a pencil and how involved it is where you have to actually source probably 15 different parts of the pencil all over the world and how global trade is important. How one pencil is used by the whole world, but it actually takes countries to build a pencil. And at the end of the book you realize you’re not alone. There’s lots of parts. When I get my ingredients it’s all over the country and all over the world just to make a can of Native Jack. It’s the same thing with the pencil.

Matthew: That’s interesting yeah. I never would have thought of that. You got graphite, wood, rubber, little metal band. That’s crazy.

Jason: Yeah the supply chain is always interesting when you start a business and you have to go beyond your boundaries of your backyard, your local grocery store. You have to really think other countries, how can I incorporate better ingredients from parts of the world. Maybe it’s a little intimidating to say I’m going to call up Bali for chocolate or start sourcing coffee from Thailand and before you know it you’re pretty much internationally supply chain management guy.

Matthew: Is there one of the founding fathers that kind of leaps out to you as being interesting or compelling in any way?

Jason: Thomas Jefferson is probably my favorite of all the founding fathers because of basically his writings, his passion for knowledge was, at such a young age I feel like I was nothing compared to this guy. What he was doing, you know, it went from year to year but it’s inspiring to kind of do better and really understand and to learn as much as you can so that’s where I kind of followed that kind of thought.

Matthew: Yeah the Federalists Papers and all these original documents were so compelling to learn about where their ideas came from. They also borrowed a lot from the French. Having witnessed the French Revolutionary War were they got a lot of their ideas for liberty. It’s really cool. I sometimes think about how they talked about taxes being such a burden and there should never be a personal income tax and don’t let that ever happen and don’t let the banking cartels control money supplies. All the things that they warned about we’ve done and somehow it still has stuck together, but I think about those things sometimes. Like wow we’re kind of teetering way way away from the original thesis that these guys brought back hundreds of years ago. So I’m glad that there’s people reading it out there.

Jason: Yeah just the fact that even the cannabis plant itself is banned and is a federally Schedule I drug.

Matthew: Right, right.

Jason: I’m all for personal freedom so if people want to make decisions on their own and test a drug. I’m always baffled how you can say tobacco is fine. The whole argument is if one drug is legal, I think they all should be.

Matthew: Yeah. Yeah certainly Portugal is trying that route and they seem to be having success with it. They’re like we’re just decriminalizing everything. We don’t have the resources or time and if we do, do we really want to put people in jail or help them recover if they’re nonviolent. So that is an interesting argument.

Jason: There are laws when you’re violent there’s a law for that, assault and battery and that’s fine, but if you’re on an ingested drug in your own private time and not hurt anybody, what’s the big deal.

Matthew: Now is there a tool web based or otherwise that you would consider indispensible to your day to day productivity and you could not imagine living without?

Jason: I would say my iPhone. It really extends my desktop from anywhere I have to be. If I have to try to try to spend a lot of my time in production but I can also be physically writing emails back and taking phone calls. I didn’t have that when I started in ’99 with my first job and you were pretty much tied to your desk. You got back to your desk, checked your emails. This extended unfortunately my day is a little longer but it’s more efficient. I can have maybe ten emails instead of 50 before I get back to my office. Being a small business owner I think that’s the most important. I put down fires much faster and I respond to customers quickly with any concerns. So the desktop I feel like it’s an extension of my desktop, my iPhone.

Matthew: Yeah I hear ya. I’ve been experimenting with new morning rituals and right now I’m trying to not look at anything internet related until after all my morning rituals are done; eating, showering and all that stuff. I find I have a much clearer mind because as a great of a tool it is it kind of takes away the attention to focus on one thing. There’s all these background processes going on when I have emails to respond to and these things to do. In other words, if I don’t look at it, I don’t think our evolution has caught up to the technology. I don’t know if it ever will. I mean it seems like that’s growing exponentially and we’re still here in these primate bodies trying to figure out how to use these effectively.

Jason: Yeah there’s definitely encouragement on family life. I have on kid, a baby. He’s one year old. So I think we’re going to probably put a lot of parameters on his uses of technology until he gets old enough he can have a reason for it. When I visit families they’re always on their iPhones. They’re not even making eye contact. A lot of social interaction is lost. I think conversation is important. People have to learn how to have that. Networking is such a powerful tool when you have a small business to go into a room or a bar or any location and go up to people and start introducing yourself and speaking and that could be lost art. It could be something that could die away.

Matthew: Right. I see sometimes now in restaurants there’s these baskets where everybody puts their smart phone in the basket and if anybody has to get their smart phone out and look at it, they have to pay for the whole group’s meal. So it’s kind of a way of incentivizing focus on the group you’re with and what you’re doing now. So that’s kind of a welcomed change. It’s a little sad that we have to do it that way but it is still kind of cool.

Jason: No, it’s great. I think conversation is important. Just talking to someone, someone brand new and just understanding where they came from and what they’re doing and why they’re here. It’s more fascinating than social date.

Matthew: Tell us, are you still looking for investors for Native Jack?

Jason: I did a first round with investors and I did a safe note so if anyone is interested in learning more about that, it’s basically a simple agreement for future equity. So it’s a different level than a convertible not. It doesn’t bring any debt in the company. It’s more of a promissory note to investors that when I do convert into equity everyone converts at the same time. There’s no time cap to actually raise in that trend. So the note is always open. It never really closes until you do your next round. So if I do speak to an investor tonight or tomorrow and he’s like oh I would like to do 50K, I can easily have that note offered to him. Yes I’m looking for investors, but it has to be the right one too.

Matthew: Okay. If someone is interested in investing in Native Jack is there a way to reach you or reach somebody at Native Jack?

Jason: Yeah you can go directly to my website at the contact page. All the emails get sent to me or you can just write me directly at Jason@pharmalabsinc.com.

Matthew: Jason can you tell us your website url one more time?

Jason: Sure. It’s www.nativejack.com.

Matthew: Okay www.nativejack.com. Well Jason you have a great sounding product here. I’m really excited about it. I want to try it soon. I’m going to be purchasing some to give it a try. Thanks so much for coming on the show we really appreciate it.

Jason: Great well thanks for having me.

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The Five Disruptive Trends Shaping The Cannabis Industry Now

Connecting with Dispensary Customers to Create Deeper Relationships – Joel Milton

joel milton baker technologies

Download Transcript >>

Key Takeaways:
[2:20] – Joel explains what Baker does
[3:51] – Joel talks about when he decided to get into the cannabis space
[4:57] – Voids Joel encountered when entering the cannabis space
[7:37] – Joel talks about benefits that are most popular with dispensary owners
[11:04] – How Baker drives dispensary customer engagement
[12:46] – Open and click through rates when a customer first starts using Baker
[14:12] – Using Baker to send text messages
[16:01] – Joel talks about expanding customers’ interests without alienating them
[17:15] – Does Baker have an API to the different software systems
[18:31] – Baker’s loyalty features
[20:40] – Joel talks about training staff to use Baker
[22:54] – Joel discusses Baker’s user interface
[24:51] – Joel’s book and web application recommendations
[27:37] – Baker’s fundraising process
[28:35] – Contact details for Baker

Many vendors have sold outside “solutions” to the cannabis industry. As a result, dispensaries are running on a hodgepodge of systems. To make matters worse, none of these systems talk to each other, costing your staff time, and dispensaries money.

These vendors don’t understand the cannabis industry and its inherent challenges, but Baker does. Running a dispensary is not like running your local pizza shop learn why in this interview with Joel Milton, co-founder of Baker.

Learn more at:
http://www.trybaker.com

Important Update:
What are the five trends that will disrupt the cannabis market in the next five years? Find out with your free guide at: https://www.cannainsider.com/trends

Read Full Transcript

Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatibles. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatibles can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.

All businesses want solutions to help them attract, retain, and delight their customers and cannabis businesses are no different. That is why I’ve asked Joel Milton, Co-Founder and CEO of Baker Technologies to join us on the show today to discuss how to drive cannabis customer engagement? Joel welcome to CannaInsider.

Joel: Hey thanks for having me.

Matthew: Give listeners a sense of geography. Tell us where you are in the world today Joel?

Joel: Excellent. I’m actually in San Francisco. I split my time between here and Denver which is where our company is based and headquartered and Baker itself started off in Colorado and that’s where our initial dispensary clients were. This year we’ve expanded into Oregon, Washington, Arizona, Nevada, New Mexico, California, and even Toronto, Canada.

Matthew: Oh wow and give us a high level overview of what Baker does?

Joel: Absolutely. So Baker is a software company and first and foremost our goal is to help dispensaries really build their brand, keep their customers happy and loyal, and ultimately make more money as a business.

Matthew: Okay.

Joel: Yeah.

Matthew: And are you from Colorado originally? Are you from the Bay Area? Where are you a native of?

Joel: I’m actually a native New Yorker so I grew up just outside of Manhattan and I spent about six years living in New York City working in the tech startup scene and that’s where I met David and Roger my now co-founders. We got interested in the cannabis space, found out that between the three of us we had the product, the backend development, and the sales capability and we headed west and got involved.

Matthew: Does every place just seem vanilla after living in New York City? I mean you’ve got that tempo, the cadence of life there is just so ba, ba, ba.

Joel: It’s a lot. I think it’s a really exciting place to live and work and you do a lot of things in a very short amount of time while you’re there and I always will have a soft spot in my heart for New York but excited to have moved on and be spending a lot of time in Denver and the Bay Area. When you live in New York it’s easy to think the rest of the world doesn’t exist and when you go elsewhere you realize hey New York is a great place but there’s more to life too.

Matthew: True, true.

Joel: Yeah.

Matthew: Was there a particular aha moment when you realized you wanted to bring your skills to the cannabis space?

Joel: It’s funny you know it actually wasn’t my idea. David and I were working together doing a bunch of freelance work in New York City helping companies come up with and iterate early stage tech ideas and someone was telling me about the cannabis space and what was going on and I really started digging in and looking at the space and took a trip to Denver and I was really excited by the whole industry. I thought it was amazing. I met with a handful of dispensary owners and really talked to them about what their current challenges were and what sort of solutions existed and I realized there weren’t that many people solving problems who had a true technical background and it was there that David, Roger, and I really started evaluating where we were and it just so happened we were all at a decent point where we had the bandwidth to take on something new and it started off as like a side project and before long we were full time on Baker.

Matthew: What was the void? I mean aside from the background expertise that you’re like hey we want to go in and solve this problem or scratch this itch? Was there anything in particular?

Joel: Absolutely yeah. So two things one in Colorado at the time rec had just passed and you had these pretty long lines or at least crowded dispensaries and all of your customers waited in the same line whether it was a customer who shops once a week and buys a 100 dollars at a time and know exactly what they want or whether it was a tourist or a first time shopper who walks in and says hey what’s Indico, what’s sativa, or how many milligrams should I eat in an edible? So originally we built Baker to be an online ordering tool to help dispensaries keep their 20% of customers who accounted for 80% of the revenue right typical 80/20 rule. Keep these small group of people who really drove revenue and spent a lot of money happy and let them order ahead get in and get out so that the bud tenders could spend more time with people who had questions talking to them and explaining.

