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Ep 309 – Investors Are Helping Cannabis License Holders Access Capital

anthony coniglio new lake

Cannabis license holders are using an interesting new way to free up capital and grow their business. Here to give us the details is Anthony Coniglio of New Lake Capital Partners.

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

Key Takeaways:

  • Anthony’s background in real estate and how he came to start New Lake
  • An inside look at New Lake, a newly-formed Maryland real estate partner that leases industrial and retail properties to state-licensed cannabis operators
  • Why cannabis has been deemed essential across the country and how this is influencing investors and license-holders
  • Factors to consider when choosing the most valuable states and cities to buy real estate for the cannabis market 
  • How New Lake has raised $100 million in capital to build its diversified portfolio
  • How much New Lake’s investors can expect in returns and Anthony’s predictions for where dividends are heading in the next few years
  • What Anthony looks for when considering cannabis operators looking to lease his properties, from their business strategy to their ability to raise capital
  • How COVID-19 has affected the commercial real estate market in the US and where Anthony sees it heading
Click Here to Read Full Transcript

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

Cannabis license holders are using an interesting new way to free up capital to grow their business. Here to help us understand how this works is Anthony Coniglio of NewLake. Anthony, welcome to CannaInsider.

Anthony Coniglio: Well, thank you for having me.

Matthew: Give us a sense of geography. Where are you in the world today?

Anthony: I am currently in Connecticut riding out the coronavirus wave.

Matthew: What is NewLake on a high level?

Anthony: We're a real estate company. We own 21 properties across eight states, and we're focused on building a diversified portfolio of retail and industrial properties that we lease to companies in the cannabis sector for use as dispensaries, as cultivation, processing, and manufacturing facilities. We acquire those properties using sale-leaseback transactions, and our tenants are some of the most experienced and well-run businesses in the industry.

If I had to summarize it, our business model is quite simple. We earn revenue by charging rent. Our investors receive a nice, healthy quarterly dividend. We believe there'll be significant appreciation in the value of our portfolio as the legal status of cannabis changes over time.

Matthew: Just give people a snapshot. You work with license holders, and you say, "Hey, I'm going to give you a whole bunch of cash for your real estate and lease it back to you. That frees up your capital, and that allows our investors to make money." That's pretty much it in a nutshell, right?

Anthony: That's pretty much it, yes.

Matthew: How much money have you raised so far?

Anthony: We've raised $100 million so far. We've been able to deploy a lot of that. We're out raising more capital today.

Matthew: I know we're all serious people here and serious investors, we're wearing collared shirts and you have sport coats on, but the moment you raise $100 million, do you just take some $100 bills and throw them up in the air and fall back on your bed and say, "Money"? Don't answer that question. It's going to make you sound unprofessional. Let's move on.

You've raised 100 million, that's great. Let's talk a little bit about what's going on in the general commercial market here for real estate. It's a bloodbath. There's malls, office buildings, general retail, commercial real estate. It's a mess because of COVID-19. Where are we at the 10,000-foot level for people that don't follow it day by day?

Anthony: I would say we're in the early innings, to use a baseball analogy. For me, I tend to believe that most of the early prognostications will be overblown as it relates to commercial real estate. For instance, I think the depth of the office is exaggerated. I've managed distributed workforces before. It takes the right person or the personality to operate remotely and maintain the same level of productivity.

I believe that this early enthusiasm that we've been seeing for remote working on both the employers and the employees side, I think that's going to fade. I think people want to be with other people. I think employers want to have their people around. Now, let me say, I do think that some trends have been accelerated for sure, whether it be retail or industrial real estate with respect to last mile and those types of distribution strategies. Yes, there's some of those elements that have changed. Perhaps there'll be some change in office, but I think we're still in the early innings.

I also think we're early because when you look at some of the defaults happening in retail or an office or even, to a lesser extent, in industrial, that's really only been from the shutdown. We're just now entering this recession. I think there's going to be a rolling occurrence of events that will further shape what happens from here. That's why I say I think we're in the early innings.

Matthew: You've carved out this niche here and a lot of people would be hesitant about investing in commercial real estate right now, but this very specific niche where cannabis has been deemed essential, it's a different thing. Investors can say, "Well, governments all across the country are deeming this essential, state governments, local governments." How has that affected the conversation and affected your business, both in terms of the license holders and the investors?

Anthony: You're absolutely right. It's amazing how things change in only 90 to 100 days. We're sitting here in a world where only 60% of retail rents are being paid. Shopping center REITs are collecting only 50% to 55% of their rents, and there's even probably upwards of 10% of office tenants aren't paying their rent. We're very happy with our hundred percent collection rate and our hundred percent occupancy rate. We think it's a testament to our disciplined underwriting and focus on diversification.

Yes, as you pointed out, our tenants did benefit from the essential designation, but there are some real estate platforms out there that focus on cannabis that are dealing with some delinquencies and default issues. Listen, we're not declaring victory by any stretch of the imagination, but we think the last three months remind us why we focus on diversification and why we emphasize sound underwriting practices.

Now, let me pivot a little bit to talking about that opportunity around COVID-19 and about how cannabis is a really different sector. While COVID-19 is taking a toll on-- actually taking whole all of us, our communities, our families, our friend or neighbors, and we're leading into the recession. As many of you are listeners know, this industry has really weathered the storm better than other industries, and not just because of the essential designation, but really, I've been so impressed with the way the industry has risen up in the face of this challenge, come together.

I think they've changed the perception at the state level, at the legislative level, at the regulatory level, and also in their community level. I think that's going to bode really well for the industry and just fuel that long term secular growth trend that the industry is in today. I'm pretty bullish on the opportunities in cannabis. I think the essential designation helps, but this industry is growing very rapidly, and it's just so exciting to be part of it.

Matthew: Not all geographies are the same in terms of cannabis. What states and cities do you think are the most desirable to buy real estate in?

Anthony: Well, you're absolutely right. While we look at opportunities in all markets across the country, we do like to focus on states and jurisdictions that have a more limited licensing regime. Examples of those would be Pennsylvania, Ohio, Illinois, New Jersey, Connecticut. Those would be just a few of those states that you see a more limited number of licenses being granted by the regulators.

Matthew: Limited licensing. That's key. That's the moat. Also, I would say difficult governments is a moat too, as perverse as that sounds. I think I'm thinking of Chicago and Boston, not calling you both out but I kind of am, difficult environments make it, so people are like, "Wow, I have to put up with so much dysfunctional government," that it's really a barrier to entry. Is there anything else besides limited licensure that you look at? Obviously, population is a factor, population density. What else do you think about?

Anthony: We definitely look at density. We definitely want to make sure that the properties, whether they're retail or industrial, we want to make sure we understand what the alternative use is for and what they could be applied to outside of cannabis. It's critically important to understand how you can mitigate your downside risk. In some of the deals that we see quite frankly, you have to zoom out 8, 9, 10 times on Google Maps simply to see another building. Literally, some of these are in the middle of nowhere. I don't know how they get power and water into some of these locations.

You're right. The limited license jurisdictions do provide that moat. It's a better operating environment for the operator, meaning hopefully they have an easier time generating cash flow and profit. There's intrinsic value in those licenses. If an operator does fall on hard times or is not able to operate the location to profitability, there's a long list of people who've been waiting for on-trade at the state that would be happy to step into the location and operate in. Therefore, we think those companies in distress would seek to monetize that intrinsic value in the license.

Matthew: $100 billion raised. When did you close your first acquisition?

Anthony: October 15, 2019.

Matthew: Moving fast here. If I'm a license holder listening right now, how does this work? Do I find real estate I want to buy then reach out to you, or do you buy real estate and then a license holder comes in? How does this work?

Anthony: In multiple ways. I will say what we don't do is we don't purchase a property and take tenancy risk or vacancy risk. We won't purchase a property and then go in and title it and then try to find an operator. Right now most of our transactions are where operators own the property and they come to us and they want to unlock capital and raise that non-dilutive capital to invest in their business. We will do a sale-leaseback transaction where they don't have to leave the facility, there's no interruption to the operations, it's all on paper. They sell us the property at the same time they enter into a long term lease with us. What we're starting to see more of and doing more of is a situation where an operator has identified a property they want to be in because it fits either their retail desires or their growing desires in terms of location, and they are securing a purchase agreement for the property. We will step in. We will assume their role in the purchase transaction. We will buy that property with our dollars and we will concurrently enter into a long-term lease with them. In that instance, the property never has to be funded by the operator, we fund it right from purchase.

Ultimately, over time, as the industry normalizes, I'd expect our dialogue with our tenants and other operators in the industry to evolve where we are bringing them properties that we think fit what their particular needs are. We will transact only after they've agreed that that's a particular property. We do see it in phases.

Matthew: If I'm an investor listening or even even a licensed holder and I'm thinking, "Is leverage or a lot of debt going to be deployed here, and does that put me at risk?" Can you talk about how you view leverage or where its place is, or there's no place at all for it?

Anthony: There is a place but there's, in our opinion, a very careful place for it. We think there's very attractive returns to be had right now without adding in the added risk of meaningful leverage. What we would want in leverage is a debt facility that had some term to it. There is no what I would call regular way refinance market for cannabis real estate. Quite frankly, that's part of the big opportunity here for us as a company, is banks aren't serving the needs in traditional credit providers and capital providers for commercial real estate, aren't serving the needs of the sector.

