Most Recent Interviews

  • Andrea Brooks
    Ep 296 – Cannabis Delivery Service Boasts Great Revenue With a Counterintuitive Twist
  • Alan Brochstein
    Ep 295 – Cannabis Stocks – Opportunity In The Storm with Alan Brochstein
  • Andrew Watson
    Ep 294 – Dispensaries Are Re-Engaging Old Customers Thanks to This New Platform
  • Michael Mayes
    Ep 293 – Winning A Cannabis License + Update on IL and MI Markets
Browse All

What is CBD

(Cannabidiol)? What is cbd cannabidiol See more

The Hottest Jobs

in the Cannabis Industry Read more


Marley Natural with Christian Groh of Privateer Holdings

Christian Groh

Privateer Holdings is a private equity company focused exclusively on the cannabis space.

Privateer’s portfolio of companies include: Leafly, Tilray and now Marley Natural. Marley Natural promises to be the first global brand of cannabis.

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

[1:37] – Christian explains what Privateer Holdings does.
[2:37] – Christian explains why Privateer Holdings focus is on cannabis.
[5:06] – How as the app Leafly changed and evolved since being acquisitioned by Privateer?
[7:51] – Christian explains Privateer’s goal with Marley Natural.
[9:47] – The consumer response to Marley Natural.
[10:38] – What strains will reflect the Marley Natural brand?
[12:18] – Managing Marley Natural in different states.
[13:16] – Christian explains Tilray.
[16:44] – Tilray’s research on cannabis and PTSD.
[19:38] – Tilray’s grow size and other variables.
[21:28] – Supply and Demand dynamic for the future.
[22:59] – Christian explains the big problems / opportunities in the cannabis industry.

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at That’s Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at Now here's your program.

Privateer Holdings is a private equity company shaping the future of legal cannabis on many fronts. You’re probably most familiar with Privateer through their acquisition of Leafly, a popular app for exploring cannabis strains and reviewing dispensaries. As you’re going to find out there’s much more to Privateer than just Leafly. Privateer recently announced that they have successfully negotiated with the Bob Marley Estate to license the Marley name and create a brand of cannabis called Marley Natural. Also Privateer is focused on the Canadian cannabis market with their company in British Columbia called Tilray. We’re going to find out more about the interesting things that Privateer is up to with the COO of Privateer Holdings Christian Groh. Welcome to CannaInsider Christian.

Christian: Thanks Matt, great to be here.

Matthew: Christian can you give us a sense of geography, where you are in the world?

Christian: Yeah right now I’m in sunny Seattle, Washington.

Matthew: Okay, and can you tell us at a high level what Privateer Holdings is and does?

Christian: Yeah. So Privateer Holdings is the world’s first private equity firm dedicated to the emerging legal cannabis industry.

Matthew: Okay, and can you tell us a little bit about your other two co-founders?

Christian: Yeah, so it’s myself and then there’s Michael Blue and Brendan Kennedy. You know all three of us come from traditional venture capital, private equity. Brendan and myself were at a venture capital bank in Silicon Valley for years, and then Brendan and Michael did their graduate school together at Yale. And we got together in essentially 2009 and 2010 and kind of quit our day jobs and started Privateer Holdings.

Matthew: Why the focus on cannabis? I mean was the opportunity just seem so big you just had to stop everything you were doing and focus on that? Can you tell us a little bit about that?

Christian: Yeah. You know, Brendan and I were at Silicon Valley Bank together and we focused on, you know, early stage venture backed companies in, you know, technology or clean tech or hardware or software. So we had the fortunate position to look at really, you know, all venture capital deal flow, not only in the Silicon Valley, but you know all around the US. And so we got really good at, you know, looking at trends and whether it be, you know, coupons or nano technology or mobile banking or wind power or whatever was kind of a hot emerging trend at the time.

You know, back in 2010, you know, we were in California and this was around the time Prop 19 was gaining a lot of attention in the news and media. And an opportunity came across our desk which was really a point of sale software company that was selling to dispensaries in California. You know, we never took them on as a client at the bank, but it just really peaked out interest. You know, it was such a big industry and it was getting a lot of attention, but it was still taboo, and there was still a lot of legacy issues associated with it. And so we really just started thinking about it, you know, under a different light and through a different lens. And you know, we realized this would probably be the biggest opportunities we will see in our lifetime.

And so we spent, you know, a good part of a year researching this space. You know, we went really around the globe, and we met with attorneys and activists and growers and dispensary owners and anybody else that was generally touching the space. And you know we realized that, you know, we could be a first mover here. And so thereafter we started Privateer Holdings and raised some capital and started making some acquisitions in the space.

Matthew: Now Privateer acquired Leafly, and I just want to understand from when you made that acquisition to where you are now how has the app changed and evolved and how has the market using the app changed and evolved and is it different than what you anticipated when you made that acquisition?

Christian: Yeah. So, you know, when we first started doing diligence on Leafly we liked it for a couple of different reasons. You know, one, it didn’t have kind of the ubiquitous pot leaf and, you know, the girls in the bikinis. It was a clean, mature, you know, yet whimsical brand, but we liked that. And it provided a fairly good level of education for you know either connoisseurs or first time users, but it really breaks down, you know, the strains and how people look at different strains. But when we first started exploring Leafly it essentially had, you know, 150,000 unique visitors per month and essentially zero revenue.

You know, you fast forward it to now or last month, you know, we had close to 5 million unique visitors in a 30 day period. You know, revenues are probably in line with what we projected, you know, before we made the acquisition. You know, user accounts are up 500 percent. You know, strain reviews are up 500 percent. You know, a 2X or 3X increase in revenue year over year. And you know, just a highlight from last year it won App of the Year through Geek Wire Magazine which is a fairly mainstream technology publication. So we went, you know, head to head with a couple of Microsoft apps, and some other early stage venture backed apps. So that really kind of raised the bar and got a lot of people looking at Leafly not only from the industry prospective, but people from the outside, you know, just from a technology development standpoint. You know we have an Android app and an iPhone app which I think is getting about 100,000 downloads per month. So that number has increased significantly as well. So the trend lines keep going up in really all aspects of Leafly. So it’s really an exciting time to be a part of this group.

Matthew: And for listeners that want to hear more about Leafly, what it does, CannaInsider did an interview with Cy Scott a few months backs and that’s in the back catalog. We go into great detail on what Leafly is, how you can use it, it’s benefits and also you get to learn a little bit about Cy’s story which is really interesting, including his favorite strain. So I invite listeners to check out that interview on iTunes or Stitcher. Now switching gears to Marley Natural, can you tell us how that came about and what your goal with Marley Natural is?

Christian: Yeah. So, you know, the Marley family has been thinking about, you know, a cannabis brand for a long time. They’ve been approached by, you know, other folks in the industry over the years, you know, but it was never the right fit for them. You know, they heard about Privateer Holdings and our leadership in the industry, and they approached us, you know, about a year and a half ago and started talking about the possibility of working together in the industry. So it’s been, you know, a year and a half close to two years in negotiations, kind of philosophical discussions about the brand.

And, you know, we will have products in the marketplace in late 2015. You know, essentially Marley Natural is a premium cannabis brand with deep roots in the life and legacy of Bob Marley. It’s a partnership between, you know, two cannabis pioneers, the Marley family and Privateer Holdings. You know, the way we think about it is, you know, we’re the first private equity firm investing exclusively in the cannabis industry in building profession mainstream brands, and we think, you know, Bob Marley could be synonymous with that. And we really break it up. We think about really three different lines. You know, there’s a hemp and cannabis infused topical line. There’s Jamaican heirloom cannabis products, and there’s the accessory piece, you know, which allows users to consume and store. So it’s really an exciting time, and we’re really excited to start the work on that, that brand.

Matthew: What is the response been like? Well I know what the response has been like. There was a huge, overwhelming response by the media interest in this, but what has been the response been from people that aren’t in the media, you know, consumers? Have you talked to many of them so far?

Christian: Yeah, I mean it’s really been overwhelmingly positive for the most part. As you know opinions towards cannabis are changing. You know, people are really starting to recognize the benefit of the herb. You know, politicians are starting to get it and laws are evolving. You know, Bob helped the movement 50 years ago, and you know the movement and the momentum continues to gain on a daily basis. You know, the herb was important to Bob and he looked forward to this day, and you know we’re at the throws of full legalization. So it’s been a really exciting time, and it’s been overwhelming positive.

Matthew: And do you have an idea of exactly what strains will be offered? Were they Bob’s favorite or how are you going to come up with strains that, you know, reflect the Marley tradition?

Christian: Yeah, so we’re going to curate a selection of heirloom cannabis strains, you know, including some of Bob’s favorite Jamaican strains like Lamb’s Bread. You know, we plan to share some information on a different varietals closer to the launch of the product. You know, but we’ll probably have about half a dozen true Jamaican heirloom strains.

Matthew: Now when can we expect to see that in dispensaries?

Christian: Probably late 2015. As you know, laws are evolving rapidly. Our intent is to produce and/or sell Marley Natural products where regulations allow, you know, alongside commercially viable opportunities. You know, right now we’re in conversations with distributors in Israel and Uruguay, and you know markets like Italy and the Netherlands and other emerging legal cannabis countries. As you know this conversation is really happening globally at the highest possible political arenas, and we are part of those conversations.

Matthew: You know, this a still a fresh announcement so I don’t know if you have an answer, but I don’t know how to describe it except it’s such a cluster of state and federal regulations at odds with each other here in the States. How will you manage relationships for Marley Natural in different states? Is it a licensing arrangement? How do you do that?

Christian: Yeah it’s really a state by state assessment. You know, obviously, you know, there’s medical states now and recreational states or adult use states. And so we have essentially boots on the ground, you know, evaluating each state opportunity. You know, we wish there was some easier kind of blue sky law, but there’s unfortunately not. So we’re very cautious on how we approach the market, but you know once again, the walls of prohibition are slowly deteriorating. And so as each day goes by those conversations, you know, become a lot easier.

Matthew: Now moving on to Tilray. Most people are familiar with Privateer for Leafly and now Marley Natural. Can you help us understand what Tilray is in the Canadian market?

