Ep 266 – Everything You Need To Know About The Latest Trends In Cannabis – with Roy Bingham of BDS Analytics

roy bingham bds analytics

Roy Bingham is the CEO of BDS Analytics, which produces the leading market trends reports, analyses, and consumer research in the cannabis industry.

Not only does Roy know EXACTLY what is selling in dispensaries, but he also has definitive data on which cannabis product trends are accelerating and which are fading.

In this interview, Roy shares his insight on where cannabis is heading in the months and years ahead.

Learn more at https://bdsanalytics.com

Key Takeaways:

  • Shifts and trends that are beginning to take hold in cannabis
  • BDS Analytics’ statistical modeling methodology and how the company projects accurate market data
  • Roy’s clientele at BDS Analytics and how they benefit from the company’s market data
  • How much CBD is selling and how this currently varies by geography
  • New cannabis delivery systems and Roy’s projections for their success
  • BDS Analytics’ latest insights on cannabis consumer behavior
  • Acceptors and rejectors and why they are important to the cannabis industry
  • BDS Analytics’ recent partnership with leading data provider IRI
  • How cannabis has evolved over the decades and Roy’s insight on the industry’s future
Click Here to Read Full Transcript

Matthew: 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 cannainsider.com. Now, here's your program.

Hi, CannaInsiders, you are really going to enjoy today's interview with Roy Bingham of BDS Analytics. He's going to take you behind the curtain and tell you not only what is selling in cannabis dispensaries right now, but give you context as to what's driving those sales. My biggest three takeaways from this interview were one, it's great to start a business that already has shown to be successful in other industries as Roy will share about. It not only helps you raise capital, but it gives you confidence that there's a better than average chance that the business will work.

Two, consumers more than ever want control of their cannabis and CBD experience. Before, consumers would settle for general control, but now they want granular control. For example, in the past, a consumer might be content with the product that helps put them to sleep. But now they want something that allows a pleasant twilight experience that enables them to read without a racing mind before going to sleep. Three, the kind of business you choose to be in really matters. For example, Roy's business has two big benefits that jump out at me. First, it allows clients to have a clear sense of the reality of the marketplace instead of speculating about what's happening. Second, it helps clients make decisions on their strategic direction. This is like having a clairvoyant in your boardroom. It's a huge benefit and one reason people pay a good sum for BDS insights. Okay. Enjoy this interview, and if you like it, let me know what you liked about it by sending a tweet to @cannainsider. Enjoy the show.

Today we welcome back Roy Bingham, co-founder, and CEO of BDS Analytics. Roy is a regular guest that brings important data about what is selling in cannabis dispensaries right now. Roy, welcome back to CannaInsider.

Roy: Thank you, Matthew. Great to be back.

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

Roy: I'm just at our head office, which is in Boulder, Colorado. Kind of nice to be back at head office. I spent a lot of time on the road as I'm sure most entrepreneurs do in the cannabis industry, but I've actually got a full week here.

Matthew: Good. What a nice, a nice place to be this time of year. So, for new listeners, can you just give a high-level snapshot of what BDS does?

Roy: Yes. Absolutely. So, you know, before I came into the cannabis industry, I was involved in developing products and selling products in the dietary supplement space, especially digestive care products like probiotics. And in order to figure out which products to develop, we needed data. We needed to know how big was a category, how rapidly was it growing, and what were the leading products in those categories and therefore, which attributes and characteristics did they have so that if we launched into that market, what was a reasonable expectation for sales, and what would our product have to look like in order to win? Well, that data was available in the dietary supplement space, in the natural products world from a company called SPINS, which I actually helped found over 20 years ago. And then also in the food drug mass places like Walmart, Walgreens, CVS, etc., you could get that data from two other big companies, Nielsen and IRI.

That data simply didn't exist in the cannabis industry. And so, four years ago we started BDS Analytics to pull in that data, to give the insights to the growers, producers, and brands so that they had the advantage that other people have in other industries. And that's the origins of BDS Analytics. We call it sales tracking. We've processed more than a billion transactions through our system now. We focus on the big western states of Colorado, Washington, Oregon, California, Arizona, Nevada, which are about 70% of the current legal U.S. cannabis market. And we can provide all sorts of insights on categories, subcategories, brands, items.