If we do layer in some debt over the near term, it would have to have three to five years of maturity. It would have to provide us some meaningful flexibility in order for us to get comfortable in taking on that type of risk. I wouldn't foresee it for a meaningful amount. On a $100 million, perhaps we might look to layer in $20 million. I think of that debt more as a bridge to additional capital raises than I do as what I would traditionally call structural debt, where we're leveraging a portfolio to drive a return.

Matthew: What kind of returns are you paying and can investors expect? You can only really talk for sure about dividends paid, and then this pro forma or it's, our best guess, based on where everything's at right now on a shifting landscape of probabilities. What's your best idea of where dividends are going?

Anthony: We've paid a 8% dividend yield quarterly for the last few quarters since we started purchasing our first building. We feel comfortable being able to pay the 8% dividend yield as we continue to go along. For our investors, the opportunity is not just to get paid the dividend yield. There may even be upside on the 8% given we think we could generate a net 10% after expenses for our company. Beyond that 8% to 10% yield, that's unlevered, we also see the opportunity to realize gains by getting a public listing of our company, and having our meaningful above-market yield with a long duration get valued by public market investors at potentially two to three times our book value.

Matthew: Well, that sounds juicy. People are like, "Hey, I can get these dividends, but also at some time in the future, there might be a public offering." No one knows the future, but how far out would that be?

Anthony: Well, right now what you're seeing in IPO markets are companies that would typically lead the way in this environment. Healthcare companies, tech companies, anything that plays into the theme of what we're going to continue to see around COVID for the next six months or so. Even Albertsons filed for an IPO last week. It's not for the next six months at least, it's probably a next year event at the earliest when the market is willing to consider non-down-the-middle, the fairway type of offering documents.

For us, we're going to continue to raise capital. I mentioned we're raising another 50 million of capital. We'll be at 150. We're going to continue to get our company ready to jump through that window of opportunity when it presents itself because we think not only does it provide liquidity for our investors and provide a potential valuation bump as well, but more importantly, in order to continue to grow our business, scale our company, we need to have access to a ready and deep pool of capital. The public markets are that deep, robust pool of capital that we would gain access to.

Matthew: If a tenant can't pay, for some reason, we kick them out, and then we start to sell tickets for a rave, right?

Anthony: [laughs]

Matthew: No, I'm just kidding. What do we do? It's, obviously, you're thinking that when you're looking at a property, you're saying, "Well, who else can come in here? What other industrial uses are? As you mentioned. Could have been used for something else? Obviously, you don't want that prospect, to begin with, of someone not being able to pay, so you look at their credit-worthiness, how well their business is going, talk about that a little bit.

Anthony: Yes. This is probably one of the most important things that we do. This is our entire business, and we would call it layered risk mitigation. It starts with understanding the operator, how they manage their business, how they run their business, what's their strategy, and, very importantly, what's their ability to raise capital. There are a number of people that can run a good business, but they don't run it well enough to be able to raise capital on it. That is critical because, in this industry where the industries are so dynamic, capital is so important, so one's ability to raise capital is important to assess.

Beyond that, clearly, we look at the balance sheet, we look at the P&L, we look at their projections. We further then look at the property itself and understand how critical is this property to the overall strategy of the business. Is this a tiny portion of their operations or is this mission-critical piece of real estate that they will need to protect at all costs in order to maintain their own cash flow. We go further to then look at the contract we have with them and building features that provide us additional protection, like security deposits and parent guarantees.

In many cases, non-traditional covenants that do give us the opportunity to understand what's going on at the property, what's the revenue being produced, what's the condition that it's in. Then we look at the alternative use. We understand if we're wrong on all of that, and you can't be right 100% of the time as much as we try, but if we're wrong on all of that, here's where the limited license state kicks in. For wrong on all of that, they just don't do a good job with it. There are many, many folks and companies that would love to enter into these limited license states. In that period of distress, we don't expect the operator to toss the keys, or to give up and risk losing that intrinsic value to the license.

In some of these states, licenses are trading for $8 million, $15 million, $20 million, over $20 million. We think the operators, instead of going dark for just giving up, are likely to sell that license, garner the intrinsic value of the license. Since the license is typically attached to the property in the in these limited license states, we then have a new tenant that will go in and operate the dispensary or operate the cultivation facility and pick up the cash flows. That layered risk mitigation is really important.

I guess then lastly, I should have mentioned, is understanding that alternative use. If, for some reason, we can't get a cannabis business to take over the lease and to step into the facility, making sure we're in a location that isn't in the middle of nowhere that has no alternative us but that there is a well-developed market in proximity to our location that we would have a reasonable likelihood of being able to redeploy to other industries.

Matthew: Is this only for the big boys like the MSOs, the multi-state operators? Who's the right fit for this type of scenario and sale buyback or the sale lease scenario? Is it only the big guys? Is there medium and also small guys, and how do they fit into this, and girls?

Anthony: It's a great question. We get it asked a lot. It is up and down the spectrum. We do have some large MSOs in our portfolio, names like a Columbia Care or Grassroots or PharmaCann. We also have a single-state operator. In the state of Pennsylvania, we think they're probably the best or one of the best cultivators in the state of Pennsylvania. Our property is nice proximity to Pittsburgh. Yes, we will do business with a single-state operator. We've looked at regional operators. Really, what sets businesses apart is management teams, their capital structure, their ability to raise capital. Then also something quite simple is audited financials. We've come across some folks who don't have audited financials, and as much as we want to trust people, as good stewards of capital on behalf of our investors, we do have to have an independent assessment of the assets and liabilities of the entities we're entering into a long term contract with.

Matthew: Sure. Just at a high level, what's the breakdown in terms of cultivators, extractors, processors, people that do all the above? How's the real estate broken down?

Anthony: Today we own 17 dispensaries and four cultivation facilities. When I look at the opportunity, I'd say the opportunity is across the spectrum. I think we'll need, undoubtedly, we will need more dispensaries across this country as the industry continues to grow. Undoubtedly, we will need more growth facilities across this country as the industry continues to grow. Then I think we'll start to see more and more processing opportunities, and then ultimately logistics properties. I'm really excited to watch all of those evolve and develop.

Matthew: The lease length. Are you pretty open to what the tenant needs, or are you looking at a certain duration for your investors? How does that conversation unfold?

Anthony: Duration and risk are key to that analysis. I would say that the retail leases tend to be a little on the shorter side versus the longer side, so there'll be under 15 anywhere from call it 12 to 15 years. On the cultivation side, they'll typically be 15, sometimes up to 20 years.

Matthew: Is there any kind of improvements that a tenant wants to do that you say, "Hey, that's not really going to be valuable in a secondary market. You want to put in a chocolate river like Willy Wonka like I don't think that's a good ROI investment." Do you get involved in that at all, or you just let them do what they want?

Anthony: Well, we certainly get involved because we own the property. We want to make sure we understand what they're spending money for that we ultimately will own, and again, mitigating risk. What we found to date, though, is most people are very, very responsible about what it is they're looking to buy. These are expensive facilities. Everybody wants to have a world-class cultivation facility, or a beautiful, comfortable, and inviting dispensary environment.

I don't want to say no expenses or sparred, but these are significant investments. We spent a lot of time understanding what those improvements will be and then quantifying how we could possibly recover those improvements relative to the market we're in. So far, it's been a very, very reasonable dialogue. We've had nobody that's wanted to install chocolate rivers yet.

Matthew: Too bad, lack of imagination, I say, but, hey, it's just me. Actually, if I'm consuming cannabis on a Saturday and I'm told that someplace has a chocolate river that I can dip a cup into and get a drink of that, I might go just for that.

Anthony: That sounds like a new cannabis experience theme park that you can start, man.

Matthew: Yes. Gosh, I'm thinking small. Thanks for pointing that out, Anthony. The tenants involved in the build-out, but as long as it's reasonable, you pretty much say yes. It's not like you're the business of saying no, you want to get as many sales as possible and people aren't doing anything outlandish, typically.

Anthony: Yes, that's exactly right. When you look at the revenue that's generated in the cannabis industry relative to other industries on a per square foot basis, we have some of this data where our properties generate approximately six times what an alternative use business would generate for those particular properties, and that speaks to, I think, what a lot of people who operate and invest in the cannabis industry are after. This is high-quality business with high-quality products that drives pre-tax that is, high-quality margins. We think that improves the risk profile of the business, and so if there are reasonable improvements to the property that can further enhance revenue, we're all for it.

Matthew: People are listening that either, a, want to connect with Anthony, their investor, and this sounds interesting to them, we'll get all of his contact information here shortly. Then if there's anybody that has a big or has a facility, and they're interested leasing it back and having to buy it, we can give Anthony's contact information out at the end of the show, as I mentioned, so we'll do that.

Before we do that, let's shift to some personal development questions here, Anthony. Is there a book that's had a big impact on your life or your way of thinking that you'd like to share with listeners?

Anthony: There are a few that just actually jumped into my mind if I could have some latitude and give you a couple.

Matthew: Sure.

Anthony: I put these in categories and I try to read a lot. One that really shaped me a long time ago and really sticks with me today around management is Straight From the Gut by Jack Welsh. Just really understanding how he brought management into the GE environment. I think Jack these days is becoming a little bit of a controversial figure nowadays past, but in any event, there is some unbelievable lessons in that book that have worked really well for me.