Christian: Sure. So, you know, just a little background on the Canadian market. This year, April of this year, it switched from essentially a quasi-legal market to a fully legal medical market, and the switch took place on April 1st of 2014. And so what essentially happened about a year and a half ago we got invited by Health Canada to essentially evaluate and potentially invest in applicants to grow and distribute medical grade cannabis to patients all across Canada. You know, we interviewed probably about 50 different companies that essentially threw their hat in the ring. And we never got comfortable with either their business plan or the economics or some of their techniques. And so we essentially put together a proposal ourselves to become a licensed producer in Canada.

And so January of this year we got approval to essentially build a facility licensed and sanctioned by Health Canada, and then late March we became I think the fifth or sixth licensed producer in the country. And so since April we’ve been shipping continuously to medical cannabis patients all throughout Canada. So we are, Tilray is one of the 13 licensed producers in a regulated and sanctioned by the federal government of Canada to grow, harvest, distribute and ship medical grade cannabis to patients all throughout Canada. The biggest differentiator of this model is it doesn’t allow for retail. So we essentially ship direct to patients’ houses all throughout the country.

Matthew: Yeah that’s a big difference. I mean, the Canadian market, that’s just one way they’re different. I mean, can you highlight a couple of other differences you see in your mind to contrast the US market to the Canadian market and how they do things differently?

Christian: Yeah. So I mean it’s definitely the most stringent regulatory environment in the world, but we think that’s a good thing. You know, we’ve built a $25 million, 60,000 square foot, state of the art production facility on Vancouver Island in British Columbia. You know, we have 40+ strains in cultivation at the facility. You know, we see it as a, you know, $1 billion market over time, but you know we’ve also assembled a team of, you know, 100+ professionals that are dedicated to the science and the safety and the ethicacy of medical grade cannabis in Canada. So, you know, with those tight regulations comes with, you know, essentially a better box that’s put around an unregulated system. So it’s been a really exciting time up in Canada as well.

Matthew: Now I understand that Tilray has done some research or is doing some research on cannabis helping PTSD patients. A lot of people are really interested in this. Can you tell us a little bit about your findings if it’s not too early?

Christian: Yeah we’re currently seeking regulatory approval to conduct Canada’s first clinical trial examining the therapeutic benefits of medical cannabis for veterans, first responders and sexual assault survivors suffering from post traumatic stress disorder. So we’re conducting this study in partnership with the UBC, so the University of British Columbia and expect to be able to share results two years after it’s approved.

Matthew: Do you get a lot of applicants from returning from theatres of war and things like that?

Christian: Yeah, we’re still going through the approval process, but we’ve aligned ourselves with different industry groups that service those patients essentially. So there will be a significant population for us to choose from when we hit the go button.

Matthew: So British Columbia, Vancouver in particular kind of has two things at odds here. I mean there is people visiting dispensaries. I don’t know if they’re called legal dispensaries or not, but purchasing cannabis and then there is the medical which can only be delivered by mail. Do you see these things kind of reconciling and dove tailing at some point in the future? Do you have a sense of that or is it just too early?

Christian: It’s still pretty early. You know, there was an injunction put in place around the April 1st timeline when the MNPR was essentially born. You know it’s very similar to what’s happening in the United States as well. You know, take Arizona for example that has state license dispensaries, but it also has legacy dispensaries from a Compassion Care Act. So we see conflicting systems really all over the world and it’s really no different. You know, the way we look at it as, you know, we’re trying to be part and be stewards of a regulatory environment just because we think ultimately it produces better quality, better security, better ethicacy. It helps us with clinical trials. It allows us to create real data, and that real data makes real change. And so we work harder than a lot of people in this industry and we jump through more hoops, but we think ultimately that’s what gets us to a world of less prohibition.

Matthew: Now we’ve interviewed Greg Wilson of Vida Cannabis in Ottawa, and Bruce Linton of Tweed also in Canada. These companies are creating just absolutely huge grows. How does Tilray’s grow size compare and is the size of the grow the most important thing or what other variables do you look at?

Christian: Yeah. So we currently have a 60,000 square foot, state of the art research and production facility on Vancouver Island. Pending regulatory approvals, we have plans to expand in a second facility that is, you know, four times larger than their current size. You know, I don’t know if bigger is essentially better at this point. You know there’s still a lot of growing pains in this industry. You know, there’s a lot of people entering this space that might not know cannabis very well, and then there’s another contingent of people that have been in the industry for a long time that don’t understand the business behind it. But we really focus on, you know, quality, safety and security. That’s kind of the model that Health Canada has set up, and that’s what we adhere to. You know, we are growing at a very rapid cliff, but going, you know, launching at an enormous size, you know, I don’t know if there are efficiencies gained by coming out of the gates with that model. And the whole market’s evolving too, right. It started at, you know, patient zero. It’s not like we were able to transfer a whole system of quasi-legal patient base over to a legal patient base overnight. So it’s an evolving system, and we believe in an evolving business plan to go along with that.

Matthew: I know it’s a hard thing to predict the future, but in the months ahead what do you think about the supply and demand dynamic both in Canada and the United States?

Christian: Well, you know, it’s an interesting question. It’s a great question. You know right now supply, you know, anything that’s grown or produced is being sold, right. I mean that’s the reality, and that’s a fact of what’s happening. But back to your earlier question, you know, if you start seeing a big influx of, you know, big box, you know, grows and they all enter the market at the same time, you know, there’s a potential to see an excess of supply. And you know, what does that do? I mean it changes the fundamental economics of an industry, but you know, as Privateer’s and Privateer’s Holdings and the way we think about that is, you know, we think about this in terms of brands. And we think about clean mature brands that, you know, patients and consumers can trust, and that’s what we focus on right. We’re focusing on the real long term play of building value and creating quality, safety and security around a product. And you know, when you talk about, supply, that essentially should not matter because we’re creating global, reliable brands.

Matthew: Now for potential or prospective entrepreneurs out there that are considering getting into the cannabis industry, what are the big problems you feel like need to be solved?

Christian: You know, banking is probably the highest on my concern list. You know I think once banking is changes, there’ll be a domino effect for the better. You know, if you’re a young entrepreneur, this is really complicated. This is the most complicated industry I’ve ever been a part of in my lifetime. You know, state laws vary, you know, county laws vary, city laws vary. It all varies, right. And there’s this conflict, and it’s just not as easy as entering the space and, you know, creating a billion dollar company. There’s a lot of pitfalls that you can easily encounter and there’s a lot of mistakes that can be made.

So you need to take a little bit of time to research the industry and research the players and the people that have been in the industry for a while and the people that are entering the industry. There’s not a lot of real good information out there. There’s a lot of white noise. There’s a lot of people that make proclamations, you know, good, bad, or indifferent. And it takes a while to sift through what’s real and what’s not. You know, and entrepreneur needs to due diligence on whatever sector of the spaces they plan on entering.

Matthew: Now a lot of people in the cannabis community look at Privateer as among the most savvy individuals in the space. When you look out on the horizon 2016 and beyond, do you see cannabis being removed from Schedule I list of dangerous drugs?

Christian: Yeah. You know, we hope. That’s our hope, but we, you know, see something, some major changes in the next three to five years. You know, it’s hard to put a date on that, but you know we, yeah we have our fingers crossed and we hope that happens.

Matthew: And as we close Christian, how can listeners learn more about Privateer and the growing portfolio of companies?

Christian: So yeah you can go to you know from there you can see a list of our portfolio companies. You can read more about our team, our management team and other managers within the group. You know, there’s a lot of news articles on us, and there will be a lot more forthcoming. You know, we generally have a lot of fairly exciting announcements every couple of months, and you know we have a half a dozen really exciting things that we’re working on right now.

Matthew: Great. Well Christian thanks so much for being on CannaInsider. We really appreciate it.

Christian: Yeah thank you Matt. I enjoyed it.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at That's Have a suggestion for an awesome guest on, email us We would love to hear from you

Colorado’s Cannabis Czar – Ron Kammerzell, Lessons Learned and How Edibles are Changing

Ron Kammerzell

Ron Kammerzell is the Deputy Senior Director of Enforcement at Colorado Department of Revenue, he is often referred to as the Colorado Cannabis Czar.

What you’ll discover in this interview:

– How edibles regulations are changing

– Lessons learned by Colorado regulators

– A look at banking for cannabis businesses

– Excise taxes on cannabis going forward

– and More

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at That’s Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at Now here's your program. Our next guest is Ron Kammerzell, the Senior Director of Enforcement at Colorado Department of Revenue. Ron is often referred to as the Colorado Cannabis Czar. Welcome to CannaInsider Ron.

Ron: Thank you very much. I’m glad to be here.

Matthew: Now before we get started, how do you feel being referred to as a Czar? You seem like a nice guy, not someone that’s very Czar-like.

Ron: Well it’s kind of an interesting twist. I don’t know that I’ve ever been referred to as a Czar before, but certainly we’ve been very involved with trying to get this program off the ground. So you know, I’ve probably been called a lot worse.

Matthew: Me too. Can you give listeners an idea of what your job is exactly and how it relates to cannabis?

Ron: Sure, let me give you just a real quick, broad overview. I’m the Senior Director of Enforcement. So I have management oversight responsibilities for gaming, racing, liquor, tobacco, auto industry and marijuana in the state of Colorado. So it’s kind of a varied group of things that I’m responsible for, but in many respects a lot of the things we do in some of these other regulated industries have really translated well to the marijuana industry.

Matthew: And what was your background before becoming the Senior Director of Enforcement?

Ron: I was the Director of the Division of Gaming, so regulating limited stakes casinos in Colorado, for about seven years. And prior to that I was also employed as a criminal investigator with the Colorado Division of Gaming.

Matthew: And one thing I want to point out for listeners before we get into the cannabis-specific questions is that if you live outside of Colorado, the things were talking about are very pertinent today because Colorado’s under a microscope, and a lot of other states are looking at what’s going on here, and it’s very likely that whatever state you look in one or two things will probably be taken from the Colorado play book. And if you know that ahead of time, you’ll be in a good position to understand what’s happening. So as we dive in Ron, looking back at 2014, how do you feel like legalization went?