So that was the original void and it worked. We did that. We had early success. It was solving a pain point but pretty quickly we realized there was an even bigger void in the market which was dispensaries were spending a lot of money on customer acquisition. Advertising in print paper, digital, as well as the different listing sites getting their menu out there, trying to get eyeballs but they weren’t really spending any money on customer retention. So if you look at any other industry you see in typical retail it’s actually six times more expensive to acquire a new customer than to keep an existing one but for some reason in cannabis it was all about driving foot traffic, driving foot traffic and we found that a lot of these dispensaries didn’t actually fully realize the economics of every dollar they spend on these new customers many of them would come in for a deal, buy whatever product was on sale, and then not come back again.

So the ROI was actually negative and we started working with dispensaries who start to understand this and realize that it doesn’t have to be a race to the bottom. It’s not just about having the cheapest A or having the best deal that you can get people in your door. It’s really building that brand loyalty. The same way if I buy one brand of sneakers over another I’m not trying to buy the cheapest sneakers right. I like the brand that I like. Likewise there’s a real opportunity here for dispensaries to build their own brand, really connect with their customers, and drive repeat business. So we’ve really evolved Baker to be a full set of software tools that do just that which is really help build the relationship between the dispensary and their customer, drive that loyalty, keep the customer happy, and ultimately help the dispensary make more money.

Matthew: So it sounds like you’re saying segmentation and customization are some of the big primary benefits when you sit down with the dispensary owner. What are the top two or three benefits that you really try to drive home and that they seem to like the most?

Joel: Absolutely. Well first and foremost it’s building your customer list right. I think everyone knows that at the end of the day as a dispensary it’s really important to know who your customers are so helping them capture those customers pretty easily and for that we use an Ipad that we’ll give you that sits in your store or a tool that goes on your website. A lot of the times these websites are dead ends for dispensaries. If a customer does happen to find them there’s no real call to action. It’s just an address, maybe store hours, sometimes even they have a live menu, often not. With Baker we give you a shoppable menu so if a customer does land on your site they can actually order something and take an action or if they want to they can enter their cell phone number and sign up for personalized alerts.

So really it’s about capturing that customer data and then the second thing you said is exactly right too which is personalization and segmentation. So if you have one generic list that you send out to all the time there’s going to be a lot of people on there who are getting a lot of irrelevant messages and just like when you log on to Amazon part of the reason it’s such a powerful platform is because every time you log on its personalized to you. You see things that are on sale or available or recommended based on your needs and interests. With Baker we try to do the same thing so rather than send out a text to every single customer every Wednesday about Wax Wednesday half off two thirds of your customers never use concentrates which means two thirds of your customers are going to be getting spam every single Wednesday and they’re going to be very likely to opt out of all messages because they don’t want to keep getting that annoying text every Wednesday.

So with Baker we make it really easy to segment your customers based on their interests, send them what feels like a personalized relevant message so that they get excited every time they hear from you and they’re not like oh another message and I’m just going to instantly delete without reading but they know hey if I get a message from my dispensary it’s because they have something I want and it becomes that exciting feeling where you’re going to rush when you get a message and then the customer takes action and they actually click on a link and make a purchase.

Matthew: Yeah you’re kind of training your customers in a way that your emails mean something and your text messages mean something.

Joel: Absolutely and it’s not necessarily training them in a bad way right. We’re not manipulating the end customer. We’re actually making them happier and again that’s the same reason Amazon is great right. It’s not that they’re training us. They provide a valuable service. I know when I go on and I click recommend for me it’s going to be interesting and likewise we help these customers have a better experience and another feature that we offer is called strain alerts where if you have a really high demand product that you love right. Maybe it’s Blue OG a special hybrid that just is your favorite and it’s always out of stock. You can actually sign up to get a personalized message so as soon as that product comes back in store I get like hey Joel good news Blue OG is back in stock and I know I can either reserve it right there from my phone or run into the store and get it before it’s gone again and now that’s providing a really valuable service for the end user and ultimately if you make that end customer happy they’re going to become more loyal and be a better customer.

Matthew: So it sounds like what dispensaries that aren’t using Baker are doing wrong is they’re treating everybody and that they’re putting everybody in the same bucket, they’re sending them email blasts that don’t really tell them what to do next. Hey we have some announcement there’s no way for you to take any action. There’s no call to action. With Baker you’re saying hey we have this in stock now, I know you like it that’s why I’m sending it to you, and hey you can reserve it right here on your phone. So it’s taking it to a much deeper level.

Joel: Exactly. I mean the analogy I use is imagine if you got an email from J. Crew saying hey Matt pants are on sale today but there was no link or no image even. It was just an email that said those four words. They’re going to expect you to get in your car and find the nearest J. Crew and walk in and say I’m here for the pants right. It doesn’t make sense right. Of course not there’s a big picture of a model wearing the pants where you can see what it looks like and you can read a description and you can click on it and order it right from wherever you are your mobile device or your desktop. We’re providing that same experience. So when you get that Wax Wednesday text or that Blue OG alert you can click on it. You can see the specific product, you can read about it, and you can actually order it.

So it’s providing that next level. Closing the loop if you will on all messaging with a call to action and that also lets you track it because if you don’t have a call to action it’s impossible to know which messages are better than others right so a lot of times dispensaries don’t know what an effective messaging campaign looks like because they have no way to track it. They say oh I think we were a little bit busier on this day but maybe it was due to the text or maybe not. With Baker you can actually compare click through rates so you can see that hey 20% off did much better than five dollars off. We should do that again next time or hey the deal on this strain performed a lot better than they do on this strain. So it’s really important that you get that data, that feedback loop so you can actually improve and continue to do what’s working and change what’s not.

Matthew: Interesting. So when a dispensary implements Baker for the first time and they start customizing and getting deeper into the customization and segmenting of a customer’s interest what do you see in terms of open rate and click through rate? I mean is there like a doubling or what’s the general there?

Joel: Absolutely. Yeah it’s pretty exciting. We see typically after the first 30 days or so of collecting customer phone numbers with the iPads. Our clients usually send out their first marketing campaign and we’re surprised that they don’t do an incremental 10,000 dollars worth of revenue that initial day or two or three days and often times we have dispensaries say when they first really turn on Baker it’s the highest revenue they’ve ever seen and we get these unsolicited messages. We got one early this week. The subject was happy Monday and it was; it was to Glen, our Head of Customer Success. Hey Glen just wanted to let you know we did 10,000 dollars this weekend thanks to your message, 10,000 dollars more than we usually do thanks to your message.

It’s completely unsolicited and I think what these guys don’t always understand is they don’t believe that it will work because it seems almost too good to be true and that’s part of the reason we’re priced so competitively and that’s honestly our biggest challenge is that education piece because the notion of customer retention is not something that’s fully wide spread yet in the cannabis industry. So we’re still trying to help educate our customers, our clients on what this really means and why it can impact your business and more importantly the best way to actually implement it and to start using it.

Matthew: What about sending text messages? Most people are familiar with getting emails from businesses they like but what about text messages? Is there any kind of protocol or etiquette or things to do differently or think about differently there?

Joel: Absolutely and it’s the same things but it’s even more important on text because your phone, your text messages are very personal right. They have a 99% open rate right. Everyone reads their text messages and it’s because usually you only get them from people you care about or you know versus email everyone’s used to getting spam which is why the open rate is so low but if you start getting spammed via text message that feels much more like an invasion of privacy then getting spammed on email and that’s why it’s even more important that you only send the right messages to people based on what they like and at the right time of day. Our unsubscribe rate on text message is actually; the typical unsubscribe rate on text messages is actually 300% larger than ours.

So ours is less than a third of what the typical unsubscribe rate is and it’s because we really understand these customers and also we can help our clients understand the best way to send these messages right. We work with 150 dispensaries in 8 different states. We have a really good understanding of the cannabis market as a whole and obviously every state is very different and that’s why we have a full team of customer success that really understands each local market and every dispensary thinks they’re different and many of them are in a lot of ways but at the same time when you have that high level overview and really understand the market you can really work with your clients and understand the best way to send out these messages so you don’t get an unsubscribe and that you actually take advantage of the tool to drive revenue.

Matthew: Okay so let’s say you have Baker software implemented and working. You know your customers’ interest, you’re sending them emails kind of contoured to their personal interests, but how do you start to expand the possibilities of what they might be interested in without alienating them?

Joel: Great question. So a few different things one in the store like I said we set up an iPad where customers can select their preferences for what types of products they like. We also offer that full online order right so the more you use Baker the more we can understand what types of products you like and you order and then down the line as we start to integrate deeper and deeper with the different POS systems then it becomes even easier for us to build a customer profile to make sure you’re getting the most relevant information possible. So there’s a number of ways right and the goal is that the longer we’re around and the more we’re working with each dispensary then in this industry we’re going to continue to refine our platform to be smarter and smarter to provide a better and better experience.

Matthew: How does Baker enable online ordering for dispensaries but then integrate with the point of sale systems which you just mentioned? I mean it’s really valuable to be able to reserve and eighth of Blue Dream but if I go in to the dispensary and its gone then that turns from a benefit to a liability pretty quickly. How does that work? Is there an API to the different software systems out there?

Joel: Yep great question. So we do work with a number of the biggest POS solutions out there as well as a bunch of the smaller ones that are up and coming and Baker is designed to be complementary to a point of sale right. If you look at most industries your point of sale is very different than your customer retention platform and your marketing tool. In cannabis a couple POS systems are trying to do all of it themselves and many of them offer some basic functionalities that we do but at the end of the day all we do is focus on that and we do it really well and many POS providers understand that and they say hey you know what if we integrate with Baker we can give our client the best experience possible. We can give them our point of sale, Baker can handle the online ordering and the loyalty and the messaging, and if it works well together that client is going to be really happy and they’re not going to churn and that’s great news for a POS company as well.

So we are really working closely with these POS companies to do just that and insure that if you order something online that order shows up directly in your point of sale. If we’re not integrated with the point of sale that order will show up in Baker and you’ll pull it off the shelf but obviously it’s a much smoother process when we have that full POS integration.

Matthew: Tell us about the loyalty features in Baker and how we get customers to be more loyal in general?

Joel: Absolutely. Yeah so loyalty is interesting right. A lot of people understand that they need it, a lot of people don’t understand the best way to use it, and we provide a number of different tools that are pretty customizable to fit whatever the dispensaries needs are but we also have our set of best practices and that’s really important because at the end of the day like I said you start to see certain things that really work well and for us we’ve found that one of the best ways to drive loyalty is have almost like a digital punch card, like a check-in system so every time someone comes into the dispensary they sign in on the iPad, they get points just for coming into the store and we know that driving foot traffic means that customer is going to be more likely to see something and maybe buy something else and just keep them coming back builds good will.

And we find that’s actually more effective than a points per dollar because then you get this long tail where you have these really high spending customers on one end and they actually take up the bulk of your loyalty resources and the majority of your customers don’t benefit from it because you have to build your system to cater towards these really high spenders. So Baker has actually designed at its base level to just be points per check-in. So every time someone comes they sign into the Ipad they get points, once you get a certain amount of points there are certain rewards that you’re eligible for, and it’s not a static list of rewards and it’s not like you have to get this at this milestone. So after you accumulate points think of it as like a ticket at an arcade right.

