# Headquarters — Full Article Corpus Plain-text export of every article at https://www.tryheadquarters.com/blog. Generated at build time. Curated index: https://www.tryheadquarters.com/llms.txt --- # Schedule III Split: Separating Medical and Adult-Use Books Before Dec 31 URL: https://www.tryheadquarters.com/blog/schedule-iii-split-separating-medical-and-adult-use-books-before-dec-31 Published: 2026-10-07 Summary: Treasury just made 280E guidance an official priority, with no deadline. Dual-license operators will close 2026 before it arrives. How to separate medical and adult-use books now, and why the allocation method you pick can move six figures. On September 29, Treasury and the IRS released their [2026-2027 Priority Guidance Plan](https://www.irs.gov/pub/irs-counsel/2026-2027-initial-pgp.pdf). Item 9 under "Other Priorities" reads, in full: "Guidance under §280E." That one line is the rule dual-license cannabis operators have been waiting on since April, and the plan says plainly that it "does not provide any deadline for completing the projects." The plan year runs through September 30, 2027. Your 2026 books close on December 31. Every operator with medical and adult-use activity under one roof will close the first year of the split without the rule for splitting it. The ones who come through cleanly will be the ones whose records already show the separation when the guidance lands. None of this is tax or legal advice. Take it to a cannabis CPA and attorney who know your structure. ## What the split already covers The April 22 order moved marijuana sold under a state medical license to Schedule III. Adult-use stayed on Schedule I. The next day, Treasury and the IRS said rescheduling "will generally be considered to first apply for a business's full taxable year that includes the effective date," which for a calendar-year medical operator means [January 1, 2026](https://foleyhoag.com/news-and-insights/blogs/cannabis-and-the-law/2026/september/section-280e-and-cannabis-tax-planning-recent-developments-and-practical-considerations/). The D.C. Circuit [declined to pause the order](https://www.cannabisbusinesstimes.com/cannabis-rescheduling/news/15834531/federal-court-denies-antirescheduling-parties-motion-to-stay-schedule-iii-cannabis-order) on September 9 while the challenge proceeds. The same April announcement said the coming guidance would clarify how 280E applies "only to those activities related to trafficking in Schedule I or II controlled substances (e.g., by [apportioning expenses](https://www.currentfederaltaxdevelopments.com/blog/2026/4/28/anticipated-irs-guidance-following-the-rescheduling-of-medical-marijuana-a-technical-analysis-for-tax-professionals))." That's the piece now sitting on the priority plan. A medical-only operator has a fairly clean year. A company with a medical dispensary in one state and adult-use stores in two others has rent, payroll, software and management time that served both, and no official method for dividing them. ## The method you pick can move six figures Take a dual-license operator doing $12M in revenue, $4.8M of it medical (40%). It carries $3M in shared operating expenses outside COGS: rent, store and corporate payroll, marketing, G&A. Under 280E none of that was deductible. Now the medical share is, but how big that share is depends on the method. | Allocation basis | Newly deductible (medical share of $3M) | Federal tax saved at 21% | |---|---|---| | Gross receipts (40% of revenue) | $1.2M | ~$252K | | Transaction count (30% of tickets) | $900K | ~$189K | | Square footage (20% of floor) | $600K | ~$126K | Same business, same year, a $126K swing in federal tax depending on which number you use. The percentages are illustrative. The point is that the methods rarely agree, and each one is easy to defend for some costs and hard to defend for others. The temptation is to pick the biggest number for everything. Don't. Adult-use activity is still fully under 280E, the IRS [does not accept "non-280E" positions](https://foleyhoag.com/news-and-insights/blogs/cannabis-and-the-law/2026/september/section-280e-and-cannabis-tax-planning-recent-developments-and-practical-considerations/), and attorneys report more cannabis audit activity than ever. An allocation that shifts as much as possible to the medical side is exactly the kind of position that needs a written opinion meeting the "reasonable basis" standard. The defensible approach matches each cost pool to the method that actually reflects how it's used: receipts for marketing and processing fees, labor hours for payroll, square footage for rent. ## What separation looks like by December 31 **Revenue and inventory by channel.