Ep 314 – Dispensaries Thriving as Curbside and Delivery Sales Triple Overnight

socrates rosenfeld i heart jane

Delivery and curbside pickup sales are booming as cannabis retailers seek new ways to accommodate customers during COVID-19. Here to tell us about it is Socrates Rosenfeld, CEO of I Heart Jane.

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

Key Takeaways:

[00:54] An inside look at I Heart Jane, the first cannabis e-commerce marketplace

[1:25] Socrates’ background and how he got into the cannabis space

[8:32] The type of retailer I Heart Jane typically works with and how the company has grown over the last year

[13:10] How I Heart Jane helps retailers streamline their businesses with automation and real-time integration

[15:50] How dispensary delivery and curbside pickup sales jumped from 17 to 50 percent overnight and what that means for the future of cannabis

[20:55] How I Heart Jane is helping retailers overcome obstacles with delivery and curbside pickup

[23:24] Why I Heart Jane’s business model is superior to GrubHub’s

[29:34] I Heart Jane’s integration services for retailers, including everything from point of sale to CRM

[34:31] Where Socrates sees cannabis e-commerce heading over the next 3-5 years

[39:46] Where I Heart Jane currently is in the capital-raising process

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.

As we suffer the lingering effects of COVID-19, cannabis retailers while an essential business, still have to deal with customers that don't want to come into the store. That means delivery and curbside pick-up options are booming. Here to tell us more about it is Socrates Rosenfeld, CEO of IHeartJane. Soc, welcome to CannaInsider.

Socrates: Thank you, Matt. It's a pleasure to be on.

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

Socrates: I'm currently sitting in Santa Cruz, California so not a bad place to be holed up.

Matthew: Not at all. What is IHeartJane on a high level?

Socrates: IHeartJane is essentially a retail technology that allows consumers to shop online for their cannabis like you shop online for just about everything else in this world. On the backside of that what this provides for brands and dispensaries is a fully automated way to take every single product that's sitting in a physical retail environment and replicating that in real-time to an online platform.

Matthew: Great. Soc, can you share a bit about your background and journey and how you got into the cannabis space and started this company and what you were doing before?

Socrates: Yes, I actually never tried cannabis ever in my life until I was 29-years-old. I was in the army before that. I went to West Point for college. After graduating from there I was an Apache helicopter pilot.

After I had left the service, I experienced some challenges transitioning from a highly kinetic life and death decision-making environment to be in a classroom at business school. As much as I tried to figure this out on my own, whether that was trying to work out harder or trying to meditate more, for me, I couldn't find my balance again and cannabis ultimately helped me find my balance.

Then from there, I personally was experiencing all the wellbeing effects of this plant. Started to talk to more military veterans, started to understand that they were also feeling better and healing themselves by using cannabis.

I graduated from business school. Traveled out to Silicon Valley where I was consulting for some of the largest tech companies in the world and I started to realize that technology particularly with e-commerce provides a wonderful experience for the consumer. We call it purchasing power. Essentially, you can go on an Amazon or KAYAK and find exactly what you're looking for at the exact right time for the right price. You can read reviews from other people just like you. You can get recommendations.

Back in 2015 when we were ideating on this. We had the hypothesis that in five years or today, people will expect some kind of digital experience when shopping for cannabis and we wanted to be in the position to make that a reality. Unlike other market places, Grubhub, Uber, even Amazon I would argue, where they're essentially putting themselves in between the buyer and the seller. When you buy something, when you make an order on Grubhub, they're taking about 35% from the sale out of that dispensary or that restaurant's profit.

We don't do that but instead what we're trying to do is reinvent this idea of a marketplace so that everybody can participate, consumers, the tech company and also the sellers in a really fair equitable way. We think we can do that both from a technology standpoint as well as a business model standpoint. We launched in April of 2017. Now, we're the largest consumer platform in cannabis here in the US supporting over 1,600 dispensaries across 31 states. It's been a really exciting run so far. 

Matthew: Yes, you're doing a couple of things different that I think retailers will love, and maybe other platforms will feel jealous that they didn't start out the way you did with the business decision. Just first, what's it like to fly an Apache helicopter?

[laughter]

Matthew: What's that feel like? That just sounds cool.