So, that's the starting point. And the next area is that our clients came to us and said, "Great. But now I need to know who the end consumer is." And so, we have a lot of experience on our team doing consumer insights work. Much of that is based on surveys, and we have done surveys now with well over 70,000 people about who they are, what they want, what their behaviors, attitudes, and beliefs are, when do they consume, how do they consume, why do they consume, to give tremendous insight to our clients about the consumer of today and also the likely consumer of tomorrow. So, that was the other really fundamental thing that I needed to know when I was doing sales and marketing was, "Who are they?" and, "How can I position my brand and my products in order to succeed with the growing categories of consumers?"

And then the final area of focus for us is what we call industry intelligence. So, it's bringing all of this information together with a regulatory data with our partners, Arcview Market Research, and we published a book called "The State of Legal Cannabis Markets," coming up as its seventh edition. And then we have cannabis intelligence briefings, which we publish on a monthly basis about a specific aspect of the industry. And that is very useful to people who are already in the industry, and also to big companies that are observing the industry, as well as to financial services, people who are investing in or developing products for the industry.

Matthew: Wow. That's a lot that you're doing Roy and that I can see why your business is growing because that's really important data I would want to find, you know, in the industry starting to sell something or just an industry observer. That's a critical piece.

Roy: Yeah. You're quite right. Six years ago there were... Sorry, four years ago there was six of us, and now there are 45 people in BDS Analytics.

Matthew: Yeah. It's a whole different set of challenges once you start to grow like that. Well, Roy, it's been over a year since we spoke last. What, in your mind, are the big shifts or trends that have changed since the last time you've been on the show?

Roy: Well, of course, the first thing is that there are more dispensaries and there are more dispensaries in more states. There is more adoption by consumers in the fully legal states, the 21 plus states. We have now 32% of the adult population, 21 plus, who have consumed in the last six months. That goes up about two points every six months as we repeat our surveys. So, it's just more consumers coming into the industry. Now, every state varies significantly. And so, in Colorado, for example, we now have about 700 dispensaries, and the market has slowed down. And the reality is the medical market is declining, the adult use market is still growing. But if you look at it overall, there's almost no growth in the Colorado market now.

California has also swallowed hard with the introduction of its regulated market, and the very high tax burden that was imposed and various other regulatory issues meant that California actually shrunk last year relatively to the previous unregulated market in California. Whereas other states like Oregon are still growing strongly about 20% per year. Arizona, a medical-only market, but a large medical-only market is growing very strongly, and we've all probably heard of the growth of the Nevada market as well, which is also very good. But, of course, some of those states have hundreds of dispensaries, and some of them have relatively limited numbers of dispensaries, therefore doing much higher volume. And so, everyone should be looking at the individual variations between those states.

Now, in terms of consumer behavior, we see a lot of consistent patterns. So, consumers, despite the regulatory structures, are fundamentally similar from one state to the next. And so, we've seen consumers adopting certain categories of products and subcategories of products in a fairly consistent way. We continue to see flour taking in declining percentage of purchases. It's actually growing in quantity in most states. It's just that the price of flour products has declined significantly whereas concentrates are now about 30%, in fact up to 37% of revenues in some states. And concentrate prices have either increased or at least held steady. And then ingestible products, typically around 15%, again, there's regional variation there, and they have either held steady or in fact, increased in some cases. And of course, there are all sorts of reasons for that that we can get into due to, you know, the convenience and the fact that many of these people are relatively new consumers and they're choosing convenient forms of consumption. Convenience really is one of the top five influence for consumers these days.

Matthew: Yeah. That makes a lot of sense. I wanna just backtrack a little bit now that we've a broad overview and just understand a little bit more about the statistical methodology and how you project market data accurately. Could you just give us a snapshot there?