You can spend 100 tickets and get the gumball or you can spend 1,000 tickets and get the stuffed animal or you can save up for 10,000 tickets and get the race car. So we let people choose do they want to redeem their points now for something smaller or save up for something bigger and this allows them to choose rewards that again are relevant to their interests because if you have a reward that’s a free pre-roll once you get to 100 points a lot of people don’t like pre-rolls right. People like to roll their own. If they don’t like to smoke whatever it is so again it all feeds back to that customization.

Matthew: What about getting the dispensary staff trained up and up to speed quickly so they can use this without their being a huge learning curve? How does that work?

Joel: Yeah. So when you’re a new client you get a box in the mail and it comes fully ready to go. It comes with an iPad that all you have to do is turn on. It has an instructional video when you first turn it on. It’s preconfigured for your store specifically based on your color scheme and logo and everything else and our generic loyalty system or whatever you decided upfront is also preloaded. All you have to do is just turn it on and sit it there. People like it. They walk up to it, they use it, they sign up for messages. All of a sudden you start building your customer list and it really is very easy to do from a dispensary standpoint. We have a full time onboarding specialist who does nothing but help their staff get trained when you first get started and we have a full customer success team that works with you over the duration of your time with Baker to constantly evaluate what’s working, what’s not, tweak your messaging profile, figure out what sort of deals to offer, and really make sure that you understand what’s working.

And most importantly it’s for the feedback and it’s really important to know that everything we’ve built has been built based on feedback from our client’s right. We’ve been working on Baker for two years now and every two weeks for the last two years we push updates and those updates are constant reflections of what our clients are asking for. So for example someone says hey I’d love to write a bunch of messages on the weekend and schedule them to go out for the next month because I’m going out of town. So we built that functionality right and now a marketing manager can sit down and in 30 minutes schedule all of the messages for the next four weeks and then walk away and it automatically happens or the ability to customize certain things in the loyalty platform right. We listen and work with our clients so customer success not only makes sure you know how to use Baker but their job is also to be a conduit for feedback between the client and our development team so we can continue to build Baker for our clients.

Matthew: What about user interface? It sounds like you’ve put a lot of thought into the experience. All you have to do is open the iPad and turn it on that’s a great convenience but what about the user interface in general? I know sometimes when development teams are working on something they’re so close to it that it’s hard to imagine someone looking at it for the first time. What can you say about that?

Joel: Absolutely. So David, one of my co-founders is a really talented user interface guy. He was top of his class at Cambridge studying architecture so very visual with the design and understanding how people interact with spaces and technology and then like I said we spent six years in New York building mobile web apps, iPad applications, Iphone applications, and really doing a ton of user testing of how people interact with technology and not only technology but the world around them and so his main focus is really taking all of that knowledge as well as all the knowledge we’re gaining from this space from our clients to build the simplest and easiest tools out there and we understand dispensaries are really busy places right. We see it firsthand. You have inventory challenges, long lines, new bud tenders that just started, I mean regulatory challenges. There’s always something going on that the last thing these guys need is complicated software.

So Baker is designed to actually make your job easier. Our menu takes a minute to manage as opposed to managing a menu elsewhere which can take 30 or 45 minutes. We have one button that lets you export your menu and print it versus other people who say it takes them 20 minutes a day to print out their menu or again we have automated stain alerts where we have dispensaries that are writing down your name and what strain you wanted and then when that strain came back in stock they were manually texting or calling every single customer and spending hours a week doing that. So our goal to automate as many of these things as possible, make everything one click, super simple because we know how hard it is to run your business and the last thing we want to do is be more work. We want to make it less work and help you be more efficient.

Matthew: Joel I want to transition into some personal development questions to let listeners know a little bit more about who you are personally. As you look over the arc or your life is there a book that stands out that has had a big impact on your way of thinking that you’d like to share?

Joel: That’s an interesting question. I studied psychology and philosophy when I was in school so I’m a big... I’ve always been curious into the way people think and what we think about and I would say Malcolm Gladwell does a pretty good job of helping us understand some of the odd tendencies that people tend to exhibit. We call them biases and there are certain predictable behaviors that we all fall victim to right because our brain takes these shortcuts and I think really reading that and understanding that helps me understand if I’m being irrational about something and really take a step back and look and say okay is this actually the right thing to do or am I just caught up in X, Y, or Z? So I think understanding that has been really helpful in shaping the way that we think about problem solving.

Matthew: Is there a tool web based or otherwise besides Baker that you consider indispensible to your productivity?

Joel: I mean I think Slack is the first thing that comes to mind. Our team is all very active on Slack. We have like I said the majority of us are in Denver but we have sales people in different markets and I think it’s really important to always be communicating and Slack makes it really easy to do that. I think email can get messy and the more the rest of your team knows what’s going on the better we all can be and make sure nothing gets dropped. So Slack is certainly the most important team wide tool and then personally I like an app called Wunderlist which is just a to-do list that syncs with my phone and my computer so no matter where I am if I have to jot something down I don’t forget to do it. It keeps it organized in one place.

Matthew: That’s great. I use a list app as well called Anylist and my wife and I we can share different lists of things we need while we’re out and so forth.

Joel: Yeah.

Matthew: It’s really handy that way.

Joel: Yeah it’s great. I have lists for myself, I have lists for different people on my team, I have a marketing list, I have an operations list, and then I have a shopping list that my fiancée and I both share.

Matthew: Yeah.

Joel: So no matter where you are you add something to the right list and you make sure it doesn’t get forgotten about.

Matthew: Yes. So well back to Slack do you think that’s cut down significantly on the emails that you have to look at and take some action on would you say?

Joel: Absolutely. Yeah I think it’s so easy for something to get lost in email purgatory and once it gets dropped it’s never to be seen again. So Slack is a great way just to get quick little updates and also channel wide updates without really clogging up everyone’s inbox. So I think there’s a reason they’re growing so quickly. It’s because it works.

Matthew: Joel where are you in the fundraising process? Is Baker looking for more funds currently?

Joel: So we closed a 1.6 million seed round that we announced earlier this year and we’ve been growing very quickly so from a money standpoint we’re in a pretty good spot but that said anytime you grow from 6 to 16 people in a year and we’d like to hire three or four more you’re always needing more resources to fuel growth at that pace. So we’re fortunate that we have some really fantastic investors who will continue to support us and also really well connected investors and we’re constantly getting interest from new and exciting people. So I guess my rambling answer is we’re not aggressively fundraising but we’re always keeping our ear open and there’s a very good chance we’ll put some more money in the bank soon when the opportunity that’s right presents itself so always is the answer.

Matthew: And how can listeners find and connect with Baker online?

Joel: Our website is www.trybaker.com. It’s www.trybaker.com and there you see most of our B to B tools right so if you’re a dispensary out there or even a (28:48 unclear) an edible company looking to figure out how you can better engage your customers check out www.trybaker.com and you can see all of our tools and if you’re an end user you can go to app.trybaker.com. We’re a mobile web app because Apple won’t let you do cannabis commerce in the app store but if you go to app.trybaker.com you can see all the different dispensaries that are on our platform and actually see what products they have in stock and if you see something that catches your eye you can place an order and reserve it right there.

Matthew: I got to say this is what I really love about the cannabis industry is that there is smart entrepreneurs doing really interesting things but also the industry as a whole doesn’t have to many legacy systems particularly in software so they can just boom go right to Baker or some other software that helps them a lot right away and get kind of the best and greatest from nimble little teams like you have. So this is an exciting time to be alive and congratulations to you. Good luck with everything and thanks for joining us on the show today.

Joel: I appreciate it. Yeah I think you hit the nail on the head right the tool that you use to manage your pizza shop should not be the same tool that you use to manage your dispensary right.

Matthew: Right, right.

Joel: Cannabis is a unique and special industry and we’re excited to be focused just on it alone because there’s enough there to keep us busy.

Matthew: Thanks Joel.

Joel: Alright thank you. Take care.

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The Five Disruptive Trends Shaping The Cannabis Industry Now

A Glimpse into the Booming Cannabis Trade in Canada – John Fowler of Supreme

john fowler supreme canada

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Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

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The Canadian cannabis market continues to heat up and mature. Many licensed cultivators are turning their focus specifically to producing massive cultivation facilities to accommodate the demand in Canada. One of those producers is called Supreme. We are fortunate to have the CEO of Supreme, John Fowler with us today. John welcome to CannaInsider.

John: Hi Matt. Thank you for having me.

Matthew: Sure. John give us sense of geography. Where in the world are you today?

John: So I’m sitting here in my office at our facility in Kincardine, Ontario. So very shortly I’ll be sitting in the middle of approximately seven acres or six NFL football fields of high grade medical and potentially recreational cannabis. We are located near Toronto probably a city your viewers will know and we are about two hours outside of there on one of the great lakes, Lake Huron. I remember reading one time wine makers said you can’t produce great wine in an ugly place and we’re definitely trying to produce our cannabis in a beautiful place.

Matthew: Oh good. John tell us a little bit about your background. How did you get started in this business?

John: So prior to founding this business I was an attorney practicing corporate commercial law in Toronto but actually how I got into the law was as a result of medical marijuana so the program in Canada rather than being ballot driven as in most of the United States was actually court driven. Our constitution, our supreme court, and appellate courts have found that the constitution protects the right of reasonable access for sick Canadian’s who need access to medical cannabis and I actually developed a passion for the law reading these cases and particularly being impressed that a small number of lawyers were able to advocate for their clients and create an industry not on a ballot initiative or a legislative initiative but actually through the courts.

So that led me to become an attorney. I actually realized that that was a very small market for case work for making a living and became a commercial attorney and in 2013 when the government of Canada introduced this federal program which combines high volume, high quality cannabis production with a very regulated industry. I really thought to myself that if a new industry was going to be tailor made for myself I don’t think I could do any better than this.

Matthew: And what’s Supreme? Give us a high level overview of what you’re doing there with Supreme.

John: Absolutely. So Supreme is a Canadian publicly traded company. We trade on the Canadian Securities Exchange under the symbol SL and that is a fully regulated exchange so similar in concept to the Toronto Stock Exchange here in Canada or the New York Exchange. It’s not an over the counter. Supreme is essentially an investment vehicle under which we plan to develop or purchase multiple high value assets in the cannabis sector. So currently we have one asset that’s the seven acres licensee in Kincardine that operates this seven acre greenhouse. All 100% of our focus for the time being and the immediate future is on becoming what we believe will be the world’s foremost producer of 100% legal bulk cannabis and from there we’ll look to grow Supreme through business lines whether they’re organically grown or through acquisitions to position Supreme as a real force to be reckoned with in the growing international cannabis market.

Matthew: John what do you see as the benefit for focusing on the wholesale or bulk market? What’s the strategy there? Why did you go that route?

