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Author: Antonio Javiniar

Payment Processing for Cannabis Delivery Services and Why Paying Online is Better

Posted on by Antonio Javiniar

The State of Payment Processing for Delivery in the Cannabis Industry

Let’s face it — the cannabis industry has a cash problem. Now, too much cash isn’t a bad thing; cash is still king. But, when cash is the only means of doing business – from customer transactions to paying tens of thousands of dollars in taxes exclusively in cash – it quickly becomes one of the biggest bottlenecks and security risks for the industry and its operators. 

The cause for this? Federal and local regulations make it difficult for cannabis businesses (especially those that are plant-touching) to access basic banking services and digital payment processing alternatives to cash. With the blooming cannabis industry projected to grow to $41.5 billion in retail sales by 2025, it’s important that as the industry awaits changes in federal cannabis policy, that the private sector works to make existing cash alternatives more safe, compliant, and accessible to cannabis operators. 

In this blog post, we’ll do a brief overview of cashless payments, why cannabis delivery services should implement cash alternatives today, and the existing technologies that make payment processing safe and accessible under the current state of cannabis regulations.

Intro to Banking and Cashless Payments in Cannabis

Due to constraints brought on by federal and local regulations on cannabis banking, the cannabis payment processing sector has exploded with businesses seizing the opportunity to solve the cash-only issue of the industry. With this comes many bad actors looking to make a quick buck and disappear (as does any industry), but also comes many promising companies truly looking to establish a safe, secure, and scalable payment and banking solution for cannabis operators nationwide. 

Why is this issue so important? Well, it’s an issue of efficiency and security. Without access to traditional banking services, cannabis operators often find it difficult to:

• Have a safe and secure way to store and access their cash in the same way non-cannabis businesses do

• Access capital needed to scale their operations without hefty interest rates through cash advances

• Accept more convenient ways to pay for cannabis like with credit and debit cards

• Pay their taxes and other business expenses 

And that’s just the beginning. As a “high-risk” industry that is still federally prohibited, operators can find it hard to also insure these cash assets without having to pay large premiums.

Collectively, these hurdles would undoubtedly make it more difficult for the industry to reach those projections, giving even more credence to calls for a cash-alternative solution sooner rather than later. 

Existing Methods of Cashless Accepting Payments + Risk

So if the demand is high for cash alternatives, what cashless payment solutions already exist?

Well, there are a few alternatives to cash cannabis operators can choose from. Currently, non-cash cannabis transactions can happen in a few different ways:

• Automated Clearing House (ACH)/Bank to Bank Transfers 

• Have you ever signed into your bank account through a third party to purchase cannabis? If so, you’ve just paid through ACH. ACH is simply a transfer of funds between a customer’s bank and yours (the delivery service). ACH is arguably the most secure method of handling non-cash cannabis transactions in the industry today.

• Cashless ATM Terminals

• If you’re thinking that you’ve paid for cannabis with your debit card before — you’re not wrong, but you’re not entirely correct either. Cashless ATMs are a clever workaround to solving the cash-only issue in cannabis. Instead of customers paying with their debit card, they’re actually “withdrawing” cash directly into your business bank account. Funds are debited from their account into yours equating to the amount of their order.

• Cryptocurrency

• As an emerging technology (and with the future of cryptocurrency use cases in cannabis still hazy), crypto payments are rather rare to come across. However, it is a form of payment that exists and can be used by retailers.

Each of these payment methods, of course, carry their own respective pros and cons. As more established and reputable payment processing companies enter the cannabis market, and as the industry continues to build upon non-cash alternatives, the relative risk in implementing a payment processing solution is better managed.  

The Argument for Cannabis Deliveries Going Cashless

So, why should you implement alternative methods of payment processing for your cannabis delivery service? Well, aside from it becoming an inevitable transition your cannabis delivery service will have to make eventually to meet customer expectations, implementing a payment processing solution can benefit you in multiple ways:

• Employee Safety and Risk Management

• Eliminating cash from delivery transactions minimizes the risk of cash theft. At any given moment, whether during daily delivery operations or periodic cash-only tax payments, cannabis delivery staff can be carrying with them thousands (if not tens of thousands) of dollars in cash on their person. ⁣This makes them (and you!) a high-value target for theft. Taking cash out of the equation through cashless payments mitigates this risk and creates a much safer, more convenient working environment for everyone.

• Access Banking Services

• Non-cannabis industries may take it for granted, but access to simple banking services is crucial to the future of the cannabis industry. As bigger, more reputable institutions come into the cannabis payment processing sector, more financial resources like banking become accessible to cannabis operators.

• KindTap, for example, is a closed-loop network providing merchants and customers a compliant way to pay online, thereby removing the friction of paying upon delivery or in-store pickup. By partnering with financial institutions in various states that have compliant cannabis banking programs, KindTap enables a frictionless payment solution for online transactions through a bank account-link and their own credit program.

Moreover, solutions like KindTap are actively integrating with point-of-sale technologies like WebJoint, to seamlessly fit into the customer’s natural purchasing experience and offer a non-cash payment option.

• Increased Customer Satisfaction = Increased Customer Spending

• Customers tend to spend more when they are not only happy with your service but also when they aren’t limited to the cash they have on hand. Today’s consumers pay for almost everything with their debit/credit cards – it’s more convenient and secure than cash. Though debit/credit card payments for cannabis aren’t possible just yet, there’s a reasonable expectation for operators to mimic the convenience factor that comes with it as best as possible. A successful implementation of non-cash payment alternatives will prove to be a great-long term investment for your business. 

Future of Cashless Payments in Cannabis

So what does the future of cashless payments in cannabis look like? To be quite frank, it’s hard to tell. Unfortunately, federal legalization is still up in the air and with it, regulations dictating banking services for cannabis operators hang in limbo too. 

What we can tell you, however, is that the payment processors left standing will be the institutions that place the operator’s security and accessibility to financial services, as well as the customer’s purchasing experience, at the forefront of their efforts. Existing solutions like KindTap that are thriving in today’s cannabis banking environment, revolutionizing cannabis payments, and blazing the trail towards a federally compliant cannabis payment network. 

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The Future of Cannabis Delivery Payment Processing – A Conversation with Cathy Corby Iannuzzelli of KindTap

Posted on by Antonio Javiniar

This week, I had the opportunity to sit down with Cathy Corby Iannuzzelli of KindTap to discuss the rapidly growing sector of payment processing in the cannabis industry, her vision for the future of payment technologies in highly regulated markets, and why cannabis deliveries should implement a payment processing solution for their operation today.

KindTap – the fastest growing payment processing solution for cannabis delivery services.

Q: Can you tell us a little bit about yourself, your experience in the payment processing world, and how you ended up working in the cannabis sector with KindTap?

CI: I’ve been working in financial services and payments for 30 years on the card issuing and merchant processing sides of the business. Much of my career has involved launching payment products when the whole product category was new. Things like debit cards, internet banking, e-commerce and prepaid cards we all take for granted now, but there was a lot of pioneering to bring them to market. About 3 years ago while working for a client in Denver, I became aware of how broken payments were in cannabis. Broken isn’t even the right word – payments simply didn’t exist in the cannabis market. My pioneering spirit kicked-in and I refocused my consulting on the cannabis segment. In 2019 I met the founders of KindTap who had deep cannabis expertise and were focused on the cannabis payments problem, as well. We started collaborating on what has now  become KindTap and earlier this year I joined the team full-time.

Q: What problem is KindTap aiming to solve in the cannabis industry?

CI: As we all know and experience today, the payment experience for cannabis is friction-filled, both for the consumer as well as the merchant. For the e-commerce experience, there is no actual “commerce” as payment info is not captured online and there remains massive payment friction upon delivery/in-store pickup. For the merchant, they are capturing pre-order sales with no certainty of pickup or payment, and it’s even worse for delivery when drivers are being sent out to collect cash! KindTap aims to solve all of this friction with a very straightforward payments platform for online and in-store commerce, along with a consumer-level loyalty program for every dollar spent within our network of merchants.

Q: How does the lack of traditional banking infrastructure for the cannabis industry negatively impact cannabis businesses?

CI: Unfortunately this is a major problem that will not go away with one or two bills passed at the federal level. We connect with merchants and consumers on a daily basis, and they all want less physical cash in the system. This is one of the core challenges, and with KindTap we aim to remove that physical cash and bring the industry to the 21st century of digital payments.

Q: How is it that KindTap can provide banking and digital payment solutions to plant-touching cannabis businesses while more conventional banks (Chase,Wells Fargo, BoA, etc.) can’t?

CI: Banks are excellent at managing risk. As long as cannabis is illegal at the federal level, it’s a risky business for banks to serve. When weighing the risk-to-benefit, the cannabis segment is simply not large enough to the mega-banks to make the benefit worth the risk. Smaller financial institutions – where the innovation in cannabis banking is taking place – see a large opportunity relative to their size and are investing in people and processes to manage the risk. KindTap has partnered with financial institutions that have a multi-state license to operate, but yet have the size and innovation to work directly in the cannabis industry.

Q: Up until recently, there has been hesitation among plant-touching operators to transition to digital payment solutions due to regulations, among other factors. How has that changed? What does KindTap do to ensure security and safety of an operator’s assets?