Roy: Yeah. So, we have partnerships with hundreds of dispensaries. And what we do is we create a panel in each of the states. And those dispensaries give us all of their point of sale data from their point of sales system. They give us access to that data. We have to do a lot of processing of that data to make it useful. And then what we need is a statistically significant panel in each state in order that we can project total activity in that state. It's one thing to just have panel data that says, you know, "In our limited panel, this brand is doing very well," but what our clients want to know is on a statistically significant basis across the entire state is that brand doing well and what is its market share and growth.

So, we put a tremendous amount of effort into having a demographically balanced panel of dispensaries in each state and processing somewhere around 20% of all the transactions in the state. And we found at that level we're usually very accurate. Many other industries, about 10% of the data, is sufficient. This is a very dynamic industry, tremendous numbers of new product introductions and very rapid growth of certain products and decline of others. And we found that we needed to get up near the 20% of all data in the state in order that we could project accurately total activity. So, why do those dispensaries join our panel? Well, they get the service for free in return for giving us the data. So, all of their data is anonymized and aggregated into a big database, but they can look at their own data and see how their store is doing, and they can compare it to the averages in their market. And that enables them to make smart decisions like which new products to bring into the dispensary, how to price those products, etc.

Matthew: Okay. And just to give listeners a sense, who are your typical clients purchasing subscriptions to BDS Analytics?

Roy: Yeah. It's a very big range these days, Matthew. First off, it starts with the brands in the industry. So, 70% of the top 50 brands in the United States already subscribe to our service, and they're using it in order to figure out their market share, which products to develop, and for sales and market tracking. And then in addition to them, we have people who are studying the industry very closely starting off with the big Canadian licensed producers. Many of them are subscribing to the data because they see that the U.S. trends are likely to be what will apply to them in Canada, number one. And number two, of course, they all have aspirations or have already made moves into the U.S. market. So, they want to know who the major companies are and who the prospective partners are for them.

But it goes far beyond the cannabis industry these days. So, many companies in what we might call adjacent industries like healthcare, like beverage alcohol, some aspects of consumer packaged goods are expecting that there's some impact of the growth of legal cannabis on their industry. And so, they start off very often wanting to understand, "Who's the consumer and is the consumer an overlap with the consumer of my products?" So, now, you know, the world is dominated by about 13 beverage alcohol companies, they represent the vast majority of that industry. And almost all of them subscribe to our consumer data, and in many cases our market tracking data, and certainly our industry intelligence data as well.

And then on top of that, now we're seeing a lot more interest from healthcare companies, people who do OTC products like sleep aids, painkillers, for example, are very interested to know, "Is this displacing sales of my products? Is there something that I can do to minimize the impact, if it's negative, of cannabis on the sales of my products? And is this actually an opportunity for me rather than a threat?" So, you know, the big over-the-counter companies. And then, of course, you know, the pharmaceutical companies who are long-range developing cannabinoid products. And then in addition, now we have this phenomenon of the growth of the CBD market, CBD from hemp being sold in general retail outside the dispensary channel. Obviously, we have tons of information about CBD products that are sold in the dispensary channel. And we've organized that very thoroughly because the people who are shopping in the dispensary channel are the cutting edge consumers who are now influencing others who might be shopping in Walgreens or CVS and looking for CBD products.

And so, there are many companies that are now producing CBD products just for general retail, not for the dispensary channel, who are looking for data in that area. And that can include people like dietary supplement companies, natural products companies, health and beauty aid companies. And they're also subscribing to data. And last week, we announced our partnership with the leading data company in general retail, IRI. And IRI and we are organizing all of the data about those transactions that includes CBD so that our clients can get a holistic view of what's going on, not just in dispensaries but also in the food drug mass world with regard to growth of CBD. It's a huge undertaking for us, but we have a massive partner in IRI to help us do it effectively.

Matthew: Now, I hear you mention IRI in your past too. Like, did you know them from your previous life in this kind of general business?