John: So the Canadian market here is quite unique. Some of your U.S. listeners may not be aware. So we have a market here that is roughly the size of California. Similar number of users recreational and medical and conceptually a similar market size but what’s very exciting is where California has a few thousand licensees we have 30. So what we realized was we have a very strong advantage in cultivation. We believe utilizing our size and our hybrid greenhouse model and the expertise of my management we believe we can produce cannabis more effectively than anyone in Canada but what we also realized was there were many question marks in terms of the details of the final mile to the consumer, the retail front.

So currently all licensed producers are limited to medical only sales executed online we don’t have store fronts. Moving forward we’re likely to get store fronts but it’s unsure what those will look like. So we made a decision to focus all of our investments on growing seven acres as a bulk distributor because no matter how the Canadian market unfolds, how regulated or how tight advertising is, what the point of sale looks like, we believe one thing will be true and that is the market will need high quality cannabis produced in a sustainable fashion and sent to the retailer and then to the consumer at a fair price where there’s good value and by doing that we realized that the best way to execute on that business plan was to carve off the retail side of our business and focus purely on the wholesale front.

What I also like about that is because we sell through other licensed producers currently working with six producers that are between a quarter and a third of the entire industry a bet on Supreme is a bet on the market as a whole.

Matthew: You mentioned the hybrid greenhouse model. What does that mean exactly and what are the benefits?

John: Absolutely. So as I’m sure is the case in most of the U.S. particularly where you get warm winters, or warm summers and cold winters most cannabis production is done indoors; mechanical ventilation, artificial lamps, and these kinds of things and we’ve always watched with maybe some envy of the greenhouse and field crop growers in California and the Pacific Northwest. When we went to start this business we started to see the challenges a company would have producing indoor cannabis on a scale such as seven acres but at the same time we saw some real quality limitations being a traditional greenhouse.

So the concept we developed which we call the hybrid greenhouse essentially we like to think is the best of both worlds. So it’s much, much more than just a light deprivation greenhouse. In concept it’s more like an indoor facility with a 100% skylight. So we divide the greenhouse into modular rooms, we add a higher density of supplemental lighting than most greenhouse growers would use, and we use a ventilation system that’s more in line with what you would see with an indoor grower than a greenhouse grower. The result as we’ve seen in our first crop which was completed over the last month is yields that are in excess of what we expected using indoor math. Year round production like an indoor grower but a cost scale much closer to a greenhouse grower and a little bit of extra love in terpene production that only the sun can provide.

Matthew: Okay tell us about that. About the extra love in the terpene production because terpenes is a hot topic and everybody’s always wanting to learn more about it. Tell us what your thoughts are there.

John: So without getting to much into the science. In a nutshell every artificial lamp whether it’s a HPS metal halide, LED, or any other technology the goal is to recreate the sun and some products do a better or worse job on spectrum and things of these natures but kind of our rule of thumb is if you can use the real deal let’s try to do that. So whenever we can use the sun that’s what we rely on. So for us it’s not just a cost metric, it’s also we find the sun grow cannabis with that full specter of light tends to just produce the best expression of a particular genetic as long as you can provide a good environment. So basically as I said with our concept of being an indoor facility with a skylight we’re able to use the full spectrum light of the sun but at the same time provide all the environmental controls heating, cooling, dehumidification, and even CO2 enrichment that you would see in an indoor producer.

Matthew: Okay and you threw out some facts and figures there about the size of your grow but can you say that once more? How big is the grow?

John: Correct. So at full capacity the facility is a little over seven acres. It’s about 35,000 square feet or the equivalent to about six NFL football fields. When we’re at full production we forecast we’ll be able to produce between 50 and 100,000 kilograms of cannabis per year and that will generate actually over one million plants per year on a five crop cycle.

Matthew: Wow. I assume you probably did a pro forma or some estimation of what a greenhouse would do for you in terms of a total indoor grow. How did that compare to what you’re projections were of just in your cost inputs electricity and so forth? Was there a surprise there or was it pretty much in line of what you thought the difference between an indoor grow electricity usage, utility usage versus a hybrid greenhouse?

John: I think the key here is our goal was not to be the cheapest supplier in Canada. So we do some things that create additional expense as compared to the average greenhouse grower. However we feel the result in terms of a more saleable, more desirable product is well worth it. So we’ve only been operating for about half a year so we haven’t... Canada obviously is a four season country. We haven’t been through the winters yet but initially our costs look very much in line with our projections and when we account for the additional yields that we’re able to provide per square foot per year as compared to traditional greenhouse I believe we’ll be quite competitive with greenhouse cost structures per gram and well ahead of the average indoor producer.

Matthew: Okay. What’s the patient growth like in Canada month over month? What are you seeing now? Is your estimate or is there official numbers on that?

John: Yeah so the patient growth is actually very exciting and very fantastic. So just to give context in our old system the court driven system I mentioned it took about 13 years to get about 40,000 patients into the program. Here we are approaching the third anniversary of the new commercial program and as of the most recent official statistics we’re between 75,000 and 80,000 patients. So just monumental growth for the three year period and also what’s quite exciting is we’re adding patients at a rate of about 10% month over month compounding. So really we’re starting to hit that hockey stick or that exponential trend in terms of patient acquisition and at Supreme we can’t take credit for that. That’s the hard work of all of the other licensed producers in Canada who are working with doctors and working with patients and building client databases but that’s part of why our wholesale model works.

We’re saying hey there is a lot of great companies out acquiring patients and working with docs to grow the market so let’s just sit back and supply them with cannabis so they can meet their own business goals rather than trying to roll up our sleeves and get in a fight over retail level market share.

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Matthew: Tell me about the rest of your team at Supreme.

John: Yeah so one thing I certainly find interesting having a background in marijuana production here under the old medical program and a good understanding of some high quality U.S. businesses people who come to see us at the greenhouse are often surprised that less than 50% of our staff actually work producing the marijuana. So we have a very big team from IT technicians and security folks to obviously accounting individuals, HR professionals, compliance individuals so it’s an interesting organization of a little under 30 people where less than half actually deal with the marijuana on a day to day. At a very high level some people of interest here we have a very strong board of directors at Supreme.

So key amongst that are our chairman who is a very successful developer here in Canada. Provides a lot of great expertise both on construction projects but also capital raising and corporate growth and we’ve also hired, brought on as a director a gentleman named Scott Walters who is a former investment banker who really has a passion for growing the cannabis industry in Canada and the U.S. So he provides us with great industry data and also data on developments, trends, and best practices coming out of the Pacific Northwest. So those are some great assets for Supreme and our shareholders. The company is run day to day by myself. We talked about my background and our CFO, Nab Dhaliwal who is a CA by trade but has a strong entrepreneurial side particularly with tech which I think is quite vital as day by day cannabis companies become more technologically savvy. I mean we’re just farmers on one hand but we’re quite tech savvy farmers at the same time.

And elsewhere on the team here at the greenhouse we’ve just been very fortunate to have great support in the local community and we’ve had a lot of highly skilled individuals who have knocked on our door to come work because they’re interested in what we’re doing and what we’re trying to achieve here and all in all it’s just a group here that I couldn’t ask for anything better in terms of a group of individuals to manage towards the common goal of becoming one of the world’s biggest cannabis companies.

Matthew: That sounds like a great team.

John: Absolutely. I wouldn’t trade them for the world.

Matthew: Listeners are always interested in the cost of cannabis and then what it could sell for so could you give us an idea of what the cost of cannabis is right now in Canada and what the selling price is per gram?

John: Absolutely. So in the legal market, so in the LP market where we operate which is a mail order system that I mentioned earlier the average sale price is in the 8 to 12 dollar range. So there are some outliers. There’s a few that are more expensive and there are a few that are less expensive but the average falls right in there for grams or small orders by patients. Our pricing model is we want to provide the retailers an ability to markup at least 50%. We’re very committed to our retailers doing well because our business grows when our retailers grow.

Matthew: Now I definitely don’t expect you to be an expert on illegal dispensaries in Canada but we can’t help but look at the headlines and see about all of these dispensaries that operate I guess you would say illegally or kind of in a gray area but probably illegally in Toronto and in Vancouver. What are your thoughts on that? What’s happening there and are more going to get shutdown in your opinion? Where do you see that going?

John: So definitely there has been immense growth primarily in and around Toronto and Vancouver. I would say five years ago we had a handful of very discrete medical cannabis stores and now we have hundreds. You’re correct to say there has been, it seems to be an increase of enforcement against these operators. For me I think the history of prohibition of cannabis shows if there’s demand for a product there will be supply whether it’s legal or illegal. If that was not the case you and I would not be having this conversation. Marijuana would have been eradicated in the 30’s and 40’s. So given that there is this demand to me it’s incumbent on our government to move quickly to regulate these storefronts and find a way to bring them into the market in a way that’s meaningful but at the same time is respectful and takes into considerations the safety of both users and non users.

So to me I think we have this awkward transitional period where I don’t think any action is going to be perfect. There is certainly critiques against legal action through law enforcement but at the same time there are valid critiques against doing nothing. So I think for me the big picture is I try to look forward and I try to do what I can to move our country as quickly as possible into a way where all the demand of Canada can be satisfied legally and where that industry is as inclusive as possible.

Matthew: What do you perceive as the largest challenges and opportunities for your business right now and also I’d say the market in general?

John: So if we talk first at the market I would say the biggest challenge is going to be creating a regulatory framework for recreational and medical sells that can do just what I mentioned which is provide a supply that is capable of satisfying all of the demand in Canada leaving as small as possible a black market. I think alcohol and tobacco show us there will always be some black market but I think that’s demand driven. I think most Canadian’s prefer legally sourced cannabis and as long as the legal providers give good value to their clientele I think that can be effective. So at the macro level I think that’s the challenges finding the right set of rules and regulations that allow for as close to a 100% legal market as possible and obviously the opportunity there is I’m sure there’s going to be a great growth in the number of companies and type of companies as regulations change and the recreational market opens up.

For Supreme our biggest challenge is going to be managing immense scale on a very short term. So one reason we like the wholesale business is it really allows us to focus on cultivation. So growing from the 20 or so thousand square feet we have today to 350,000 square feet under production in the next two to three years is a challenge there’s no doubt about it but the good thing is we’re able to focus all of our time, effort, and attention on that singular challenge which is scaling to become a leading cultivator which I think really mitigates a good deal of that risk. In terms of the opportunity what we see is a market that’s growing exponentially in medical. Supply is growing in more of a linear fashion and we see a massive catalyst event being the commencement of recreational distribution at some time in the next couple of years and that’s obviously going to have a massive increase in demand and we’re doing everything we can to make sure Supreme is front of mind as retailers and users of medical and recreational cannabis start making their purchasing decisions over the next 12 and 24 months.

Matthew: Okay so let’s say a lot of the rough edges get sanded and there’s a healthy medical and recreational market. What does it look like in Canada in 3 to 5 years from now would you say?

John: So actually I’m hesitant, my crystal ball has not been the most accurate in the past.

Matthew: That’s okay mine hasn’t either. We won’t hold you to it.