CI: KindTap operates within the current regulatory framework for cannabis banking and merchant processing, on a state-by-state basis with no interstate commerce. We do not operate on what they call “federal rails” which is Visa and MasterCard. Think of us like one of the MSOs: They operate state-by-state with a multi-state/national presence, and so does KindTap. Our security and safety of assets is backed by trusted financial institutions and vendors who are in the business of payment processing, with a long-history outside of cannabis.

Q: Cannabis delivery operators across California use KindTap to process customer payments. What are the benefits of payment processing for cannabis delivery?

CI: Great question, as we love to describe where KindTap shines! Our system collects payment information upon checkout, not at the delivery location, which removes the friction of paying cash upon delivery (or a mobile cashless ATM terminal, only to receive physical cash for your change). The consumer not only gets a more seamless delivery experience but also has the ability to earn loyalty rewards for shopping at multiple merchants within the KindTap network, just like AMEX. The merchant LOVES the ability to remove cash from their system, and delivery drivers can now have a more predictable schedule without having to collect cash at each stop. Everyone truly wins.

Q: What’s the biggest obstacle to implementing payment processing for cannabis deliveries? How quickly could operators implement payment processing like KindTap?

CI: Our system allows for operators to implement KindTap within a matter of days on the back-end, in partnership with WebJoint. The biggest obstacle, frankly, is the previous battle scars of other payment processors and the mess they created for cannabis operators and consumers. Once the operator pays attention to KindTap’s offering, then we tend to move forward with implementation without any issues.

Related: “Payment Processing for Cannabis Delivery Services and Why Cashless Payments are Better”

Payment Processing for Cannabis Delivery

Q: What does the future of cannabis banking look like for you?

CI: At KindTap we believe the fragmented banking system will not go away anytime soon, especially on the payment processing side where most providers live at the federal level and changing those regulations will not happen overnight. We built KindTap to thrive in the current banking environment, and whenever federal legalization occurs whereby the “federal rails” of Visa/MasterCard enter the picture, then our business will continue to thrive with our planned transition of our platform to that of a federal-level payments platform.

Q: A recent study by Grand View Research projects the legal cannabis market to reach $84 billion by 2028 and leading up to that, the cannabis payment industry is hotter than ever. What’s next for the KindTap team?

CI: We are excited about our growth roadmap for KindTap. You will read later this year our publicly-announced expansion plans and roll-out of our credit and loyalty features, which will quickly solidify us as the leader in cannabis payments and the first payments provider to offer a digital credit solution to cannabis consumers.

Q: What are a few resources you can share with our audience? What are some of your favorite books, podcasts, software, etc. that have benefited your personal and professional growth in the industry?

CI: Great question. Not to sound like a plug, but I actually learn a lot from WebJoint’s content and white papers, which help me to better understand the delivery side of the business more so than other sources.

Q: Lastly, where can our readers find you and learn more about KindTap?

CI: You can visit our website at www.kindtaptech.com or email us at info@kindtap.com.

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Make $30 for Every $1 Spent with Cannabis Text Message Marketing – A Conversation with Happy Cabbage CEO, Andrew Watson

Posted on by Antonio Javiniar

I had the opportunity to sit down with Andrew Watson, the founder and CEO of Happy Cabbage Analytics, an “integrated data platform that is revolutionizing how cannabis businesses target customers and inform business decisions.”

In this interview, we discuss Andrew’s journey into the cannabis industry, the inception of Happy Cabbage Analytics, and its mission to generate revenue by raising the standard on data-based marketing campaigns.

happy-cabbage-logo

Andrew Watson, CEO and Founder of Happy Cabbage Analytics
Andrew Watson, CEO and Founder of Happy Cabbage Analytics

Q: What can you tell us about the origins of your interest in/experience with cannabis?

AW: My first experience with cannabis was in September or October 2007 when I was 15 and a sophomore in high school. I was waiting by the Royal Farms in North Baltimore (which is where I was born and raised) for a friend to pick me up and take me to see a Resident Evil movie. Some kids from my high school were walking by to go into the wooded park that was behind “the RoFo” as we called it back then. 

Now, these were definitely kids I would consider “cool” in the social hierarchy of high school, and I was definitely considered “not cool.” I was a pretty big goth, budding theater kid, and overall weirdo. I wasn’t good at or interested in sports and instead mostly played PC video games and listened to heavy metal. These kids saw me though and invited me to go smoke with them; very cliche.

During that first session after I was handed the bowl I immediately tipped it over upside down spilling the nugs all over the ground. I remember Andy Dufrense (not a real name but let’s call him that) had to open up his flip phone in the dark for some light and pick them up off the ground. Incredibly embarrassing, but very memorable. From there I definitely became a “stoner” in high school, sneaking around my house and Baltimore, smoking out of homemade bowls, cooking brownies, and overall experiencing the black market life that was cannabis in Baltimore in the late ’00s. 

I always had a sense of it being wrong that it was so stigmatized: kids I knew got harassed by cops by just having half-smoked joints on them, kids kicked out of my private high school for being caught with weed on them (but other kids not kicked out for harassment or assault). After high school, I was fortunate enough to go to a very “hippie” college in Oregon in which I became enmeshed in West Coast (and white) weed culture. There I learned what cannabis can be when removed from the specter of over-policing and stigma. It was an alternative to the heavily ostracized culture that I experienced in Baltimore, a world in which every kid was smoking, but being caught with it could ruin your life. 

My cannabis consumption in college and in the years since definitely reduced from high school (nowadays I pretty much only smoke pre-rolls every other week) but my strong interest in the political movement, economics, and opportunity flourished. In 2017 when I had the opportunity to start consulting for a delivery business in Oakland I pounced on it, and from that experience ultimately Happy Cabbage Analytics was born.

Although from those earlier experiences I have never truly felt like a part of the West Coast weed culture, I admire its opportunity and the wave of change it will bring to the country. To put it bluntly, a place like Baltimore will likely be last in line to experience the opportunities, prosperity, and wholesomeness that the legal industry provides. Many folks who maintain power either via keeping the legal industry exclusive, or preventing legalization all together, will flourish in a place like Baltimore with its stark inequities and deeply entrenched police brutality. That being said, work being done here, mistakes we are making, and progressive movements we are building around equality restoration will eventually make it to Mondawmin Mall, Druid Hill Park, and behind that Royal Farms. 

My interest and career in cannabis ultimately stem from that hope and desire to help see it through. In a lot of ways, it’s all about making my 15-year-old self happy and to rue the stigma that shaped so much of my original experiences in cannabis. I want Baltimore City to ultimately be proud it has natives who have become cannabis entrepreneurs, and hopefully re-shape the minds of those adults who knew me back then and helped perpetuate that stigma.

Q: Can you briefly share with our readers what Happy Cabbage Analytics specializes in? What part of the supply chain do you service? What problems do you solve for them? 

AW: Happy Cabbage specializes in growing revenue- we take a dollar spent on our platform and convert it into $30. This starts with data from POS systems in cannabis retailers, dispensaries, and delivery services. From there, we detect opportunities for revenue growth. What customers have disappeared? What do customers like to purchase? What would a business analyst advise if they were to look at the purchase data? We identify opportunities, present them in our platform, and then, via a marketing solution called Polaris, we segment customers who should be marketed to via SMS. The idea is not to produce charts and graphs but to produce actionable insights. We primarily serve the Bay Area, but we do also have customers in Colorado and Ohio, from mom and pop shops, large franchises, small businesses, delivery platforms, etc. 

When our customers hear “analytics and data”, their eyes tend to gloss over and they start to feel overwhelmed. Having them use an overly sophisticated, cumbersome platform is a disservice; it actually dissuades them from taking the time to analyze and get familiar with their outputs. Our culture is focused on how to empower folks with information, without making it overly burdensome to do that. We serve all kinds of clients. Take, for example, the mom and pop shop. How do we get them to use their data, that is fully and entirely theirs, and generate targeted SMS messaging, price optimization, etc without having to invest in expensive tooling? It’s very important for us to say that cannabis is a collection of small businesses and entrepreneurs at this phase in the industry (at least in California). While we love serving all kinds of businesses, that accessibility means we have a responsibility to enable even small businesses with an intuitive and intelligent interface.

View Integration

Q: What is the value of investing in text message campaigns for cannabis retailers?

AW: As mentioned above, investing in the machine-learning powered text messaging we provide shows consistently a 30x ROI for our clients. Said another way, for every customer you engage we see about $3.50 of revenue generated. For our customers who are spending $1,500 a month on our platform, that means they are generating $45,000 a month in attributed sales from their usage of Polaris. When you compare this to the $5,000 a month many folks are spending on Weedmaps or other forms of customer acquisition, the value becomes obvious. 

Regular customers, customers who are already familiar with your brand, can be brought back into the store at a significantly lower cost than new customers can be acquired. Furthermore, they have higher average ticket sizes, consistent order frequency, and can help boost community awareness of your dispensary by referring their friends. 

Furthermore, these customers have already opted-in to receive text message promotions: they have stated they want to know the deals. That doesn’t necessarily mean however that they are engaged. Our average dispensary that has two years of data in their system, less than half of their opted-in regular customers have come back within the last 90 days (when on average the order every 20-30 days). For many dispensaries and delivery services that means they have thousands of opted-in customers who are primed to come back but haven’t.

A great way to burn these customers though is to give them heavy promotional messaging about products they don’t care about. The customer who only ever buys Plus Gummies does not care about the high THC exclusive flower you have on your menu and vice-versa. Blanketing these customers with uniform text blasts, and not matching consumers to preferences lowers the potential ROI. 