** Medical and adult-use sales should already be split in the POS and Metrc. Make sure the general ledger shows the same split, by location and by month, not as a year-end journal entry. **Labor coded to the activity it supported.** Budtenders who work both counters, a shared inventory team, and corporate staff all need a basis for their split: timesheets, scheduling data or a documented estimate. Rebuilding this next spring from memory is the weakest version. **A written allocation policy for every shared cost.** One page per cost pool: which method, why it fits, the data source and who signed off. If the IRS guidance chooses a different method, you'll be adjusting a documented position, not defending a guess. **Separate accounts where you can.** Attorneys are [giving the same advice for DEA purposes](https://www.saul.com/insights/alert/dea-reschedules-fda-approved-marijuana-products-and-state-licensed-medical-marijuana), since DEA registration covers medical activity only. Separate bank accounts, inventory and records serve the tax file and the registration file at the same time. **A chart of accounts that can carry the split.** If medical and adult-use expenses post to the same accounts with no class, location or department tag, the separation lives in a spreadsheet outside the books. That's fixable now. It's much harder to fix after the close. ## The two dates that matter before the guidance does **December 15.** Calendar-year corporations make their fourth estimated payment. April, June and September payments were likely calculated before the split was clear. Have your CPA re-run the 2026 provision using your allocation policy before then. **December 31.** The year closes whether the IRS has published or not. If the guidance lands mid-2027 and differs from your method, a clean, documented allocation is a recalculation. A commingled ledger is a rebuild, and possibly an amended return. The priority plan tells you the rule is coming. It doesn't tell you when. Plan for the year to close without it. The [Q4 checklist](/blog/15-things-cannabis-operators-should-lock-down-in-q4-2026) covers the rest of what to finish by year-end, and [the cost of 280E](/blog/the-cannabis-finance-tax-why-your-back-office-costs-more) is worth re-reading with this year's numbers in hand. Common questions: Q: Has the IRS issued guidance on splitting expenses between medical and adult-use cannabis? A: Not yet. Treasury and the IRS added \"Guidance under §280E\" to their 2026-2027 Priority Guidance Plan, dated September 29, 2026. The plan covers October 1, 2026 through September 30, 2027 and does not set a deadline for any project. Q: Does the medical cannabis 280E relief apply to all of 2026? A: Treasury and the IRS have said rescheduling will generally apply for a business's full taxable year that includes the effective date of the April 2026 order. For a calendar-year medical operator, that means January 1, 2026. Adult-use activity is still Schedule I and fully subject to 280E. Q: How should dual-license operators allocate shared expenses before the guidance arrives? A: Pick a method you can explain, such as gross receipts, transaction count, square footage or direct tracing, write down why it fits each cost pool, and apply it consistently. Have a cannabis CPA review it before the December 15 estimated payment and the year-end close. --- # 15 Things Cannabis Operators Should Lock Down in Q4 2026 URL: https://www.tryheadquarters.com/blog/15-things-cannabis-operators-should-lock-down-in-q4-2026 Published: 2026-09-30 Summary: Medical is Schedule III, adult-use isn't, and the IRS still hasn't said how to split the two. The hemp ban lands on two dates. Here's what to finish before December 31. Most fourth quarters come down to holiday volume and a clean close. This one also decides how much federal tax a large part of the industry pays for the entire year. Since April, medical cannabis has been Schedule III and adult-use hasn't, and the rule for splitting the two still isn't written. The hemp ban lands in two steps. Massachusetts votes on repealing adult-use sales. And the usual Q4 pressures haven't gone anywhere. Here are the 15 things to finish before December 31, grouped by where