Roy: Yes. So, you know, there are two companies that dominate the provision of market tracking data in North America, and they are Nielsen and IRI. Nielsen tends to be a little better known because they also measure consumer consumption of advertising. And so, they're quite known for the Nielsen Ratings. IRI doesn't bother with that. They focus exclusively on tracking what is selling in any kind of a major channel and organizing all of that data. And their clients include 90% of the Fortune 500 that are selling consumer products. So, by working with them, we're able to get this cannabinoid data as well as cannabis industry data to most of the major decision-makers in the consumer packaged goods world.

Matthew: I can see where that'd be really valuable cause the dispensaries are kind of the bow wave of CBD preferences. And then they lag behind as they enter into Target and CVS and Walmart, Walgreens. So, that makes a lot of logical sense to partner with them. Is there anything you're seeing in terms of CBD, like trends or highlights that, you know, people should be thinking about, about how it's selling or how it's infiltrating into consumer preferences?

Roy: Yeah. Absolutely. I mean, the first thing is the rate of growth of CBD products in the dispensary channel. So, we have, and this is hard to do, but we've looked at 150,000 items that are being sold in dispensaries, and we've determined which of them are primarily being sold because of their high CBD content. So, of course, they also contain THC and other cannabinoids as well, but if CBD is a major feature of the product, then we have captured that fact in our database. So, now when we look at the trend, we see that four years ago, CBD products represented 3% of sales in dispensaries. And that includes strains that are known to be very high in CBD sold as flour as well as concentrates, ingestibles, and topicals.

Now we're seeing that that 3% has grown to 11% of sales last year. So, all of the categories have grown. But within those categories, the CBD-containing products have grown even faster. CBD does extremely well in topicals, for example. Topicals is less than 2% of sales in dispensaries, but CBD-containing topicals have outperformed to the point where salves, and bombs, and lotions, now 80%, 85% of those products contain a high CBD content that's very prominently displayed on the product. So, we've seen massive shifts in the dispensary behavior. And of course, this is a guiding light for what's going to happen in, as you said, CVS and Walgreens and Rite Aid and the like.

Matthew: Okay. And in terms of, you mentioned, just the growth of the different states, you know, Colorado is kind of flat, Arizona's, you know, doing pretty well, and Oregon's growing 20% year-over-year. Is there any other variances by state that kind of jump out at you?

Roy: Yes. There are many actually. As I said, consumers are fundamentally the same, but the market can evolve differently because of constraints. So, as I said, Arizona is a medical-only market. They narrowly failed to pass adult use in Arizona, but it's a large medical market because the criteria to qualify for medical use are relatively broad. And they have gone very much quicker to concentrates than other states, and concentrates represent a much higher percentage of the market, and interestingly, ingestibles are relatively lower in Arizona. And I think some of that is to do with the availability of products.

As you know, brands find it very difficult to cross from one state to another. Some of them are succeeding in doing that now by setting up partnerships or setting up completely separate entities in each state in order to meet the federal and state-by-state guidelines. And so, some of them are now moving into Arizona, but really each state is its own production, cultivation, manufacturing, and branding environment still, with the possible exception of California and Colorado where there's quite a bit more interaction between the fairly well-established companies now. So, that's an example of regional variation where you see concentrates especially for vaporizer use being higher. In California, concentrates are also high, 33%, 34% of sales, and the vape portion of concentrates is nearly 70% of total sales. So, 500-milligram cartridges are the most popular products in that market. And yet we see in Colorado where you've got a market that has about 30% concentrates, but vape products are less than 50% of sales in Colorado. And dabbables are still quite popular in Colorado, whereas they're a much smaller percentage of the market in most other states.

Matthew: Okay. There are some new and interesting delivery systems for cannabis. What are they and how well are each of them doing? And any kind of highlights you can give us there?

Roy: Yeah. I think that the first thing to recognize is, as we discussed earlier, convenience is really important to consumers, and they're also looking for a brand and product experience that they can trust. So, the starting point for these alternative dosage or alternative systems is controlled dosing and experience. And that really matters to them. In fact, 33% of edibles consumers have told us that they prefer low-dose products, less than 10 milligrams. And if you look within that category, you'll see microdose, you know, less than 2.5 milligrams sales have grown over 100% last year. And so, that's what a lot of consumers are choosing. They are looking for these less than 2.5-milligram experiences and also with a high CBD content.