I've also managed businesses that have undergone change and there's a book that sticks out, Three-Box Solution, the author is escaping my memory but The Three-Box Solution, which really talks about how do you take a business that's somewhat mature and continue to drive profitability and cash flow from that while investing in the future and being able to give those new ideas the space and the capital to just stay and grow and become that new barn burning product if you will.

Then one just most recently that really is sticking in my head is a book called Range. It's gotten a lot of press, David Epstein. Really what that spoke to me about was this concept about being a generalist, and through my career, I've done a lot of different things, in my career. I've always questioned, boy, would I have been better being highly, highly specialized instead of being a little bit more of this generalist.

Maybe it resonates with me because it speaks to what I've done, but Range really, I think, was a great example of how-- Maybe it's not so good to be this highly, highly, highly specialized person and maybe we're more effective as business people and husbands, wives, friends, relatives, if we're a little bit more broader in what we do in our lives.

Matthew: You're the Swiss Army knife is what you're saying.

Anthony: [laughs] Without the edge.

Matthew: Okay. All right. What do you think is the most interesting thing going on in this field where you're just looking around and you're like, "Wow, I'm focused on what I'm doing here, but that's just, straight-up, interesting"?

Anthony: In real estate, it has to be this debate about how coronavirus will impact the real estate industry. I think it certainly will, but I do think that people are exaggerating what that impact will ultimately be. I'm a pendulum guy, which is to say that the pendulum swings back and forth, back and forth, and at certain times, it'll be higher in its swing then lower, but I do think at the end of the day, the pendulum spends more time in the middle than it does at its endpoints.

Matthew: I would say I would agree with you on that. I definitely think that way too, but I am challenged a little bit here because I think we're possibly in the midst of another secular trend. I don't know if you've ever heard that book, the Fate of the States by Meredith Whitney. She was a famous financial analyst years back, and she wrote this book about how these wealthy big cities in the United States, mostly on the coast, they have kind of peaked, and they'll come back at some point, but they're not treating their citizens well.

Places like New York City, where I've heard estimates that 60% of the operating side is still not even there in their homes, that might come back, but have these big cities in some ways peaked in that they're overtaxing and overburdening their citizens with property taxes, income taxes, and they're just straight up leaving? I'm guessing you're probably certainly connected? Are you in Fairfield County, Connecticut?

Anthony: Indeed.

Matthew: Okay, so here we go.

Anthony: I lived in Manhattan for 20 years.

Matthew: There's so many people, and I'm sure you know so many people too, that are in the Tri-state area of New York City, and now they are buying real estate and putting their center of gravity in Florida and spending six months in a day in Florida and like slowly minimizing their exposure to the Tri-state area because there's so much intellectual capital and actual capital there, but they're slowly minimizing exposure from these tax-sucking entities.

When I see someplace like New York City, I think the best of the best will always be there, but maybe people that run that, like marginally, they're saying, "Maybe I'll go somewhere else. Maybe I'll go to Boise, or maybe I'll go to Salt Lake City," or something like that. We have these two trends intersecting, which is kind of the secular trend away from these cities that are trying to extract everything from their citizens on top of the COVID response where people are moving virtual. Any thoughts there?

Anthony: Yes, I'll give you some thoughts on how throughout, what I see as a real wildcard in this dialogue and how it plays out. I think you're right at the margin. I think we all can have examples where somebody fled for Florida or somebody went to Nashville or somebody went here. You're right, a lot of the people from the Upper East Side are SoHo, certain parts of the city have been able to flee to other areas, either a second home that they have out of the city or maybe they rented a home out of the city.

Here's what I would say, cities have grown because they've provided something that people really want, whether it be the cultural opportunities, whether it be the experience of being with other people, whether it be education or jobs. When we think about the heartbeat of these cities, it's not someone that's at the point in their career where they could spend six months in a day in Florida and then come back to New York for their weekend trips, the heartbeat of these cities are the 25- to 50-year-olds and the people who are starting out in their careers and then starting a family and then developing a family.

They're there for different reasons. They're there for jobs. They're there for relationships. They're there to capture opportunity. I think that continues. Will we see, in my opinion, 5% maybe leave? Yes, I think we definitely could see that. Here's where I'd get to the wild card. The wild card is safety. Without getting political about what's happening in our country and the dialogue around defunding the police, well, I think city legislators need to figure out a way to thread the needle, because if they reallocate funds from policing in a manner that results in higher levels of crime, then I think all bets are off the table because I think people will vote with their feet in terms of their safety.

What you end up having, I worry about, is a self-fulfilling prophecy where as more people leave, there's less of a tax base and less of a service economy that's needed to serve those folks, which means there's fewer jobs, which just maybe only puts more pressure on it. To me, that's a real wildcard. I think we have to watch and make sure that the cities can manage the policing budgets in a manner that ensures that safety and crime maintain themselves at a level that has really drawn people back into the cities. My last thought on this, many people said, after 911, New York City was dead, and it came back stronger than ever. Yes, things are a little different here, but, again, sometimes yearly prognostications are a little exaggerated.

Matthew: Well, I really hope so because it's really a big jewel of the country and certainly people from all over the world look to New York City for a lot of different leadership, so I hope you're right. Here's one other question for you. You already gave me one thought that's counter-trend here. What's another thought that you have that most people would disagree with you on? That's a Peter Thiel question.

Anthony: [chuckles] For your listeners, here's another place where I'm a contrarian. I think all of this talk about the haves and have nots in the cannabis industry and there's going to be mass carnage in 2020 and everybody's going out of business except for a select few that are able to do this, that, and the other and there's going to be massive waves and consolidation and the landscape is going to look totally different by the end of the year, I don't buy it. I will say I'm being dramatic, but yes, for sure, there will be M&A, but there was a lot of M&A last year and there was a lot of M&A in the year before that.

Yes, there will be companies that go out of business, but there were companies that went out of business last year and companies that went out of business the year before. What I think will drive less of it is the fact that there's so much money sitting on the sidelines, and these businesses have such great promise that I do think there's enough capital to continue to provide a lifeline for some of those companies that are in the middle, that quite aren't there but they're not really dead yet. I think there's enough capital where people will be able to get enough of that lifeline to keep their business going, hoping for the better days.

Then the other thing is, I just wouldn't underestimate people in this industry. I think people in this industry are scrappy, they're smart. They're resourceful, and look at what they've been able to do to date. I don't think you're going to see a large part of this sector decide, "Well, I just can't make a go of it. It's too hard." I think they're going to figure it out to a large part. That's where I'm a bit of a contrarian. Yes, we'll have M&A, yes, we'll have some businesses fail. Will it be five x what it is over the last few years? No, I just don't see it.

Matthew: Okay. Well, you're an optimist, and I think it's a good thing to be. Anthony as we close, can you tell listeners how to reach out to you, a, investors. I'm sure it's accredited investors are looking for. Then, b, license holders, how can they reach out to you and see if they're a fit?

Anthony: Yes, accredited investors, for sure. For everybody, there are two ways that you can do it. You could either go to our website, which is newlake.com, N-E-W-L-A-K-E.com, and click on the info button and submit your information and one of the team will get back to you. We typically get back within 24 hours. Also, feel free to hit me on LinkedIn at Anthony Coniglio. I'm happy to respond to that. I prefer it all go through the website because it'll be easier for us to track it and make sure that everybody's getting the response that they deserve.

Matthew: How about if everybody just sends you funny memes on LinkedIn? Will that be good forever, not just for a couple of weeks.

Anthony: As long as I can resend them out, yes, I love funny memes.

Matthew: Okay. Well, Anthony, thanks so much for coming on the show. We really appreciate it. I think you picked a really good niche at a really good time. Lucky and right. I think those are two great things to have, two circles overlapping. Good luck with everything and keep us updated.

Anthony: Thank you. I appreciate the opportunity to chat with you, and I enjoyed our discussion.

[music]

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at cannnainsider.com/iTunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out your free report at cannainsider.com/trends.

Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsider.com. We'd love to hear from you. Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Emotional consideration may be provided by select guests, advertisers, or companies featured in CannaInsider.

Lastly, the host or guests on CannaInsider may or may not invest in the companies entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you're still paying attention, this little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.

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Ep 308 – Deflation Is Accelerating In Cannabis And Beyond

jeff booth deflation

Technological advances not only bring efficiency – they’re also profoundly deflationary. But could that deflation actually be key to an abundant future? Here to tell us is Jeff Booth, author of The Price of Tomorrow.

Jeff’s book: https://www.amazon.com/Price-Tomorrow-Deflation-Abundant-Future/dp/1999257405

Jeff’s Twitter: https://twitter.com/JeffBooth

Key Takeaways:

  • Goods and services that are inflationary versus those that are deflationary
  • What a deflation economy looks like and examples of when we’ve seen deflation in the past
  • The natural deflationary process that’s occurring right now thanks to advancing technologies like AI
  • The deceptive power of exponential technologies and how they gain traction
  • How central bankers are fighting a losing battle by taking on more debt to create inflation
  • The power of network effects for business owners, investors, and employees
  • Where Jeff sees bitcoin heading in the next few years and his advice for those looking to get in
  • Why Jeff believes AI will eventually force us to embrace deflation and how that could benefit society as a whole

Ep 307 – Dispensaries Forced To Adapt Turning To New Technology

matt-cutone-seed-displays

How can cannabis retailers adapt to the new post-pandemic environment and create customer comfort?