Using Polaris, however, you can easily drive much higher ROI by matching those customers’ preferences to the texts that you send out. This is ultimately where the value comes from. A recent customer of ours in San Francisco who surveyed their consumers found that 98% said they like the text messages they get, and many consumers respond to our messages specifically that they appreciate the personalized marketing and messaging associated with their consumption preferences.

Q: For our readers who want to implement new tactics like text-based campaigns into their overall marketing strategy, where do you suggest they start?

AW: You should start by messaging your existing customer base who has opted-in to messaging. You can collect these opt-ins (either automatically through WebJoint or) via a simple opt-in form you embed on your website. Contrary to popular belief, many consumers both want and seek out the promotional messaging that comes from retailers. High taxes, and difficulty in finding certain products, means consumers have to rely heavily on communications from dispensaries and delivery services to know if deals and products are available.

Unless you are using a solution like Polaris that can help you automatically sort through consumer preferences I would avoid strong messaging about certain products and product categories. If you have a great deal on Raw Garden, but only 20% of your consumers have ever purchased or care about Raw Garden products, the 80% you message about Raw Garden are going to get annoyed and either opt-out or simply ignore future messages.

We see this strongly in our data, where blanket messages that don’t mention specific products can get much higher conversion and engagement than blanket messages that advertise specific products.

Using Polaris however, I would start off by following our guided campaigns. This can help you see quickly who your lost customers are, who prefers flowers, who is overdue for an order of edibles, etc. From there you can leverage our Advance Targeting by going after folks with specific preferences around brands, order sizes, and importantly, geo-fenced delivery zones. That way your messaging is powerful and tailored appropriately to the diversity of your consumers. Our customers who use our tool in this way see by far the highest ROI, with some customers seeing as much as $10 per customer engagement in sales.

Q: In a few words, how would you define a successful text-based marketing campaign?

AW: One that drives $3.50 or more of sales per customer engaged, and or one that recaptures over 20 lost customers. The best campaigns we see are most often the ones tailored to a specific brand, order timing, and product category preference. These go out to a few hundred consumers at a time, but 5 campaigns for 500 consumers will easily see 2-5x the returns that 1 campaign to 2,500 consumers drives.

Q: What would you say are the top 3 factors behind a great text messaging campaign?

AW:

  1. Take the time to really carefully segment your customers. Look at customers based on their behavioral attributes, not using generic demographic data like age or gender. I feel like the focus on customer recapture isn’t as strong as it should be. Customers that drop off are still customers that have been sold at one point. They already get you and your brand. They don’t need to discover you. And oftentimes, if the incentive is there, they want the exclusive offers of a loyal customer. Get specific with their attributes; whether customers are overdue for the order, have completely dropped off, prefer extracts/flower/specific brands, etc. Communicate with them strategically, using their relevant brands and products, so they feel like you’re looking out for them.
  2. Text messages are meant to be short and to the point. When sending an SMS blast, you need to be efficient with your language and prioritize what you say, so state your offer upfront. Provide a clear call to action. Without this, recipients will most likely opt-out, or simply leave you on read.
  3. As with any marketing campaign or platform, it is important that you analyze key metrics. Are you gaining a return on your investment? What’s resonating with customers? How can these observations feed your communication strategy? Every campaign is a learning experience, and a great campaign is a gift that keeps on giving. It not only generates revenue through a single promotion, but it informs continual strategic, data-driven communications.

Q: What are the most common mistakes you see cannabis operators make in terms of marketing – specifically on text message marketing?

AW:A lot of the most common mistakes are easily avoidable ones. Some campaigns are not explicit in the action they would like the recipient to take- is your call to action clear? If a text blast is indiscriminate enough, users will sense that the message isn’t genuine, and they certainly won’t be compelled to engage. Another item that will place you in a customer’s blocked contacts is reaching out too often. Try to limit reaching out to your customer no more than once a week. We often see the most successful customers fall in the one text every two weeks category. But the most important of all these is to pick the best segment of customers. Are they relevant to the promotion you have on hand? Are they dropping off from their frequency of contact? Are they loyal to specific brands or products? And you really don’t need to get much more specific than that. If you stick with simple parameters, you lessen your chance of hyper-targeting and correlating groups that don’t really have much in common. 


Q: In the breadth of experience with your customers, what is the ultimate value of data analytics and insights you can get from text-message marketing campaigns?

AW: Humanizing your consumers and understanding the trade-offs and relationships between brand and retailer. We as an industry have a lot of myths about how consumers purchase cannabis and what information they respond to. By pairing analytics and data with text messages we effectively build a virtuous feedback loop to constantly experiment with what actually drives consumer behavior.

For example, a recent trend we have found is that when you mention a specific brand in a text message (such as Raw Garden) yes it will drive more folks to purchase the brand, but on average even our most successful branded campaigns only get 10-20% of the consumers who order to actually purchase the mentioned brand. That being said if you take 500 customers who have bought Raw Garden before and mention there is a sale on Raw Garden, they will convert at 2x the rate of mentioning Raw Garden to consumers who have not bought it before (but still prefer extracts and vapes). Of those consumers who bought Raw Garden before though, very few of them might actually buy it again, they’ll buy something else like Select or F/ELD.

Understanding these nuances is what you get from intelligent experimentation. This is what Instagram does when they serve you an ad on the story, what Netflix does when they sort your recommended shows, what Lyft does when it gives you a notification about discounted rides. All major retailers both digital and in-store are constantly testing their consumers. They make no assumptions about consumer behavior and let the data decide what to market, when to market, and how to market. This is the value of the data in cannabis, which is far richer than most retail data in the traditional industry. We as an industry should expect this level of automation, customization, and precision in our marketing. We at Happy Cabbage Analytics are taking the first steps to empowering our retailers with the tools to get them there.

Q: What are a few resources you can share with our audience? What are some of your favorite books, podcasts, software, etc. that have benefited your personal and professional growth in the industry?

AW: Check out our blog, https://www.happycabbage.io/blogz, where we try to publish a lot of our findings and recommendations. 

In terms of understanding consumer behavior better and what tools and techniques we use to create intelligent marketing campaigns, I’d suggest reading the book Thinking Fast and Slow by Daniel Kanhamen. This book goes over some of the fundamental premises of behavioral economics, consumer psychology, and buying behavior. Another good book in this realm that’s a bit lighter is Nudge by Richard Thaler and Cass Sunstein.

To keep up with cannabis-specific trends and updates I subscribe to a lot of the various newsletters. Although short and mixed in relevance, the MJ Biz Daily newsletter is a great source for industry tidbits to keep you informed.

Honestly though, I, like many people, generally feel as if there is a gap between folks on the ground doing business in California and the reporting and pomp around the more established cannabis news and investment newsletters. I really appreciate what WebJoint and some others are starting to do in terms of getting more of the on-the-ground perspective, particularly as it relates to California (which is a larger market than Canada). 

Q: Lastly, where can our audience find you?

AW: We can be found at:

www.happycabbage.io

You can find me on LinkedIn here: Connect with Andrew Watson on LinkedIn
You can reach me via email at andrew@happycabbage.io

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Building Cannabis Brands with Justine Bastida of OB Solutions

Posted on by Antonio Javiniar

I had the opportunity to sit down with Justine Bastida, the founder and CEO of OB Solutions, a cannabis consulting firm for cannabis brands and manufacturers. In this interview, we discuss Justine’s introduction into the cannabis industry and the plethora of issues she and her team solve for brands across the state of California.


OB Solutions, a consulting firm focusing on cannabis brands.
Justine Bastida (left) and Chris Milot (right), OB Solutions' Co-Founders.
Justine Bastida (left) and Chris Milot (right), OB Solutions’ Co-Founders.

Q: What can you tell us about the origins of your interest in/experience with cannabis?

JB: 2008 brought a lot of challenges and uncertainty across the world with the economic crisis.  I was going to university, dealing with my father’s newly diagnosed prostate cancer, and beginning a professional career.  I was introduced to the cannabis industry by a cultivator who noticed it was not experiencing the economic disruptions of other industries.  I was able to witness the pitfalls and challenges of starting a business from the ground up.

We began attending trade shows, industry events and focused on building relationships and collaborations to extend our cultivation, equipment, and distribution network. We met emerging leaders and technical experts that helped provide more legitimacy to an industry rooted in a “stoner” image.  Yet, the best leaders we met were the most genuine, down to earth, quality product focused individuals out there.  We, as up and comers, set 24/7 hours and I worked harder with that business than I had ever worked in my entire life.

I wanted to enhance my business capabilities to shift away from selling and distributing products to learn about ad networking, marketing, and website development along with management, team building, and financial management.  In 2014 to put my degree into use in the accounting world.

In 2017, my mentor approached me with a new opportunity with MCIG as a regional sales director specializing in packaging of cannabis products.  While I was comfortable with sales, I didn’t have experience in manufacturing methods or understanding custom packaging, so I sought out industry experts in that field.

Eventually, I met my now COO who has extensive technical experience in packaging.  She knew the ins and outs of making anything imaginable from cell phone cases to custom molded bottles and tinctures.  She took ample time to help me understand the industry like we both do now for our clients.  We decided to take a leap of faith and teamed up to form a consulting firm.  With our designers, industrial engineers, support staff, and sales team we have grown from seed to tree just like our clients.  We understand the challenges that cannabis and CBD companies face and can hold our clients hands each step along the way!