 Socrates: I've never been a bull rider but I imagine it's much of the same. I remember strapping myself into an Apache for the very first time and I had flown traditional Bell helicopters, your normal traffic helicopter or newscopter. Then getting into one of those, it's not unlike the experience of being an entrepreneur where at times you're just holding on for dear life and you are just trying to focus on what you can control in the present moment.

It really teaches you that, to balance what we call being inside the cockpit and outside of the cockpit. Making sure the aircraft is flying but also keeping ahead of what's coming down the pipeline and I'm sure there's some parallel there with being an entrepreneur.

As fun at it was to fly an Apache helicopter, I'll be honest with you, Matt, I'm actually having more fun and more exciting times being an entrepreneur here with the Jane team. Yes, both exciting I'll say.

Matthew: Just one last question about that just because I'm geeking out over here.

Socrates: Yes, please.

Matthew: Do you have like a visor that has something where you can like-- your eye-- what you look at, you can shoot at right through your visor?

Socrates: Yes. It's strange for me to talk about this because I wish on the other side of that visor there was maybe a joint or something like that other than a 30-millimeter automated cannon but that's exactly right.

You strap on your helmet in an Apache and the technology there is amazing. This technology has been there since the late '70s, early '80s, where the sensors will follow wherever your eyes look so will the weapon units. You become the Apache. When you are the pilot of that, you really immersed yourself into the machine and there's really no separation between you and the aircraft itself, which is-- it's a remarkable piece of equipment. I just again wish it was used for more peaceful things but yes, astonishing nonetheless. 

Matthew: Yes, I agree with you. We have got to move to a more peaceful planet. It's just whoever puts down their arms first is at a disadvantage. You're trusting that who you formally called your enemy is now going to be benevolent and-

Socrates: Oh, man.

Matthew: -it doesn't seem like we're there yet.

Socrates: Not to say this is what we want to talk about on the episode but you can take that metaphor into the cannabis industry. I feel very blessed that I was able to experience the tail end of a medical market here in California where there was a lot more cooperation than competition I'll say because we were all in this together to move this industry from the dark into the light. I am hopeful that we continue to maintain that, to say, "We don't need to be the first coming to pick up arms and then force everybody else too. Can we create a peaceful industry where everybody can win and everybody can provide value to those who need it and in areas that need it?

Optimism of course but I believe that is the future of this industry if we do things right and take care of each other.

Matthew: You did a great job of taking Apache helicopter and transitioning into the cannabis industry. I have not heard that being done. Well done there, Soc.

Socrates: Thanks, man.

Matthew: Tell me again how many retailers are you working with right now?

Socrates: We're working with currently 1,600 retailers across 31 states.

Matthew: Yes, and what would you say the primary benefit is? If I'm a retailer listening right now and they're saying, "Well, I have an app or I'm doing something else, why do I need this?" I heard some good things about IHeartJane and that's why you're on this show so I know a little bit about this, but talk about that a little bit if you would.

Socrates: Thank you for asking that. Just taking a step back even outside the cannabis industry because this is retail. If you think about where retail has been for the past 30 years ever since the .com-- I think it's still 30 years. I was on 40 years. I think it's 30, but if you think about what's now emerged on a spectrum of e-commerce, on one side of the spectrum you have Shopify, WooCommerce, these are great companies but what they do is they support individual micro-sellers more times than not.

Why that is is because let's say, Matt you and I had a small little company and we sold dog beds for whatever reason. I'm just looking at my dog's bed, and we want to sell online. We want to ship our products to the consumer. Well, there's no better tool than a Wix website. Let me get my Shopify plugin. I got my dog bed, maybe I sell two sizes. Maybe I have three colors. A finite amount of skews, not too much complication. We plug this in, away we go. We're happy campers as direct to consumer sellers.

Then on the whole other side of the spectrum, still direct to consumer, you got the behemoth that is Amazon. Amazon likes to call themselves a marketplace, but really, it's the Amazon show. No one knows who the seller is. When you're buying your products, you're really buying from Amazon's customer. What Amazon does is they inventory the product and they distribute the product themselves. They're this massive behemoth, but the issue that we've seen the past five, 10 years, is it completely disintermediates retailers in the physical communities.