Here to help us answer this question is Matt Cutone of Seed Technology.

Learn more at http://www.getseed.io

Key Takeaways:

  • Matt’s background in cannabis and how he came to start Seed Technology
  • An inside look at Seed and how it provides dispensaries with in-store displays that improve customer experience
  • How cannabis retailers have been impacted by the pandemic and what Seed is doing to help them adapt their retail environments
  • Matt’s advice on how dispensaries can create a successful in-store “flow” and where curbside pickup fits into that
  • How dispensaries can use handheld tablets to significantly increase profits and customer satisfaction
  • The most popular cannabis products on the market right now
  • How dispensaries can benefit from in-store displays
  • The mature and emerging markets in the US and how they differ from state to state
Click Here to Read Full Transcript

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Matthew Kind: Hi, I'm Matthew Kind. Every Monday look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider dot com. Now, here's your program. How can cannabis retail environments quickly adapt to the new post-pandemic environment and create customer comfort? Here to help me answer this question is Matt Cutone, CEO of Seed Displays. Matt, welcome back to CannaInsider.

Matt Cutone: Hey, thanks for having me back, Matt. Appreciate it.

Matthew: Give us a sense of geography. Where are you in the world today?

Matt: I'm in South Orange County, San Clemente, California, so almost directly between Los Angeles and San Diego.

Matthew: I am in Chicago today. Matt, what is Seed on a high level?

Matt: Seed is a software for cannabis retailers, specifically within the store. What we do is we help enable all the customer-facing screens and technology, whether that's interactive menus on tablets or kiosks that provide cannabis education and self-service order. We've recently started helping our customers and prospects with their digital menus. Our vision really is to help dispensary operators with safe access and successful consumption of cannabis with their customers and that translating into a more profitable operation.

Matthew: These are really helpful. I've seen some of these displays and kiosks and messaging. It's just amazing how far they've come. I would say in different industries I've interacted with screens and kiosks that just have not been helpful, but just the last few years it seems like wow, that's really crossed over into just a totally different experience. I want to get more into that. Let's first talk about what you're seeing right now, and how cannabis retailers have been impacted by the pandemic, and also, now, riots and looting.

Matt: Yes. Exactly. Certainly, crazy times, and what continue to be uncertain. We're still trying to figure this out and help our customers, our clients navigate this, and et cetera. What we're finding is that the good news, I guess, to a degree, as several months ago when we started to experience the shutdown globally, not just on a national level, is that cannabis was deemed essential, kind of an interesting scenario based on the fact that cannabis is not considered legal on a federal level, but it was deemed essential during the shutdowns and during COVID here. Great, because, obviously, being deemed essential, cannabis being viewed as medicine, that's a lot of what we want.

They had to adapt in a lot of ways in how they service their customers, in how they handle transactions. With Seed specifically, our first initiative was to reach out to all of our existing customers and let them know that we're here to help in any way we can, give them general guidance on how to sanitize and maintain the technology in a way that customers and their staff could interact with the screens comfortably. More importantly, and one of the nice things I think about this industry as a whole is very collegial where everybody is very community-based and looks out for each other. We reached out to everybody and just said, "How can we help? We're here to help in any way we can."

Prospective clients we backed off of, we knew not many people were looking to make any changes, and et cetera. It's still uncertain times. We're all collectively navigating this and trying to understand what the new norm is going to be. We're slowly starting to move out of that, but, certainly, still impact and still trying to figure out ways that we're going to successfully adapt.

Matthew: How has some of the messaging changed from a retailer in terms of social distancing, or curbside pickup, or what they're putting on their displays?

Matt: A combination of things. Like I said previously is, how do you operate differently? How do you support your customers? How do you successfully help your customers select the appropriate products? How do you handle transactions differently? Now that the stores are starting to open up and individuals are allowed to go back in, interact with staff, and et cetera, things are improving. For a while, as mentioned, curbside pickup was something that didn't really exist in a lot of ways. One of our strategic partners I Heart Technology, or I Heart Jane, excuse me, they helped a lot of their clients and their customers adapt very, very quickly in enabling them for curbside pickup, and et cetera.

Now, as far as social distancing, and et cetera, one of the things that we've noticed specifically, and, I think, there's a lot to learn from the mature industries, I always talk about this when retailers are trying to understand how to provide a successful customer experience and create a store layout or a customer flow, look to the mature industries, look to who's been doing this for quick-serve restaurants, even Target, et cetera, the entities that have a lot more resources and a lot more experience. Social distancing is now something that is being successfully executed through communication, whether it's markers or signals or Xs on the floor, and et cetera.

For us, the nice thing about our kiosks is that it almost facilitates social distancing in a way where you can separate the kiosks in [unintelligible [00:06:04]. You can have someone on your staff queuing up individuals. One, showing the individuals, showing the customers that you've cleaned the kiosks, you've cleaned the device, and that it's safe, and it's ready for you, and then pointing and saying, "Here you go." Again, I think Target's done this really, really well. Queuing for people through self-service, getting them introduced to self-service. There's now this element of concern around human-to-human interaction, and that technology can help address this concern.

There's this marriage between analog and digital. You have to have the staff there queuing up people, communicating with people, making it obvious what they should do. Fortunately, after a little while, I think the customers- it's a little bit of a monkey see, monkey do. They see how they're supposed to go about it, they get comfortable with it, and the next time back, they do it comfortably and successfully.

It's important that the retailer is, again, deliberate in the way that they communicate to their customers, but also, at the same time, setting up your store flow, separating the self-service, maybe having to eliminate a self-service device between the different kiosks, and etc, so that people can comfortably complete their transactions, and et cetera.

Matthew: When you think about the flow of a dispensary pre-COVID and then post-COVID, what comes to mind- it's how a dispensary retail environment should flow, how that should feel, how that should look?

Matt: Sure. I think, for starters, when we talk too about our clients is for starters, what is the brand experience that you're trying to communicate and convey? What do you want your customers to feel as they come in and interact with your staff and purchase your products and when they leave? I think that falls into really two different buckets. You still have your emerging and mature markets, and we can even simply call it medical versus recreational use. If it's a medical or an emerging market, you might want to create a customer flow that is much like a doctor's office, and that's something that's important to you. That's going to involve a very formal check-in process. It's going to probably have a waiting room.

It's like your name gets called, and you're allowed into the retail area. You might be interacting with staff quite significantly. That might be important to your brand. That might be important to what kind of a customer experiencing you're trying to convey. In a more recreational environment, it should be like traditional retail. There's a less formal check-in process. You're inside the store, you can walk throughout it and interact with the staff, interact with the different technology. You can interact with the different products in a much more traditional way.

I think what's most important is that you maintain flexibility. What we have learned over this past year is that flexibility becomes very, very important to customer flow. We're still a young, young industry. We're still learning a lot. There's all kinds of new customers and products still being introduced.

Having flexibility, and what I mean by that an example of something that when I say maintain flexibility and be nimble is, when a customer of ours purchases floor standing kiosks, we always say, "Don't bolt them down to the floor," because at some point, you may want to change the customer flow. You may want to highlight certain products. You may want to move them. For an example, during COVID, we had a client here in Hollywood, and they moved all their kiosks to the front of the store.

It was a great way for them to address this new issue, these new challenges, as well as facilitate social distancing. It was great. They just can pick them up and move them and separate them by six to eight feet. Now, they're flexible to what these new challenges are. I always say, "Maintain some flexibility. Things are going to change. You're going to learn new things, and you're going to want to change the customer flow. I think that's what's most important.

Matthew: Curbside has been a huge thing because it allows people that are uncomfortable with going into a dispensary to stay in their car where they might not have gone if they didn't have that option. It also continues to let revenue flow into a retail store, but not all curbside is done equally. Sometimes it's a great experience, but then the owner of a dispensary might not have the resources to properly educate the staff, or they might be helping a customer and not see that there's a curbside order. Now that needs to be fulfilled.

How do you mitigate that in assigned roles and message it properly, so the flow, back to the flow, can make it a win-win for both customers and the owner of the dispenser?

Matt: That's a great question. Just to be clear, we don't facilitate curbside. This is something we're looking at today. It's something that's on our product roadmap for 2020 and potentially handheld tablets where there's actually a card swipe and et cetera, again, helping to facilitate transactions and customer activity outside of the store. For starters, it's great that, again, the cannabis dispensaries were deemed essential so they could continue to operate and support their customers and get them their medicine and the things that they needed throughout this very stressful time. Adapting to it was, again, very unique on a state-by-state or a market-by-market basis.

You say- you mentioned resources. Do they have the right resources? Do they have the right tools? Do they have the right technology? Do they have the right processes in place? I've seen examples of where a dispensary just set up card tables. They had these pop-up tents and they had these banners that were just printed up. I know in certain cities- you're in Chicago, I'm originally from Boston, there's certain dispensaries in certain neighborhoods, there's traffic and there's no parking and it's hard to pull up and curbside is not easy. I think it's been a real challenge. I think it's great that the municipalities and the certain cities have allowed for this.

I think there's a lot of learning that's still going to happen. I don't know if it's going to be fully sustainable. I hope it is, while, yes, we facilitate transactions and support our clients inside of the store, but we want them to be successful no matter what that transaction looks like. Curbside is something that has provided some convenience for certain kinds of customers. It's something that if they can maintain, we'll see. When we're fully opened up and running, like we normally had been previous to COVID, we'll see if the cities allow for this.