Q: Can you briefly share with our readers what your firm specializes in, what part of the supply chain you service, and what problems you solve for cannabis brands?  

JB: OB Solutions is the brainchild of multifaceted professionals uniting the cannabis industry with mainstream and pharmaceutical branding and packaging solutions.  What differentiates us from other firms is our attention to solutions that make sense and are consumer-friendly as our team has been involved in growing, extracting, and filling various cannabis products.  We help accentuate the quality of the product employing the power of marketing to provide differentiation.  We help our clients concentrate and capitalize on a perfect match of quality and brand presence to become homerun brands.

In terms of problem-solving, we focus on increased profitability while decreasing frustrations and supply chain traffic jams.  We act as an embedded resource and extension of each brand we take on.  We jump into the product strategy process regardless of where the client is in the planning process prior to meeting us.

Q: What would you say are some of the most pressing issues cannabis brands are facing right now?

JB: The industry, as a whole, has a stigma against it.  The lack of proper education in the general populous has driven many companies – especially CBD companies – to become snake oil salesmen with claims that cannabinoid products can be used to treat everything or give a generic enjoyable experience.  To be taken seriously, there needs to be more regulated testing of product quality and content, tracing from seed to store shelf, and more clinical trials to prove efficacy.  While many producers are taking steps to achieve this, others cut corners and even falsify documentation to get their products to market.  A sanctioned trusted review board and qualified seal of certification can help consumers know what to purchase and how the product should work for them.

COVID-19 has affected the industry and cannabis brands in ways we couldn’t imagine.  Distribution Challenges with increased sales:  As the medical-marijuana business has been deemed “essential”, the industry has been active manufacturing and selling products.  However, recreational marijuana commerce, not designated as “essential,” has had mixed responses with sales halted in many states while others are allowing delivery services and curbside pick up.  As a result of the stay-at-home orders, many marijuana companies set sales records for 4/20 and the last two months while more users were working privately from home increasing usage.

Concerns of COVID & cannabinoid interactions: Questions on the safety of usage coinciding with the virus has left some consumers on the “edge” of purchasing, staying away until further safety information is available.  Some advocates have focused on the healing properties of the product including anti-inflammatory, anti-viral, and immune-modulating properties, but not enough information is clear or even available on the usage making it a challenging time.

Potential COVID spread?:  Additionally, uncertainty on potential exposure to the virus during manufacturing, packing, and distribution drives concern by users,  impelling producers to ensure measures are being taken to protect the product and the end consumer from the COVID virus.

To add further complexity to the industry, financial investment firms are entering the industry, often putting demands on streamlining the business with a focus on financial results.  Private equity is needed until federal funding becomes an option and SBA loans are even available.  As the market is still considered risky, many of these loans have extremely high-interest rates for the businesses forcing them to sell more to pay off their debt sooner rather than later. Some operators are making shortcut decisions sacrificing quality in growing and manufacturing to get the products to the shelf and into consumer’s hands faster.

Q: What would you say are the top 3 factors that make cannabis brands great?

JB: Quality Product: Hands down the emphasis on the quality of the product is the most important.  Taking the time to grow or find a tested top quality grower can make or break a company.  We often see companies use multiple sources for their products and the taste and quality drastically changes batch by batch.   Even for “value” cannabis brands, ensuring you have testing to ensure an enjoyable experience every time is the foundation; we can build the skin around it.

Consumer Messaging and Identification: A lot of times cannabis brands have not targeted a specific audience and simply assumes anyone and everyone will pick it up.  There’s a lot of competition out there on the store shelves and the best brands resonate and attract the appropriate consumer through effective marketing/branding.  Identifying and building brand standards consistent with the target consumer can become the next homerun hitter.

Educated Caring Advocates: Ensuring you have a knowledgeable staff, not just users who say “this product rocks,” who can articulate the story behind YOUR product (how it is grown, processed, and manufactured, as well as the benefits and anticipated experiences) brings credibility and clout.  Education and training of all people handling your product at every learning opportunity, trade shows, dispensaries, messaging, make an impact that can last and resonate with the consumer for years to come and bring them back as a loyal consistent user.

Q: What are the most common mistakes you see brands make?

JB: Many producers rush brands to market.  One of the biggest issues we encounter is the lack of a cohesive look between different products of the same brand, especially in packaging,  jars, boxes, and pouches with different labels and materials.  Consumers can identify and recognize a brand and lack of cohesion can prevent them from recognizing various products are from the same producer.  We often end up doing a relaunch with new branding for our clients to help them be identified.

Second, many cannabis brands tend to have limited understanding of lead times, beyond manufacturing the product, as packaging is often assumed to be off-the-shelf, ready to buy or turned around in a week or two while custom products done in top factories can take upwards of 8-10 weeks.  While the lead times can be challenging with additional required work such as generating art or molds, we are often able to build a short-term solution strategy while getting the requested results long term.  We can jazz up stock packaging should we need to and still bring a powerful presence.

New manufacturers frequently do not have a clear understanding of the packing and distribution flows they will have to follow.   We can help level expectations on the process flows they will encounter, the unanticipated slow down packers find when the packaging they are expected to use is not ready for quick filling.  Boxes may need to be opened or assembled prior to filling, or extra steps may be needed for unpacking products before packing.  Label applications can become a challenge without proper equipment making jars look homemade and uneven.  Additional steps may be required for shipping pack-outs to send to the end-user and stores.  We address these types of supply chain slowdowns in advance, offering solutions to help make loading and prepping products easier.

Q: For our readers who want to start a cannabis brand from the ground up, what kind of advice would you give them? Where would you recommend they start?

JB: Successful cannabis brands plan well in advance. Create a detailed business plan with targeted goals and timeline, and a financial road map.  If you are new to business planning, you might want to work with an experienced mentor.   The best sources for data are experienced growers/processors/chefs depending on the products, brand consultants, packaging experts, and staffing specialists.  Understanding realistic timelines is critical before you start selling a product that doesn’t exist and miss unrealistic timing.  The best brands are a trifecta of quality products and ingredients, appeal and targeted marketing appearance, and appropriate distribution channels.

Q: What are 3 concerns that you have as the industry continues to grow?

JB: Many of the concerns our industry will face are the same speed bumps and detours we faced in California and other legalized states.

  1. The need for regulated assurance quality and efficacy testing of all products.  Too much bad product is being produced as demand increases.  
  2. Legitimate banking and insurance availability are urgently needed.  Recognizes legitimacy, ensures business transparency, and makes economic sense.
  3. As demand increases, the big business takeover of sources like farming may challenge the ability of new small businesses.  The industry will change.  
 
 

Q: What are you excited to see as the California cannabis industry continues to evolve?

JB: I am looking forward to the day when individuals thinking of entering a shop or ordering a cannabis product, do not hesitate because of the worry about what others might think.  I am excited to see more public support in favor of adult-use marijuana. 2019 was a record year with more open minds across broader demographics and psychographics, towards the industry, culture, and where the real mission lies. Seeing studies that show two-in-three Americans believe that cannabis should be legal gives me hope, supporting the ability to medicate as openly as a prescription and not be shamed. It is exciting to see more universities opening career fields in the cannabis industry with experts in cultivation, science, licensing, distribution, business, finance, laws, and being able to share corporate knowledge with academia.

Another thing I look forward to is restaurants having an option on the menu for CBD and THC infused food. We have some of the most amazing underground chefs in our industry who have identified creative delicious vehicles for CBD and THC.  For example, Chef Matt is at every Lit event demonstrating the demand for his culinary craft.

Again, with legalization, I am excited about new subscription boxes with cannabis available in all states, This will result from more studies on products and quality assurance methods for manufacturing across the board. We have arrived in the Weed Evolution, with strength in e-commerce and facilitating online sales of all cannabis-related products.

Last, but not least, when banks and insurance companies create legitimate vehicles supporting cannabis businesses with financial accounts and risk coverage, the industry will take a major step forward.

Q: What are a few resources you can share with our audience? What are some of your favorite books, podcasts, software, etc. that have benefited your personal and professional growth in the industry?

JB: One of my favorite leadership inspirational professionals is Emilie Aries.  What started as a TED Talk listen blossomed into reading her blogs, and books about self-empowerment and setting healthy boundaries while achieving goals.  We emulate much of her leadership boss principles at OB Solutions.

The software we like to use and to share with each of our clients is the Asana project management platform.  We use this to build out individual projects and set tasks for our clients as well.  It allows anyone at any time to review where we are in the production process and sets appropriate deadlines so we can stay on forecasted timelines.  We can even send approval requests for proofs and the next steps in the building of a component.

In terms of industry growth, our team attends many of the industry trade shows and conferences where some of the most impactful speakers are artisans focused on improving the health benefits, targeting specific ailments with products.  One such influencer was Adam Jacques, a grower and geneticist focused on the science behind growing.  Growers like Jacques are focused on breeding quality plants, pinpointing specific phenotypes to express, and developing specific cannabinoid compounds and terpenes.  The next generation of products will result from the innovation and practices of teams focused on helping more patient-specific profiles.

Industry inspirational books include Ed Rosenthal’s Marijuana Grower’s Handbook, The Cannabis Grow Bible, Weed the People, High Times Cookbook, Breaking the Grass Ceiling, and Women’s Guide to Cannabis.