Ron: I think given the very aggressive timelines that we had, we’re pretty pleased with how things went. The launch of retail marijuana on January 1st went, you know, pretty smoothly. And we’re please with where we are today. Certainly we recognize that we’ve got… we continue to have work to do, but we’re making really good progress.

Matthew: And based on the regulations and the future changing regulations, what do you see cannabis businesses doing really well? What are they adopting well that you think they’re doing a good job?

Ron: Well I think they’ve really embraced the concept of seed to sale tracking which is obviously a critical component with respect to the Cole Memorandum. And the federal government, they’re very concerned about diversion. They want us to have a closed-loop system. And our licensees have really embraced that and has really done a good job of implementing that tracking system. Also with edibles, although there’s been a lot of negative press related to edibles, I can say that the industry’s been very responsive. After we determined that we had some challenges and some issues with edibles and overconsumption, the industry’s really, on their own part, taken a voluntary position really to get ahead of edibles manufacturing leading up to regulation. So, you know, they’ve really done a responsible job in that way.

I think they’ve also done a good job of ensuring that they continue to maintain a dialogue with not only the division who regulates them, but also the General Assembly. And I think as long as we continue to have a really good, open dialogue that ultimately results in really good public policy.

Matthew: Now you mentioned the Cole Memorandum or the Cole Memo. Can you just help us understand what that is and how it affects cannabis businesses?

Ron: Sure, well the Cole Memorandum was issued by the Department of Justice, and it was issued back in August of 2013. And it really gave guidance to states that were implementing the legalization of marijuana on some top priorities that the regulatory bodies as well as the states should focus on. And really the big three for us out of the eight is ensuring that we prevent diversion to other states, making sure that we’re protecting kids, that we’re keeping it out of the hands of our youth, and then also making sure that we’re keeping criminal and corruptive elements out of the marijuana industry. They don’t want this to be a front for organized crime or drug cartels to come in and profit from it. So those are really the three major priorities that we’re really focused on as a regulatory agency. And I think the state as a whole has really done a good job of focusing on those things.

Matthew: As you mentioned, there was some hiccups around edibles. Can you describe what happened that you didn’t anticipate and then how to mitigate that problem going forward?

Ron: Sure. Well we have a couple of very highly publicized incidents, really tragic incidents where it involved at least the possible overconsumption of edible retail marijuana products. And I think the challenge there is, you know, we had about two and half to three years of experience with the medical marijuana industry and regulating that. They also have edibles, and we just didn’t see those overconsumption issues on the medical side. However, I think what we’re seeing on the retail side is we’re seeing new consumers to retail edible products and even people who have perhaps even smoked marijuana have not had the experience of ingesting edible products. And there’s certainly a different physiological reaction to ingesting marijuana versus smoking it.

So I think that was something that we didn’t anticipate. We figured that recodifying [ph] what we already had on the medical side was going to be adequate for the retail side. But it clearly is not the case because we have a lot of educational gaps. If you look at the profile of a retail consumer versus a medical patient, medical patients have a very thorough understanding of the effects of THC and the effects of ingesting THC. And we have that education gap on the retail side. So in order to really focus on trying to make it a safer and a better experience for the retail consumer, we really needed to focus in part on education, and that’s really where the industry has stepped in, and again voluntarily have really done a good job of educating the consumer when they’re in a retail store about how to ingest retail marijuana, being sure you’re going slow, making sure you’re giving adequate time to feel the effects of it. But also really making sure that the consumer clearly understands what a serving size of THC is and if they’re purchasing an edible that has more than 10mg of THC in it, that we give them clear guidance through marking the product or demarking and scoring the product so that they can break off a serving and know that it’s just one serving of THC.

Matt: Now on February 1st the child resistant packaging rules will continue to expand. Can you tell us a little bit about that?

Ron: Of course we had some regulations on child resistant packaging, but what we’ve done is really more than anything in the edible, revisions to the edibles rules is really clarify that. So if a manufacturer or retail edible product is going to manufacture a single serving or 10mg of THC in their edible product, the child resistant packaging must be on the product but it only has to survive the first opening. If they’re manufacturing a product that has multiple servings, so let’s say as an example, a cookie or a chocolate bar that has 50mg of THC, presumably that’s five servings of THC, as we’ve defined it in the rule. And their child resistant packaging has to survive the first opening and remain child resistant beyond that first opening. So you’re looking at things like child resistant zip lock bags which are very popular in the industry, squeeze bottles that have child resistant properties and capabilities. So things of that nature.

Matt: What misinformation is out there among cannabis businesses about regulations and how they should interpret them.

Ron: I think probably the most challenging part of the regulatory scheme is the labeling part of it. A lot of the requirements for labeling are built into the statute, and it’s a laundry list of things. And so I think it’s very difficult for our licensees to comply with those standards. And there’s been a lot of discussion about do we have too much information on our labeling requirements and does it become white noise to the consumer. So things like “Keep out of reach of children” becomes white noise or the actual serving size. This has, you know, 50mg of THC, serving is 10mg, there’s 5 servings in this package. There’s so much information that’s required by statute on the actual labels the concerns from the industry and from others is it becomes white noise after a while.

And so there may be an opportunity here that the legislature perhaps might look at some of the labeling requirements. The industry is also looking at that this year during our General Assembly session to see if there’s some things that we can do to change that and make the labeling more effective and really do what it’s supposed to do for the consumer.

Matt: Now switching gears to taxes. Is there an estimate in how much tax was collected from cannabis businesses in Colorado in 2014?

Ron: I don’t think we have the final numbers available, but we’re looking at right now and I think it’s through November that we’ve collected about $56 million in taxes.

Matt: Great. And for listeners that don’t understand the production limits, can you give an overview of what they are? How will production limits change in the future based on demand studies or something else? I mean how do you gage, you know, gage the production limits to make sure the market exists in way that’s functional for everybody?

Ron: Right. So in the summer of last year we put some production limits in place for retail marijuana. We have tiers at the cultivation level. So we have a Type 1, Type 2 and Type 3. A Type 1 tier restricts the ability of a cultivation facility to grow no more than 3,000 plants. A Type 2 is 6,000 plants, and a Type 3 is 10,000 plants. So part of the production restriction that we put in place is new entrants into the market because vertical integration went away (13.24 unclear) in October. So we have new entrants into the market that maybe only want to be a cultivation. They don’t necessarily want to be a store. So any of the new entrants into the market have to start at that lowest tier, the 3,000 plant limit. And order for them to move up into a higher tier, they have to demonstrate to us that they’re selling at least 85 percent of the marijuana that they’re producing over (13.50 unclear).

So they’ve got… they have to demonstrate that they’re able to sell the product that they’re producing, that they’re not overproducing because clearly our biggest concern is you have too much on hand inventory and overproduction will really drive down the prices of marijuana and really create a stress point or an incentive for people to move marijuana to other markets where the prevailing price is much higher. So that’s kind of the mechanism that we’ve used to do that is if you want to move up your production, you have to prove to us that you’re selling your marijuana in the regulated market at least 85 percent of what you’re producing. We will likely, in fact, in the rules that we promulgated this summer we said that we were going to revisit this. We are going to update the market demand study that we did last year. The good new there is we have a full year of data out of our metric or inventory system that can be utilized to really help us better understand the market here in Colorado. And so once we have that study updated that will really be a springboard for us to take a look at our production to see if we’ve got it right. It’s a challenge for sure, and we’re trying to hit that sweet spot where or to the extent possible we’re balancing supply in demand within the state and it’s not an easy task.

Matthew: I’m interested to hear what you think the price should be per gram, for example, to eliminate the black market or move it down to something that’s just a tiny, tiny piece of the market. I’ve heard people talk about, you know, certain price points where the black market would essentially go away because it’s just not profitable anymore. Do you have any ideas in mind where the price per gram, if it reaches this level, if it drops to this level, it will essentially eliminate almost all of the black market?

Ron: You know we haven’t really looked at that to that granular of level at this point because in large part because just has changed so much in the last year. I mean when retail marijuana opened in January of course we had shortages because there was more demand than supply, and we’re starting to see that correct itself as we have more retail cultivation facilities and retail stores come online. I think it’s really too early to really at least make a confident response to that. I think time will tell, but I think that’s something that we’re really interested in looking at. And you know, the other comment is, and I’ve said this before, is we want to do everything in our power to shrink the black market. We’ll never eliminated it.

Matthew: Right.

Ron: I just don’t think it’s realistic to assume we’ll totally eliminate the black market. But we want to do everything we can to minimize it in the state.

Matthew: Now currently only recreational marijuana is subject to testing. Will medical marijuana be subject to testing soon?

Ron: Well the medical marijuana program just went through a Sunset Review from the Department of Regulatory agencies in that it’s required by statute that we go through that Sunset. And one of the recommendations in their report is to harmonize the testing for retail with the medical marijuana regulatory framework. And I think wherever possible we are really interested in harmonizing the two because the reality is is we have any of our retail licensees are also medical licensees. Many of their operations are in the same buildings or next door to one another. And to the extent we can harmonize them so that the rules are the same on both sides of the fence. It makes it easier for our licensees to comply. And you know, we’re really interested in obtaining voluntary compliance from them. So that’s one critical piece of that is to harmonize the testing. And that’s just one reason. The reason is it seems strange to test retail marijuana, but then the marijuana that’s being used for medicinal purposes by patients is not tested.

Matthew: Right it does seem a little strange.

Ron: Yeah, it almost seems backwards really, but it’s just how the evolution of the industry here has occurred. So I think, you know, we recognized and the folks that did the Sunset review recognized that that’s an important component that we bring medical marijuana into the fold of mandatory testing.

Matthew: Now some people say that the taxes on recreational marijuana are prohibitive and lead to more gray and black market activity. What’s the future of taxation on marijuana both medical and recreation going forward?