I'll be surprised if they do. Certain markets are very conservative. It's been good that they've allowed for this for now. Some dispensaries have done a really, really good job. There's others that have just been challenged. They didn't have the technology in place. They didn't have the processes in place, and they really didn't know how to fulfill. It's been a pretty steep learning curve for these folks. There's still some things to be figured out and some things that are still quite uncertain as it relates to that.

Matthew: What about for people that are in line? If you go to a fast-food restaurant like Chick-fil-A, let's say, and they have people out on tablets that are getting one part of the order started maybe your name and then you move on and then they add some other things as you move along the line. How does that work? How can that facilitate order?

Matt: This was one of the things that we were looking at. Our hardware partner, a company by the name of ELO is launching some handheld tablets with card swipes for this summer. We expect to get that hardware in hand to our product development team shortly so we can start to understand, again, how do we support our dispensary clients and enable transactions and really transactional velocity. If you think about what you're talking about, Chick-fil-A, In-N-Out Burger, et cetera, there's a quick-serve restaurants that are-- What they're trying to do is-- One of the examples I always use is that when we go to a restaurant it's quite busy, and the waiter or the waitress gets you a drink.

At least you feel somewhat satisfied. You've got a menu in hand. You feel like you're moving in the right direction, but when you're sitting there and there's no correspondence happening and there's no service happening, and you feel a little bit lost. Do they even notice that I'm here? Et cetera. When you have the handheld devices and staff outside of the store that are taking orders, and et cetera, one-year increasing transactional velocity or servicing more customers in a more expedited way, which is important for the profitability of the business. Nobody likes standing in line.

I don't care who you are. There's nothing enjoyable about it. That's one of the big reasons why we've really heavily invested and really focused on self-service ordering. I think that, again, this is playing out significantly in mature industries and quick-serve restaurants, and people are becoming accustomed to it. If you go to the airport, yes, we've been printing our own tickets for a while, but now we're bagging our own luggage. That whole operation, that whole process has been pushed to the other side of the counter. It's great. To be perfectly honest, it's harder and harder to be profitable in any industry in any business.

The more that you can put in at the end of the customer, in a comfortable way, the better. Southwest does a great job of it. Now they've got a couple of people that man could be 12 kiosks, and then we're actually printing out our baggage tickets and sticking them on our luggage ourselves. We never would've thought that that would happen, but it's happening. This is something that needs to be looked at. Drive-thru. There's not a lot of drive-thrus today. Harborside has recently opened up a dispensary out in the Palm Springs area with drive-through.

That's something that needs to be further explored and understood, considering COVID, considering all the things that are happening and allowing dispensaries to support customers as best they can in the same way that traditional industries, traditional operations do today.

Matthew: What have you seen in terms of what products have sold more or better recently?

Matt: There's certainly- inhalation-related products certainly took a hit with the COVID being a respiratory element. A lot of people backed off of that. Edibles absolutely saw a spike. People that had been maybe a little bit timid or apprehensive have now started to explore that. Again, a big part of our responsibility here is what we call safe access, successful consumption. We always say, "Go low and go slow." People are now starting to be more willing. Tinctures, topicals and other consumption methods are definitely seeing an increase in activity.

One of my secret shoppers, if you will, is my dad. He's in his 70s. He's a medical cardholder in the State of Florida, and he's an ex-retail executive, retired retail executive. I always go to him and ask, "Tell me where you've been? How was the experience? What'd you do?" Going back to your question on curbside. He recently did his first curbside pickup. His transaction was two X, what it normally would have been. He thought about it from a consumer perspective, maybe I should stock up a little bit. There was an increase in the overall sales activity. The very beginning of COVID, the dispensary saw some of the panic buying that was happening, toilet paper being the humorous example of what was being brought up quickly, but cannabis saw the same thing. My father's transaction was actually $400, roughly. I said, "Well, what would the average transaction have been?" He said, "200." I said, "Talk to me about the psychology on that." He said, "Well, it's because I didn't know when I was going to get back there. I want to make sure I have inventory, if you will." I said, "Okay, talk to me about the products you bought." He had historically been using a vape pen. He said there was no vape products at all. He went to sublinguals and tinctures.

I found that interesting. I think that will swing back around maybe. I hope it does, to be honest, but I certainly know that with COVID being a respiratory-related element, that people were really just trying to steer clear of anything that could exasperate that maybe, or cause more issue.

Matthew: I like the way your dad rolls. Dropping 400 bucks at a dispensary, not even thinking about it.

Matt: [inaudible [00:19:05] Part of the loyalty program over there. Jeez.

Matthew: I want to go to a Cutone family reunion, I think, now. That's on my bucket list.

Matt: It's a good time. It's a good time, I can promise you.

Matthew: Speaking of ordering and cart size and things like that, order totals, do you ever feel like there's too many things, too many products, overwhelming customers? You want choice, but then I call it the "Chili's menu problem," where you go to Chili's restaurant and they give you this book, and I'm like, "There's hundreds of options and permutations. I'm overwhelmed."

Matt: Absolutely. I agree 100%. I believe today that this is an area of the industry where we need to see some consolidation. There are too many brands. They do believe it to be overwhelming. It's a challenge not only for the consumer but also for the operator. Aside from the consumer, and it's a great example, when you say like a cheesecake factory. How can this one restaurant make so many meals successfully? It is, it's overwhelming. I also think it's a challenge for the operator in a way that like their staff has to be up to speed and educated on all of these various brands and how do they suggest all of those products in an equitable way. Then, the other part is that the operators are trying to be profitable. Inventory is a huge expense. You want to be able to offer all of these various products. You just don't know what's going to work, what's going to be successful, what's going to resonate. You want to have a little bit of everything, but that can become expensive. It's a challenge. That's a big, big reason why we created our consultation, is to walk people down a path and to have that be conversational.

Also, we ask people various questions on what are their goals in consuming cannabis. Then, we try to narrow that. We integrate with the POS and inventory management system so we can pull live product availability, and then they can throw that right into the shopping cart. This is an area where, I think, there's a lot of room for improvement. I think there are some great brands out there. I'm sure they'll succeed, but there needs to be some consolidation. I think it needs to be minimized to a degree to get people to be more comfortable and easier.

Matthew: No, I know when you specialize in industry like you do, you develop these mental models of what's successful and what you've seen work. Do you have a mental model in your mind of a retailer that's not- doesn't have any displays at all? Then they come to you, and they're like, "What? I really don't even know what I don't know." Then, how do you orient them in terms of like, "This is what you need, and this is the benefit you're going to see."

Matt: One of the things that I think we're seeing in the industry as a whole, from a technology perspective, we're very fortunate to have a great partnership ecosystem. We partner with some great POS companies Flowhub and Blaze and Treez, and then we also partner with, again, non-cannabis, noncompeting cannabis technology. I spoke of I Heart Jane and some of the loyalty programs Bring Big, and et cetera.

I think it's very important that everybody take a very solution-based or consultative [inaudible [00:22:13] approach. We all have a responsibility in helping the operators of this industry as a whole be successful. Teaching them, your prospects or your interested parties and what your technology can do to make them more successful is important. Not selling, and really more so educating them.

I'm finding that right now, it's important. This is a time where, I think, everybody on a personal level, on a professional level, is taking a bit of a step back and reassessing. From a business perspective, how can I run my operation a little bit differently? How could I be more nimble for the unknown? Things that are around the corner that we're not aware of. I highly suggest that operators take the time to learn about the different technology that's out there. Most of the companies that are out there today that we partner with have a great demo process. It's not a lot of your time. In a half hour you're going to learn about what's out there and how you can introduce us to your operation and do it successfully.

You mentioned there's still a lot of dispensaries today that haven't introduced a lot of technology, and I think that's okay too. I think it has a lot to do with the brand experience, consumer experience that you're trying to deliver. We find them the upper Northwest in areas like Washington and Oregon, and they're very hands-on. They don't want a real technological vibe, and that's okay. I think it's great.

I think it's important for the operator to at least take the time to understand what's out there, get the education, see where that will translate to profitability for them. You have a lot of different kinds of customers out there. Let's find a way to address all of them in a successful way that people that want to deal with a human being give them that capability. Just there needs to be a fine balance between the human element and the technological element of your customer experience.

It's a little bit of a challenge to get there, but you really-- I tell everybody now, "Take the time to learn about what's out there, see what works and fits for your operation." For us, it's like self-service. You said it at the top of this conversation, self-service kiosks are becoming a lot more common and certainly in the mature marketplaces, and we're seeing it in cannabis, certainly. I encouraged the operators, "Go through a demo, let us educate you on what it is that we can do to help you. If it is not a fit today, that's okay, but now you know, and maybe it can be introduced at a later time when the timing is right."

Matthew: You gave that example of your dad and the curbside pickup and how he felt like, "Hey, I want to stock up." When people are doing the self-service orders in a dispensary where they're interacting with display and putting their order together, prior to COVID-19, do you see a difference in basket size, prior to the "stock up" mentality?