That leaves this middle swath and I would argue the majority of retail sits in this middle swath where you are a let's say a dispensary. On average, a dispensary in the United States cares about four to five hundred skews. On average, a dispensary in the United States turns over their inventory 15% day in, day out. If you're trying to maintain accurate digital representation of what's in inventory, that has required really since the onset of the legal market before Jane, for you to manually reconcile what's in your store with what's being represented online.

I don't know if you've ever worked retail, Matt, but I have and there's no time in the day to even go to the bathroom, let alone sit down at a laptop, reconcile what's in store, download a photo, write a description, upload it back onto your menu. What we've done is essentially, because we can't go to direct to consumer, which I think is a blessing, we can't disintermediate the retailer, which again, I think is a blessing, now what we've had to do is actually think less so as the retailers as just the distribution of our network, but more so as really our retail partners.

We provide for them software that can essentially automate e-commerce. Meaning through point of sale integration, we extract all items in their inventory, we apply the right content directly from the brands, the photos and the descriptions, the taxonomy effects, flavors, et cetera. Now, what that means is retailers, whatever products are sitting on their physical store shelves or in their delivery depots, is in real-time being streamed to their online digital menus without any work required on them.

What that means now is that they have a part of their business, which has been really the biggest limiter of their business. To think of a retailer having to build their own software is like, think about MIT engineers trying to open up a dispensary. It doesn't really fit. Now, what we're doing is we're saying to the retailers, focus on what you guys do best and allow Jane to automate the really complicated stuff so that you can build your business on top of that. Again, in partnership with that dispensary, not in competition. I think that model's worked out for us so far.

Matthew: Okay. There's a big automation and convenience factor here because as you were mentioning, there's a lot of heavy lifting to look at the inventory, make sure the menu's up to date, people aren't ordering things that are out of stock. That's a massive advantage there. You integrate with how many different point-of-sale system here because I know depending on your geography, different POS systems are popular and other ones are more popular here and there. How does that work?

Socrates: We actually have a few utility software patents on our ability to through point-of-sale integration, automate e-commerce. We integrate now proven real-time integrations with over 50 points of sale systems across the country. We're always looking for more. We say we integrate with every single one. The bottom line is whatever the client wants, whatever our partner wants, whether that's the dispensary or the brand and they want us to integrate into, we'll go and do that and make that happen for them.

Matthew: This is interesting because your outward-facing benefit is, we help your end customer find you and find your product and a for sale to occur. Behind the scenes, I'm imagining this API and what you're doing and keeping invisible is a huge undertaking.

Socrates: That's exactly right. I got asked on a panel a couple of weeks ago, and they asked, and I was sharing the panel with Harborside, and Charlotte's Web, two of the most prolific historical I would call pioneering brands in their own respective verticals, retail and brands or products. I got asked the question, well, what is Jane doing to promote Jane? What is Jane doing to advertise Jane? My answer was, it's actually not about Jane. We actually prefer to be in the background.

This is why we white label completely our e-commerce menus that live on the sites of the brand and/or the dispensaries is because we want to be able to support them. They're the ones who are doing the heavy lifting. They take all the risks, they're opening their doors, they're hiring, they're engaging with the consumers on the ground. Let's promote them in a smart, fair way.

Not what we've seen in the past where let's pit one against the other in LA and whoever pays us the most we're going to promote, but exactly like you said, Matt, if you're providing great service, if you're carrying great product, and you're serving your local community, as all retailers should, and you're doing it right, let us showcase that and connect you to more consumers who are looking for those products and those services. That's what I think we do very well. 

Matthew: Let's talk a little bit about what the delivery and curbside pickup looked like in January in February and what it looks like now. If someone didn't know what was going on, how would you describe the change?

Socrates: Sure. I think worth noting, overnight, when back in early mid-March when COVID and the pandemic was really scaring a lot of people. Number one, the cannabis industry proving to the world, we are essential. Number two, I think the cannabis industry is stepping up and providing a vital service during a time when it's perhaps most needed in the history of this country. I want to take that opportunity to be like, I think we're moving really in the right direction showing the world that we're here to help.