Ron: Well you know that’s really up to the General Assembly. When they passed Proposition AA, it gave some latitude to the General Assembly to change the excise tax and the special retail sales tax on retail marijuana. I’m not aware of any movement afoot to change the general sales tax on medical marijuana. I think the general thought is that by changing that you may limit the accessibility of medical marijuana to patients, and I think that that’s probably not a way that the General Assembly would move toward. But I don’t speak for the General Assembly, but I think they’re going to continue to monitor it. And this summer they have an interim revenue committee that took a look at the tax revenues. So I think they’ll continue to monitor it and they may make adjustments over time. They certainly have the authority to do that.

Matthew: Okay so the excise tax on clones, flower and trim has gone up from 2014 to 2015. This is something that the General Assembly decides then or there is some leeway within the Department of Revenue?

Ron: The average market rate, which is the average wholesale price of those products upon first transfer out of a cultivation facility, is set by the Department of Revenue, actually by our taxation group. And so what they do is they look at the wholesale prices and they actually calculate an average. It’s prescribed in statute. The General Assembly gave us very specific formulas to follow. And so based on the information collected by the taxation group on the wholesale price, that’s why the average market rate changed this year.

Matthew: Now going back to taxation or collecting revenue, do cannabis businesses actually drop off cash at your office? How does that work?

Ron: A very high percentage of them do. We have actually developed a system for them to pay their taxes with cash. They pay their license fees with cash. And we, you know, of course had to take additional security precautions with that and you know, have counting machines and some additional equipment to actually process that. But it’s important to note that they’re not the only businesses. You know, there are other businesses within the state that on occasion will pay with cash. So it’s not a concept that’s totally foreign to us, but certainly the volume that we’re seeing from the marijuana industry has made us have to take some additional precautions.

Matthew: We talked about the Cole Memo a little bit and there’s also news of a cannabis credit union opening up here in Colorado. Do you think 2015 is the year that banking will be resolved and cannabis business will be able to partake in just traditional retail checking accounts?

Ron: I certainly hope so. It remains to be seen. I can’t predict what the US Congress is going to do. I know that’s an issue that’s on the radar of many of the Congress folks from Colorado. I know they understand the importance of it. And I think the state is really doing everything they can from the state level to, you know, develop this co-op and I think it would be a huge victory to have banking for the industry because quite frankly I think it’s just a general public safety concern for the state and the communities that have these businesses. But also from a regulatory standpoint it would really improve our ability to have an audit trail to go in and audit taxes and audit the movement of marijuana in the state. I think it would enhance the regulatory framework as well.

Matthew: Have any other states reached out to you for help or guidance in setting up their cannabis programs and regulations?

Ron: We’ve had a lot of contact and interaction with a number of states and countries quite frankly. We’ve had some interaction with Switzerland, Columbia, Uruguay, Canada, France, Germany and pretty much just about every state that’s contemplating legalization of marijuana in one form or another in the United States. And in fact today I’m attending a conference of the Colorado Association of Chiefs of Police on marijuana, and we have a lot of folks from different states that are attending this as well. We’ve met with Oregon and Alaska. Of course as we were implementing retail marijuana we were really talking to Washington State almost on a weekly basis. So there’s been a lot of interaction with other states and other countries.

Matthew: So with other states and other countries that are setting up their regulations, what are the top questions or problems they’re trying to solve and get guidance from you?

Ron: Well I think the number one question we get is what are the most important things for us to get right. And I think our biggest response to that is give yourself plenty of time. Of course we had very aggressive timelines here in Colorado that were established in large part in Amendment 64, but also through the legislative process. So give yourself ample time to set up the infrastructure and make sure that you have proper funding for the program. And you know, make sure that you’re bringing all the stakeholders to the table as you start to begin to set up public policy on this issue. If you don’t bring all the stakeholders to the table and identify the issues upfront, that results in really problems with your public policy, with your regulations, with your statutes. And the more you can get those issues identified upfront and really get them address in the implementation of the public policy, the better off you’ll be.

Matthew: Ron we talked a little bit about what cannabis businesses are doing well and working with the Department of Revenue. What could they do better in 2015?

Ron: Honestly we’ve been really pleased with the level of compliance we’ve had in the industry. Is it perfect, no. A perfect example of that is underage compliance. We modeled our underage compliance program after the Liquor Enforcement Division, what they’ve been doing for years where we sent operatives into try to purchase retail marijuana as under 21 year old. We’ve had an incredibly high compliance rate with that. We’ve had some issues, some noncompliance issues, but they’re pretty minimal considering the scope of things. And you know, comparing that to the liquor industry, you know, we’re probably slightly higher in our rate of compliance right now on underage sales compared to the liquor industry. So I think that’s something they’ve done really well. Again I think they’ve really embraced the inventory tracking model, and they’ve done a good job with that. I think we’ve had some challenges with labeling and, you know, but those are to be expected as we roll out a pretty sophisticated regulatory model. We recognize that there’s a lot of opportunities for us to educate the industry through the compliance process and make sure that they understand things. I think overall we’re pretty please where our compliance level is right now.

Matthew: Great. I love to hear that. In closing how can listeners keep abreast of all the work you’re going at the Department of Revenue?

Ron: Well certainly visiting our Department of Revenue website. We have a lot of information on taxation there, and visiting the Marijuana Enforcement Division tax site or website. You’ll see a lot of activity related to rule making. We’re currently working on putting together an annual report that we anticipate will be distributed widely and will be very interesting to most folks. And really starting to put together some monthly reporting on the state of the industry here in Colorado. And it will pull in information from licensing, from compliance, from aggregate inventory information. I think it will be really important, and it really dovetails nicely with, you know, a big part of our regulatory framework as being transparent to the public. And so the more we can share information with the public on the state of the industry here in Colorado, I think is better for us. Tell your listeners to stay in tuned on that, watch the website and we hope probably by the end of the first quarter to have some of that information out there.

Matthew: Great. Ron thanks so much for being on CannaInsider today. We really appreciate it.

Ron: My pleasure.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at That's Have a suggestion for an awesome guest on, email us We would love to hear from you.

Cannabis Consumers are Turning to Vape Pens Find Out Why With Ralph Morgan of O.pen Vape

Ralph Morgan of Open Vape

Discover the latest in cannabis vaporizer technology from co-founder of O.penvape Ralph Morgan. Learn why Ralph thinks you are wasting 80% of your cannabis smoking a joint versus vaping.

Key Takeaways:

– How you can pick a strain of oil that works for you
– A new line of cartridge that is just cannabis flower oil is coming
– Learn why O.PenVape uses propylene glycol in their vape cartridges

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Each week I’ll take you behind the scenes to interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at That’s What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at That’s Now here’s your program. Prefilled, ready to go cannabis vape pens are very popular and becoming more popular every day. We’re going to find out why that is and what you should know about prefilled vape pens from the co-founder of O.penVAPE, Ralph Morgan. Ralph, welcome to CannaInsider.

Ralph: Thank you. Thank you for having me, pleasure to be here.

Matthew: Ralph to give us a sense of geography, can you tell us where you are in the world?

Ralph: Yeah we currently operate in five states in the US, and we are continuing to add licensees in states to that ever growing list and also looking abroad in Europe.

Matthew: How great, and just to set the record straight I know people say Open Vape and O.penVAPE. How do we pronounce this correctly?

Ralph: Yeah we, both are correct. O.penVAPE is the correct pronunciation. Often times it’s an O pen which we like equally as well.

Matthew: And can you give us a high level overview of what O.penVAPE does?

Ralph: Absolutely. O.penVAPE is a company that provides a wonderful vehicle for adjusting cannabis, and that of course is the personal, portable vaporizer. And we license our IP our recipes to folks in other states that are licensed to extract organically cannabis that goes into those pens.

Matthew: How did you get started in this industry? What’s your background?

Ralph: My background is in healthcare, sales and marketing in the healthcare industry. I worked for companies like Stryker that sold implantable orthopedic devices. And got in this industry by first realizing the incredible medicinal advocacy of it, and learned very quickly that there was a demand on the market for a product that would deliver a unified, repeatable and dependable dose of cannabis. And so from that we created O.penVAPE which is our own line of pens so that we could control quality and offer a product to folks that was healthy and organic and that’s been very popular. We’ve had a lot of fun so far with it.

Matthew: And can you describe how O.penVape works in detail? I mean there’s probably an atomizer, there’s the liquid, the battery. Can you just give us an overview of what’s actually going on in the device?

Ralph: Sure. So you have the battery, and this is a lithium ion battery, so very similar to all the batteries that are in our cell phones. So they’ll last typically for about 1,000 charges. And there’s a microchip on top of that batter that tells it to do things. For example to turn off in a certain period of time and to reach a certain temperature. Then you have the atomizer or the cartomizer which is the area that has the fluid in it as well as the heating element. And that heats up and vaporizes as someone drags or pushes a button and inhales.

Matthew: So the battery lasts roughly, did you say 100 or 1,000 uses.

Ralph: About a 1,000 charges, correct.

Matthew: Wow and then what about the atomizer? Do those have to be replaced typically?

Ralph: Those do. Those need to be replaced much more often, and we sell our cartridges as a disposable. So one time use, and what this ensures is quality. The cannabis oil that’s inside of these is very expensive. So the last thing we want is for those to malfunction or leak. So each time someone gets a new cartridge they’re also getting a new heating element.

Matthew: Okay. And I’m imagining, I don’t know if there is or not, is propylene glycol in the liquid? Can you explain what that is if it is and tell us exactly what it’s for?

Ralph: You bet. We absolutely do not use propylene glycol and there’s a lot of what sounds like subtleties differentiating polyethylene glycol which is what we use and what the electronic cigarette world has used which is PG or propylene glycol, and VG vegetable glycerin. Those two really like nicotine and mix well. Cannabis really loves polyethylene glycol and more importantly it’s a product we use because it’s safe, and it’s something that the pharmaceutical industry has used for decades for inhalants. Bayer, Astra Zeneca, Johnson & Johnson for example all use polyethylene glycol as a product that helps suspend something and used for an inhalant for children.

So with that we were very delighted to see that we had a safer alternative to what was largely and still used in the market which is PG or propylene glycol. So polyethylene glycol is what we use to suspend the cannabis, and we are also getting ready to launch a pure line that’s just cannabis which is a lot stronger. And we’re delighted to offer both, but we’re excited to launch the pure cartridge line here very soon.