they sit in the business. None of it is tax or legal advice: take the federal items to a cannabis CPA and attorney who know your structure. ## Federal and Tax ### 1. Know which of your licenses are Schedule III On April 22, the Justice Department moved marijuana sold under a state medical license to Schedule III. Adult-use marijuana is still Schedule I. On September 9, the [D.C. Circuit declined to pause the order](https://www.cannabisbusinesstimes.com/cannabis-rescheduling/news/15834531/federal-court-denies-antirescheduling-parties-motion-to-stay-schedule-iii-cannabis-order) while a challenge to it proceeds, so for now the line holds. It runs through the middle of a lot of companies. A vertical operator with a medical dispensary in one state and adult-use stores in two others is now in three different federal tax situations. Write down which entities, licenses and locations sit on which side. Items 2 through 5 depend on it. ### 2. Separate medical and adult-use books before December 31 Treasury has promised guidance on how businesses with both medical and adult-use activity split their expenses. As of late September, [it hasn't arrived](https://foleyhoag.com/news-and-insights/blogs/cannabis-and-the-law/2026/september/section-280e-and-cannabis-tax-planning-recent-developments-and-practical-considerations/). Dual-license operators are closing 2026 without the rule. The operators in the best position when it lands will be the ones whose records already show the split: inventory tracked by channel, labor coded to the activity it supported, separate bank accounts where possible, and shared rent and overhead allocated on a basis someone can explain. Attorneys are [giving the same advice for DEA purposes](https://www.saul.com/insights/alert/dea-reschedules-fda-approved-marijuana-products-and-state-licensed-medical-marijuana), since registration covers medical activity only. Rebuilding that separation from one commingled ledger next spring will be slow, expensive and harder to defend. ### 3. Re-run your 2026 tax estimate before the December 15 payment Treasury and the IRS have said rescheduling "will generally be considered to first apply for a business's full taxable year that includes the effective date." For medical cannabis, that means January 1, 2026. A qualifying medical operator gets a full year of ordinary deductions, not eight months. Payroll, rent, marketing and professional fees that were nondeductible in 2025 can come back into the calculation. Estimated payments made in April, June and September were probably calculated under the old rules. Calendar-year corporations make their fourth installment on December 15. Have your CPA re-run the provision before then, not in March. The gap between the two numbers is [the cost of 280E made visible](/blog/the-cannabis-finance-tax-why-your-back-office-costs-more). ### 4. Get a written opinion for any position that isn't straight 280E Adult-use activity is still fully subject to 280E, and the IRS [does not accept the argument that it isn't](https://foleyhoag.com/news-and-insights/blogs/cannabis-and-the-law/2026/september/section-280e-and-cannabis-tax-planning-recent-developments-and-practical-considerations/). Tax attorneys report more cannabis audit activity than ever. The case testing the question in Tax Court, *New Mexico Top Organics*, is fully briefed and still undecided. If your 2026 return takes any non-280E position, including an aggressive medical/adult-use allocation, the supporting opinion has to meet the "reasonable basis" standard. An argument that is merely arguable won't protect you from penalties. Commission the opinion this quarter, while there's still time to change the position if it doesn't hold up. ### 5. Check where your DEA registration stands Medical operators who applied for DEA registration within the 60-day expedited window can keep operating under their state license while the application is pending. DEA said it would try to process applications [within six months](https://canndelta.com/dea-reschedules-medical-marijuana-to-schedule-iii-a-guide-for-state-licensees-dea-registration-instructions/), which puts the first decisions in Q4. Confirm the application is complete, that the contact on file is someone who reads the mail, and that your facility and records still match what you told DEA. A question from DEA in December is easy to answer if the documentation is already assembled. ### 6. Don't build 2027 around a federal