Other inspired reading/audio:  Many Ted talks have been very informative for medical expression and aid, kicking out the stereotype of the “stoner”, and detailing the reality of productivity that surrounds the cannabis plant.

Blair Brown’s “The Cannabis Mirror”, focuses on education from AD to BC history on the use of cannabis and breaking through Cannabis prohibition.

A piece from Zachary Walsh, “Making Peace With Cannabis”, helps provide an understanding that times are changing as we continue to frown upon this issue (Cannabis) in the world.

On a more focused note, Matt Hill, Ph.D.’s, “Your Brain on PTSD: The Impacts of Cannabis,” shares multiple studies on how the brain is impacted by cannabis and how it can be an aid for PTSD patients.

  • Making Peace with Cannabis | Zachary Walsh | TEDxPenticton
  • Stoners Coming Out – Beyond the Marijuana Monster Myths | David Schmader | TEDxRainier
  • The Cannabis Mirror | Blair Brown | TEDxSunValley

One of my influential and fierce producers and hosts is Krishna Sai Andavolu of Viceland’s, a focused cannabis show.  You can find it as Weediquette. The show’s purpose is to inform the public of the planned and actual timing of legalization in the cannabis industry and the various states. Many of the episodes are targeted to education on the benefits of medical cannabis for cancer treatment and PTSD.

My all-time favorite actor and cannabis activist is Seth Rogan.  We have all seen him in movies like “Pineapple Express” and “This Is The End”. Always making cannabis a fun and playful experience through his movies, he is so involved in the forward movement and expansion of educating about the plant with his cannabis association, Houseplant, education about plant strains, how to meditate, and how to make your own product and process, making it really fun where to and how-to guide.

Q: Lastly, where can our audience find you?

JB: We can be found at:

www.obsolutionsconsulting.com

Email: justineb@obsolutionsconsulting.com // chrism@obsolutionsconsulting.com

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Digital Cannabis Payments with Ian Rassman of Chosen Payments

Posted on by Antonio Javiniar

I had the opportunity to sit down with Ian Rassman, the Deputy Director of LA NORML, Merchant Specialist at Chosen Payments, and a close member of the WebJoint family. In this interview, we talk about Ian’s experiences in the cannabis industry and where he thinks the future of cannabis payments will end up.

Ian Rassman, Deputy Director CA NORML
Ian Rassman, Deputy Director CA NORML

Q: What can you tell us about the origins of your interest in/experience with cannabis?

Ian: I grew up on the Big Island of Hawaii during the late 1970’s through the mid-80’s and I was definitely aware that it was around me with some regularity. We called it Pakalolo which is the Hawaiian slang word for cannabis. By the time I was in high school I knew many people who were using it, but in all my years in Hawaii I never tried it. Looking back, like most of America I was influenced by much of the media on TV during the failed War on Drugs; “This is your brain on drugs,” “Gateway drug,” that sort of thing. In the mid 90’s I was fortunate enough to get a job in Europe as a traveling software engineer. My boss said I could live anywhere I wanted as long as I had quick access to a large International airport. So, within weeks I moved from Los Angeles to Naarden, just outside of Amsterdam. One of my software partners was a retired police officer from the famous Red-Light District in Amsterdam. I learned a lot from him about Holland’s long standing, sensible, and non-criminal approach to cannabis. From my local Dutch friends, I came to understand more of the cultural and medical aspects surrounding cannabis during the several years that I lived there. By the time I returned to California in 1999, Proposition 215 had been enacted and California’s approach to cannabis was picking up speed. The culture was coming out of the closet and becoming more mainstream in California.  Fortunately, I had just moved within a 10-minute rollerblade of Venice Beach where dispensaries and script-writing doctors seemed to outnumber Starbucks.

Q: You’re involved with a lot of different things within the cannabis industry. Can you share with our readers what organizations you’re affiliated with and what you do?

Ian: I wear a few hats within the industry but I hadn’t originally set out with that as my plan. Going back a bit, in 2012 I received a patent for a software platform that automated communications between livery companies providing town car services. I became entrenched in the limousine industry and developed a relationship with Chosen Payments who was rising to become the dominant credit card processor for that industry. I honed my payment expertise in the limo industry, and rapidly expanded my client base out to other retail merchants and verticals such as bars, restaurants, attorneys, automotive, CPAs and plastic surgeons to name a few traditional businesses that frequently receive payment via credit cards.
In 2017, sensing the wave of impending legalization of recreational cannabis in California, I decided to go deep into the cannabis vertical. Not realizing how truly different the cannabis industry is when it comes to financial services, I was in for a quick awakening. Banking and payments for cannabis is a frustrating process for nearly every business in the industry. Every business owner has horror stories about having their banking or merchant services shut down, funds seized, or a myriad of other financial issues. My entrepreneurial instincts made me realize that I needed to spend more time and energy to help change the things that I thought needed addressing within the industry. I also felt it was important to volunteer my time and pay it forward to support the business community from which I expected to make a living. With its national effort to reform some of the banking issues we were all facing in the industry, NORML became that vehicle for me. I found that NORML’s mission aligned very well with my core values. I learned everything I could about consumer activism, safe access, social equity, expungement policy, employment protections, and education. I ramped up my time and effort within the organization and realized that Los Angeles, where I have lived for over 34 years, is a perfect microcosm of the industry as we are undoubtedly the largest cannabis-friendly city on the planet. With a mature medical marijuana market, a plethora of cannabis companies basing themselves in Southern California, a liberal government and a county population larger than 42 U.S. states, Los Angeles is where consumers, industry and policy makers come together to define how cannabis will become integrated into our communities. This is a great opportunity, and grave responsibility that I believe most Angelinos and policy makers take seriously. The War on Drugs was particularly fierce on our streets and our minority communities suffered from it. There is much work remaining to be done and I am extremely proud to be part of Los Angeles NORML.

Q: What problem does Chosen Payments solve for the cannabis industry? 

Ian: Retail cannabis merchants and cannabis delivery services have mostly operated in cash. Issues of storing, transporting, depositing, auditing, theft and safety are all amplified for CRBs operating heavily in cash. Chosen Payments provides Point Of Banking (POB) services to retailers and delivery services allowing them to accept safe, secure, auditable and compliant digital cannabis payments from their customers while also increasing the average ticket price per sale. Chosen Payments helps minimize cash and increase digital cannabis payments that fund directly to your bank account. For cannabis delivery services Chosen Payments provides 4G mobile terminals for secure, compliant digital cannabis payments.

Q: Cannabis delivery services are subject to robberies and other hazards on the field. How can digital payments make deliveries safer?

Ian: The new normal brings health and safety concerns to both customers and drivers alike. First and foremost, on everyone’s minds these days is the current COVID-19 pandemic. No one wants to touch cash anymore, so digital payments via a Cashless ATM with limited contact is a much safer alternative for everyone. Eliminating the cash also makes drivers less of a target for robberies. Mobile terminals providing digital payments can enable safe home delivery and curbside pickup. Cannabis payment processors have always been a shaky part of the cannabis industry. There are horror stories of accounts getting shut down and assets being frozen. How has Chosen Payments ensured the safety of their retail accounts? Well, if your bank throws you out for being a cannabis business, your merchant services account dies along with it. However, there was a time when some CRBs and processors, to get around restrictions put in place by the Card Brands (Visa/MC/Amex, etc.), would mis-represent who the merchant was by coding the dispensary as a “pharmacy” or a “florist.” Eventually it would become clear that there were no aspirins or roses being sold and that account would be shut down. Misrepresentation was a common contractual reason for closing a merchant services account. It should have been the responsibility of the processor to lead their customer down the road to compliant solutions, rather than the many work-arounds (crypto, blockchain, stored value, etc.) that exist to undermine the Card Brand policy of not accepting credit cards for cannabis. No matter how much everyone wants it, there are simply no air-miles for your cannabis purchases. Transparency is critical in this process. For our cannabis clients at Chosen Payments, we only utilize Point Of Banking (POB) where all transactions are PIN-based and through your ATM card. Our solution utilizes the ATM rails. In the simplest possible terms, a payment rail is any form of digital infrastructure that transfers money from one individual or business to another. These are a completely different set of payment rails than the ones owned and operated by the Card Brands. At this time, there is no Visa/MC/Amex for cannabis. 

Q: Can you give us a quick breakdown on the difference between ACH transactions and the cashless terminals Chosen Payments uses?

Ian: ACH payments are electronic payments that go through the Automated Clearing House (ACH) Network. Funds move from one bank account to another with the help of a centralized system that directs funds to their final destination. Most people are already familiar with ACH payments either from Direct Deposit from their employer or when they pay bills electronically from their checking account.  Customers need to know their bank Routing and Account numbers to transmit funds. The cashless ATM (point of banking) terminal supports PIN-based card transactions: ATM/debit cards. When the customer inserts their debit card, a digital transfer is initiated. This gives your customers the ability to pay with their cards at the point of sale, increasing customer throughput and average ticket price. The secure countertop and 4G mobile terminals that we use are easily updated with the latest software, and on the first day that the card brands allow for it, we will patch the terminals to accept those cards. Customers must have their card present and know their ATM PIN number to transmit funds.

Q: What are the benefits cannabis retailers can experience by using digital payments? Do customers spend more? 