Matthew: So the polyethylene glycol , is the purpose of that just to suspend the cannabis oil and make it viscos? Is that what’s going on there or just so we can understand the purpose of what it is?

Ralph: Yeah so there’s a couple of things it does. It does suspend the cannabis and it mixes with it and it changes the viscosity and it basically makes it thinner so that you’re not left with a cartridge that has 40 percent of the product left in it once it’s done. So it allows for the best value. So you’re getting all of that cannabis oil that you’ve purchased out of the container. And it also acts as a lubricant so it helps vaporize the particles or the cannabis oil. And again we didn’t invent that. That’s something that we recognized from Big Pharma and realized that hey this can be applied to cannabis just as it’s been applied to many medicines that are out there.

Matthew: And how do you purchase the cartridges? Is it something where you buy the housing of the device of the O.pen and then you just keep on as you use a cartridge and discard it, you just grab another one?

Ralph: Yeah so there’s two ways you can purchase. You can go online to and you can buy all of the ancillary equipment like the battery or an empty cartridge. We’ll soon sell what we’re calling the O.penVAPE kit which will be everything including the mixing tools minus your own oil. And that can be for any essential oil. For example, you may want to vaporize chamomile or cava for relaxation effects. But if you want to buy the cannabis, that of course needs to be purchased through state licensed and recognized dispensaries and you can text O.penVAPE to 20300 to find a location nearest you, or you can go to your favorite local dispensary who will more than likely carry the O.penVAPE product, and again in those states that are licensed to do so.

Matthew: Now what about listeners that want specific strains of oil with the pen? How does that work? Is that possible?

Ralph: It is. So many of the cartridges that we sell and the oil that we make are strain specific. So in Colorado for example probably half of the product out there is strain specific. The other half is separated to at least sativa indica hybrid which is really nice to enjoy those differences. With the strain specific people may find a strain that really speaks to them, may speak to their ailment or that may just have a really nice affect on them and they can enjoy the affects of that.

Matthew: So apart from THC level, what other information about the oils on the cartridge as far as are there CBD levels or what else is on there?

Ralph: Yeah so testing’s mandatory in Colorado, and we’re seeing that of course take place with the other states as they catch on. So we include the test results which give you the cannabinoid profile that includes THC of course, but also CBD and CBN. CBD probably being the most interesting other bit of information, and we have CBD rich cartridges where we try to have not just a trace of CBD, but a really nice CBD rich cartridge that’s derived from genetics that we’ve grown or that other leading growers in the space have grown and we have extracted.

Matthew: Okay. And is there a general ballpark, I’m sure it varies from state to state and day by day, but is there a general idea for the price of a vape pen or a cartridge?

Ralph: They come in three sizes, 150 mg, 250 mg and 500 mg. The most common is a 250 mg and it’s for sale on average between $25 and $40 for a cartridge.

Matthew: And what does the year ahead look like for O.penVAPE? You mentioned that there’s some expansion and licensing going on. What does 2015 look like?

Ralph: Well 2015 is going to be an exciting year. Expansion definitely, we’ve got six licensees to date. We’ll have another four in the next 30 days. So 2015 is definitely a year of expansion. We’re also going to be launching a O.penVAPE 2.0 which we’re very excited about. We brought on a CEO in 2014. His background is in the semiconductor business. So we’ve invested heavily on the technology side and really looking forward to having some of those products come out the pipeline. We’re also going to be introducing products that are possible because we are isolating cannabinoids. I think that’s part of the future here as we move forward is the continued purification and sophistication of extraction. So being able to extract and then isolate those cannabinoids allows us to make custom blends for either ailment specific products or to really hone in on what kind of effects people are looking for and what we can safely and repeatedly offer for folks. So I think those are the top three things for 2015 which is additional growth and the continued purification and new technology about to come on the market.

Matthew: Now apart from anything that O.penVAPE is doing, is there just anything you see in the cannabis industry that excites you?

Ralph: Boy I think there’s lots of things in the cannabis industry that are really exciting. One is the continued sophistication of the folks in the space and that draws investors which continues to raise the bar in the high water mark of products and safety and sophistication. We see it every day. We see new and interesting marketing doing interesting products. And with all these things we see the continued acceptance of the industry which is really exciting. It’s really more than just an industry we’re all part of. It’s really a movement and a social movement and it’s really exciting to be a part of.

Matthew: So I don’t think a lot of people know that O.penVAPE played a small part in Weed the People. Can you talk about that a little bit?

Ralph: Yeah so Weed the People is a film talking about just that, about this mission and this social change that we’re all part and led by Rikki Lake. And she reached out to us and we appreciated that. She recognized us as folks in the space that were leaders in the space, and she asked if we would help her cause, and we jumped at the opportunity and we donated some Go Pens and some devices to help her raise money for that cause. And it’s been a lot of fun to work with her and work with other celebrities that have reached out to support again the cause. So I think we’re going to see a lot more to come as cannabis hits mainstream. I know there’s several shows hitting including Pot Barons. There’s a lot of attention on this new industry that’s growing faster than the smart phone industry.

Matthew: Wow, that’s saying a lot.

Ralph: It sure is. We all love our smart phones and here we are in an industry that’s growing even faster than that. It’s incredible.

Matthew: You mentioned a little bit about isolating certain cannabinoids. That is something that is really interesting because we hear so much about THC, CBD seems to kind of be Justin Bieber rock star of the moment, but is there any other cannabinoids or plant compounds that you look at and you say wow this is, there’s really interesting possibilities here?

Ralph: And you mention Justin Bieber being the CBC of the industry. If that’s the case then technology that can isolate cannabinoids would have to be the record label.

Matthew: Right.

Ralph: So we’ve invested in equipment that can isolate the cannabinoids. So the genetics will always be important, and you can get, you can enjoy the benefits of CBD rich raw material as well as high THC raw material, but if you can further isolate that and have a pure oil that’s CBD rich or any other cannabinoid that you’re trying to isolate, then it opens the door to a whole other discussion. And that is products that could be ailment specific. For example if you have someone who is suffering from seizures, they may want a blend that’s high in CBD but still want to take advantage of the entourage effects or they still want some THC but they want the full array of other cannabinoids. And they want a special ratio, and that may be driven by the consumer or it may be driven by a physician depending on if we’re talking about medical or rec.

So for us we’re really excited to be invited to the table of a lot of research that’s being done or about to start, as well as, is offer products that we haven’t been able to offer before, the industry hasn’t seen before. So really excited about that. You can liken it to a microbrew, and right now everyone’s just making beer, but now we’re going to be able to offer, you know, something that has a lot of hops for the people that prefer that. And to lay on top of that, a medicinal effect is absolutely exciting for us. We don’t want to be in the way of Big Pharma, but we certainly want to push the envelope with this incredible plant and see what it can do. We’re all aware of the magic that it’s capable of. And so what we’re seeing, what we’re going to see this year and in the future is that being further understood, and we’ve got so much to learn. So really excited about the isolation of the cannabinoids. It’s going to be a fun fun year and we’re really looking forward to that.

Matthew: And you know when people smoke flower in a bowl there is obviously some lighter fluid heat and combustion going on, and you’re not necessarily getting everything you want. You’re getting some of what you want, but there’s some other things that you don’t want in there. Do you ever look at what’s actually happening when people use a lighter and combust the flower, and can you talk about that a little bit? Is there, not so much risks, but are you getting things that you might not want?

Ralph: I know when people smoke marijuana they’re getting carcinogens. They inhaling, you know, burnt plant matter, and that’s one of the many dangers of smoking. What I like about vaporizing and what we like to offer folks is the fact it’s an option that does not include that which is wonderful. Also there’s a wonderful economic aspect to it. When you smoke a joint you’re wasting, on average, about 80 percent of the cannabis due to it burning while you’re not inhaling it. When it’s in a vaporizer, of course that’s not happening. So it’s great value as well as a much safer alternative.

Matthew: Great. Ralph, as we close how can listeners learn more about O.penVAPE?

Ralph: Yeah to learn more about O.penVAPE they can simply go to the website and they can hit the contact us and we’re happy to answer any questions. We have several customer service reps that answer folks’ questions and that’s the best way to get answers to your questions. We take them all very seriously. Often times people’s questions are related to not just a preference but related to an ailment or an issue they have. So we’re very sensitive to the fact that people are using this medicinally and that comes with a lot of responsibility. We’ll be launching a blog soon and having regular updates as we do on Facebook and Twitter which are two other places that are great to go to for information.

Matthew: Thanks so much for being on CannaInsider today Ralph. We really appreciate it.

Ralph: My pleasure. Thank you for having me.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at That's Have a suggestion for an awesome guest on, email us We would love to hear from you.

Making an Emotional Connection with Cannabis Customers and Creating Safe Edibles – Maureen McNamara

Maureen McNamara

In this interview Maureen McNamara of helps us understand how cannabis business owners can make a connection with their customers, so customers stay loyal. Maureen also shares some best practices on creating edibles in the kitchen.

Don’t miss Maureen’s invaluable suggestions about making your cannabis business stand out.

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Each week I’ll take you behind the scenes to interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at That’s What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at That’s Now here’s your program. Many cannabis businesses have invested in compliance training for their employees, but after that is done how do they go to the next step and ensure employees have meaningful customer interactions. We’re going to find out the answer to that question today with Maureen McNamara from Cannabis Trainers. Welcome Maureen.

Maureen: Hello, pleasure to be with you.

Matthew: Maureen, for people to get a better understanding of where you are in the world, can you tell us where you are?

Maureen: Yes, I am in Denver, Colorado.

Matthew: Okay, and how did you get started in the cannabis arena?

Maureen: It was interesting. It was almost accidental. I teach classes, I’ve been teaching classes for, oh my gosh, training’s been my focus for about 20 years. And last year… in the beginning of every class I introduce myself and I get a feel for who’s in the room, where do they work, what are they doing in the world. And I had about 13 months ago, I had some folks in my class that make edibles, and I stopped in my track. This is the first time anyone who had come to one of my certification classes that worked in the cannabis industry, and I was fascinated, and I kept referring back to how what I was teaching would be applicable to their business. And from there it just started to grow. Month after month I had more and more people coming and then seeing the opportunity and the need to provide to the industry, I created a new company called Cannabis Trainers.