We're also seeing consumers looking for a promised experience that they feel confident about. So, it's not just dosage, it's actually they're guided by moods and effects. And currently, that represents, you know, mood and effect statements being made on the product represent about 5% of sales in 2018 but it is also growing significantly where people are putting tranquility or energy or relax or sleep, etc., in the branding of their individual products. So, that's just another overall macrotrend that we're seeing. So, to recap, they're looking for convenience, they like mood and effect, they're very interested in good dosage and control. Of course, consumers want discrete products, and they're treating, you know, health and wellness conditions that run the full gamut from, "I need to relax," all the way to, "I have pain," maybe, "I have severe pain," or, "I have chronic pain," and PTSD characteristics, for example. And so, we're seeing different behaviors in all of those categories.

Now, when we come down to the specific new formats of delivery of product, sublinguals have done well. They've grown 53% in the last year, but what's done really uniquely well within that world is dissolvable sublinguals. They've actually grown at 3320%. And what we mean by that is strips typically. There are a number of products that have recently come onto the market, and they may also combine... So, they are all of those things that we talked about, aren't they? They're convenient, they're discreet, they seem to have accurate dosage control. In some cases, people are making a mood and effect statement and associate it with those products, and they're there for health and wellness. They look like a more medical-oriented delivery system. And very often they also contain CBD. So, that's the sort of six out of six important trends. We use a trends score card. So, that's one area that has really taken off.

Topicals is a very interesting area of growth. I mentioned that they are only about 2% of the market, but they are very important to the boomer group and boomers overindex in their purchasing of topicals, especially for pain relief. I'm a little familiar with that because I am just a boomer myself, and I also try to run marathons and do silly things like triathlons and the aches and pains can be quite significant afterwards. And so, we've seen people adopting topicals, some of the faster-growing companies in the industry are topicals companies. And again, you see a more medical application for health and wellness. As I said before, a lot of CBD products are in that category and especially targeting the boomer.

Then I think another really interesting area is beverages. It's a small portion of edibles. It's really only 6% of edibles sales at the present time are in beverage format. And by that, we mean drinks, powdered drinks, teas, shots, etc. But when you get into the detail under the top of that, you actually see that what's doing very well are the teas, the discreet kind of dosage formats, dissolvable products. So, before, it used to be a can of a product and it might have 50 or 100 milligrams and obviously very uncertain as to how you gonna feel after you've taken it. Now you're looking at these microdose products, dissolvable or teas and they've been doing very well. I think another interesting area, it's interesting to everyone, let's face it, is sex aids. Okay. So, we've also seen considerable, a number of companies launching both topicals, edibles, and inhalables for that matter with "this will improve your sex life" type of message as well. And there's been a significant improvement in that category and significant growth. That's just a few examples of some of the things that come out of the data that, you know, are not very obvious until you dive in below the hood and look at the subcategories and even the sub-subcategories.

Matthew: Wow. That's fascinating. Now, you mentioned that you survey people that visit dispensaries about their behaviors and beliefs, and beliefs kind of stuck out to me because beliefs don't necessarily have anything to do with reality, but they influence our decisions. Is there anything in terms of behavior or beliefs that kind of jumped out at you in terms of, was it back to, "I want convenience," or micro-dosing, or that type of thing? Or is there anything that was just a straight up unusual about the beliefs or behavior?

Roy: Well, I think what's very interesting is that people don't understand a lot of products and they certainly don't understand CBD products. In fact, in both the United States and Canada, 69% of people incorrectly asked the question, "Will CBD products make you high in the same way that THC does?" So, there is a false expectation out there that CBD will have a psychoactive effect. And so, we've got at this same conclusion a number of different ways in our questionnaires. And the concern behind that, of course, is that people are gonna try a CBD product, they're not going to feel, in most cases, much different. Some people tell me that there are small psychoactive effects that certain people will notice. And then they're gonna say, "Well, it didn't do anything for me. So, I don't think I'm going to bother with it again."