change that hasn't happened Two things will be pitched to you as imminent: adult-use rescheduling and banking reform. Neither belongs in your base-case budget. The DEA hearing on moving all marijuana to Schedule III ended July 15, and the administrative law judge's recommendation has no deadline. The optimistic path puts a final rule in late 2026 or early 2027. [Legal observers](https://greengrowthcpas.com/dea-hearing-outcome-july-2026-cannabis/) put real operator impact 12 to 24 months out. The SAFE Banking Act was reintroduced this year as S. 4942 and H.R. 9471 and, [as of this summer](https://mgmagazine.com/policy-regulation/safe-banking-act-2026-cannabis-banking/), had no committee vote. Budget adult-use on full 280E and today's banking costs. If either changes, it's upside. ## Books and Inventory ### 7. Count everything and reconcile it to Metrc before the close For adult-use operators, cost of goods sold is still the only deduction 280E allows, which makes the year-end inventory count one of the most valuable numbers on the return. It's also a compliance number. A count that doesn't match Metrc is a variance a regulator can find on their own, and it gets harder to explain the longer it sits. Run the count in early December, not on December 31, so there's time to investigate variances and [correct them in the system](/blog/metrc-reconciliation-why-inventory-mismatches-become-license-risk) before the books close. ### 8. Mark your flower to what it would actually sell for Packaged flower averaged [$3.62 a gram in June, down 5.7%](https://www.headset.io/data/cannabis-prices) from $3.84 a year earlier. The national wholesale spot price sat around [$1,003 a pound](https://www.cannabisbenchmarks.com/reports/) in mid-June, and October's outdoor harvest has historically pushed wholesale lower. Inventory carried at what you paid last spring is [probably overstated](/blog/your-flower-is-on-the-books-at-last-quarters-price). Writing it down to realistic value before the close shows you the margin you actually have, and keeps an inflated asset away from a lender, buyer or auditor who will find it anyway. ### 9. Clean up receivables before year-end Every open invoice on the December 31 balance sheet is a claim that the money is coming. Go through the aging report account by account. Write off what isn't coming back, move stalled 60-day balances into a real escalation process, and put accounts that keep sliding on prepay before holiday orders ship. In New York, check the aging against [OCM's 90-day payment rule](/blog/new-yorks-90-day-payment-rule-adapting-your-ar-strategy-to-ocm-regulations). A Q1 cash forecast built on receivables that won't be collected is wrong before January starts. The [five AR metrics worth tracking](/blog/5-accounts-receivable-metrics-every-cannabis-cfo-should-track) are a good place to start the review. ### 10. Close December as if a buyer were going to read it Whether or not you plan to sell, the December close is the set of numbers lenders, investors and acquirers ask for first. What [raises a sale price](/blog/what-your-dispensary-is-actually-worth) is also what makes an ordinary business easier to run: a store-level P&L, reconciled bank and inventory accounts, no suspense balances, and no open tax or compliance issues. For medical operators, 2026 is the first tax year after rescheduling. These financials become the baseline every future year gets compared against. ## State and Cost Changes ### 11. Plan for the hemp ban on two dates Federal restrictions on intoxicating hemp were set to take effect November 12. A funding bill signed September 2 [moved the date to December 11](https://foleyhoag.com/news-and-insights/blogs/cannabis-and-the-law/2026/september/a-temporary-reprieve-for-hemp-thc-products%E2%80%A6-but-what-now/) for naturally derived products, which will be capped at 0.3% total THC by dry weight and 0.4 milligrams of total THC per container. Synthetic and converted cannabinoids like delta-8 and HHC are still banned on November 12. Demand now served by gas stations, smoke shops and liquor stores will need somewhere to go, with beverages and gummies first in line. Plan for it in assortment and marketing. Don't commit heavily to inventory against a date Congress has already moved once, with four hemp regulation bills still pending. ### 12. Massachusetts: have a plan for Question 8 either way On November 3, Massachusetts voters decide [Question 