Matt: Yes, absolutely. Again, there's a lot of data out there that communicates that whether it's at your house and you're ordering on Amazon, or if it's outside of a retail environment where you're utilizing a self-service device for the shopping process, that basket size is significantly larger. One has to do with the psychology of the buying process. When you can shop at your own pace, you're going to view and look at a lot of different products. That increases the likelihood that those products will get into the basket. Beyond that, this is a technology platform. A responsibility that we have is to make sure that our customers are more profitable.

We can smartly position certain products. We can pair certain products up. Certain markets we can see do if you will manage your specials. I think we might've talked about this on our previous conversation, but because of the sophistication of the Seed technology platform, we can identify slow-moving inventory, and then on an automated way, creative manager special and slash it at 50% and get it into the basket. How do we turn that inventory into cash rather than having it sit on the shelf?

Yes, absolutely, we're seeing a huge increase on customers that are utilizing self-service order in the average transaction. Minimally, we usually say it's around 10%. The goal always is, let's get X percent of your customers that come through your door to use your self-service devices. We usually will find that there'll be a sales lift of X percent, and very quickly, they'll experience ROI, but it's very-- Hey, listen, Amazon has done it very, very well. We're taking a very similar approach in some respects to getting the right products in front of the customers that they're for the products they're looking for.

Matthew: Now, the cannabis market in the US is bifurcated between now mature markets which- you're in a mature market, in emerging markets that are just coming online. What states are you involved in and how has it been different working in those different states?

Matt: We're active in every market today. We just recently penetrated the Puerto Rican market, so, slowly, shortly here, we'll be- we'll have the platform, will also be in Spanish, but-- It's interesting. I'm sure a lot of the folks that you have on the podcast would agree it's a super-challenging market. It's challenging in a lot of ways because it's emerging and it's young and it's evolving and it's changing on a daily basis, but it's also- on a state-by-state basis, every single market's different. That creates its own unique challenges. One from a compliance perspective, and et cetera, we're agnostic. We can be in any state, we can be in any market. It doesn't matter what it is. If it's medical, if it's recreational emerging, mature, it's fine.

We have a platform that's configurable. The platform is completely branded for the dispensary itself. We can introduce vernacular, we can eliminate vernacular, we can make it so that it adjusts appropriately for that market. We're everywhere today, which is great. Certainly, we focus more heavily on certain markets. When it's emerging markets, they're much more interested in the education, because they have new people coming in to be introduced to cannabis for the first time.

Mature markets, it's much more about self-service and operational efficiencies and how do you help me service more customers much faster and how do we increase that basket size? The messaging is much more focused in that respect for those kinds of markets, but, fortunately, we're pretty much everywhere. It's one of the benefits really when we built this platform, we wanted to be agnostic. We wanted to be able to service any and all dispensaries no matter where they're located in the United States.

Matthew: I don't know if you mentioned this, but if you're going through the self-service checkout and you're adding things to your cart, would Seed Display act in conjunction with, let's say, Flowhub to recognize that something sold out and not even show it to a prospective customer?

Matt: Yes, absolutely. You've got to be very careful about those things because, again, we've taken we got years of experience of really understanding the psychology of the buying process. What we don't want to do is create anything that would be negative. As soon as inventory levels hit a unit count of five or less, we eliminate it from the menu. That's, again, automated. Everything that we do as best we can today with some respective limitations is automated. We're always looking to provide a platform that doesn't create additional work for the dispensary. We want to actually make their lives easier. Yes. As soon as the unit count hits five or less, in an automated way, it eliminates. That's not even there for them to browse or shop any longer.

Matthew: That's good. Well, Matt, I'd like to ask a few personal development questions. Since you've been on the show before, I've come up with a few new ones.

Matt: I noticed.

Matthew: What is one change that came out of COVID-19 that is net positive for you?

Matt: I'm very fortunate that I've got a beautiful and wonderful family throughout this unique period that we've all been going through. It's been an opportunity to spend time with my wife and my three kids in an unstructured way. Typically, we're running in 50 different directions. We've got all kinds of things going on in the weekend and sports and obligations and, yes, of course, the kids would have school, but it's been unique in a way that we didn't have some of those weekend obligations. We can spend time together as a family. I let those things resonate with me.

Those are developmental opportunities and moments that help you hit that reset button. Then I allow that to translate into the business side of things. Throughout COVID, we were going through all the same challenges that every other business was. This uncertainty. What's this going to mean? I've always treated my employees and my company and everybody here like family and communicating on a consistent and a regular basis to try to lead us through this has been something that has been a real net positive.

That looking at both the professional and the personal side of things and really understanding how important my family is and whether they're, again, employees of Seed Technology or they actually have the last name Cutone is treating them all the same. It's been a real net positive for me.

Matthew: What is one skill that you have as an entrepreneur that you feel like is super important but wasn't taught in school?

Matt: I just said. Being an entrepreneur, what comes with it is a lot of risk. With those risks come stress. The management of that stress is something that today-- Again, I've been out of school for quite some time. Maybe they've introduced us another curriculum, but I really don't think so. It's the management of that stressing and maintaining balance. Being an entrepreneur, there's going to be days that you're absolutely knocking out of the park. You're killing every little thing that's in front of you and you're crushing it. Then, there's the days you just can't get a win. That's a reality.

How do you manage that and how do you deal with that? For me, there's been days where I'm like, "Man, I'm just getting my own butt kicked all day long here." There's been times where I've said, "Well, why don't I-- It's been four or five o'clock, so I'll pack it up, call it a day and I'll go home. I might just throw the baseball with my son for a little while. It's a great way to feel like I've been productive. Again, maybe more so on a personal level, but it's a way for me to meditatively just toss the baseball with him for a little while and relax and breathe a bit.

Stress is something that's real, for any entrepreneur without a doubt. Somewhere within the curriculum, there's an opportunity to teach people to understand how to maintain some balance and how to manage that stress because it's a key component of success. If you can't manage that stress here, I don't know if you're going to be around for it.

Matthew: You strike me as a big cotton candy guy, but you tell me what's your favorite comfort food.

Matt: [laughs] Wow. That's interesting. I've never heard that description before. It's funny. I hate cotton candy.

Matthew: I was just teasing. It's just like a fluffy, like whimsical [unintelligible [00:33:41]. That's why I was teasing.

Matt: It's so funny. Yes. I know. I know. It's pizza. It's pizza.

Matthew: Pizza, okay.

Matt: Again, it could be breakfast, lunch or dinner for me, hot, cold, I don't care. They always say there's no such thing as bad pizza, and I would agree with that. That's a big comfort food for me without a doubt.

Matthew: That's good. That's good. Well, Matt, as we close, tell listeners how they can find out more about Seed Displays, maybe see a demo or get some ideas and how they can put something like this in their retail environment.

Matt: Sure. I always like to offer up my direct contact information. I'm always looking to make friends and be of assistance and be helpful in any way I can. My email address is cutone, "c" as in cat, utone@, get, C-G-E-T-S-E-E-D.io, or you can go to the website, which is getseed.io and, certainly, take the opportunity to learn a little bit more about the platform, or you can go ahead and schedule a demo right there on the website. We'd be happy to help. I hope you understand how to run a more profitable operation without a doubt.

Matthew: Well, thanks for coming on again and educating us. This is really interesting times. It's cool to see how you're adapting and how you're helping retailers adapt. All the best to you in the rest of 2020.

Matt: Hey, thanks so much for having me on, Matt.

[music]

Matt: I wish you the best too.

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

We'd love to hear from you. Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis for using it for medical treatments. Promotional consideration may be provided by selected guests, advertisers or companies featured in CannaInsider. Lastly, the host or guests on CannaInsider may or may not invest in the companies, entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you're still paying attention. This little whistle jingle listening to will get stuck in your head for the rest of the day.

Thanks for listening, and look for another CannaInsider episode soon. Take care. Bye-bye.

[00:36:32] [END OF AUDIO]

Ep 306 – Born in Nigeria, Now He’s the Youngest African-American Dispensary Owner in America

seun adedeji elev8

What’s it like to immigrate from Nigeria, grow up in the US, and put yourself at the forefront of the cannabis industry in multiple states?

Here to help us answer that question is Seun Adedeji, CEO of Elev8 Cannabis.

Learn more at https://elev8cannabis.com 

Key Takeaways:

  • Seun’s background in cannabis and how he came to start Elev8
  • An inside look at Elev8 and its dispensaries across the US
  • Where Elev8 currently is in the capital-raising process
  • Why Seun decided to open dispensaries in Oregon, Massachusetts, and now Illinois
  • Oregon’s shifting supply and demand and how Seun is working around it
  • How Elev8 partners with local businesses to get customers in the door
  • Seun’s advice to those trying to get into the cannabis industry
  • Where Seun sees the cannabis market heading in the next few years
Click Here to Read Full Transcript

[music]

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

[music]

Matthew: What's it like to immigrate from Nigeria, grow up in the USA and put yourself in the center of the cannabis industry in multiple states? Here to help us answer that question is Seun Adedeji, CEO of Elev8 Cannabis. Seun, welcome to CannaInsider.

Seun: Thank you, Matt, for having me.

Matthew: Give us a sense of geography. Where are you in the world today?

Seun: I'm currently in Eugene, Oregon at one of our dispensaries.

Matthew: What is Elev8 Cannabis on a high level?

Seun: Elev8 Cannabis is a retail cannabis store. We're a multi-state operators with locations in Oregon and Massachusetts, and we're looking to expand across the United States.