John: One reason that we like the wholesale business and we focus on growing is exactly that reason because what I can see in 3 to 5 years I’m quite confident we’ll have a recreational and a medical market and I’m quite confident I have a lot of faith in our government and our federal government and our provincial governments, our state governments that we’re going to have a pretty functioning marijuana or cannabis market. What that means for us is the only thing I can tell you absolutely will be true is a large functioning cannabis market needs a lot of great cannabis and that’s why we’re focusing on making sure we can be there as a leading cultivator and distributor of great cannabis to support the medical and recreational markets.

Beyond there the minutiae what does a store front look like, who gets to own it, how many extract products will be available, advertising restriction these things we actually don’t even speculate on those because as long as we can agree that great cannabis will be the backbone of any functioning cannabis market we’re well positioned to be successful.

Matthew: John I like to ask a few personal development questions to give listeners a sense of who you are personally. Is there a book that has had a big impact on your life that perhaps after you look at the arc of your life and look back on history has changed your perception or given you a new lens that you’d like to share with listeners?

John: Absolutely. So I actually thought about this one quite a bit thinking and maybe coming listening to some of your older interviews and I narrowed it down to two but I’ll give you one if I must. I would say that anyone looking to become an entrepreneur should read “The Hard Thing About Hard Things” by Ben Horowitz. That book is about Ben’s career in a number of different successful startup tech companies but in a nutshell it comes down to CEO’s and entrepreneur’s are not graded on their history of success and their good days. Really the good and the bad are separated by how effective you can be on the bad days and it talks a lot about identifying those bad days and doing everything you can to keep the company going in the right direction.

So I think that is fantastic and if I can slide in one more I think everyone should have a look at “Zero to One” by Peter Thiel. That’s our concept here. We believe that through our hybrid greenhouse model we’re going from zero to one in terms of creating a totally brand new way of cultivating cannabis that combines the best practices of indoor cultivation with the power of the sun and the cost savings of a greenhouse.

Matthew: Is there a tool web based or otherwise that you consider indispensible to your life for productivity that you would like to share?

John: Absolutely. So we’re big believers here in virtual offices and virtual telecommuting. In part in necessity there’s 3 hours between our corporate office in Toronto and the greenhouse here in Kincardine. So whether it’s simple messaging software like Telegram or more advanced software say like Slack we feel very strongly in this day and age that every organization needs that quick sort of messaging solution that you can ask and get quick feedback on much more efficiently than typing out a whole email.

Matthew: John any thoughts on the American election? I just want to see if you can alienate half the audience really quick here.

John: I’m pretty sure you’re going to end up with a new president and beyond that that’s my only prediction.

Matthew: Does it look like a wrestling event the way it’s being produced in the conflict between the two? Is it entertaining out there in the great white north looking at this?

John: Entertaining yes until you realize that the TV drama is going to result in the next U.S. president.

Matthew: Right, right yeah right. That’s no laughing matter. Okay well John in closing how can listeners learn more about Supreme and can you tell us is there an opportunity to invest in the company that we haven’t discussed yet?

John: Absolutely. So the best way to find out about Supreme is to visit our website. It’s www.supreme.ca. So it’s www.supreme.ca, a Canadian ending and if you go there you can learn a bit more about the company but more importantly you can join our mailing list so you get all of our news releases and shareholder updates. Currently we’re not actively raising funds. We were very successful in closing what I think is the biggest non brokered private round for a Canadian marijuana company. We closed gross proceeds of approximately 15 million dollars over this (28:23 unclear). So we’re well funded right now for our phase 1 expansion which will take us to about 100,000 square feet under production and we believe in excess of 10,000 kilograms of production per year.

So in terms of future offerings the best bet is to join the mailing list but also viewers are reminded that we are publicly traded so someone can always make an incremental investment either through the Canadian Securities Exchange where we trade under the symbol SL like the Mercedes or on the OTCBB market where we trade under the symbol SPRWF.

Matthew: Great. John thanks so much for joining us on CannaInsider today we really appreciate it.

John: Awe it’s my pleasure anytime.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


Canada’s legal cannabis business are booming, just take a look at their stock performance over the last few months. The reason has to do with the incredible growth of users that are purchasing cannabis from licensed producers.

About our Guest: John Fowler, President & CEO of Supreme (CSE: SL) (OTC: SPRWF)

John began working in the medical marijuana sector over ten years ago. He pursued a career in law to assist medical marijuana patients with legal challenges relating to access, employment and tenancies. This culminated in 2013 when John assisted with R v. Mernagh at the Ontario Court of Appeal. John is committed to providing Canadians access to high-quality, low-cost medical marijuana and working with the medical community to improve physician education and support for medical marijuana.

Key Takeaways:
[2:44] – John talks about how he got started in the cannabis space
[4:13] – High level overview of Supreme
[5:31] – Benefits on focusing on the wholesale market
[7:39] – John explains the hybrid greenhouse model
[9:35] – John talks about terpenes
[12:48] – Patient growth in Canada
[14:50] – John talks about his team at Supreme
[17:34] – Cost of cannabis in Canada
[18:44] – John talks about illegal dispensaries in Canada
[20:38] – John talks about challenges and opportunities in his business
[23:20] – Canada’s cannabis market in the next 3 to 5 years
[24:46] – John’s book and web tool recommendation
[27:43] – Contact details for Supreme

Learn more at:
http://www.supreme.ca

What is CannaInsider?
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Important Update:
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The Five Disruptive Trends Shaping The Cannabis Industry Now

Consolidation is Happening – Wholesale Platform Cannabase Acquired

cannabase helix tcs cannabis industry consolidation

Read Full Transcript

Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

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As the cannabis market matures and becomes more competitive we begin to see strategic alliances, mergers, and acquisitions. Recently Cannabase a wholesale cannabis marketplace announced it had been acquired by Helix TCS. Here to tell us about the wholesale cannabis environment and her recent sell to Helix is Jennifer Beck, CEO and Co-Founder of Cannabase. Jennifer welcome back to CannaInsider.

Jennifer: Thank you so much for having me.

Matthew: Jennifer give listeners a sense of geography. Where are you in the world today?

Jennifer: Denver, Colorado.

Matthew: Great and I am in Asheville, North Carolina. Jennifer you’ve been on the show twice before but give listeners a sense of what Cannabase does so they can get an understanding.

Jennifer: So the Cannabase platform is the oldest and largest cannabis wholesale market in the industry. We provide a whole suite of seed to sell marketing and sales tools for cultivators, retailers, and infused product manufacturers as well as powerful advertising tools for ancillary businesses to showcase their products and services.

Matthew: Okay. So you started Cannabase back in 2013. What was it like the first few weeks and months you were doing this? This all was just very unknown and I bet you’re probably wondering if this was even going to work but what was it like the first few weeks and months?

Jennifer: Yeah it was a really exciting, fast-paced time. Like you said we were moving a little bit in the dark. The space was much less saturated so there was a lot more discovery that had to take place. So when we began late in 2013 we went to the Marijuana Business Daily Conference in November which was way smaller than it is today. Everyone could fit in one small auditorium and we really were looking around at the other solutions that were available and were surprised how little technology there was outside of the point of sale space. So with vertical integration coming to an end in Colorado the following year we were really excited to kind of pioneer the wholesale space.

Matthew: And how could you tell it was starting to pick up steam? I mean you create this online marketplace where license holders in Colorado can come together and maybe buy from each other or sell to each other but you put the marketplace in place and then you just call people and say hey this is out here I just want to see if you want to come on or what happened next?

Jennifer: Yeah I mean those first six months were really focused on; they’ve always been focused on onboarding and user engagement but the chicken and egg problem of having buyers and having sellers which is what you need to make a marketplace work and come to life was absolutely the focus of those first six months. The beginning of getting the platform live so we went and met with tons of dispensary owners. We had over 60 dispensaries participate in our beta period where we worked really closely with them not to build a product necessarily as we envisioned it but to take their current work flow and to take their current hurdles and make them a streamlined online solution that was intuitive and saved them time and would make them excited and I think that was how we knew it was working because people were really, really excited.

Matthew: Beta is kind of an interesting thing because you have all these ideas and they sound great on paper until your customer’s say yeah I don’t care about that or they say this is really great and you’re like wow I didn’t really think they’d be using this much as they are or what were some of the initial feedback you were getting in beta? What did they like, what did they not like?

Jennifer: Oh that’s a great question. Very quickly people were accessing the platform to buy and sell but also to see prices. Before Cannabase there really wasn’t a centralized place that you could understand what the market was demanding at that moment and as you know pricing is very volatile. So we began developing Cannalytics which are interactive kind of data and charts in the app. That was a huge hit. Making listings incredibly easy to build and manage and maintain. One thing that we discovered was that our background had been in technology. Building technology solutions for companies that were more excited about I guess using technology so I came from a company called Track Via which built custom business database applications for managing your workforce and that was a very, very different environment than building wholesale solutions for these new cultivators and retailers who maybe had one computer in the back room.

So we needed to get them excited about engaging, excited about using tools to their full capacity, and what it challenged us to do was make things as streamlined and intuitive as possible. So a lot of the early (06:30 unclear) were around making feature sets more accessible so that business owners would use them to their full capacity.

Matthew: That’s a real draw to get people to log on just to see what pricing is like and then when they’re on they can then use the wholesale marketplace. When you started in 2013 what was the wholesale price of cannabis at that time?

Jennifer: So we actually didn’t go live until early 2014.

Matthew: Okay.

Jennifer: So that’s when our data starts. At the time pricing was around 2,100 a pound.

Matthew: Okay.

Jennifer: And medical was cheaper at about 1,900 whereas recreational was about 2,300, 2,500. So at the time recreational grows were just coming online and product was very scarce and it was really demanding a premium.

Matthew: So why is that then is it because of the excise tax or is someone who’s licensed to be a medical cultivator is not the same as a recreational cultivator? What’s the difference there?

Jennifer: So medical and recreational product needs to be medical or rec from seed to sell. So you have a license as a medical cultivator or medical retailer. Actually with medical you have to have both because it’s still a vertically integrated model. So you need to as a medical dispensary grow 70 percent of what you’re going to sell yourself and then there’s a 30 percent allotment for wholesale. So it keeps the market small. All of the retailers are growing their own product and then there’s a little bit of wholesale product moving around. On the recreational side it was vertically integrated for the first about ten months of 2014 just to; I mean like the current model and make it a little bit more (08:14 unclear) for the current business owners and then in October 2014 mandatory vertical integration expired for recreational product.

So at that time you could still be vertically integrated if you wanted to. You could have your own grow as a dispensary and grow your own product like you always have. A lot of business still operate that way but it also made being a standalone grow or a standalone cultivation legal for the first time which meant that we had big cultivations coming out just focusing on growing lots of product and growing it well and that’s what’s really created the recreational surplus that we don’t see in medical which is still a vertically integrated market today.

Matthew: Okay that makes sense and what besides flower is on Cannabase? You mentioned edibles and so forth but what’s the marketplace look like if someone were to log on for the first time and see it? What’s selling? What are people most interested in?

Jennifer: So in Cannabase you can buy or sell like you said flower, bud, trim, extract, edibles, seeds, clones really any type of extract or medicated product that the licensee’s are interested in moving.