Ian: Yes. Retailers typically experience increased average ticket price as compared to cash payments. Other benefits include:
  • Eliminating the liability of having cash at the counter.
  • Safe, Secure and Compliant.
  • No processing fees to your business.
  • Quick and easy approval process with only a cannabis license, a driver’s license, and a voided check. 

Q: What are 3 concerns that you have as the industry continues to grow?

Ian: I am concerned that we are not doing enough about expunging criminal records for non-violent cannabis convictions. We can’t leave a single person in prison for selling cannabis while our regional governments are handing out licenses to sell cannabis. I am concerned that we need to do more on social equity, especially here in Los Angeles. As well, we need expanded licensing for those social equity applicants and faster timelines on that approval process. I am concerned that the Federal Government has not taken more decisive action on legalization when 66% of Americans believe cannabis should be legalized, and only 32% oppose legalization. The last decade has seen a steady increase in support for legalization and the disparity between these numbers continues to widen. The path towards Federal legalization and de-scheduling (not re-scheduling) is critical for enabling additional banks and credit unions to determine their own risk assessment and willingness to bank CRBs, without the threat of being afoul of Federal KYC and AML issues.

Q: What are you excited to see as the California cannabis industry continues to evolve?

Ian: Again, one of the most exciting things is a better banking infrastructure surrounding cannabis. California has been proactive on this issue to protect the industry and in late 2019, regulators issued guidance to state-chartered financial institutions regarding banking relationships with CRBs as more banks and credit unions choose to bank the industry. This will be significant for everyone involved. Federal clarity would come with the passage of the Safe Banking Act, the MORE Act, or the STATES Act.  I am excited to see cannabis become more mainstream and start to shake off the harmful stereotypes, propaganda, and stigma directed at consumers for nearly 90 years and continue to haunt our nascent industry nationwide. I am excited to see the science pushing forward on this versatile plant so that we may better understand it and our own endocannabinoid system. I am also excited to see the potential of industrial hemp and look forward to seeing it replace some of the petroleum and other non-sustainable materials we currently use for plastics and building materials. Hemp can be made into paper, biofuels, food, energy storage, and thousands of other products. Hemp plants also help with water and soil purification, and I look forward to seeing industrial hemp become part of our global solution for climate change. 

Q: What are a few resources you can share with our audience? What are some of your favorite books, podcasts, software, etc. that have benefited your personal and professional growth in the industry?

Ian: Ha, well it’s funny to hear you ask that because actually WebJoint is one of my favorite social media companies to follow in the industry; I appreciate all of the social equity issues that you champion and shine a light on here in LA. You bring out the local stories and your media team produces top quality content. Beard Bros. Pharms publishes one of my favorite weekly newsletters with their take on all the latest cannabis news. My own California Cannabis Event Newsletter has been a lifesaver for my own time management to know which events I plan to attend and who I am going to see there. Some of the best opportunities for education come from our very active event scene in California with a few of my favorite locally repeating industry events being CannaGather, Blunt Talks, & SCCBIG. Great education also comes from our regional and local associations such as NORML, NCIA, ASA, NCAB, CCC, LPP, CCIA and many others. It is very important to support the associations that support our businesses.

Q: Lastly, where can our audience find you?

LinkedIn: https://www.linkedin.com/in/ianrassman Email: ian.rassman@chosenpayments.com www.chosenpayments.com www.lanorml.org
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Cannabis Delivery Customer Expectations with Melissa Stapley

Posted on by Antonio Javiniar

WebJoint had the opportunity to sit down with Melissa Stapley, the founder of MJ Hybrid Solutions. After discovering a need for cannabis employee training, Melissa combined her passion for sales training and cannabis education to develop the MJ Hybrid Training System. With her 12 years of corporate sales experience and 5 years of cannabis industry expertise, MJ created a training platform for cannabis employees that is both scientifically accurate and helps employees better sell to customers. Her mission is to legitimize the cannabis industry through proper employee education and training. We are excited to partner with MJ Hybrid Solutions to build operation around the cannabis delivery customer.

 

Q: What can you tell us about the origins of your interest in/experience with cannabis?

Melissa: I joined the cannabis/CBD industry back in late 2014. After seeing the benefits of CBD on helping me get off of sleeping pills, I started educating myself and realized I needed to help educate others. I started working with CV Sciences, a CBD manufacturer as one of their first sales reps. Back then CBD was still so new so it was one of the most difficult sales jobs I’ve ever had. But I learned so much about the history of cannabis, the benefits and got a good taste of how people viewed cannabis and how to educate them based on their understanding.

Q: What inspired you to create MJHybrid Solutions as a training and education platform for cannabis operators?

Melissa: In 2016, I left CV sciences to go help build a sales team with another cannabis and CBD manufacturer. It was there that I really started working more with dispensaries and really noticed the lack of communication between the new cannabis consumer and these dispensaries as well as the lack of knowledge. I knew there was a huge need for training and development in this space. My background was heavily in sales and leadership and I absolutely loved training and developing others so I took that passion and combined it with my passion of cannabis education to develop the MJ Hybrid Training System. Since I got into this industry to help educate the world on cannabis I figured if I can take my knowledge and skill set and help train budtenders and other cannabis professionals on how to effectively sell cannabis while also educating them then I would be able to have a greater impact on educating and ending the stigma.

Q: What does MJHybrid do differently to ensure positive results and long-term growth for your clients?

Melissa: MJ Hybrid Solutions is not just a cannabis training platform, our goal is to ensure our clients get results and provide the tools and guides to be successful and implement the training. We also put a big focus on sales/customer service training. I am a big believer that you can have all the product knowledge in the world, but if you don’t know how to communicate or understand who you are speaking too then sharing that knowledge may be ineffective. I worked closely the first year with dispensaries, got behind the counter and listened and developed sales training content based on what I heard from the customer and what I saw was needed from the budtender to effectively sell cannabis. I also provide an implementation plan to really help businesses focus on the 3 areas to grow their business and set goals to achieve them. It is also important to make sure your team is engaged with the training so we provide tools to roll out the training in order to get the best results from it. 

cannabis delivery service customers experience

Q: From your experience, what do cannabis retailers – more specifically cannabis delivery services – underestimate/overlook when it comes to meeting and exceeding their customers’ expectations?

Melissa: I think they overlook the value of asking questions and listening to their customers, whether in person or on the phone. Especially with delivery services, when people call in to place an order, the rep will usually just assume the customer knows what they want and if the customer does ask a question about product, the rep tends to just list and talk about all the products they carry when what they should be doing is asking the customer questions to understand their needs and what they are really looking for. Most customers don’t know what they need or they choose a product based on what they saw or tried one time, so if the rep was trained effectively on how to ask questions and build rapport they would be able to guide the customer towards the best products for them which would build more confidence with the customer. Confident and empowered customers purchase more and spread the word! 

I think the lack of training and development plays a big role in this as many employers overlook the value of training front line employees, especially on effective communication. And many retailers/owners think that answering the customers questions is great customer service, when in reality we as the employees should be the ones asking questions and listening to our customers needs. When you focus on those small changes, you will yield huge results! 

Q: Can you explain the importance of a cannabis operator’s brand, staff, and company culture? How do these 3 factors work together to develop the customer experience?

Melissa: Having a solid brand and aligning your staff and company culture with that brand is extremely important. You want to create a place that people remember and can relate to and that starts with your brand. Making sure your staff aligns with your vision and values is crucial to keep your brand and culture consistent. When customers come back they come back for that experience and it needs to be consistent. People will purchase more because of the customer experience and that experience is created by your people, your brand and your culture. Stay consistent!

Q: How can cannabis business owners empower their own staff to succeed at their respective roles?

Melissa: Cannabis business owners can empower their staff in many ways. One, it’s important to take the time and build a relationship with them. Just like we train employees to effectively communicate and ask questions to get to know customers, owners and managers should be doing the same with employees. I always say People are loyal to People and when employees feel heard and valued they will work harder and be more engaged. Be open with them, get them involved in processes. People like to feel like their role matters so asking for feedback and getting input from them will empower them. Do regular 1 on 1’s with the staff to see how they are doing, do team building with the whole team monthly and always thank them and remind them how important they are. 

Q: If there was one thing a cannabis operator can enact immediately to better their operations, what would you say that one ‘thing’ is?

Melissa: Focus on their employees and customers. It’s so easy as an operator to get caught up in inventory, products, compliance and regulations, etc. but really taking the time to focus first on the team and customers will really help create an amazing culture, happier employees which will increase sales and make day to day work better overall. When you overlook training and development, employee relationships and customer interaction as an owner you really hurt your business. Remember the 3 ways to grow your business- Get new customers, get them to purchase more and get customers to return. All 3 of these won’t happen if you aren’t focused on developing your employees and ensuring your customers’ are having an amazing experience each and every time.

Related Post: 5 Questions Customers Will Ask That Your Cannabis Delivery Service Staff Should be Able to Answer

Q: What are 3 concerns that you have as the industry continues to grow?

Melissa: Lack of professional development, education and liability as it relates to customers. So many consumers are still new to cannabis and it can be overwhelming. When employees aren’t properly trained or educated it can hurt consumers as they may not get what they really need, take too much and have a bad reaction. Also not understanding tolerance to THC can be a liability issue and as the industry grows I believe we will start to see more complaints and concerns over that because of the lack of proper training. 

Q: What are you excited to see as the California cannabis industry continues to evolve?