Matthew: And what does Cannabis Trainers offer?

Maureen: Our top two programs, definitely about responsibility, knowledge, compliance and we offer those classes to owners, managers, cannabis consultants, really anybody in the industry. Our top two programs, one is about food safety and the other is about responsible selling.

Matthew: Okay. Can you go into a little bit about what each one of those is, the food safety and responsible selling?

Maureen: My pleasure, sure. Sure. So the food safety class that I teach, it sounds pretty boring, dry cracker. But it is one of those foundational elements that they need and in fact, Matthew, here in Colorado it’s a requirement for recreational adult use marijuana edible infusers to be trained in food safety. And I think that’s a really positive move. And it will likely, as more and more states become cannabis friendly, that that will probably be a requirement within other states as well. But the food safety class I teach, I have been teaching it for 18 years and I’ve certified probably over 10,000 people, and what’s interesting and that I’m loving is customizing that for the cannabis industry. So it’s based on the model food code and all of the basic elements to food safety, but then I bring in the cannabis twist to all the different parts from receiving to cooking to infusing, all of those elements. And I think it’s widely and hugely impactful.

There’s some crazy statistics out there. Well I think they’re a bit crazy. They’re not crazy, they’re real. They’re real statistics from the CDC. The Center for Disease Control says that just in the United States about 58 million people get sick every year because of food borne illness. So that’s a huge one.

Matthew: That is huge.

Maureen: If we could see all your listeners as raise your hand if you’ve had a food borne illness, it is unpleasant.

Matthew: Yes it ruins your weekend for sure.

Maureen: It will ruin a couple of days. It’s not good. And I applaud the team that put together the rules here in Colorado by making that mandatory, part of the regulations. And I think it shows a commitment to safety and compliance and certainly with cannabis and cannabis edibles. Part of the population consuming that are medical patients. And people at most risk of food borne illness are people that already have a compromised immune system. So I know because the clients that have been coming to my classes are committed to creating a product and medicine that does good in the world, not that’s going to create all the symptoms of food borne illness that we shall not speak to right now.

Matthew: Yeah right. So if I have a cannabis related business or maybe an edibles business and I want to get up to speed with compliance, what’s the best way to do it from like a holistic standpoint? I want to build it into my business, not just have it as an add-on that kind of gets duct taped on.

Maureen: That’s a great way to say it because I find compliance to be a foundational element, shall never be duct taped. And honestly, Matthew, it’s one of those things where get a gallon of coffee, a comfortable place, maybe even some reading glasses because you’re going to be at it for a long time. And really read through the rules, read them. Read them from front to back, and I have done that several times, and feel free to take frequent breaks. But it is interesting and I think that’s the most comprehensive way to jump in is read the rules and then you will be likely, unless you have a strong legal background, a bit confused. And that’s where I come in. I have found it part of my job to read the rules, read them again, read them thrice and then create it in a way that’s digestible and easy to understand, easier to understand. But really that’s the place to get up to speed with compliance is to go front to back on them, and then make your list of questions and talk to an attorney, a client, a coworker, somebody else that can say how do you interpret this. And that’s something I’ve found really interesting. As I read through the rules and regulations to ensure I’m sharing with people how to be most compliant. There is room through interpretation. So I have a working relationship with the enforcement folk, and I call them often with questions.

Matthew: So you have this food safety course and now it’s kind of evolved into edibles. Is there some big differences there as far as food safety and edibles? It’s probably, is it the food safety plus so you’re doing everything you were doing at food safety and then adding specifics for the edibles people?

Maureen: That’s right. The food safety program I facilitate is already a well-established, five learning people already trained course that’s based on elements of the food code. Not based on elements, it is based on the entire food code. Now what’s different, at least in Colorado and that I’m aware of in other states, no one yet is making cannabis infused edibles with highly risky foods. I think I know business, now going to be a crazy example, here we go. Cannabis infused chicken, cannabis infused burgers.

Matthew: Foie Gras

Maureen: These are the things I am grateful for here and now in this moment don’t yet exist, although I’ve just inspired somebody to go create that. Good luck. Why I say that is because there are potentially hazardous foods and certain high risk foods, and most of our protein items are high risk foods. So your classic restaurant works with a lot of potentially hazardous foods. Where our cannabis infused edibles are generally more baked goods and chocolates and lozenges and candies and things like that. There isn’t an across the board, those are all safe, yet they’re typically safer. There’s a lot of science that goes into determining which foods are actually potentially hazardous; water activity, ph level, etcetera, etcetera. But typically I’d like put air quotes around that, most edibles are… look at your classic cookie. You can have your cookie, non-medicated cookie just on your shelf. It doesn’t require refrigeration. So when I’m leading these food safety trainings it is about customizing the conversation to their specific needs from certainly receiving food safely, who they’re purchasing from and how to receive trim or flower, what to look for. How to make sure we’re starting with the highest quality ingredients so that we’re assured that we’re creating the highest quality and safe edibles. And I know that the word safe has many meanings when we’re talking about cannabis from a food safety prospective, from a concentration prospective, all of that.

Matthew: So there is people that have experience in baking and creating edibles and infused products, and then they have this experience and then they come to your class. Is there any light bulbs that go off where they say oh my god I was doing X, Y or Z and that was really put me at risk.

Maureen: I love when experienced people come to my program. It delights me because I really… I facilitate in a way that it’s really pulling on all of my participants’ wisdom, savvy, street smarts. I call them stories from the streets as well. And so I really love when there are well-educated, everybody comes in with knowing elements. And I believe and in fact I ask in most classes what did you learn that you didn’t know before, and everybody hand… every hand goes up and like I poll on some of those details. I would say the biggest opportunity, and this isn’t the cannabis industry, this is anybody making, working with food is the basic, this is something we started learning decades ago, it’s personal hygiene. And it’s amazing. In fact I will throw down a challenge to your listeners to how long do we have to wash our hands, and there’s actually details about that in the food code, and it’s 20 seconds. And I would say most people, and I’m an observer of this when I’m out there in the world, wash their hands for about 5 seconds or less if they do at all.

Matthew: It’s the Happy Birthday song right?

Maureen: It’s Happy Birthday twice, you know the deal. You know the scoop. So this is the number one way to keep ourselves healthy so that we never miss a day of work, a day of fun, whatever it may be is our own frequent, proper, thorough hand washing. And so almost every class I meet people are like yeah, I could correct and coach my team to do that better, more frequently, more thoroughly. And then we talk about details with glove use, and there are some guidelines around that so that we’re making sure we’re making safe product. It’s been wonderful. I would say I’ve trained a lot of people in food safety and a lot of cannabis focused people as well, and they’re already doing a lot of this really well and that’s good to see.

Matthew: Now what is reliable vendor training? Can you explain what that is and also tell us if that’s required?

Maureen: It is the other of the top two programs that we offer. And it’s a class that I love, and I’ve actually been leading its sister version for restaurants and hotels, safe alcohol service for 18 years. And so I transformed and created a program called Sell Smart, and it is the responsible cannabis vendor training. And it really digs into the details of at point of sale for cannabis consultants, managers, owners, and it goes into security at an establishment, at a dispensary, all the laws and regulations that really pertain to the selling process. Details of checking IDs, how to handle tricky situations and our final chapter is a hugely important one, How to Educate Consumers or Patients to Consume Responsibly and Safely. And it’s interesting about it being required. In Colorado it’s a voluntary program and it is called the Responsible Vendor Act. And if people get their team trained and then every new employee is trained within 90 days, they are then designated and considered a responsible vendor. And it is a voluntary program and I look forward to seeing, as the years go on, what other states will choose. In Colorado it’s voluntary. It’s interesting, I would put a guess out there. Am I allowed to make guesses and predictions?

Matthew: Sure absolutely.

Maureen: Is that I’m seeing that many of the enforcement divisions in each state are linked or cousin/sisters of the liquor enforcement divisions. And I have a hunch that when alcohol training has been required in states, those states will also mandate/require safe cannabis selling training as well. But this really varies state to state.

Matthew: Okay. Now switching gears to leadership. In addition to some of the services you offer, you offer leadership coaching. Is leadership something that can be taught?

Maureen: I do believe so.

Matthew: Okay.

Maureen: We have probably crossed paths with people that seem natural leaders. They seem to do it easily, effortlessly. It reminds me of being in yoga. There are people in my yoga class, I’m like whoa, you are so bendy and flexible and you can do that with great ease and I admire that. And then there’s other people in yoga like me that really need to work with positions, but it does get easier and it becomes more fluid. And I think that’s similar to there are natural talents and skills of leadership, and they are skills. So when we practice or get coaching on how to coach, how to lead, how to communicate, those skills strengthen and can transform. And so I do believe there’s a blend, but somebody that would claim, ugh, I’m just a horrible leader; I don’t buy it. I believe that if you desire to create changes, you can learn the skills, practice, practice, practice the skills and create a shift.

Matthew: Do you have an example of somebody that really took to the leadership training and came out of their shell and went with it?

Maureen: I do. I did some work with an organization, a nonprofit organization that works primarily with at-risk women and providing them food cooking, restaurant skills and things like that. And I was honored and thrilled to be able to work with this group. We did a five week series really blended of communication and leadership and to see the shift from session one to session five was powerful. And these are… these were people that really wanted to create changes in their life circumstance and likely hadn’t taken, you know, the Dale Carnegie course or leadership skill or a Red Books, etcetera. And so the shift that I witnessed was powerful. And one of the things, sometimes it’s just the simple things that really can create those changes. And one of them was on how to give feedback powerfully. So many of these men and women in the program would need to tell people how to do things better or differently and that always wasn’t so well received. So to give correction in a way where it can actually be heard and then skills change and develop was one of the most powerful things I saw them able to do.

Matthew: So some soft skills that people can work on right now, you know, eye contact, tone of voice, body language, can you tell us a little bit about those things?