How things have changed? At the beginning of the year, online throughput, meaning all orders at a dispensary, about 17% of those orders were going online, though, the 83% was going offline. Now we're sitting at about 50/50 and that was really an overnight switch. For dispensaries that were thinking oh automation and this digital experience is really a nice to have but it's more secondary to my core business and that is serving people in my store, now that has completely reversed. Now, it's digital-first and then maybe the in-store consultation as a secondary service to only really those who need it.

I think Planet 13 is a great part of- that I like to highlight because they adapted so well they're a very big dispensary. Here they were in Vegas, if you've been to their showroom floor, it looks like a casino in and of itself. It's beautiful. They've obviously spent a lot of resources making that experience wonderful, but now nearly overnight due to the pandemic, they had to close those doors and shift completely to a delivery-only. What we're seeing now is delivery has ticked up significantly in states like Nevada, California, obviously, Colorado starting to think about it. Florida obviously is a massive delivery market for us.

What has emerged, and I think you're alluding to that, Matt, is this curbside pickup is a very interesting thing. What I mean by that is a dispensary like Planet 13 can maybe do 1,000 deliveries in a day and I'm completely making up that number. They have to go and wait and traffic and load up the cars, they can only hold out so certain inventory, so it's actually pretty inefficient for the retailer to process 1,000 orders via delivery. They could probably process 1,000 orders in a couple of hours doing curbside pickup.

That's actually where we've seen a lot of innovation go, is in this what was overlooked, curbside pickup because that really didn't exist. If you ordered for pickup, you'd actually walk into the store, maybe go to the back through a Jane lane, and then pay and pick up your product. Now, really what to do is, and depending on how the store wants to run the flow, you'll say, "Hey, I want to order for pickup, I'm driving in a white sedan." They assign a parking spot for you, you drive up to it, you pop your trunk, and they drop the cannabis in you, you hand them your cash and away you go in a matter of minutes.

Now, what has emerged is what the digital world is proving to retailers is that actually it's not something to be afraid of, but it's actually something now to adopt because you have a lot more efficiencies, you have a lot more throughputs through your store. The consumers love it because you no longer have to wait in line and by the way, you're keeping safe and physical distancing.

Also, now what that's doing is if you do want to build an in-store experience and a consultative experience, which I think should never go away, particularly in cannabis, now you are identifying only consumers that really want to come to the store. The worst thing that could happen is you order online, you go to the store and you still have to wait in line. Maybe you experienced that pre-COVID.

Now, there are separate lines or separate entrances for curbside online orders, and what that's doing now is maybe you're a new consumer to the space, you want to actually go and talk to someone. You can do that, do it efficiently and once you find the product or brand or category that you like, now you're plugged into their digital network.

Now you can order for delivery curbside pickup, and that's how we're seeing the evolution of retail is, new customers come in, they get familiar with the product set, they understand flavors, profiles. Okay, this helps me sleep, and then once they find the products that they want they convert to online users and that's either through delivery or curbside fulfillment. I think we saw this change happen overnight, Matt and honestly, I don't think this is going to go back. 

Matthew: How well are the different retailers executing and waiting for, or I should say, when a customer pulls in they're assigned to a spot. I know that I'm just at a short attention span and every second feels like a minute. I'm like, "Do they know I'm here? How long am I going to have to wait?" Is it a huge spectrum on how well they're executing and messaging, "We know you're here. We're getting your order ready. It's going to be ready in five minutes." How does that work?

Socrates: Absolutely. We're all learning together. Six months ago, no one was doing curbside, not even Best Buy and Whole Foods. Now, everybody's doing it. We're all [unintelligible 00:21:41] quite exciting as an entrepreneur to where if you think about it, the cannabis industry is starting at the exact same place as other retail verticals. Let's go and innovate together.

To your question, does this vary? Absolutely. Are there still circumstances? Now you can reserve a certain time slot down to almost 15-minute increments. Retailers are getting tighter and tighter and better and better and more accurate with their execution and we're also unlocking different things from a tech technology standpoint to help that. Now put in your license plate number. Hey, you have to pick from one of these three parking spots. When you arrive, hit this button and this will message back to the staff and they'll come out.