Melissa: For one, I am excited to see those who have paved the way for the industry continue to thrive and overcome the hurdles they have been facing. I know some have been hurt and hope to see those who crafted the way make it through the hurdles this year and come out strong. I am excited to see some changes with social equity as well and hope we can push for those who deserve it and help those who have been incarcerated. And I’m excited to see California continue to push out quality products and push for education to continue to end the stigma and get more consumers access to safe cannabis. 

Q: What are a few resources you can share with our audience? What are some of your favorite books, podcasts, software, etc. that have benefited your personal and professional growth in the industry?

Melissa:

Podcast: Entrepreneur on Fire, Hemp Revolution, Tony Robbins

Books: The Four Agreements, Good to Great (Jim Collins), Cannabis Revealed (Bonnie Goldstein).

Q: Lastly, where can our audience find you? 

Email: mj@mjhybridsolutions.com

www.mjhybridsolutions.com

Linkedin: Melissa MJ Stapley

Instagram: @mjhybridsolutions

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Cannabis Regulations in California and Elsewhere! (Overview)

Posted on by Antonio Javiniar

Cannabis regulations for cultivation, distribution, sale, and use has received a lot of attention in recent years, in most parts of the world. There is a shift in the mindset, acceptability, and general perception of the cannabis plant in recent years. Somehow, this has helped to demystify some of the long-held beliefs stemming from the U.S. War on Drugs, effectively giving room for better assessment of its benefits to society.

How exactly has the playing field changed over the years in regards to cannabis regulations? In this article, we look at the various cannabis regulations that affect different stakeholders of the cannabis industry.

General Overview

At the international platform, cannabis possession, cultivation, and supply are only allowed for medical use and scientific research. In this sense, on the world stage, generally, it is a crime to cultivate, possess, and supply cannabis. Many counties punish this crime by stringent prison terms. It was not until recently when several changes emerged on the perception and approach towards cannabis. The result of the move was an increase in the number of countries legalizing cannabis for both medical and recreational use.

Notably, though, this legalization often comes with strict guidelines on cultivation, supply, and personal consumption of cannabis. In this respect, therefore, in many places, cannabis is still not a commodity that one can access easily. 

In the United States, 11 States have legalized marijuana for recreational use, while 33 states have legalized it for medicinal purposes only. Other nations, including Canada, South Africa, Georgia, and Australia, have legalized marijuana either for medical, recreational uses, or both.

Cannabis Regulations in the United States

The USA stands out amongst many nations in its approach to regulation of cannabis use. At the Federal level, cannabis is still illegal, and there are severe penalties for trading, consumption, and possession of marijuana. 

Several states have now legalized either medical marijuana, recreational marijuana, or both. There is also a lot of diversity in the ways these states have enacted regulations on marijuana. There are specifications regarding cultivation, transportation, and even private possessions in homes across various states in the USA. Here is a highlight of multiple approaches given by just a few selected states.

California Cannabis Regulations

California became the first state to legalize cannabis use with Prop 215 back in 1996. Prop 64, which would permit the recreational sale and adult-use of cannabis, was approved by California voters in 2016. 

Prop 64 culminated in the signing of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) by the then governor, Jerry Brown, on June 27, 2017. MAUCRSA created the general legal framework for the cannabis market in California. 

The bill created the Bureau of Cannabis Control (BCC), the lead agency responsible for licensing, regulation, and enforcement of laws for all cannabis-touching operators in the state. To supplement the BCC, the California Department of Public Health (CDPH) was commissioned to regulate manufacturers and the California Department of Food and Agriculture (CDFA) was made responsible for the oversight of cultivators and implementing the state’s track-and-trace system, METRC. 

To date, California remains one of the most dynamic cannabis markets – it’s expected to be a $7.7 billion market by 2022. Cannabis is legal to persons over 21 years old. The law prohibits possession of more than 28.5 grams of cannabis in the plant form and 8 grams in the form of concentrates. The law allows cannabis consumption in private property, although landlords and property owners can set their own rules regarding cannabis consumption. Additionally, California has been one of the few states to permit state-wide cannabis delivery. The laws in California provide a template for several other states.

Cannabis Regulations In International Markets

In all the places mentioned above and others, legality, especially in regards to commercial use, varies significantly. Here is a highlight of approaches adopted by different nations.

  • In Canada, users in Ontario are only allowed to purchase marijuana over a government-run online platform. Still, in Quebec, Canada, you can smoke cannabis wherever tobacco smoking takes place. Other provinces within Canada also have specified rules. In Europe, all national governments currently oppose cannabis legalization, mainly for recreational use. There are penalties for illegal supply. Similarly, within the European Union (EU), possession of cannabis for personal use is an offense. Nonetheless, in more than a third of the nations, a prison sentence is not an acceptable penalty.
  • In Spain, there is no penalty for growing or consuming cannabis privately. But cannabis sale is still prohibited. Similar to South Africa, you can only grow and possess small amounts of cannabis for personal use as long as you meet the age requirement.
  • In the Netherlands, officials tolerate cannabis sale in shops as long as it follows specific guidelines. It is an illegal activity but not necessarily punishable. In many jurisdictions, discussions into the legalization of cannabis are at advanced stages. One can easily buy various edible twisted extracts from reputable retailers.  

 

Effects on the Social Set-Up

Statistics indicate that there are more than two million Americans under incarceration. Although it is hard to determine the exact number of people held over marijuana-related cases, in 2018, about 47.5 percent of federal prisoners (81,900) were serving a drug-related sentence.

In another report, out of 20,000 drug convictions in 2017, only 92 related to marijuana. One argument has been that most of these convictions related to minor possession of marijuana and not to trafficking or violent acts. Yet, they have a significant impact on society.

Fortunately, with the increased pace of legalization across states, more government entities are looking to amend the injustices from the past. With more states legalizing, we begin to see more licensing programs centered on social equity (giving communities affected by the War on Drugs an opportunity to be stakeholders in the legal cannabis industry) and the mass expungement of non-violent drug offenders and their records. For example, Illinois’ governor just expunged 11,000 non-violent, cannabis-related drug offenses upon the state’s legalization in 2020. 

Conclusion

Cannabis regulation, especially in older democracies, is a discussion that dates back almost a century now. In the last two decades or so, there has been a significant shift and rethinking the existing laws related to cannabis possession, growth, and distribution. Nowadays to buy cannabis seeds online, one can browse the net and choose among a plethora of strains. 

With the revelation that cannabis-based products such as a CBD have positive impacts on human health, more changes will undoubtedly come to effect going forward. At the global stage, it is clear that there is a need for a better approach to harmonize regulations passed in different jurisdictions to make them relevant across the world.

Disclaimer

The materials made available in this blog were are for informational purposes only and not for the purpose of providing legal advice. You should contact your cannabis attorney to obtain advice with respect to any particular issue or problem.

This article was written as a guest post/collaboration with Cannabis2Biz.

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What is Los Angeles’s Cannabis Social Equity Program?

Posted on by Antonio Javiniar

LA’s Social Equity Program

The explosion of cannabis and cbd marketplaces with increasing legalization led to the implementation of social equity programs to ensure communities that have been disproportionately affected by the War on Drugs have the opportunity to become stakeholders in the legal cannabis market. The enforcement of cannabis laws and its criminalization has harshly impacted people from minority communities and low-income earners for a long time. 

To address these issues around cannabis, LA is developing and enforcing new cannabis policies under LA’s Social Equity Program. This program aims to create a fair and equitable cannabis landscape to provide opportunities to individuals from communities disproportionately affected by the War on Drugs.

Read on to discover more crucial information about how this program works and who qualifies for social equity.

What Is LA’s Social Equity Program?

The main goal of this program is to reduce inequalities facing marginalized communities and promoting equitable opportunities in the cannabis industry. It will create better life outcomes for victims of the war on drugs and allow the city government to offer assistance through funding, licensing and physical space. Moreover, it gives the opportunity for those affected to participate in a booming cannabis market – allowing them to own retail premises to sell cannabis products like: flowers, edibles, concentrates, cbd pills, etc. However, there are strict requirements that cannabis business owners and distributors should meet to qualify.

Benefits of LA’s Social Equity Program

The launch of the Social Equity Program comes with many benefits to those who qualify. The City is set to issue about 300 cannabis retail licenses to social equity beneficiaries. Here is what you may enjoy if you are eligible:

•Priority processing

•Verification of your qualification without site verification

•Training through an incubator

•Help with your licensing, and business compliance 

•Fee waiver

•Access to funds

What Are the Qualifications for LA’s Social Equity Program?

Based on the factors influencing the groups of people most affected by the previous cannabis laws, the city of LA has come up with three requirements. 

Here are the requirements that can qualify you for the social equity program. 

Tier 1: Low income and prior California Arrest or Conviction

According to LAMC Sec. 104.20, any income that is 80% or below the City’s Area Median Income qualifies as low income. For the years 2017 and 2018, that is approximately less than $45,644 in gross or total income. To prove low income status, you need to provide a federal tax return from 2017 or 2018 reflecting low income or proof of eligibility for General Assistance, Food Stamps, Medical/CALWORKs or Supplemental Security Income or Social Security Disability (SSI/SSDI). 

  • The second part of this requirement means that those who qualify need to have involved themselves in the cultivation, manufacture, use, possession, and sale of marijuana, leading to arrest or convection before November 8, 2016.