Maureen: Well I do believe those are a foundational element to powerful communication, connecting leadership and really moving forward. And I would say consider those… I know we call them more soft skills, and they are transcendent between a colleague, a team, a customer, a patient, all of us, and find them so hugely important because they really are those foundational elements to success. And they create an environment of respect, professionalism, loyalty, and again that could be for my teammates, my colleagues or my clients. And the other thing that I think is really helpful about being a good communicator is that if something goes wrong, it’s just way easier to recover. I teach a class called “Calming the Cranky.” And all of us, we’ve had stuff go wrong in our business or not go quite the way we desired. I’m dreaming of a quote here and I forget who said it. A good recovery can be better than if nothing went wrong in the first place. A great recovery could be better for the customer interaction if nothing went wrong in the first place.

Matthew: That’s a great quote because you really get to see how a person responds under stress.

Maureen: Indeed, and if we have already created that respectful, professional, loyal foundation again with one of our clients, customers, patients or with our internal team, it’s simply easier to overcome or dissolve any of those tricky situations.

Matthew: Now one of the themes of this show is that at some point supply and demand are going to even and cannabis is not going to be this green gold in essence. There’s going to be more competition. It’s more commoditized, and dispensary owners and managers will have to stand out in a certain way. And some of the things you’re talking about like some of the soft skills, and I can even tell when we’re talking you weave in my name as we talk over and over again. And not everybody does that, and I can imagine that someone that’s a bud tender that listens to their customer, you know, says their name once or twice throughout the conversation shows that they’re listening and what customer is saying is being understood. These are huge advantages. Can you tell us some other ways that dispensary owners can do things to stand out so that customers come to their dispensary over and over.

Maureen: I am so grateful that you pointed that out, and I think that using names is a major way to show that person that they are important, that you are connecting to them and if we were going to poll your listeners again, right, now set aside whoever’s had a food borne illness. My next question for everybody is who listening is excellent at remembering or using names. My hunch is the majority of people are like, uh, not me, not me, sometimes I need to look at my own driver’s license to figure out names. So it’s a skill that is powerful to create connection. And I have a couple of tips especially for cannabis consultants, bud tenders is that one of the, let’s see, one of the skills that I encourage and invite people to do when they’re in Sell Smart class is to not only check that person’s identification at the door, but to keep that ID visible and available throughout the selling process and to check it again for sure as the sale is complete in that element. And with that, for those of us that think we’re not good at remembering names, good, don’t. You don’t need to remember it, just look at the ID. It’s really easy. It still creates that connection. So overall the question, I think, imposes how do we stand out. How do we stand out in this industry. And other industries might say location, location, location. It’s the three legged stool, location. I would say quality, compliance and connection. First of all with compliance, if we’re not being compliant, you know, good luck. That calls for shutdown, investment money gone, etcetera, etcetera. So please always play compliantly. I say whatever the rules are do that and add a little bit of extra rule in there. But the way I think we really begin to stand out is how connected we are, how caring, compassionate and creating that connection. As humans we desire to feel seen and heard, respected, honored and so much of that is in the high quality guest service, customer service, patient service skills. And I think you mentioned one of the most basic, yet helpful in creating that connection is really being attentive and in that attention using people’s names, making them feel heard and honored. And one of the things I’ve done several secret shops when I go in and visit and see how are the bud tenders doing and what’s my experience. And one of the things I really liked in creating that connection is staying ahead of the game and standing out in the competition. What if everybody has high quality flower and high quality edibles, but what’s the differentiator from there. And this cannabis consultant said, ladies I really hope you have a good experience like this, please come back next week. Let me know what your experience was and then I will be able to help direct you to your next purchase. And I loved it, and she was the only one out of the shopping that I had done that did that. One, comeback, ask for me. Let me know what your experience was, I will help guide you in your next experience. And there’s so many things about that that are great and inviting and it’s assuming of course I’m going to see you again. I have more products so you might as well do it with me, and I will guide. Like all of that is really powerful.

Matthew: A little bit of subtle power of suggestion in there.

Maureen: I know you’re going to have a fabulous experience and you’ll want more. Let me guide you.

Matthew: It’s so funny that we’re talking about these things. I did a poll recently and I asked everybody I knew almost in the cannabis industry, you know, who’s the best bud tender, what’s the best dispensary. And it’s so funny to hear the things come up over and over again. You know, and it’s the connection that you’re talking about. That’s what people go back for. I even heard things like, sometimes they even run out or they apologized even for those dispensary’s mistakes because the connection was so strong.

Maureen: That’s right. Those soft skills that you and I spoke to moments ago really help create that. And again if a ball gets dropped, when people feel respected, honored, appreciated, the ball is more of a bounce, right. It’s not going to shatter. So that is an important element to that. I also had another interaction that was a stand out experience. And I’m also very aware. When I go into purchas cannabis I’m very curious. I’m a newer consumer and I have a lot of questions, and I also want to honor that consultant’s time. And if there’s people in the waiting room or there seems to be a line, I kind of want to hurry it along, yeah, I’m still curious. He did such a good job. He said don’t worry about anyone else. I am completely here for you as long as you need. And the thing that was different about this, Matthew, and I think you’ll get this because this is a huge part to standing out and created that connection. It was authentic and genuine. You know, there’s probably.. you and I have crossed paths with people that are kind of wrote. They learned the script and they’re saying it and it doesn’t mean anything. He was very authentic and genuine, and really seemed like I’ve got all the time in the world for you.

Matthew: That’s a great point because if it’s not authentic and genuine, it can have the exact opposite effect.

Maureen: It’s so true. We’ve all crossed paths with that. Like oh, your robot is saying that and it doesn’t mean it is. And so sorry that was your experience. I wonder how can I make it better. Like it’s a script and the person doesn’t really care. But the caring, genuine, authentic, professional, those are the people that I’m seeing a lot of in this industry and they will continue to flourish.

Matthew: You know this has been a great interview Maureen. I’ve learned a lot today and I think that I may need to take How to Calm a Cranky Person course.

Maureen: It’s one of my favorite classes. There’s formulas that we use on how to handle a diffused, tough situation. It’s a good one.

Matthew: Now how can listeners learn more about Cannabis Trainers and follow your work?

Maureen: Oh I’d love for your listeners to come join me. Well that can occur at Cannabis Trainers on Facebook, on Twitter and My I share my email?

Matthew: Sure, absolutely.

Maureen: Yeah, I welcome people if you have questions about what Matt and I spoke about today, I welcome you to reach out to me. It’s So those are the best ways to reach out.

Matthew: Well great, you know, one more question. I was just thinking that you’re also really involved with Women Grow. We’ve had Jane West on here too. Can you just touch a little bit on your experience with Women Grow?

Maureen: I am a big fan of Women Grow. Jane West and Jazmin Hupp are the co-founders, and I’m proud to be one of the founding members. And really it’s about cultivating cannabis entrepreneurs. Who’s the next generation? And it’s caught like wildfire. We’ve got chapters from coast to coast and a lot of involvement. And I’m honored to be contributing in part of that. And one of the things in fact earlier this week, we are putting together webinars and live streams, and one of the first ones we’re going to launch in January is about how to get into the industry. If there are women that are curious and kind of watching us from the sidelines or really anybody who wants to be involved, well be having a webinar on that. And the industry, I’m really pleased and thrilled. There was times I was at a women networking event which happens the first Thursday, unless it’s on a holiday, of every month, and at the last meeting a couple of weeks ago I got teary eyed. I was moved, and listening to women talk about her experience and story about why she’s in the industry. And I felt and feel so honored to be part of this movement, to be a contribution in any way that I can to have it go more safely, professionally, filled with knowledge and awareness. And I find that so many other entrepreneurs and especially female and Women Grow are really moving the conversation forward in a super positive, professional way.

Matthew: I agree. Women Grow has been very helpful to me too. It’s not just women they are helpful to, you know, it’s been very helpful to me. So I appreciate that.

Maureen: They have lots of brave men that come in. Yeah.

Matthew: And just to reiterate for women listening across the country, there’s chapters in different cities and you can also make your own chapter if there isn’t one in your city.

Maureen: Yeah, please consider that. The team at Women Grow is trying to make… is making that as easy as possible, and we’ve had chapters popping up all over the country. And it’s a really great way to be collaborative with other professionals in your actual area.

Matthew: Thanks so much to you Maureen McNamara of Cannabis trainers for being on CannaInsider today. Thank you Maureen.

Maureen: Thank you.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at That's Have a suggestion for an awesome guest on, email us We would love to hear from you.

Profiting as The Black Market Dies with Cannabis Investor Douglas Leighton

Douglas Leighton

Douglas Leighton of Dutchess Capital details why most people don’t understand how the cannabis market is different. Most new businesses have to convince prospective customers to try their product or service. This is not the case with cannabis. There are millions of people that use cannabis illegally right now they just need to be brought over to the new, legal market.

Also learn about Doug’s savvy investment style that includes investments in: MassRoots and Dixie Elixirs.  See Dutchess Capital’s report, The Macro View of the Cannabis Market.

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Each week I’ll take you behind the scenes to interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at That’s What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at That’s Now here’s your program. Douglas Leighton is a partner at Duchess Capital, and a well-known cannabis investor. Today we’re going to learn why Douglas is excited about the cannabis industry and what he sees is the best investments. Welcome to CannaInsider Douglas.

Douglas: Thanks very much for having me Matt.

Matthew: To give us a sense of geography, can you tell us where you are in the world today?

Douglas: Sure, I’m in rainy and cold Boston today.

Matthew: Okay. Can you tell us a little bit about Duchess Capital and its focus?

Douglas: Sure Duchess has been around for about 15 years, almost 20 years. I’m sorry. And we are a hedge fund. We have several offices around the globe, and we are industry agnostic, and we invest in primarily publically traded entities. And about a few years ago we started looking into the legal marijuana market, and we sort of progressed into, you know, still doing our traditional business, but we’ve put about 25 percent of our resources into the legal marijuana space.

Matthew: So you produced a report recently that gives a lot of detail about the cannabis industry and your thoughts about it. Excellent, very well done. Can you give us some high level overview of what’s in that report and what’s important about it?