And that is one of the concerns that we could be seeing a CBD bubble, especially in the general retail world. Because remember, most of the CBD products that have good anecdotal support for them are sold in the dispensary world right now in conjunction with some element of THC and other cannabinoids. And, therefore, people may be feeling different because of the presence of the other cannabinoids and especially the THC. Now we're moving into this new world and we expect it to be very large despite this concern of a possible bubble. We think the CBD market outside dispensaries will be over $15 billion by 2024, but it's products that just come from hemp extract. And of course, they tend to be moving in the direction of an isolated molecule as well of just cannabidiol. And I'm not sure that people are gonna notice and therefore stick with all of these product formats.

Matthew: Okay. Can you talk a little bit about the concept of acceptors and rejectors, what is happening there and what we should know about it?

Roy: Yeah. Sure. So, I mentioned earlier on that 32% of consumers in the adult use states have consumed in the last six months, 32% of the population. The next category is what we call acceptors. So, they've answered questions which say, "Are you likely to become a consumer some point in the future now that it's legal and readily accessible?" And they said, "Yes. I haven't consumed in the last six months, but I probably will consume at some point in the future." That represents around 35% of the population. And then you have what we call rejectors. They represent about 30% of the population and they're people who've said, "I've not consumed in the last six months, and I don't intend to consume." And they will often say, "It doesn't fit with my lifestyle. I don't know how it's going to make me feel." Those are many of their reasons.

So, what's really interesting is that every six months when we complete our analysis of these markets, we see about two points. So, about two of those, roughly 30% of people, move from rejectors into acceptors and about three or four points of acceptors move into consumers. And so, it's really important to understand who those acceptors are. And then the encouraging thing is that the rejectors are also changing their attitudes with regard to cannabis consumption. And the fact is that 90% of the surveyed U.S. population now believe that cannabis has valuable medical effects. So, even among those rejectors, many of them are saying, "I think it might be useful for certain people, just not for me."

Matthew: That's great. Okay. So, where are we in terms of industry consolidation? You've mentioned that some brands are having success, you know, moving their brands across state lines, maybe through licensing or partnership, but where are we in terms of consolidation from your viewpoint?

Roy: Yeah. I think it's really beginning to happen and it's gonna be a powerful phenomenon for the next several years. In fact, I take myself back to the days when I was in the early stages of the natural products industry, you know, and Whole Foods only had 19 stores back in 1997 when I got involved there. And they, of course, consistently rolled up and established new stores and became the dominant chain of natural grocers. Well, that's not yet happening when it comes to dispensaries, although there are many multistate chains of dispensaries now and those didn't really exist 18 months to two years ago. There may be the odd dispensary chain that was very dominant in one state and had a few locations elsewhere. Now we're seeing dispensary operators who are in a dozen states.

And that's going to continue because there are tremendous efficiencies associated with having large operations on the dispensary side, and also on the marketing side, and the consumer acceptance and adoption. So, you know, one day there will be a Starbucks of cannabis dispensaries, there'll probably be a Walmart of cannabis dispensaries, and there'll probably be a Whole Foods. And I think we're seeing the beginning of that. But also you mentioned brands, and we have started to see some acquisitions of some leading brands. Select Oil Cura Cannabis was purchased by Curaleaf for a stunning amount of money, $1.2 billion. Select Oil was the leading brand in both Oregon and California, still is. And so, that's a very important move that was made by Curaleaf recently.

And we expect to see a number of other brands where they really emerged as a truly respected brand, not just the discount product that's out there that happens to have very good distribution. But people are actually saying, "I remember this brand. I've tried these products. I trust these products. I'm even willing to pay a premium for these products because I'm confident in them." And those, of course, are what the consolidators, the acquirers are looking for as opposed to something that has a branded name, but is always sold for 20% less than the list price and therefore has significant sales. But it's really not because people are choosing it because it's believed to be better, it's just because it's cheaper.