Matthew: So Jen if someone’s an edibles manufacturer what’s the best way to go out there and to get other license holders interested in their product? I mean they’re brand new. They don’t have a reputation yet. They want to sell to other license holders. How do they put their best foot forward?

Jennifer: That’s a great question. So the edible market in Colorado is unique because it’s the only product that you’ll see on a retailers’ shelves that are still branded as the infused product manufacturer. So you can walk into Live Well and you can see Incredibles Bars or you can see Mary’s Medicinals. Bud tends to not be the same way because it was a largely vertically integrated market and still is most flower is branded with the dispensary’s name that it’s being sold at. So you’re not exactly sure what cultivation you bought it for. Some people try to change that and hope that their brand will live on once it hits the retailer’s store but usually the retailer is going to rebrand it and say this is our flower.

But edibles on the other hand stay packaged as the business that produces them and that’s a lot of what sales. We have brand names in edibles. We have Incredibles, Mary’s Medicinals, Edipure, and people learn what they like and they shop for those brands. So the edible space has been a really exciting space to watch grow because we’ve seen really powerful brands emerge. Cannabase has been part of this because we built early on what we call MIP catalogs. So MIP catalogs are slightly different than our traditional listings and they’re a place that infused product manufacturers including people making tinctures and patches and extracts anyone that has a product that’s going to stay branded on the retailer shelves. They can activate a MIP catalog and it’s a dynamic visual catalog of all of their offerings.

So you can see each of the gummies or the candies and what they look like. We have surveys so that the infused product manufacturers can ask retailers hey what flavors would you like us to develop next or what have your clients been asking about or hey if you’re not buying why is it? So the edible space is kind of independent and very mature and our MIP catalogs provide a great space for brands to showcase all of their different products in a really beautiful visual format to help increase the likelihood of retailers stocking them on their shelves.

Matthew: So when two license holders get together and decide they want to do a transaction how does that work then? What’s the next step?

Jennifer: So we have a couple different options. We allow users to connect over listings which opens up just an in app message center that’s fully encrypted, very private, and integrated with text messages. So they’ll get mobile alerts and they can go back and forth and have a conversation. On every listing we show the number of views that listing has had and the number of connections it has. So you get a little bit of an idea of supply and demand. We’ve also built negotiation dashboards. So negotiation dashboards give businesses a place to go back and forth on price without having to necessarily send each other messages with all the nicey’s like hey how are you? What about this strain, what about that strain? They can really just use more of a shopping cart approach. Say I want to buy this, this, this, this. Here’s the price I’m offering, here is the delivery that I need, and then the other party can accept or deny and the dashboard reflects those changes live with some messaging on the side if you do need to talk.

Matthew: Oh that’s handy.

Jennifer: Yeah.

Matthew: That’s great.

Jennifer: So it’s a really cool feature.

Matthew: Okay let’s talk about the price of cannabis now versus the last couple of years because that’s what people really; their ears perk up because they’re wondering how much profit can I make, how competitive do I have to be, how much stuff to bring down my cultivation costs, and so on and so forth. Where is the wholesale price of cannabis as we speak now in late 2016?

Jennifer: Well I mean it’s a really astute question and I like what you said about people beginning cultivations now and needing to kind of rethink their original assumptions. I can’t tell you how many people we meet who have projected selling their flower at 2,500 a pound which is what it was beginning of 2014 and then at a couple different stages when we’ve had shortages then the prices have risen there but in general they’re much lower. So prices today overall are about 1,500 a pound with med holding steady at 1,800. So you know back in 2014 it was at 1,900 today it’s at 1,800. So it’s really stayed steady. However recreational; the price of recreational flower has gone down considerably. The average right now we’re seeing on the platform is about 1,450 a pound but that’s up a little bit. A couple months ago we were seeing down at 1,000. People moving product for 800 and truly that’s for product that is testing well.

So I think a lot of the new recreational grows that come out on a very large scale their first batches they’ll pump out might have some strains testing at 6% or 7% or 10% or 12%. With the rec market becoming as flooded as it is with all of the standalone cultivations that have popped up over the last year and a half that product is really, really, really hard to move and you’re going to be demanding much, much lower prices just to get something for it. To demand that 1,450 a pound for your rec product today you really need to have high testing, high THC with great shelf display really beautiful, really full buds. It needs to be top quality to demand that 1,450 price.

Matthew: Wow. This is what I thought would happen last year and I was totally wrong and now it’s finally come around and I keep on seeing or talking to these growers in Pueblo and other places and they’re bringing more and more supply on and they’re doing it on a much bigger scale with much more efficiencies and it just makes me wonder the cultivators that are just not prepared for this or don’t have some sort of unique selling proposition I’m worried are just going to get monkey hammered here. It’s going to be a tidal wave of supply. I could be wrong about that. I’ve been wrong before but I mean do you see us moving into an era of vastly larger cultivators who are using efficiencies and economies of scale to kind of disrupt the market?

Jennifer: 100% you’re right and it’s already really in motion and when you predicted that the price would fall sooner I think you were right and it was really some extraneous factors that kept it from doing so. So last year we began to see prices spike around this time last year. It was a little later though. It was more around November. October, November we saw prices shoot back up again but that wasn’t because of anything we really could’ve anticipated. There were some regulatory and testing issues that became more stringent all of a sudden and there weren’t enough labs equipped to test for the things that suddenly needed to be tested for and so we not only had people throwing out large batches of product but we had a terrible laboratory bottleneck.

So that bottleneck eliminated supply for a while shooting prices through the roof but that was a superficial price increase in terms of the actual trend. Trend wise what we have seen is exactly what you predicted large scale cultivations coming online with much more efficient growing techniques pumping out tons of product and very few people setting up standalone retail centers especially with the moratorium in Denver on new licenses for retail centers. We don’t have enough retail centers to absorb all of the product entering the wholesale market and demand hasn’t spiked as dramatically or as quickly as these cultivations have been built.

Matthew: Yeah wow. That is why I would prefer to have a license in a state that has limited amount of licenses so you can get around this problem. You want to have constraint on supply to maintain margins if possible otherwise you just have to be the huge, huge economies of scale especially when we have cultivators coming online that have massive greenhouses. That really brings down their operational costs so this is going to be really interesting to watch. I mean I think cannabis is kind of interesting because we’re going to leap frog a lot of technologies. Just as in Africa they’re not putting down phone lines they’re jumping right to wireless.

We’re going to see cultivators jump to new technologies because they don’t have any legacy technologies and it’s going to allow for vastly greater yields and growth in the field. So it’s going to be exciting to watch. It’s good to be in the picks and shovel side of the business like you’re in not providing the marketplace.

Jennifer: Absolutely, absolutely. We’re all kind of living it live and what’s been interesting is we have the medical market to compare the recreational side to and in the medical side where you have these checks and balances that whatever you grow 70% of it you have to sell yourself there’s a natural control there. You understand your own sales cycle and you don’t necessarily grow that much more than you’re going to be able to move from your shelves. On the recreational side where we’ve seen that limitation lifted the natural tendency is like you said people to put really big money into really efficient grows where they can leap frog and discover new technology.

I mean this has been an underground plant for how many years and now all of a sudden tons of capital and time and attention is being infused into growing techniques and how to really create the best product at the lowest price possible and while that innovation is very exciting we need to make sure that the market can support all of the product that’s coming out of it otherwise we’re going to see a lot of businesses not last as long as they were hoping.

Matthew: Right and I didn’t mean to discourage anybody listening it’s just that there are opportunities to find different ways to add value and I know for example in Boulder there is some kind of artisanal cultivators that sell out their whole crop before it even germinates because they have such a good reputation. So there’s other ways to add value. The companies that have a me too product that are going to have a harder time and going to see smaller and smaller profit margins. So it’s just time to evolve a little bit I think. Unless you’re in a marketplace that has limited licenses and it’s tightly controlled. That’s a good place to be.

Jennifer: Absolutely. There’s so much room for innovation. I mean especially on the edible side, the tincture side, alternative delivery methods, and people overwhelmingly don’t want to smoke. They want to find other ways to consume cannabis for whatever reason they do to sleep, to exercise, to relax, and so I think there’s so much room for innovation but it is about thinking outside the box and being a mass bulk supplier of flower it’s probably; I personally wouldn’t recommend doing it unless you are sure that you can produce very, very, very high testing like you said. High testing, well branded product that’s going to be able to differentiate itself very well in the market.

Matthew: Let’s pivot to your recent acquisition or how Helix TCS recently acquired Cannabase? When that courtship first started what was it that kind of perked up your ears like hey what’s the synergies here? How can this make sense? What were you thinking about because Helix does some interesting things? Why don’t you talk a little bit about that?

Jennifer: Absolutely. So we approached Helix because they are the leaders in transport and logistics so the absolute leaders in the security logistic space which is essential for a wholesale market and we really wanted to work with the best in that space. So that was kind of what began the relationship. Once we began working together we got a better idea of their vision which was to create integrated operating environments for these license cannabis businesses and you’ve spent a lot of time with me so you know I’m very, very, very passionate about integrated solutions for business owners, for infrastructure in this space that connects all these disjointed startups and all these yeah disjointed startups and components that the license businesses need to grow and so we really shared a common vision of building integrated solutions that would maximize efficiency.

The founders of Helix TCS have incredible experience in emerging frontier markets. So they have experience dealing with spaces with nebulous or conflicting regulations in the laws where there are many new entrepreneurs. Where there are businesses surviving off of pure fundraising model which can kind of skew the market and they have a lot of experience in growing successful companies. So for us at Cannabase it was kind of a no brainer that from the base level of being able to provide cutting edge logistics to our clients to being able to expand our capabilities to provide those integrated solutions I’ve always been talking about and wanting to see come to life as well as the deep intuition and market experience that come from people who have grown successful companies in these crazy environments.

I don’t want to say it was a no brainer because our company, Cannabase is very, very important to us and it was a decision that couldn’t be taken lightly but once we went down that road there really was no turning back. We were so excited to join with them.

Matthew: Yeah you’re merging together the online marketplace with the offline logistics and expertise so the world of bits and atoms come together. That’s a compelling offering and it’s a difficult thing to follow.

Jennifer: Thank you. Yeah it’s incredibly exciting and allows us to do much more quicker than we would’ve ever been able to do on our own and we think it’s a pretty incredible offering now that we’re able to bring to the market and able to continue expanding upon.

Matthew: Now you’re in Colorado. Where else where Cannabase and Helix extend their reach to in the future?

Jennifer: So we’re in Colorado. We’re still in beta in Washington. But however one huge change that’s happened since the beginning of our life here with Helix has been the beginning of a couple very powerful strategic partnerships with MJ Freeway and BioTrack. So we have basically entered into agreements with both companies that allow us live inventory data and integration with their systems exclusively nationwide.

Matthew: Wow.

Jennifer: So that’s going to be a very, very, very powerful channel to take the wholesale market and the live data to the next level with a more real-time live exchange model and give us a very powerful avenue for nationwide distribution.

Matthew: Wow. So for people that don’t know MJ Freeway and BioTrack are the two largest seed to sell tracking software so that’s a powerful value proposition. That’s great.