Douglas: Sure. The first thing I think to mention, which is very important, is that this is a industry that is being served illegally and has been served illegally for thousands of years which today stands at about a $50 billion illegal black market. The current legal market for cannabis is approximately $2 billion. As more states come online, that black market will diminish and it will become a legal market. That gap has to be narrowed. That $48 billion has to be narrowed. That in itself is probably the highlight of the entire report.

The second is the fact that the demand is constant. The demand has been there for years and there’s no real marketing that has to be done on the side of these dispensaries and retailers because the demand is there, and marketing is a very large portion of a business’s budget, and that makes it very easy to sell a product that there’s already a current demand. The other thing that’s very important about that is that there’s only 24 jurisdictions in the United States have allowed either medical or adult use marijuana. There’s still 26 left to go. So that just in itself is a doubling or almost a tripling in the market due to the state sizes, populations in each state. And of those ones that actually have gone full, either recreational or medicinal, they’re still not fully built out. So we estimate about $1.7 billion will be spent in infrastructure, sort of the picks and shovels to miners over the course of the next 18 months. And that’s what gets us excited about the business.

Matthew: That’s an excellent point. So this industry exists. It’s just moving from black to white market, let’s say, and all these customers are lined up. It’s so much different than investments where you’re speculating if a market will… if we can create a market. The market is already there, it’s just transferring it to a, in many cases, less desirable, or most cases less desirable black market to a legal market. So excellent point. It’s enormous. It’s an absolutely enormous market. Can you tell us a little bit about your cannabis related investments so far, who you invested in and why?

Douglas: Sure. We looked at the cannabis space for quite a long time before we actually made an investment. And we started with the widest funnel possible. And our first investment was a company called Mass Roots, which is the only and specifically social media network for the cannabis space. I believe you had Mass Roots on a couple of weeks ago I think.

Matthew: Yeah, Isaac. Isaac, he’s a very smart young man.

Douglas: Yes, yeah. The team, Isaac and the team over there have done a fantastic job at building out this network with very little capital, and there’s a need to have this sharing service where on the terms of service of Twitter, Facebook, Instagram, you’re not allowed to post pictures of cannabis. This allows in states where it’s legal, you can talk and post pictures about cannabis and that is your marijuana profile where you don’t want your coworkers, parents, friends to see that maybe you use cannabis for medicinal purposes or you’re in an adult state that allows it, and you don’t want anyone else to know. This is where that’s your profile semi-anonymous network, and that has been… that’s been a fantastic and fun investment. We invested in that about a year and a half ago. You know, they’re now up to about 215,000 users from 6,500 when we made the investment which is pretty amazing.

Another company that we did sort of fall in that funnel concept was American Cannabis Company, and they are a end-to-end business service company that helps you if you’re looking to get a marijuana dispensary or cultivation license. They’ll help you from the beginning, planning stages of business and perform all the way through the application through standard operating procedures for running a dispensary and for running a commercial cultivation. And that company has been fantastic as well, and they’re growing very rapidly. Those are just two. We’ve made about 14 investments in this space so far to date.

Matthew: Do you see a spark in the eye of some of these entrepreneurs? Is there something at a gut level where you say, you know, I’ve looked at the math, but there’s something I just really like about these entrepreneurs?

Douglas: Absolutely. Without the spark there’s no investment. These are all young, younger-ish people and they are all immature, not as immature as they were two years ago when we first started looking, but they’re immature from a business prospective side, but they all are very hardworking, very energetic. They have the vision. They understand the industry. And they know where the industry is going to be. You know, the standard sort of stereotype of a stoner is, you know, sitting on the couch, you know, eating Doritos, watching TV. From the entrepreneurs we’ve seen, we do not get that image whatsoever. These are all very hard working, smart, young kids that are working 17-18 hour days, 7 days a week, and they’re really the pioneers of a new industry.

Matthew: Do you focus exclusively on equity investments or do you do some loans at all?

Douglas: We’re primarily equity, however we have done some short term debt loans to companies who are already equity invested in, just to sort of help them out over a hump either for factoring reasons or for some different short term financing issues, but generally we’re equity investors not debt investors.

Matthew: Do you have any opinion on whether or not you want to invest in companies that touch the plant or don’t touch the plant, or is that a non-issue for you?

Douglas: It’s a non-issue for us. We will invest either in the plant or not. We don’t invest in either Colorado or Washington State because of the residency requirements which forces you to invest in debt. We’re not debt investors so we’re staying away from those markets that touch the plant.

Matthew: Help us understand the supply and demand dynamics here. Infrastructure nationwide is still being built out. A lot of grow operations are still small, but we’re seeing some larger ones come online. At what point does the price per gram start to really plummet, or do you think that will happen?

Douglas: So that’s one of the interesting things that we wrote about in our report which is this is a very different situation than most other investments that we’ve looked at over our 25 plus year history. In that in some states, for instance Colorado, it was not… it was vertically integrated. You had to grow and sell your own marijuana for many years. As of July 1st, there was a decoupling of that where now you can actually grow your own marijuana and sell it to dispensaries. That is going to lead to a commoditization of the product which in turn will turn, put price pressure, and that is another reason why we’re not investing in Colorado, very similar to Canada and similar to Washington State.

Other states such as Massachusetts for instance, they do not allow that. You have to be vertically integrated. That will keep the price very high and the product will not be commoditized because you have to grow it and sell it in your own retail shop. And as far as interstate commerce, I don’t think I will see interstate commerce at least for ten years. And the reason why, many other people disagree with me, but the reason I believe that is for the simple fact that in the state of Massachusetts, you can’t even ship wine into the state of Massachusetts which has been legal for 80 years. They’re very protective of that, and I don’t see them changing that rule to allow anyone else to ship marijuana across state lines, especially in the state of Massachusetts.

Matthew: That’s a great point there. So the dispensaries in Massachusetts in essence by default have regional monopolies because there’s not enough supply and it’s so strictly regulated. Does that leave room for the black market to still exist then?

Douglas: Well it won’t because there is… as long as the price is similar to the price in the black market, which it should be able to be because it’s easier to grow and less expensive to grow on a commercial scale than it is to grow ten plants in your basement. That will in effect keep the price very similar to the black market.

Matthew: Okay. And how about let’s look at 2015, and are you looking at making any more cannabis related investments in 2015, or are you just keeping an open mind to see what comes to you, or what do you have on the horizon?

Douglas: So we will close two deals probably the end of this year bringing the total to sixteen. And next year, you know, we look to do 12 to 15 investments. If we, you know, we’re shown 30 we would do that, that set the criteria. If you know valuations are still in check, you know, we’ll certainly look at more, but we would… we also would do none if we couldn’t find the right spot for it.

Matthew: Yeah let’s talk about valuations for a little bit. Where do you see them? They’re still reasonable, do you see more becoming unreasonable? What can you tell us?

Douglas: They had a spike along with the public equity markets in January through March. They have become a little bit more reasonable. They need to be considerably more reasonable. They’re not yet, and a lot of these entrepreneurs simply just don’t understand how to value a company, and they believe because they’re in the cannabis space that it’s worth a considerable more. And the issue with that that was just recently in the last week, a company that raised capital at a very high valuation. They launched their product and within a week, they were sued by a major city, the second largest city in the country and they were sued to be shut down. And now they’re fighting. They’re using all the invest money for lawsuits. So as much as I love this space and I think it’s the next great frontier, there’s a tremendous amount of risk in this space, and that’s why valuations need to be adjusted to that.

Matthew: If I’m a entrepreneur listening or an investor listening, what are the big problems that need to be solved in the cannabis industry that someone’s going to be, do really really well if they can solve these big problems?

Douglas: I’m going to… three off the top of my head. One, banking, and that’s merely a safety issue. There’s too much money being carried around by people that should not be carrying around that much money. Number two, they need to reschedule the drug. This is not as risky as heroin or cocaine. And number three, they need to change 50 years of brainwashing and stigmatism that is put on this plant on how evil it is and that needs to be changed. Those three things are the most important things. You’re never going to change number three or make any money from it anyway, but the first two are very very important to change.

Matthew: Now a lot of the entrepreneurs out there that understand the investor's point of view really well seem to do well. And I think there’s a perception that that’s not the case. But can you tell us a little bit about how entrepreneurs can be more investor friendly?

Douglas: Sure. The first is to not… to put a pitch deck and PowerPoint together that you understand and that is your gut feel that’s your vision, not that someone wrote for you and you’re reading it to me. I want to hear it from your heart of exactly what your vision is and how you’re going to get there, and what you believe is your, you know, differentiating fact in your value proposition and what this money that we’re going to invest is going to turn into. And the second thing is to have open communication. While the process of the investment is being made, once it’s made, constant reports, monthly reports on financials whether it be contracts, user growth, anything positive and most importantly anything negative. We have 25 years experience in investing. We have a very deep bench of people that can help us out, and we need to know all the good news as well as all the bad news, and if a pivot has to happen, let us know about it. Let’s discuss it and let’s try and fix it together, not just tell me everything’s great every day, because I know that’s not the case.

Matthew: Right, and you don’t want to be the last one to know. Okay. So you mentioned you’re in Boston, and the stigma still exists to some extent, in some places much more than others. How is it changing there? Are attitudes changing a little bit?

Douglas: A little bit. You know, Boston’s always a little slower to change than other places, but it’s slowly changing. And you know the issue is people again have been so, you know, brainwashed by “Reefer Madness” throughout the years and how dangerous the drug is that people really need to be educated to understand that it’s not as dangerous as heroin and cocaine. It’s not addicting. No one ever died from it, and there just needs to be an education process which is taking place, but it just takes a long time.

Matthew: And Doug how can people learn more about Duchess Capital?

Douglas: They can go to or they can call us on any of the social media outlets. We’re on all of them. And you know, contact us if you have any questions.

Matthew: Thanks so much to Douglas Leighton for being on CannaInsider today. Thanks Doug.

Douglas: Thanks very much. Have a good day.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at That's Have a suggestion for an awesome guest on, email us We would love to hear from you.