Matthew: I mentioned that you're originally from Nigeria, but can you share a bit about your background and journey and how you got into the cannabis space and started Elev8?

Seun: Absolutely. Like you said, I migrated from Nigeria at the age of three. I moved to Chicago, Illinois. While I was in Chicago, Illinois, I lived with my stepmom, and my home was not a wholesome home. There was just a lot of chaos. As a young kid to make money, I was a kid with a duffel bag with candies in my bag. I was selling the kids like, "Hey, y'all know you like Alexis, your breath stink. I got some gum for you." Kids used to buy gum from me, buy candy.

I used to go to a place that was like [unintelligible [00:01:48]. It's really big in Illinois. I used to buy a batch and mark it up, and the cafeteria people mark up was insane. I was undercut numb a little bit and kids just loved it. I progressed to cannabis. I saw that there was more margins in cannabis. I started selling cannabis to kids in school and I did really well. At the age of 13, I got busted. I got arrested for cannabis possession at a really young age, and at that time, I felt like my life was over. I had a stepmom that told me I would never amount to anything. I was in a destructive environment, and I just didn't see a path forward for myself.

Luckily, I had my auntie who said that I can move to Texas with her. My auntie's very successful. She's an entrepreneur/nurse. She gave me the opportunity to really hit a restart to really center my life and to encourage me. She was the first woman to show me love, meaning unconditional love. It really helped me focus my entrepreneur skill set to look at how can I be better? I started focusing more on education. I joined FBLA, future business leaders of America. We went to state, we went national, so different things like that really helped me out.

I then pivoted, moved to Washington state. At this time, I was about 20, 21, and I saw cannabis legalization unfold before my very eyes. I started looking at how can I get into this emerging market? Now, looking at the revenue being generated motivated me even more. I wanted to bring a level of unconditional love like my auntie brought to me to my company. How could I do that with a lot of capital that is required to get into the cannabis industry? Cannabis started to uplift Elev8 and encourage more people to have a better life. We got started, I only have $50,000. I was just a young kid. It was a process.

Like I told you earlier, it was a three-year process, where getting a license, getting everything set up. I called myself the CEO. I was the chief of everything, and we finally got our business open at the age of 23, where I was able to acquire a property here in Eugene, Oregon. Now, I was paying an arm and leg in a very hidden location, and what really helped us succeed in Eugene, Oregon was-- Customer acquisition is great, customer retention is even better.

We were really community-focused and we were able to really word of mouth spread. We really did great. Like I said to anyone, listen out here, I slept in my shop for a whole year because I was underfunded. I only had 50,000 to get my first shop open, and now we're multi-state operators with locations in Massachusetts.

Matthew: You're in Oregon and Massachusetts. That's right?

Seun: That's correct.

Matthew: You've raised capital more than that initial 50,000 seed money. Can you talk a bit about that?

Seun: Yes. Oregon one, is an over-saturated market. In 2018, we saw products going for $100 a pound. We saw a dispensary selling grams for about little to $1 a gram to consumers. Longevity, I saw that this was not sustainable. I didn't want to work and die at my shop. I saw a greater opportunity in Massachusetts because there's a limitation of licenses and the harder it is for you to get an application in, the better it is. One thing that we leveraged, the State of Massachusetts, for retail cannabis, they limited to three per corporation. What this corporation, what do they want to do? They want to be profitable for the shareholder.

I know how to win licenses. I know how to write applications. I went to Massachusetts, I read the law. I hired one of the top attorneys out there, Paul Feldman, and we worked together to win our first license in Athol, Massachusetts. We purchased the properties. We lobbied the politicians, and we were able to win a license in Mass, and we won two additional ones. Now keep in mind, Massachusetts is a hard market to win a license, so we had our host community agreement non-opposition. That's the first step of winning a license. You got to win it in the community before you can actually apply with the state, which is what we did.

Each city in Mass, they limit the amount of licenses that they are given out to entities. For us, we were able to go to cities they were only given out to, and we were able to win them. Now, the second phase is how do we raise more capital to complete our build-out? What I did was I had a relationship with politicians like Tito Jackson, who is very minority-focused and very minority forward. I told him my situation in raising more capital. He introduced me to an entity that saw the benefit of shelf space.

What I did was I basically sold my shelf space to raise more capital instead of giving up any equity. Long-term, we modified that into just strictly debt capital with X amount and percent after we open after six months period.

Matthew: That makes sense. Well done so far, that's a big accomplishment. How did you say you were again? You're in your 20s?

Seun: Yes. I just turned 27, May 23rd. I opened my first location at the age of 23.

Matthew: Oh, great. Well done. You have a multi-state operator who invested in your business. Can you talk about that?

Seun: Yes. We negotiated for about eight months. It was a back and forth. The reason why they invested in me, keep in mind, to get a license in Mass is very hard and they see this young kid that had a lot of hustle. I was able to articulate and speak on the market on a high level compared to a lot of other people. I think that they were super impressed by that. I also own property, so that's the other way I was able to get some capital. My real estate property, I bought it for a huge discounted price. One of our property, we bought for 50,000. Now, the property is appraised at a mil. What we were able to do was re-collateralize the property to get more finance out of it.

Matthew: You leveraged the equity in your existing real estate, you cashed out that equity to invest in your Massachusetts dispensaries. Is that right?

Seun: That's correct.

Matthew: Was it this politician in Massachusetts who was pivotal and introducing you to some investors that could help you out? That was a key introduction.

Seun: Absolutely. It was a politician and also their attorney, so the big multi-state operators. Keep in mind, I'm sitting here lobbying for myself to win a license in different cities. They had lobbyists, we were all sitting together because we had a presentation. They were all impressed by me. They were impressed by my knowledge show. Outside in the politician, we also had some big firm, Vicente Sederberg, their attorney spoke really highly of me.

All those people, your reputation follows you. When those people are speaking highly of you, and what you've accomplished in such a hard market to even get a license in, that also helped me out. It was a combination of just people speaking highly of me and my track record of winning licenses.

Matthew: That's great. How do you think you honed your mindset because unfortunately, the state of the world is that I think most people would rather complain that the system doesn't work and they can't get things done. You just see this as an opportunity and run right into it and just talk to people, figure it out. Did you read any books or have any mentors or anybody that helped illuminate like, "Hey, this is possible. This is how you do it," or was it just self-taught? What can you say there?

Seun: I believe nothing is given, everything is taken. What I mean by that is everybody has their own problems situation. You have to go out there and hustle, you have to go out there and get it in and nobody's going to do it for you. What I did was I learned from everybody. I assess every situation. I learned from people what their success were, what their mistake was, what decision they made to get them to the point they're at right now. I assessed those situations. I said, "Okay, this is what I don't want to be and this is what I want to be."

I started hanging out with people that I want to be like. I remember the first wealthiest multimillion-dollar person I met was in Eugene, Oregon. He was just wealthy beyond my wildest imagination. When I was struggling, he never gave me a penny but what he did give me was knowledge. I didn't want his money, I wanted knowledge. I called this man, I called him about a hundred times. I was like, "Hey, can I just take you out for coffee?" One day he finally returned my call and he's like, "Yes, I'll take you out and I'll pay for it." I said, "No, I want to pay coffee for you."

He came, we went to coffee and he started talking and I learned so much. I asked him about his journey. I don't want to hear about people's success, I want to learn about your journey for you to attain that success. I think that's super important. I read a lot of books. I think that a lot of people undermine kindness and love. I think that in these times that we're in, love win more than anything because back in the day you had to be firm, you had to be a hardcore, you had to be this mean person and control people. I think right now when you lead with love and passion and integrity, you can go a lot further than ever before

Matthew: Well said. You have a presence in Oregon now. You've got the three licenses in Massachusetts and you're working on Illinois. You're like, "Hey, how can I get into the most difficult markets?" [chuckles] That's the decision you made but that's also good. You have a moat around you. Illinois is maybe a little less difficult than Massachusetts but I wouldn't say it's easy. What do you have going on there?

Seun: Illinois is my home state, giving back is really big. What we did in Illinois is in 33 states out of the 50 States in the United States, all 33 states you need real estate before you can even get into or apply for a cannabis license. This does not say you're going to win. You're gambling hundreds of thousands of dollars. What we did in Illinois, we worked together, we lobbied and we had the opportunity to talk to the politicians that are writing a bill like Stein, Kelly Cassidy. We really advocated for the real estate to be removed as a criteria before you apply.

We also advocated for funds for minorities to tap into so they can get their business started because when you look at all the states right now, everyone is looking at how to implement minority inclusion. The biggest thing that fail when people do that is yes, it's great that we have advocacy work that's being done and we have now social equity that people are rolling out with but the biggest hurdle is capital. Money talks at the end of the day. What we did in Illinois, we lobbied for capital to be implemented in the bill. To our surprise, they did that which was a huge one for us.

The third step was, how do we get this information out to the people that really need it? The people that have been affected by the war on drugs. Illinois bill was 800 plus pages. Just for you to read the law, the process on how to apply, you have to read 800 pages worth of legislation. When you look at the minority that have been most affected by the war on drugs, they live in a disproportional area, they have three jobs.

One of the things that we did was we started to Elev8 Our Community where we went out, we helped people from the Southside, Westside of Chicago and we helped them with understanding how to apply. We also had workforce seminars where we partnered up with Minority for Medical Marijuana, we partnered up with greenRush, with Good Tree Capital where we gave them the resources they needed to apply and actually have an opportunity to win a license.