Matthew: Okay. That is a stunning figure with Select. Wow. So, the brand messages or the brand evolution is really happening with the multistate operators and different brands. It sounds like one of my takeaways here is that, you know, brands that can deliver a certainty of outcome and start to appreciate nuance like, "Hey, I want some outcome that's not necessarily sleep, but more like twilight and you can give me a microdose that creates and enhances that experience I want." Like, that's a premium. Being able to kind of control and tweak to that level of granularity. Would you agree with that?

Roy: Yes. Absolutely. That is the key.

Matthew: Yeah. Okay. Now, just a broader level question here. How have you seen the professionalism of the industry evolve since you first got into it?

Roy: Yeah. The people in the industry have changed significantly. Over the last couple of years, we've seen a lot of people coming in with backgrounds in consumer packaged goods, and beverage alcohol, and some from the tobacco industry as well who've, you know, dedicated the last 20 years of their lives to developing products, to selling products, and also on the cultivation and manufacturing side. So, we're gradually seeing mainstream operators as individuals recognizing the opportunities in the cannabis space and crossing over. And of course, they speak the same language as the rest of Corporate America.

So, it's a little bit of a different experience, not necessarily to say that they're better than the people who were long established in the industry, they just use different terminology, and they have different familiarity with things like data. Many of them are very used to the kind of product that we provide because they used it in other industries. So, we don't have to explain its benefits, they're already there. Whereas the entrepreneurs, younger, typically entrepreneurs who got things going on a state-by-state basis, may have done that largely based on their own instincts and their own connections and relationships. And in some cases just developing products that they like themselves or that their family or [inaudible]. And that was good enough back in the day. Now you have to actually use data in order to target specific markets and recognize exactly what you're competing with and exactly who you're appealing to.

Matthew: Now, just for anybody that's listening that's interested in BDS, and they think, "Hey, if I get a subscription here I'm going to be overwhelmed with data, and I won't know how to make it useful." Is there some sort of training period, or training videos, or something to get new clients acclimated to, you know, the benefits of BDS?

Roy: Yeah. So, what a great point. So, you know, way back in my career, I worked at Mckinsey at a big consulting firm and we consulted to the Fortune 100. And what I often saw in those companies was analysis paralysis, a huge amount of information floating about but nobody really able to make decisions based on that. So, we have put a tremendous amount of effort at BDS Analytics into making sure our data is actionable. So, it's easy for our clients to access, to understand, to dive into the specific category, subcategory, or question that they're addressing and then come out, you know, after only 15 minutes and say, "Oh, I know what I need to do. Now I need to create a new product that looks like this," or, "I need to change the pricing" or, "I need to increase the CBD content of my product," or, "make a statement about the benefit of my product on the packaging." So, we make it as simple as we can.

We do also provide training for all of our clients. It's a software as a service system, but we give you at least an hour's coaching on how to use the service. And then we'll follow up because the best thing is then to go in, use it and discover things that you don't understand as you do it and then come back to our account management team. And of course, as I mentioned earlier, we're growing rapidly, where a lot of that is adding account management people to help our existing clients.

Matthew: Okay. Roy, I wanna pivot now to some personal development questions. And since this is your fourth time on the show, I'm gonna ask you some different ones. I remember your favorite book was "Innovator's Dilemma," I believe, but I'm gonna ask you some other questions today.

Roy: Yeah. Well, I think my favorite book was "The Count of Monte Cristo."

Matthew: "The Count of Monte Cristo." [crosstalk]

Roy: Clay Christianson. He was one of my professors, so I liked [crosstalk]

Matthew: That's what it was. Okay. "The Count of Monte Cristo." That's a story of deep revenge, right? And resentment?

Roy: Ah, yes. It is kind of, yes. Yes. Although ultimately, I suppose I see some optimism in this story.

Matthew: Okay. Okay. So, with that, what is the most interesting thing going on in the cannabis space other than the part of it that you're in?