All those different nuances, as a tech company, that's what we love because let's go and build very flexible technology and software to where we can say, okay, Jane curbside module, how do you want to run your curbside? Do you have assigned parking spots? Do you require someone to fill in their license plate number? Do you want them to hit a button and notify you when they've arrived? Should they wait in line out in the back? All these different nuances because no retail operation's the same.

The software should be nimble enough and inflexible enough and adaptable enough to support the retailer however they want to slice and dice their operation. Again, that's really exciting for us and that's going back to this partnership ethos at our company. We only uncover those wonderful ideas when we're working in partnership with our dispensaries. Again, I really feel blessed that we have developed that relationship with our retail partners.

Matthew: This is where I think you stand out, is how you get paid. We talked a little bit about how Grubhub taking 30-35% from restaurants, which restaurants have a really low margin to begin with so I don't know how that works. Talk a little bit about how you get paid and how that's different from other platforms.

Socrates: That's a great question so thank you for asking this. A lot of people mistakenly think that Jane is the Grubhub of cannabis and iheartjane.com is a marketplace that looks- you could argue it's like Grubhub. I won't bore your audience with how I think we're different but that is part of our business.

Really, what we do though, unlike Grub-- I'm going to pick on Grubhub for a little bit, Matt, I'm sorry. For all the Grubhub fans out there, and it's nothing against anybody at the company. I think they've done some great stuff, but we're learning from them. What they done for the- they started 10-15 years ago, out of Chicago, and they came up with this unbelievable idea. I love takeout. Could I have some aggregated platform where I can go as an end-user, find all the restaurants and just order online for delivery or pickup? It was a phenomenal idea.

Then they went to the restaurants and they said, "Hey, restaurants, we're going to plug you into this marketplace." Where now if you were a Chinese food restaurant on the south side of Chicago, you now can actually access customers on the north side of Chicago. If they're looking for Chinese food and you get good ratings, now we're going to bring more customers to you. They loved it and it was a really virtuous relationship they had going.

Then all of a sudden, not all of a sudden, they started the take rate at taking 5%. Which to your point, Matt, restaurants operate on like 1-2% margin, no one's really making money, but they said, okay, "Let us take 5%." The restaurants thought, "Okay, that's fair."

What ended up happening though, was their plan all along was, I don't know if it was their plan but it's how it unfolded, the more restaurants they got the more leverage they had to increase the take rate. Now if they had every restaurant in Chicago on their platform, they could go to you as the Chinese food restaurant, say, "Hey, we started you at 5%, but I'm sorry, we're now going to have to increase this to 10%, 15%, 20%, all the way up to 35% take."

Guess what, they didn't do anything differently. They didn't say, hey, I'm going to increase my take rate from you and here's the value I'm going to give you in return. Really, all they did was use their aggregated marketplace as leverage against the individual seller, which if you paid attention to the public markets, Grubhub stock went down because DoorDash and Uber came in. DoorDash and Uber said, "All you guys provide is online menus for restaurants and you charge 35% take. Well, we could do online menus for restaurants and we could just charge 34% 30%, 25%", right?

Now, this is what's going on to the point where like in Oakland, Santa Cruz where we're based, cities have actually capped the take rate because it's unfair to the individual restaurants.

Long way of saying, Matt, when we were looking at the space we said, "That is unsustainable. How do we create this virtuous cycle, this model where can we charge on a SAS $300 a month all in for any retailer, or dispensary, or brand that wants to join our network and use our automated e-commerce? Then from there, can we create a network where we can sell other things, again, not in an egregious price, to where if we can do that at scale and create monetization in other parts of our business? Can we subsidize our e-commerce business and keep the cost low for that small business corner dispensary in Santa Cruz?"

I give my credit to my team and the investors that had the foresight and quite frankly, the courage to say, "Hey, let's go give this a shot." Now what we're seeing is, we have minimal churn, no one really leaves our network, we provide really good software in partnership with the supply side of our business. What that's doing is it's allowing us again, in partnership with the brands and dispensaries, to grow the size of the pie so that we can all monetize and keep costs low for everyone. 

That's our ultimate goal and I think we're well on our way to setting that flywheel, which is exciting. Hopefully, if you look at, to beat a dead horse, but actually there's a company out in the restaurant industry called ChowNow that prices not only percent take, but instead on a monthly SAS, and they are disrupting in that restaurant industry. My guess is that they're probably going to force the hand of an Uber and Grubhub to where now they're going to convert to a SAS.