OR

Low Income and cumulatively lived for at least 5 years in a Disproportionately Impacted Area

These zip codes are for areas that qualify: 90003, 90062, 90057, 90037, 90001, 90061, 90008, 90059, 90011, 90016, 90002, 90021, 90014, 90044, 90021, 90037, 90043, 90058, 90033, 90027.

Tier 2: To qualify for the program, you need to own more than a 33.33% equity share of the business that will benefit if you get the license. And the proof of:

  • Low Income with not less than 5 years of cumulative residence in qualifying area: 

OR

  • Not less than 10 years of cumulative residency in a qualifying area.

Tier 3:

A Tier 3 candidate has to sign a Social Equity Agreement with the City of LA to provide property, capital, licensing and compliance support for a duration of 3 years to individuals who qualify for Tier 1, and business, licensing and compliance support to for a period of 3 years to individuals who meet Tier 2 requirements.

Tier 3 applicants have to give Tier 1 candidates access to the property without rent charges and with prorated utilities for not less than 3 years in a plan in line with LAMC Sec. 104.20(e)

Related Post: Cannabis Regulations in California and Elsewhere! (Overview)

Conclusion

The new era of legal cannabis in California comes with lots of benefits. The new policies will open amazing business opportunities and create employment for many people. However, many cannabis users are still yet to enjoy the benefits resulting from cannabis legalization equally. This includes people from marginalized and low-income communities still fighting the repercussions of the War on Drugs. 

To bridge the gap and empower equal opportunities, the city of LA created the Social Equity Program. This program offers support and assistance to people affected by the harsh cannabis laws previously.

Disclaimer

The materials made available in this blog were are for informational purposes only and not for the purpose of providing legal advice. You should contact your cannabis attorney to obtain advice with respect to any particular issue or problem.

This article was written as a guest post/collaboration with Cannabis2Biz.

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Connecting Cannabis: Craig and Marc Wasserman (Pot Brothers at Law)

Posted on by Antonio Javiniar
On this episode of Connecting Cannabis, Craig and Marc Wasserman, Founders of Pot Brothers at Law, join Hilart “Art” Abrahamian (COO, WebJoint) for a conversation on the nation’s cannabis vaping epidemic, going viral with their “Shut the Fuck Up” campaign, and licensing/regulations in California’s market. The Pot Brothers at Law seemingly blew up overnight with over 400 million views.  You can view the entire interview here!

Connecting Cannabis – Pot Brothers at Law – Chapter Guide:

Viral Success – 1:25
Law Background – 2:28
Transitioning into Cannabis – 03:23
Trademarking STFU – 08:20
Going Viral – 11:20
Typical Clients – 14:57
Do regulations kill small business? – 16:04
Evolution of Retail – 19:17
Instagram Speed Round – 20:53
When a Delivery Driver Gets pulled over – 33:38
The Illicit Market – 37:40
Consumers Against Unlicensed Retailers – 39:41
Licensing Fees – 40:19
280E & Taxes – 41:35
The Vaping Epidemic – 44:08
Fighting Against the Illicit Market – 47:21
Cannabis in Orange County – 48:44
Social Equity – 51:09
Process of Applying as a Social Equity Candidate – 52:42
Improving the Social Equity Program – 53:43
Improving Cannabis Policy – 55:14
The Famous Script – 57:33

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The Employees that Drive Cannabis Brands with ForceBrands’ Founder Josh Wand

Posted on by Antonio Javiniar

WebJoint had the privilege of interviewing Josh Wand, Founder and Chief Executive Officer (CEO) of ForceBrands. ForceBrands is a New York-based recruiting firm for cannabis brands of all sizes. HerbForce, the cannabis division of ForceBrands, connects cannabis companies with talented job-seekers who specialize in sales, marketing, finance, operations, and HR roles. HerbForce’s goal: to supply fast-growing cannabis companies with the talent they need to building meaningful brands and drive scalable operations.

 

ForceBrands CEO, Josh Wand

 

What inspired the idea of creating ForceBrands and more specifically, HerbForce, to address recruitment needs within the cannabis industry?

Josh: ForceBrands was born out of my natural passion for the beverage industry and my interest in connecting people. In the early 2000s, I ran a rum company, an experience that helped me develop deep industry relationships and taught me how to hire a team, manage business development, and run a national sales and distribution network. The idea for ForceBrands came about in 2006 when I was promoting our rum brand at the South Beach Food and Wine Festival in Miami. Someone from a champagne company approached me and asked if I knew of any Regional Sales Managers. A few minutes later, someone from a different champagne company expressed his interest in changing jobs. And suddenly my professional matchmaking career was born. At the time, high-quality recruiting for the beverage industry didn’t exist. In 2007, we launched BevForce. Following its success, other forces emerged. We expanded into packaged food with FoodForce and then into beauty and personal care with BeautyForce. Most recently, we’ve formalized several years of work in cannabis with the official launch of HerbForce, which was a natural evolution of our service offerings.

How would you say HerbForce differentiates itself from other recruitment firms addressing staffing needs in the cannabis industry? Essentially, what does your company do differently to ensure high quality talent for cannabis brands?

Josh: At ForceBrands, we’re in the people business. We see recruiting through a human lens and engage with job seekers and employers in a real way — we get to know them personally, understanding that each individual is as unique as the needs of an organization. All of ForceBrands’ industry-specific divisions collaborate with clients as friends and trusted colleagues in the pursuit of transformational goals. HerbForce is unique in that cannabis is a whole new industry where hiring playbooks do not yet exist. We’ve found that there are countless natural synergies between cannabis and other CPG sectors. It’s an exciting opportunity for us to leverage more than a decade of experience and our incredibly powerful community to build the cannabis teams of tomorrow.

What are some lessons you’ve learned while building your own brand/staffing your own company that you’ve shared with your clients?

Josh: Culture is key. Building great teams goes beyond matching skill sets with job descriptions and responsibilities. I’m proud of the culture we’ve built at ForceBrands — one that is centered around our core values: people first, integrity, collaborative culture, progressive, purposeful. I always recommend to the teams that we’ve helped build to go beyond filling a role — hire candidates who fit the role not just professionally, but personally and culturally as well. 

Considering ForceBrands has staffed businesses in multiple industries, what industry would you say cannabis brands can learn from the most? (Food, Bev, Beauty, overall CPG businesses?)

Josh: There are a lot of natural synergies between cannabis and the beverage alcohol world as they’re both highly regulated industries. Even though alcohol is federally legal in the U.S., the laws are complex as they vary at the state and local levels. Cannabis brands should look to the bev alc industry and to those with experience cooperating with legal restrictions as determined by federal, state, and local laws.

How important is the connection between your brand, your staff, and your company culture when building a team for your cannabis brand?

Josh: There is no one-size-fits-all approach to team building. Understanding that each organization is uniquely different helps us approach each brand differently. Cannabis is a new industry, and even though there is not yet a hiring playbook for this sector, we’re able to take what we’ve done building beverage, food, and beauty brands and apply that directly to cannabis companies.

Related Post:  3 Hiring Mistakes to Avoid for Your Cannabis Delivery

Scenario: It’s 2019 in California and you’re building a cannabis brand currently with a team of one (you). What are the first 3 positions you would hire? Where would you start looking for these people (what industry)? How much would you expect to invest in the hiring process?

Josh: The first key hires I would make would be Head of Operations, Head of Finance, Head of Revenue, and Head of Field Marketing. I realize that’s four positions but they are all incredibly valuable for getting a cannabis brand off the ground. And when it comes to sourcing talent for these roles, I would look toward the CPG industry as cannabis essentially is a consumer good. I would invest a lot in taking the time to find the right people — not just the people who meet the desired skill sets necessary to succeed.  

What should cannabis brands look for in their applicants? What are a few common mistakes brands make when hiring?

Josh: Hiring is about looking at the whole picture. As mentioned above, brands should consider looking at their hiring strategy beyond just filling roles. It takes patience to find the right fit. It’s not an easy feat and there are no shortcuts when it comes to making great hires. Brands that take the time to hire right will be rewarded with long-term growth and success.

Where do you see the future of staffing in the cannabis industry going? What trends should brands pay attention to ensure they have a top tier team building their brand?

Josh: Cannabis is already an incredibly crowded and competitive space, and I don’t see its momentum slowing down anytime soon. When it comes to building top teams, employers should look to their benefits and compensation packages to attract and retain top talent. ForceBrands’ 2019 Talent Market Report, a comprehensive analysis of benefits and compensation packages across CPG, found that the cannabis sector was among the most competitive, with average annual raises the highest across CPG at 14 percent. When it comes to benefits, paid leave policies have gained in popularity in recent years and as a result, we’re seeing cannabis companies offer more extensive leave policies than established businesses across other industries. Cannabis brands should pay attention to their employee offerings to ensure that they’re building the best teams possible.

What are a few overlooked positions brands should consider implementing into their business to ensure the success of their business?

Josh: Some key overlooked positions are Head of Operations and Head of Finance. Both of these roles are critical to ensuring the business has what it needs to succeed.

What are some of your favorite resources (books, podcasts, software, etc.) that you can share with our audience that has benefited your personal and professional growth in this industry?

Josh: I’m all about additional resources that help personal and professional growth. I highly recommend reading “Delivering Happiness: A Path to Profits, Passion, and Purpose” by Tony Hsieh and “The Alchemist” by  Paulo Coelho. I also love the Peptalks app that offers daily motivation.

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