Matthew: That's a lot. You've got endless hustle, Seun.

[laugher]

Seun: That's one of our core values. I'm young right now and the biggest thing is I'm the underdog. They don't see me so it gives me the ability to if I make a mistake compared to all the bigger MSOs, I can pivot, I can adjust. There's a lot more in the capital cost to build out our store compared to a lot of other people is a little bit lower because our target market, we don't really focus on big cities. Our goal is smaller border town, so that's what we focus on. You don't currently see Elev8 in Boston or any big city right now because we see that property acquisition in smaller towns are a lot cheaper.

We focus on smaller towns because they're on the border of illegal state, so all three of our locations in Mass are on the border of New York, Vermont, New Hampshire. We do that strategically because of those few things I initially mentioned, less capital and the lobbying power. You have a greater opportunity especially when you already have a track record, the ability for you to get in front of the mayor, and actually talking them buying into your goal and your vision and how you can help the city and the town is a lot greater. Strategy is big and understanding your market is big.

Matthew: Let's circle back to what pushed you out to look at Massachusetts and now Illinois. It was Oregon's flood of inventory. There was so much supply of cannabis flower that the price just dropped massively. You said $100 a pound and that was a couple of years ago. Where is it today?

Seun: The prices are actually coming up. You saw a lot of institutes sell out and you saw bigger corporations come in and consolidate a lot of the mom-and-pop businesses. Prices are going up again. You can get a b-bud from $500 a pound. Now, you could get some really great flowers from 1,000 to 2,500 so prices are normalizing. Before, that was not the case. As you know Oregon right now does not have a cap on the total amount of licenses they've given out so is a endless amount of licenses. Now, they put a pause on it currently and that is really helping the market.

Matthew: When you have a dispenser, you have the problem of chicken and egg problem is that you want customers, you want to serve them and you want to retain them. How do you get them in the door? Right now, Leafly and Weedmaps is probably the biggest chunk for most dispensaries. It's thousands of dollars a month that they're being paid to get people into the store. That's a valuable service, I don't want to minimize that. What else can you do? How do you drive word of mouth? Is there anything else that's less expensive or how do you get those initial customers to come in?

Seun: Partnering up with small businesses, that's what we really do. Vendor days where we get our local farmers to come out. COVID-19 is freezing that for us a little bit but we get local farmers. They have their following, they have people that trust them and we get them to come in, set up a booth, do different promotions where we both eat the cost. We get different discounts out there where we can really push. We look at different margins like what is your profit margin need to be? What is ours need to be? We partner up with those farms to get it to that where now we are pushing really crazy deals to get people to notice us but now once we get those customers in, the prices we then normalize it.

It's a win, win for us and the cultivator. There's a mom-and-pop-business that might be struggling to even push their product out. Now we've come up with a creative way where I'm not taking any equity in your company but we are coming up with creative ways where we can both win. We also do things like treat everyone like gold. We partnered up with University of Oregon local businesses, where our customers come in, they write positive note, each month we pass it our random strangers. What that does for us is it gives more visibility to who we are.

Those local businesses are putting our flyers at their business. They're putting different swags at their business, so really partner up with the community and local businesses has really given us the ability to save on costs. Like you said, Leafly is a arm and a leg, but those little small things where we could do a cross-promotion with local businesses has definitely helped us out.

Matthew: Three locations in Massachusetts strategically placed to border other states. It's a lot of logistics and capital and everything to get that open. When do you think the first sales will happen in Mass for you?

Seun: We are ready to go. We have our post provisional license right now. Due to COVID-19, we were set for our in-person walkthrough investigation. Right now because of COVID-19, they paused on that about two, three weeks ago. Mass Cannabis Control Commission, we've been lobbying for virtual investigation, our commissioned title and our Commissioner Hoffman has agreed to those things. They're now just working on the guidelines on what virtual investigations actually going to look like is in place. Once they figure that out, we're really hoping before Q4, we're going to open our shops in Mass and we'll be good to go.

Matthew: There's a lot of people that are listening that have been waiting and trying to figure out how to get into the industry. They maybe just send out a few resumes and then they say, "That didn't work. I guess this isn't for me." What do they need to do differently? You have a level of commitment I think that is way higher than the average person. Is it first just the commitment in your mind to get into this industry? Is that what it took for you, or once you got some traction that gave you the courage for the commitment? What are your thoughts there?

Seun: I'm scared. I was scared when I first started. I was terrified. I'm a young kid. Outside of selling drugs, I was a marketing manager for Sprint, but I never run my own store. Being optimistic and knowing that life, you can have-- I believe personally, this is me, this is just my personal opinion. I think that, like I said, nothing is given everything is taken. It's just how bad do you want it? There's a saying you have to want something as bad as you want to breathe. Has anyone ever try to hold your breath, how hard would you fight to make sure you're able to breathe? For me, I don't make excuses on what is not possible. I started looking at what can be done.

There's certain things that are absolutely out of my control. I really dive in on creating a core team around me, really great executive teams. Shout out to Catherine Tanner, she's our COO. She keeps me grounded. She's super amazing. For the people that feel like they're just having a hard time to get in, I think really understanding what part of the cannabis industry are you most passionate about that even if you don't get paid, you'll still do it. Figure that out first. Then once you're able to figure that out, look at now, how do you get paid?

Keep it simple. What step do you need to do to win a license, or to get this job? Who do you know, within your network? Can you go on LinkedIn and start looking at who works in this facility? Can you start interacting with them, emailing them, showing them your resume, showing them who you are, your personality? I think it's more about getting creative, thinking outside the box and inside the box. Look, I tell people leverage the laws to get to where you want to go. In every state, I read the laws. What that does is, outside of my attorney reading it, it gives me a level of understanding on how can we target this market and how do we win a license.

Like in Massachusetts, we had a lot of people that were targeting the same city we were targeting. I was the only minority African-American man to win in that particular city where everyone, big foreign firms looking to get in. How I did that was I understood the laws and I also have a track record. This is a mouthful, but hopefully, it answered your question on a mastery level so I'm going to leave it at that.

Matthew: All right. Seun, I'd like to ask some personal development questions to help listeners get a better sense of who you are as a person. I think in your case, everybody's gotten a sense already, but I'm still going to ask the questions. Is there a book that had a big impact on your life or your way of thinking that you'd like to share?

Seun: Yes, I have several books. The Four Agreements really played a big part in my life. How I look at it is what you speak to yourself is what manifests. I think that we are all-powerful beings, our mind is so powerful, so when we think something it manifest. When we are gloomy or sad, that's how we see the world. When we're elevated, we see it in a different light. We have the power to-- I believe in the blank page, and what that means is we all have the power to write our story because you didn't come from wealth, that does not mean you can't obtain wealth.

I'm going to say this again. I came from a third world country where poverty was everywhere, where is either you're rich or you're poor. There was no middle class. When I came to America and I saw the endless opportunity. Not everything is perfect, but I believe that if you have a level of hustle and grit, there is more possibility for your success than if you were in a third world country.

Matthew: I love it, man. That should be your slogan, grit and hustle. You got it.

Seun: [chuckles] Actually, that's actually part of our eight core value that we make all our decisions based off our eight core values, and that's how I live my life.

Matthew: Tell me, is there one thing that you believe to be true that most people disagree with you on?

Seun: Wow. Yes, that's a deep question. I'm a very optimistic person. Let's just say we get in a confrontation and you do something bad to me that really hurt me or you screwed me over. I have different options. I can sit there and harbor hatred and look at how to get you back, or I can pivot and use my energy in a more positive way to get the outcome that I want. I'm the type of person where I'm very optimistic. I don't take bullshit, of course, but if you do something to me, the way I would react is a little different than other people. I just don't have time, nor do I have the energy to apply on your demise when I could focus on my own success.

I believe energy and my time is precious, so I rather not waste it on negativity when I could be more creative when my mind is clear, when I'm a lot more positive. I have an example, somebody owed me a lot of money and it was getting to the point where it was just draining me. It was like, "Just pay me what you owe me," and I just told them to keep it. The amount of stress and energy that it was taking me to really get, it just messed up my whole vibe. It messed up my day. I just don't have time for that. Let me stop right there, but it's just your mindset is really powerful and what you focus on is what you manifest.

Matthew: Well said. Seun, as we close, how can listeners connect with you and find Elev8 online?

Seun: You can find us at elev8cannabis.com. You can also follow us on social media @Elev8Cannabis on Instagram, Twitter, and all social platforms.

Matthew: Awesome. Thanks so much for coming on the show and good luck with everything. You do have a lot of grit and hustle. I really appreciate the spark and energy you bring to the industry. It's really motivating. Keep it up.

Seun: Thank you so much for having me. I'm a huge fan of yours. I listen to your podcast every Monday.

Matthew: All right.

Seun: Yes, so huge fan. Thank you so much for having me on.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at cannainsider.com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends.

Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsider.com. We'd love to hear from you. Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Promotional consideration may be provided by select guests, advertisers, or companies featured in CannaInsider.

Lastly, the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial adviser before making any investment decisions. Final disclosure to see if you're still paying attention. This little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening, and look for another CannaInsider episode soon. Take care. Bye-bye.

[music]

[00:30:55] [END OF AUDIO]