That's my hypothesis but I think the days of going to a small business and saying, hey, we're the tech company, but you cook the food and you deliver the food and you pay the taxes and the rents and everything and hire all the employees but that doesn't matter we're still going to take 35%, I think those days are done. I'm hopeful that other tech companies who have the aspirations to do something like this in cannabis think otherwise because that's not going to create a healthy industry where we can work all in unison and in a zero-sum game where the only way we can make more money is if we take more money from our supply side. That's not the game we want to play.

Matthew: Definitely much more sustainable and retailer friendly. No doubt about it. Now, can you integrate into other parts of the business part from just the POS? How does that work?

Socrates: Yes. You have touched upon probably the biggest pain point for any retailer, is the integrations. If you think about what a retailer has to manage outside of the physical infrastructure, but from a tech standpoint, they have a point of sale system, they have a e-commerce solution. Hopefully, it's Jane. They have a CRM solution like springbig or Sprout. They have a payment solution like CanPay or HyperPay tender or something like that. They have in-store displays like Divvy. They just have all these decisions to make.

Then when you make a decision, you buy a point of sale, it's really frustrating when it doesn't talk to your in-store display, or when you buy a payment solution and it doesn't push back into your point of sale. Or when you use Onfleet as a fleet management and it doesn't speak to your e-commerce.

What we've done is we've actually said, "Hey, where should our core-competency be right now? Where should we double down, triple down, quadruple down?" Really, it's in the integrations. Now, not only do we integrate in over 50 point of sale systems, but now we integrate into every payment solution, nearly every CRM solution, I think every in-store displays, fleet management.

Now, what has occurred is you have these large MSOs or these large single-state operators that are utilizing Jane as the software backbone. Say, "Okay, I use Jane. Jane is this connective tissue that makes my point-of-sale actually speak to my payments, which actually speaks to my CRM, which speaks to my fleet management." We can connect all those dots, which is really exciting. I won't hang our hat on many things, but systems integration, data, architecture and cleansing, that's what we do very well.

Matthew: Great. You're not a SAS developer. You're a helicopter pilot.

Socrates: [laughs]

Matthew: How do you even know where to start when you're creating a SAS product here? There's certain things you have to worry about. I heard if IHeartJane goes down, you're not getting love letters, people are putting pins in a voodoo doll, Socrates.

Socrates: Oh man, yes. I ask myself that question every day. I say that jokingly. I love this metaphor with the Apache. I was a pilot. I was a commander of a company. I had about 50 soldiers, eight aircraft and I had to maintain that in Baghdad, Iraq 24/7 for an entire year. Like I'm a CEO of a company, we have about 50 headcount. Why I draw that metaphor is, even as a pilot, I didn't know how to turn the engine. I didn't know how to fix the engine and maintain the transmission and download all the data, read the weather and look at the intel. I had specialists who did that. I trusted and took care of and supported the experts.

That's no different to what I do now, Matt. I am not the expert, but I take care of the experts on my team. I help them grow. We learn together. That is how you build a team. That's what I learned in the army. Any success I ever had in the Army was because we did it as a team. Any success we have at Jane is shared. There really is no one guy leading the charge. It's all of us being experts in our own fields. It's really exciting to see that all come together. All different people, all walks of life, all different passions, all different expertise, all coming together to move the mission of Jane forward.

I'll tell you what, as fulfilling as it was in the army to do is equally as fulfilling, if not more, to do if you're in cannabis because I truly believe we're writing history as we move forward. We take that position very seriously at Jane. The things we do, the things we say, the technology we produce, how we communicate and partner with our dispensaries and brands, that's going to set precedent for years to come, not only for Jane, the company, but for everybody else who comes behind us, all the other tech companies.

You want to say, "Hey, let's do this the right way. Let's learn from other tech companies and other industries. Let's make sure we take the best and apply them here, but also the stuff that we can improve upon, let's do that." To your original question, how do you build a SAS company with technology? You attract, retain and grow special people. I'm grateful that we have special people here on team Jane.