Roy: Yeah. So, I think, you know, it's one of those grass is always greener. You look over at something that you don't know much about, and you think that must be cool. And in my case, I don't know very much about the scientific research that is going on at the present time, but I get excited every time I hear a little bit about it. I just think that there are enormous opportunities, you know, people say you know, "My child is a scientist, or they're at college, or they're doing the graduate studies now. Should they be interested in the cannabinoid space?" And the answer's gotta be, "Yes." I mean, there's tremendous opportunity to develop life-saving and life-changing drugs or, I don't know whether they're drugs, but products that will have tremendous impact on people's lives. And so, getting into the research on these cannabinoids, and what they do, and how they do it, and which conditions they can be effective with, it's gotta be really exciting.

Matthew: Okay. And here's a Peter Teal question for you. What is the one thought you have that most people would disagree with you on?

Roy: Well, as you know, I'm English. I have been living in the United States for 25 years. I actually became a US citizen two weeks ago, which is...

Matthew: All right. Congratulations.

Roy: [inaudible] I was very excited about that. For 25 years, I've been living here using a Green Card, but now I can actually have political opinions. And so, growing up in Europe, you do have a different perception of certain terminology. So, in Europe, the word socialism is not a dirty word. And so, when people like Bernie talk about us being a social democrat, that has a very different meaning to someone who grows up in Europe typically. And so, although I went to Harvard Business School, and I've done all of this business-related stuff, and I'm clearly a capitalist, I believe that capitalism can live alongside socialism in a sense, and that we can come up with a structure for the economy where people are rewarded for hard work, and for brains, and for applying capital to build businesses. But at the same time, the benefits of that can be more fairly distributed to create a more healthy overall society. So, not everyone in America would agree with me on that. More people as a percentage in Europe would agree with me. But, of course, we also have the rise of a lot of nationalism in Europe as well at the present time. So, it's certainly not a universally accepted theory.

Matthew: Yeah. And the first time I met you, Roy, you and Patrick Ray were at the CanopyBoulder Accelerator. I know he obviously still is, but you were kind of talking about bringing this concept that you've seen work in other industries over to the cannabis space. And it was really just an idea. Now, you mentioned you have 45 employees, and it's become this thriving business in a category that's just only gonna grow. What are your general thoughts about what's been the most challenging and rewarding parts of this journey for you?

Roy: Well, I think, you know, the most challenging part for me is that I recognize that I had to be in Colorado in order to start this business and then built a team here in Colorado. And that took me away from my family in Rhode Island and my wife didn't want to move out here. And, in the end, unfortunately, that led to a divorce and not spending very much time with my children. And so, that's been really the hard sacrifice. You know, the positive is the excitement of building a business, getting great colleagues around me, creating 45 new jobs directly. Fortunately, I picked the right business partner in Liz Stahura and she's done a fantastic job, and now we brought in some wonderful additional people into the business.

And so, my job now is more of a management role and maybe to some extent, a mentoring role as I'm sort of the granddad of this company and a public face of the company type of role. And so, I've got more comfortable with public speaking and getting the word out about what we do and what we've learned. And it's easier because we have such fascinating data. So, I'm able to at least talk with facts behind me rather than making it all up. And let's face it, in the first year or two, we were a concept company without really a lot of data to support any of what we were saying, just belief that it was gonna be valuable. And now we have hundreds of clients. And so, that's pretty darn exciting. And when people quote us as the definitive source of data about the cannabinoid space, I always get, you know, the hairs on the back of my neck prickle up.

Matthew: Roy, as we close, please tell listeners that are interested in finding out more about dispensary data and the survey data and everything you have going on with IRI how they can learn more about BDS Analytics.

Roy: Yeah. Probably the best first place is the website, bdsanalytics.com. You can get an overview of our services there. There are many opportunities for you to complete a form on the website to enable the right person within our organization to contact you. And don't hesitate to send an email even to me, roy@bdsanalytics.com. I'll either get back to you or make sure it gets into the hands of the appropriate person.

Matthew: Well, Roy, thanks so much for coming on the show and educating us about what's going on at dispensaries. That's really valuable information.

Roy: Thank you, Matthew. It's been a pleasure. It's always fun to talk with you. You ask such great questions on behalf of your audience, and I look forward to doing it again in a year or so.

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@canadainsider.com. We'd love to hear from you. Please do not take any information from CannaInsider or it's 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, 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 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.