8](https://ballotpedia.org/Massachusetts_Eliminate_Recreational_Marijuana_Sales_and_Allow_Limited_Possession_Initiative_(2026)), which would repeal adult-use sales and home cultivation while keeping the medical program. Polling favors the industry: a University of Massachusetts Amherst and WCVB survey in August found [about 55% of voters](https://www.cannabisbusinesstimes.com/us-states/massachusetts/news/15832963/55-of-massachusetts-voters-oppose-repealing-cannabis-laws) planning to vote no. That isn't a reason to skip the contingency plan. Know what happens to leases, inventory, loan covenants and staff if it passes, and which locations could run as medical. If it fails, the same work shows you where you're exposed to the next attempt. ### 13. Load January 1 cost changes into the 2027 budget Several changes hit on the first day of next year. California's minimum wage [rises to $17.40](https://www.dir.ca.gov/DIRNews/2026/2026-66.html), Connecticut's [to $17.48](https://portal.ct.gov/governor/news/press-releases/2026/08-2026/governor-lamont-announces-minimum-wage-will-increase) and Michigan's [to $15.00](https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/min-wage). States that index to inflation, including Arizona, Colorado, New Jersey, New York, Ohio, Oregon and Washington, typically adjust on January 1 as well. For a store with 20 full-time budtenders, a 50-cent raise is about $20,800 a year before payroll taxes. Maine's sales tax on adult-use cannabis [rises from 10% to 14%](https://mainemorningstar.com/2025/12/31/here-are-some-of-the-new-taxes-mainers-can-expect-in-january/) on January 1, which will come out of either margin or shelf price. California's 15% excise rate holds through June 2028. Build the budget on the rates that take effect, not the ones you're paying now. ### 14. Put expansion dates on the calendar If new markets are in the 2027 plan, the dates have moved. Virginia's budget, enacted in June, sets adult-use retail sales to begin [July 1, 2027](https://www.cannabisbusinesstimes.com/us-states/virginia/news/15827823/virginia-will-launch-adultuse-cannabis-dispensary-sales-in-2027), with up to 350 stores and the Cannabis Control Authority accepting license applications from February 1, 2027. That window opens five weeks into Q1, so the applications, sites and capital are Q4 work. Pennsylvania [passed its budget without legalization](https://patch.com/pennsylvania/across-pa/2026-pa-budget-passed-law-what-it-does-what-it-doesnt-do), despite the governor proposing sales starting January 1, 2027. Plan Pennsylvania as a medical market for 2027. ## Holiday Retail ### 15. Plan Green Wednesday for margin, not just volume Green Wednesday is November 25 this year. In 2025, U.S. dispensaries did [$113.5 million](https://www.headset.io/data/cannabis-industry-statistics) that day, 1.7 times an average day and second only to 4/20. Black Friday added $107.5 million. Not all of it is new money. In [Headset's 2023 data](https://www.headset.io/blog/understanding-green-wednesday-the-rising-star-of-cannabis-holiday-sales), Thanksgiving Day sales ran 70% below a normal Thursday, the week finished 8% below the prior four-week average, and the average discount during Thanksgiving week rose from 17.9% to 25%. Set a discount ceiling before the promotions get built. Then stock for December, when edibles and vapes peak: New York's edible sales hit [$9.8 million last December](https://www.covasoftware.com/blog/cannabis-product-trends-2026-seasonal-sales-trends-by-category), the highest month of the year. Clean up [duplicate SKUs](/blog/duplicate-skus-are-quietly-killing-your-cannabis-margins) before the traffic arrives, not during it. ## The Q4 Calendar | Date | What happens | |---|---| | November 3 | Massachusetts votes on Question 8 | | November 12 | Federal ban on synthetic cannabinoids takes effect | | November 25 | Green Wednesday | | Early December | Physical count and Metrc reconciliation | | December 11 | Federal hemp THC cap takes effect (as of publication) | | December 15 | Fourth estimated tax payment for calendar-year corporations | | December 31 | Medical/adult-use separation in place; books closed clean | | January 1, 2027 | Minimum wage increases; Maine's sales tax goes to 14% | | February 1, 2027 | Virginia opens adult-use license applications | If you only get to three items, make them 2, 3 and 7. The separation, the tax estimate and the count all have hard deadlines, and each one gets harder