Jennifer: Thank you. Yeah it’s really huge. I mean being able to pull inventory data live and connect buyers and sellers is going to greatly increase the efficiency of wholesale transactions and the amount of data that it’s going to make us exclusively privy to is going to allow us to provide very enhanced Cannalytics and market data to our users allowing them to make great decisions, enhance forecasting. We really couldn’t be more excited about the opportunity.

Matthew: Yeah. That’s incredible. For entrepreneurs that are listening that want a product that stands out we talked a little bit about adding value; how to start on the right foot. Let’s put you on a hot seat here. If you were to create a product, if you had to wave a magic wand and you had to do something besides Cannabase and Helix and you’re going to create let’s say an infused product. What would you try to do to standout and kind of create that unique selling proposition that would allow you to have a thriving business?

Jennifer: Oh great question. I think the infused product space is really fascinating and would really encourage a lot of people who are looking to get into the space to explore that area. I would definitely start with high testing product, lab tested product, pesticide free clean growing method so really knowing where your product is coming from is baseline important these days. The old adage of well we’re just going to be the best. We have the best pot. We’re going to use the best product. That song has been sung so many times that it’s really lost its meaning in this space.

Matthew: Right.

Jennifer: So you really need to think about what does make you unique? I think the biggest thing is making sure that you have a unique value proposition. Is it the method of deliver, is it how fast does it take effect in someone’s system, how well can people control dosage, how predictable is the experience going to be? As more and more people start using cannabis in their daily lives it becomes more and more important that they’re not zonked out for longer than they think they’re going to be. That it produces a repeatable consistent experience. So I think making sure it’s well branded, it’s attractive, it sits well on the shelves, it has a long shelf life, it’s realistic in the market is very important but most importantly that the product is good, very strong quality, and that you have identified a unique value prop.

You cannot just put something great because you have the best stuff into the market and expect it to sell. You have to have something that really sets you apart but I think there is so much room for innovation especially in the infused product space and would really encourage people to explore and be creative.

Matthew: Yeah. I really would welcome more entrepreneurs that are interested in alternatives to sugar as a sweetener and who are looking to do things that are GMO free. Just healthier options and the reason I mention infused products is that for people that have infused product companies wholesale cannabis is just one input and as your prices go down you can offer your product at a lower price so you don’t have quite as much risk there if you’re risk averse. So that’s a compelling proposition but there’s just so many ways to do things. So many novel concepts still out there I think so I would encourage listeners as well who are on the fence to try something new and different just not a me too product because I think that might end in tears.

Jen as we pivot to personal development questions I like to ask a couple things to let the audience know you a little bit more. Is there a book that has had a big impact on your life where you look back over the arc or your life and say hey this has given me a new lens to look at things that’s really had an impact?

Jennifer: Absolutely. So I’m a huge proponent of The Lean Startup Methodology. The Startup Owner’s Manual is a phenomenal book to help new entrepreneurs think about how to iterate through a product and really make sure that users are engaging at any given point no matter what that product is. I think in a market like cannabis where you have to grow with it in realtime there could not be a more applicable framework for learning how to grow your business and for how to stay very cognizant of your assumptions and to be testing those at any given point to make sure that the vision is staying real with reality. So I couldn’t recommend the Startup Owner’s Manual more.

Matthew: Wow that’s a great suggestion. So did you when you were starting Cannabase then did you use The Lean Startup Methodologies to go to prospects and say hey we’re thinking about doing this are you interested in that? Does that make sense? Were you kind of bouncing the idea back on them?

Jennifer: Absolutely. I mean we were always trying to understand from the market a couple steps ahead of what we were building at that moment so that we were building the direction they wanted us to build. We’re not making this product for ourselves. We’re making it for their business so little things like it really quickly became apparent how much the high employee turn rate impacted a business’s ability to engage with our software because there is a learning curve and you need to onboard new users and what happens when someone leaves? How do they have access to that data and whatever relationships that that employee was cultivating? So although we began with just top level user accounts for each dispensary or cultivation quickly we built out employee roles and permissions that you could easily set up an employee account, it would be tied to your main account, you could set the permissions.

What should this person be doing, what shouldn’t they be doing, and then you could easily activate or deactivate that user without impacting your overall account and then you could access their messages and access what they were doing. This was really, really key for some of our earliest users who now have been through four or five or six wholesaler inventory managers and don’t want to lose the relationships, the traction, the listings, the data that they’ve built in the last couple years on their Cannabase account. So that’s just one example of listening to the problem which is hey people keep quitting and we’re switching over accounts and how can I see stuff and saying let’s really build out a piece of the platform that addresses this churn and makes this comfortable for business owners and make it a tool rather than a hindrance.

Matthew: Great points. Is there a tool web based or otherwise that you consider indispensible that you would recommend to listeners but you can’t say Cannabase?

Jennifer: I was going to say Cannabase.

Matthew: You can’t say that, can’t say that.

Jennifer: Yes absolutely. I am a huge; our whole team I should not take all the credit. Our whole team are huge fans of QuickBase and actually Eric who’s been with us since the beginning. He does all of our data and finances is a QuickBase hero. He is such a super user. He’s accumulated so many points with QuickBase. But QuickBase is a custom database application much like the company I used to work for TrackVia that allows you to create custom business applications tailored to your workflow. So it’s basically like you’re creating inner linking spreadsheets with forms on top which is what most software programs really are. So we have a custom CRM, a custom finance manager, custom dashboards, custom sales dashboard. Things that allow us to monitor our progress and monitor the app and monitor our development flow in a way that is totally unique to us and this was something we began building when it was just the founders and we just had a domain name.

We began setting up the QuickBase and all of our data about our accounts and really how we would track our workflow and manage our employees and being on QuickBase has allowed us to be as iterative with our internal processes as we are with the app and it’s allowed us to scale and keep very, very, very comprehensive records at every stage of the business which from getting off the ground to the acquisition was incredible important that we were that organized and still today every time we face critical decisions we’re able to look back at the data of the past and say hey have we been down this road before and does our data support the pivot that we’re looking to make. So I would highly recommend looking into a product like QuickBase or TrackVia instead of using just a CRM that you buy online or project management tools that you buy online.

Really thinking about your own organization and putting together those custom processes for custom workflow which allow you to really take ownership of how your team and your product is growing.

Matthew: And that’s the same company that makes QuickBooks right Intuit? Is that QuickBase?

Jennifer: Yes. QuickBase is owned by Intuit. I think that they have sold within the last year.

Matthew: Okay.

Jennifer: The actual QuickBase platform but yes it’s an Intuit product.

Matthew: Jennifer in closing how can listeners learn more about Cannabase, follow your work, and learn how to become involved?

Jennifer: So now there’s two places. You can of course visit Cannabase online at www.cannabase.io. So www.ca-nna-base.io or you can also visit our parent company Helix where we are putting a lot of press updates and recent news there as well. So that website is www.helixtcs.com.

Matthew: Jennifer thanks so much for coming on CannaInsider today. We really appreciate it.

Jennifer: Matt thank you so much for having me.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


Jennifer Beck, CEO of Cannabase discusses how and why she made the decision to be acquired by Helix TCS and how Cannabase is now in a stronger position post-acquisition.

Key Takeaways:
[2:10] – What is Cannabase
[2:50] – Jennifer talks about the first weeks and months of starting Cannabase
[5:13] – What was the initial feedback in the beta phase
[7:31] – The difference in price in medical and recreational marijuana
[9:12] – What are people most interested in on Cannabase
[9:49] – The best way for edible license holders to sell their product
[12:10] – How are transactions handled on Cannabase
[13:33] – Jennifer talks about the wholesale prices today
[16:15] – Large cultivators using economy of scale to disrupt the market
[21:53] – Jennifer talks about Helix TCS acquiring Cannabase
[24:38] – Will Cannabase expand to other states
[26:42] – How to make your cannabis business stand out
[29:33] – Jennifer’s book and web tool recommendations
[34:51] – Cannabase’s contact details

Important Update:
What are the five trends that will disrupt the cannabis market in the next five years?Find out with your free guide at: https://www.cannainsider.com/trends

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

Summary of Cannabis Ballot Initiative Results with Canna Advisors

2016 cannabis ballot initiatives results

Read Full Transcript

Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

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Hi CannaInsider’s. I just wanted to let you know before this interview starts that the audio quality is not perfect on here. I kind of rushed to get this out to you as quickly as possible so you could get an update on the ballot initiatives that took place yesterday, Tuesday, November 8th so I apologize that the audio is not perfect but it will return to great quality in the very near future thanks and here’s your program.

Yesterday there were many ballot measure that affected cannabis legalization. Here to help us digest all that happened are Diane and Jay Czarkowski. The husband and wife team manage a boutique cannabis consulting firm in Boulder, Colorado. Diane and Jay welcome back to CannaInsider.

Diane: Thanks for having us.

Jay: Matt thanks for having us.

Matthew: I know you’re busy in Orlando right now welcoming in the good news with clients there in Florida. I want to jump into all the ballot initiatives that took place yesterday and what happened but before we do Jay can you tell us again what CannaAdvisors does and what states you’ve been involved in?

Jay: Sure thing Matt. So CannaAdvisors was really born of Diane and I’s early entrance and experience in the cannabis industry in Colorado. We received one of the first licenses in the state. I think it was state license #7 back in the day. A few years later we started CannaAdvisors when we were approached by a group of guys in Connecticut that wanted to know if we could help them win a competitive license there. Connecticut was really the first state to have a competitive application process. Four years into this now really Matt the majority of the work that we do is we win competitive licenses and whatever it takes to make that happen the application side, the facility design side so that’s most of what we do but we’re also a collection of a lot of smart people mostly former operators so we do a lot of compliance work, facility work, operations, SOP’s. We’re a full service cannabis consulting and services company.

Matthew: Well let’s jump right in and talk about the biggest market. Jay what was on the ballot in California and what happened?

Jay: Well sure Amendment 64 passed and it was quite contention certainly not within the industry. There were a lot of folks in the industry in California that were very much against Amendment 64 but I think it was probably the majority of the population there that was certainly ready for cannabis legalization and they passed that with flying colors by a wide margin. It’s quite a complex amendment. Certainly the most complex amendment or bill or set of rules that I think any states going to ever see. From what I understand there are 19 different types of business licenses including 13 different types just for cultivation of various sizes and that kind of thing. The state intends to build upon what already exists in the medical industry. Licensing begins January 2018.

Supposedly there’s provisions in there to prevent monopolies but it’s certainly going to be a brave new world in California and there will certainly be many, many existing operators that will probably have trouble complying quite frankly just like we had the shake up when we began to get rules in Colorado six years ago.

Matthew: Just the cost of compliance you think is going to be very hard.

Jay: Well some of that and building compliant facilities and adhering to building codes and yada yada yada. Just like any business when government gets involved all of our costs go up.

Matthew: Yeah. You’re saying it’s just basic organization skills and business skills and transitioning from no regulation to some regulation or high regulation is just not a journey everybody can make.

Jay: Certainly.