Matthew: I've watched how this is evolving so quickly and COVID-19 certainly been a catalyst, but just technology in general before that is just really moving quickly. I feel like in five years I'm going to think about a cannabis product, a drone is going to emerge a minute later and shoot a vape pen into my mouth. I'm joking around, but where do you think in the next three to five years improvements will be made where we're going to remove more and more friction points. There's not much friction now, but I feel like that's coming.

Socrates: Maybe not as sexy as a drone that shoots a vape pen in your mouth, although that would be pretty neat. Maybe Jeff Bezos and his team at Amazon is doing something like that. For us though, what we see to be the future, particularly we obsess about the future of e-commerce is we don't think the future of e-commerce is going to look like Amazon. Amazon's been around for 30 years. They run a lot of things, but I don't think you're going to see another company emerge as the next Amazon because Amazon has done a phenomenal job at structuring the chess board to make sure that no one can build another Amazon.

Zappos tried it, Wayfair tried it, Jet.com tried it, they all failed. The reason behind that is that they will just wait for you to improve where margin is, and they're just going to undercut you. If you also think about what's happened with Amazon is they found their own limitations. Again, they inventory the product and they had to deliver the product to you. They have their 747 jets and 18-wheelers. That's how I get my toothbrush to my doorstep in two days. Actually, I think the future of e-commerce instead of going to an Amazon, will go to the company or companies, I will say, that are able to completely digitize all of existing analog retail infrastructure. 

How do you take the dying shopping mall and transform that for the digital age? How do you take the local corner dispensary in Santa Cruz and transform them into the digital age without overpricing, without over complicating, without creating more work for these small businesses and retailers? How do you do that? I think the cannabis industry is ripe to prove and leapfrog other retail verticals. Every other retail vertical has been anchored on direct-to-consumer other than alcohol really. If you think about it, when I say, "Hey Matt, let's order something online." You're really thinking about, "Okay, is this going to be mailed to my house?"

Matt, I don't know where you're based, but I'm not too far away from San Francisco or Oakland. The products that I'm looking at on Amazon, I bet are based somewhere in the Bay Area or California or the United States sitting on a store shelf somewhere at a small business or a retailer that's desperately trying to sell that product. What if we could create a system where you, as the end user, can be afforded the same level of convenience and curation, you can compared by price, you can read reviews, you can bundle products except instead of it coming from just one seller, Amazon, it's coming from all available settlers across the country?

I think that's where the future goes. That's where we're really excited. I think that's what we're using this cannabis industry for. Not only to help and support this industry, but prove to the rest of the world that in doing so we could provide a new definition, redefine what this means to be a tech company working with physical infrastructure so we don't run into the same scenario as an Amazon or Grubhub but these tech companies are working actually in unison, in partnership with physical retail businesses. I think that's where the future will go.

Matthew: Do you think there's any possibility of Shopify buying FedEx and actually executing that strategy?

Socrates: Perhaps, but again, Shopify is going to support that small micro seller who can really already go and mail his or her product in the mail. Everybody's focusing on it. You got Etsy, Shopify, Wix, WooCommerce. They're all supporting that little microseller. No one s supporting J. Crew, no one supporting Macy's and Sears. No one is supporting that hardware store or the local grocery store in Santa Cruz. Those are the ones left behind that can't use Shopify due to their limitations, can't use Amazon because they're the competitor. 

They're left with either building it themselves or being left in the dust and having no digital tool to advance their business. This is where Jane comes in. I think we're proving it here in cannabis because largely these are fragmented small businesses. Hopefully, one day we can prove to the rest of the world that perhaps there is a better way to shop online.

Matthew: Soc, where are you in the capital-raising process?

Socrates: We're always talking to investors. We're really very interested in forward-thinking investors who aren't trying to jam an old model, a Grubhub, a Yelp and stick it into this industry and say, "Hey, make it fit." Instead can build something from scratch on the ground with the retailers in cannabis to build truly a tech solution for this industry.

We raised our Series B last year. We have no reason to raise again for a lot of time, but we are looking at the opportunities we have before us. We are accelerating our business faster than ever before. We are scaling into different business lines faster than ever before. We see the opportunity to continue to carry that momentum. Always talking to investors. No formal raise plans anytime soon, but when the opportunity arises, hopefully, we'll be able to make it happen.

Matthew: Okay. For accredited investors that are listening, that are interested, is there a list they can sign up for anything or just to keep on checking on an investor's tab or something on your website?

Socrates: Send me an email. I'm always looking to connect. My email is SOC S-O-C @iheartjane.com. Shoot me a note and we'll get on a call.

Matthew: Okay. Soc, a couple or a few personal development questions to help listeners get a better sense of who you are as a person. Although, I feel like we've got a pretty good sense [inaudible 00:41:22] cannabis entrepreneur. Is there a book that's had a big impact on your life or way of thinking that you'd like to share? 

Socrates: Many books, but one that I recommend to any entrepreneur, quite frankly any leader, is a book called Endurance. It's a story of Ernest Shackleton in his expeditionary crew as they went out to go and explore and traverse the Arctic and be the first ones. I won't spoil the story for you, but their boat crashes and the story begins. Okay, what do you do now as a leader? How do you take care of your people in a time of uncertainty in absolute fear and death all around you? How do you maintain normalcy, organization accountability? How do you stay productive? How do you find the small victories and celebrate those as a team?

That book is really powerful. It's a wonderful story. It's a true story. Something we go back to and revisit as a team at Jane all the time.

Matthew: As you mentioned, you were an Apache helicopter pilot, West Point graduate. I've never met a lazy West Point graduate or Annapolis graduate. I don't think that's coincidence. 

Socrates: That's my mom [laughs].

Matthew: What's one skill that you feel like that wasn't necessarily taught in a classroom, but you've taken away from your experience in the army and at West Point that you feel like you use like, "Wow, I really leveraged that skill a lot." 

Socrates: Wow. That's a great question. Many of them, I will say I left West Point not really remembering what I studied in the classroom, not really any tactics that I learned. That was more on the job. Really, what I walked away was some of the deepest friendships I had ever developed through love there and values. Not values that were written on a wall, but what really courage means. What does persistence really mean? What does loyalty really mean? Again, not read out of the dictionary, but lived and observed. That's what I got away and pulled from.

Applied now fast forward 16 years to today, at Jane, I'm working with people who I admire, love, trust, and respect. We have values that are lived in upheld and breathe every single day. That's why, in my opinion, coming out of West Point, there's a certain standard there that you can expect for graduates. The same thing is true here at Jane, no matter who you're talking to on the team, there's a certain standard there, whether it's customer support, partner success sales, all the way up to the CEO, respect, love kindness, that's really what we try to maintain and uphold here at Jane. I think that started from my time at West Point in the army. 

Matthew: Okay. Here's a Peter Field question for you. What was one thought you have that most people would disagree with you on?

Socrates: If you ask my wife, there are many thoughts. I'm still pretty bullish on-- I think a lot of people think that cannabis drinks is going to have their time in the sun. I agree. That's not one that people disagree with me on. I think the pet category has yet to see their time where a lot of these pet owners--

I don't have children, but I got a white fluffy dog we call Larry. I give him CBG. I give him CBD, he's healthy. He's 15 years old. He's running around like a puppy. I'm not giving him these pharmaceuticals. I think we're starting to wake up to that as humans. I think we're going to start waking up to that for our loved pets. I say that the pet category will be a very strong one in the future, but I don't think a lot of people agree with me right now.

Matthew: Okay. Well, Soc, as we close, how can listeners learn more about IHeartJane?

Socrates: Please sign-on iheartjane.com, go place an order. Let us know what you think. We're always open to feedback and hearing what consumers and brands and dispensaries think. Shoot us a note on info@iheartjane.com and we just appreciate everybody's business.

The last message I'll say, it's not relevant, Matt, to this conversation, but I hope we can continue to just take care of each other. This industry was founded on community. I think this is a cross-section of many different things, particularly around social justice now. This industry is moving in the right direction. We're trying to merge the past with the present to the future. We're trying to take care of everyone. It's really an honor for us as a team to be involved. Again, I hope that as we move forward, we continue to take care of each other and ultimately make sure this plant is accessible to anyone who needs it.

Matthew: Soc, thanks so much for coming on the show. We really appreciate it. You've got a lot of exciting things going on and I hope you'll come back and share updates when you can.

Socrates: Absolutely, Matt. It's a real pleasure. Thanks so much.

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