Matthew: Okay. Well next up Jay is Florida where you’re at right now and where I’m at right now. I’m in Destin, Florida right now. Tell us what happened here yesterday? What was on the ballot? What happened, how many people voted and got out there? What’s the big news here in Florida?

Jay: Florida two and a half years ago the legislature passed a very weak CBD Only Oil Bill. It was really put in place so the politicians could say what do we need Amendment 2 for we already have medical marijuana. Well the program here stinks. It’s very limited. The people spoke yesterday. As you probably remember in order for this to pass they needed to pass by 60%. Two years ago the people of Florida voted for this 57.8% in favor yet it failed. So I think everybody was adamant this time and it passed. It’s full on medical marijuana with a good list of conditions for CBD, THC, oil, pills, infused products, dried flower the works. A very robust medical marijuana program.

Matthew: Wow. That is huge and for such a populace state. Florida now more populace than New York. So that’s really big. Now in terms of how long it will take to digest this ballot initiative and have it manifest into this market that has now been voted on how long does that journey take?

Jay: Well it’s going to happen rather quickly. We’ve already been working on the draft regulations with United For Care. Those will be ready to submit to the State House I would think by January at the latest. Per the language in this law we have to have send draft regs out in six months. We have to begin accepting license applications and begin registering patients in nine months. So it’s going to happen quickly. There will be a competitive license application process in Florida probably fall of 2017 and this program will develop. The people have spoken. I could tell a little bit about the numbers if you’d like.

Matthew: Yes. Dive in.

Jay: So when we got to the watch party last night everybody was pretty mellow. I mean they were happy and excited of course but there was polling numbers on the screen that showed how many people voted and what the percentages were. By the time I looked at it it says that eight and a half million people had voted which is close to half the population of Florida.

Matthew: Right.

Jay: And with that many people voting Amendment 2 was in the lead by 73% to 27% and I asked somebody has any

Matthew: That is massive especially when it was so close last time and now this time it was just overwhelming. I guess people had an opportunity to think about it and they saw it happening in other states so it just wasn’t so bad. I mean what do you think the reason Jay was for why there was such a big difference between the last ballot initiative and this one?

Jay: Well first of all I think a lot of people were certainly aware. This has been in the news and it’s been out in front of people for years now since we tried passing Amendment 2 in 2014. People are a lot more educated. People see this a lot more. The studies are coming out that this is not a bad thing. I think there’s two additional years of looking at this in Colorado and other legal states not that its rec here but it’s still a good bill weather for what’s to come and the people are sick of the drug war, they’re sick of all the issues we have from opiates. It’s time to legalize this plant so the people have spoken.

Matthew: Great points. Di let’s pivot to Nevada and Nevada is such a big deal even though it gets over shadowed by California or Florida or some other states but it really just can’t be overstated that it’s such a huge recreational market with people visiting and so forth. Dive into what was on the ballot there and what happened in Nevada?

Diane: Well Nevada in my opinion Nevada already had a really good medical marijuana market and a lot of that was because the political vibe around that was very supportive. They had representatives that were really working with the industry. People like Dina Titus and others that really worked with the businesses to make sure this program rolled out well and they made some changes along the way to make sure that they ironed out some of those initial bumps. So I think that’s really a key to for making sure that a program can be successful is that you have that local cooperation but gosh the legal market. The ability for people who go there already for this giant tourism market, the canna tourism market that could be available now to places like Las Vegas and Reno is just; it’s enormous and I think that this will be a really good program.

They’re going to add something that we haven’t seen in a lot of states that certainly I think has a play and that is a distributor category. Typically we see licenses that are broken down more like dispensary, processor, cultivation, and labs but this will have a distributor category added which I think will allow for a more robust kind of wholesale and distribution market and then of course they have people from neighboring areas that can still come and get it for medical purposes as well. Another good thing about this program is that it does still give those who went through the process of going through the licensing process for medical marijuana a good 18 months before they’ll be accepting new licenses for people that are new to the market. So it’s good for the people that have already been invested with their businesses there.

Matthew: That’s interesting. Yes I mean Nevada is just enormous. So thanks for that update there. Let’s move on to Massachusetts. Jay what was on the ballot in Massachusetts and what happened and why is it important to talk about?

Jay: Well Matt it certainly gives me a great pleasure to talk about Massachusetts because as you know we’ve been out there for a long time although we personally put the majority of our effort into the Florida campaign this year and there were a lot of other great folks out there spearheading the effort in Massachusetts. Two or three months ago Matt it was not looking good in Massachusetts. It was maybe polling 50/50. The governor was against it. The Mayor of Boston was against it. There was a lot of pressure on folks not to come out for it quite frankly but I think a couple of things happened that changed everybody’s mind.

First and foremost there was a 2.1 million dollar donation into the campaign by a private donor that really gave the campaign a shot in the arm. Number two you may have seen this Matt. There was a National Guard, State Police raid on an 81 year old woman in Amherst, Massachusetts.

Matthew: Yeah.

Jay: They came in with a Blackhawk helicopter from the air and a state SWAT team from the ground to seize her single marijuana plant she was growing out by her raspberry bushes. So I think when that came out it cost 60,000 dollars to eradicate that one plant. I think when that came out on the news that probably gave the campaign a 10 to 15 point bump right there. People are sick of that kind of thing and they want change. In terms of what the people vote for; cannabis is legal there. They don’t have the right to grow it at home like we do in Colorado but for the most part cannabis is now legal in Massachusetts; not now but once the law takes effect then we will see additional dispensaries, we will see additional cultivation facilities, lots of additional opportunities for business, and lots of opportunities of course for the people of Massachusetts to have access to this plant which of course is most important in all of this.

Matthew: You mentioned that the powers that be in Massachusetts really didn’t support this Jay. Do they drag their feet then in kind of getting this implemented or do you think it will be measured in months how long it will take to make recreational or adult use a reality in Massachusetts?

Jay: You know I’ll tell you I don’t know the specifics of the bill and what if any timeline it requires. Kelly Cross at the Marijuana Policy Project really spearheaded the effort and is probably the most knowledgeable but again Matt the people have spoken. They want this. Massachusetts voted for rec just like wow it was exactly four years ago Matt that the people of Massachusetts voted for medical and four years ago in the 2012 election they passed medical by roughly maybe 64% in favor so it was a wider margin. It’s certainly a narrower margin this time but it’s a clear winner so I would suggest that the officials in Massachusetts they get with the right side of history, get behind this, and make it happen.

Matthew: Yeah. Great points. Di let’s move to some of the smaller markets that don’t get as much attention but there are some developments there. What can you tell us about North Dakota, Maine, Montana, and Arkansas and Arizona? Let’s machine gun through them really quick.

Diane: Sure. Well Arizona sadly failed. I think their latest polls show it’s gotten about 47, 48% of the vote. So it looks like that one’s not going to pass which it’s a shame but my hope is that as the Marijuana Policy Project has projected there could be 47 measures in 2017 pass legislatively but who knows what happens with Arizona. Maybe they’ll be able to get it either back on the ballot or pass something legislatively in the future. I just think that as the more conservative states and I also think that the perception is that they have a decent medical program and that might be enough for people right now but that one looks like that was the only one out of the 9 measures for cannabis legalization this year that looks like it failed.

Arkansas that one I did not think was going to pass. They actually had two different issues on the ballot and even though the Supreme Court disqualified Issue 7 it was still on the ballot and I was concerned that that might divide the vote and be something to put in jeopardy Issue 6 but it actually passed. So that’s great for Arkansas. Maine Question 1 to legalize marijuana that passed. They’ll be able to have social clubs there which is something that we don’t have in Colorado. We’ve legalized cannabis but there’s no place to go and use it that’s not a private place so that was good for Maine; great for Maine. Montana had medical marijuana initiative I182 and that passed. That’s going to turnover a law that was established in 2011 that limited the caregiver’s to only being able to serve 3 patients each and it basically forced the industry to kind of shutdown.

But this will expand the program. Give more access to patients there and it will be better for the businesses there as well. North Dakota had a measure, Measure 5 to legalize medical marijuana and that passed. That passed actually I think by like 63%.

Matthew: Wow.

Diane: Quite a big gap there and that one looks like it’s going to be a program similar to Massachusetts in that they’ll be vertically integrated businesses, they’ll be a nonprofit component, they’ll be residents 2 requirements, and they’ll have some strict limitations on inventory. So all in all I think for the cannabis industry I think they’re estimating the wins of yesterday were equal to about eight billion dollars worth of new industry potential that we could see by 2020 because it will take some time for these programs to roll out.

Matthew: Wow that’s amazing. So Arizona was really the only state that it didn’t pass. The rec didn’t pass but they already have a robust medical marijuana market Di so it’s not like they’re in dyer straights necessarily considering everything else was a win.

Diane: Yeah I think there’s still room for that medical program to expand and like I said perhaps there could be something that could expand the market legislatively as well.

Matthew: Jay when you look at what happened yesterday with all these ballot initiatives on a high level what’s your general feel looking over the lay of the land and can you add some context into the big picture view of what all this means? Go ahead.

Jay: I would say no matter where you were in the country last night Matt, whether you were on the East Coast, the West Coast, the South, North Central, people across the country they voted positively for cannabis whether it be medical use, whether it be recreational use, adult use, whatever. People from all parts of the country voted yes last night and that’s huge. This is a huge turning point. We’re at that tipping point right now where I mean California alone sixth largest economy in the world legalized cannabis last night. The federal government has to listen. At this point they’re just being obtuse and their stance that cannabis is prohibited at a federal level that is just not a sustainable position anymore. So I think we’re going to see some change.

Matthew: Jay do you think all the ballot initiatives yesterday is going to accelerate the forum of banking or access to banking for cannabis businesses?

Jay: Well I won’t use the word accelerate. It would be nice if it was accelerated. I’ve been waiting for the banking issue to be fixed for seven years. Every year I tell people ha ha by the time you get your license next year it should be fixed and then another year goes by and another year goes by certainly again with California speaking, the rest of the nation speaking that’s going to get fixed one day. I don’t know when. I wish I did.

Matthew: Di as we close how can listeners connect with CannaAdvisors and learn more about what you do?

Diane: Well our website is www.thinkcanna.com and we’re on all the social media outlets and for the people that like the old school telephone our office number is 720-708-3154.

Matthew: Jay and Di thanks so much for jumping on the horn with us and doing a quick run through of the state by state initiatives. I really appreciate that.

Jay: Thanks Matt our pleasure.

Diane: Thanks for having us Matt.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

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A quick summary of the state-by-state results of cannabis ballot initiatives.
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Key Takeaways:
[2:33] – How Canna Advisors helps clients win Cannabis licenses
[3:38] – Jay talks about the California ballot
[5:42] – Florida’s ballot results
[6:53] – Jay talks about how long the process takes after an initiative is passed
[8:41] – How Florida’s ballot initiative differed from the last one that failed
[9:45] – Diane talks about what happened with Nevada’s ballot initiative
[12:13] – Jay talks about the Massachusetts ballot initiative
[15:29] – Diane talks about the initiatives in ND, ME, MT, and AR and AZ
[19:35] – Jay talks about what all these initiatives mean moving forward
[21:06] – CannaAdvisors’s contact information

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