to fix after December 31. Common questions: Q: Does 280E still apply to cannabis businesses in 2026? A: It depends on the activity. Marijuana sold under a state medical license moved to Schedule III on April 22, 2026, and Treasury and the IRS have said the change will generally apply to the full 2026 tax year for that activity. Adult-use marijuana is still Schedule I, so 280E still applies to it in full. Q: When does the federal hemp THC ban take effect? A: Synthetic and converted cannabinoids such as delta-8 and HHC are banned as of November 12, 2026. For naturally derived hemp products, a funding bill signed September 2 pushed the effective date to December 11, 2026. After that, hemp products are capped at 0.4 milligrams of total THC per container. Q: When is Green Wednesday 2026? A: Wednesday, November 25, the day before Thanksgiving. In 2025, U.S. dispensaries did $113.5 million in sales on Green Wednesday, about 1.7 times an average day and second only to 4/20. --- # What Your Dispensary Is Actually Worth URL: https://www.tryheadquarters.com/blog/what-your-dispensary-is-actually-worth Published: 2026-09-24 Summary: A New Jersey store doing more than $10M a year sold for $9M in September, and a third of the price wasn't cash. How dispensaries are actually valued, what moves the number, and what the non-cash part of a price really means. Ask most independent dispensary owners what their store would sell for and you'll get a guess. That's not carelessness. Almost every cannabis deal closes with undisclosed terms, so owners have almost nothing real to compare against. September gave them something. A single New Jersey store doing more than $10 million a year sold for $9 million, and a third of that price wasn't paid in cash at closing. ## A Rare Look at Real Terms On September 21, [MJBizDaily reported](https://mjbizdaily.com/news/new-jersey-cannabis-retailer-sells-to-marijuana-mso-for-9-million/618212/) that Aunt Mary's Dispensary in Hunterdon County sold to a public multistate operator for $9 million: $6 million in cash at closing and a $3 million convertible note paying 6% interest over five years. The buyer's executive chairman put the store's revenue at "more than US$10 million" a year. That's roughly 0.9x revenue, and less if revenue is above the $10 million floor. This wasn't a distressed sale. New Jersey recorded [$1.16 billion in cannabis sales in 2025](https://www.nj.gov/cannabis/documents/Quarterlies/Rec%20Med%20sales%20Q4%2025%201.pdf), and the state now counts [more than 320 licensed dispensaries](https://www.nj.gov/cannabis/dispensaries/find/). Dividing one by the other gives a rough average of about $3.6 million per store. Aunt Mary's was doing nearly three times that, and it still sold for under 1x revenue. It wasn't a one-off: | Deal | Price | Structure | |---|---|---| | Aunt Mary's, NJ (1 store), Sept 21 | $9M | $6M cash + $3M convertible note | | [M3 Wellness, Hawthorne, NV](https://www.cannabisbusinesstimes.com/business-issues-benchmarks/mergers-and-acquisitions/news/15835492/vireo-growth-completes-acquisition-of-m3-wellness-a-nevada-dispensary) (1 store), Sept 22 | $500K | $290K cash + $210K in buyer's shares | | [PharmaCann Penn, PA](https://investors.crescolabs.com/news/news-details/2026/Cresco-Labs-Acquires-Nine-Pennsylvania-Dispensaries-in-Accretive-Transaction-to-Strengthen-Market-Leadership/default.aspx) (9 stores), Sept 2 | $50M | Cash plus a seller note | All three paid part of the price in something other than cash. For an owner, that changes what "the price" actually means. ## How Stores Are Actually Valued The main method is an earnings multiple. A buyer takes the store's **EBITDA** (earnings before interest, taxes, depreciation and amortization, roughly the cash profit the operation generates), **normalizes** it (strips out one-offs and owner-specific costs so it reflects ordinary conditions) and multiplies it by a number. That number is the **multiple**. Advisory-firm rules of thumb, per [Collateral Base](https://collateralbase.com/cannabis-business-valuation/) and [Cova](https://www.covasoftware.com/cannabis-business-valuation-dispensary-sale-guide): - **Single stores:** 3x to 6x normalized EBITDA - **Multi-store operators:** 6x to 10x - **Distressed or saturated markets:** as low as about 2x, with limited-license states at the high end Small single-store shops are often priced on **SDE** (Seller's Discretionary Earnings) instead: profit plus the owner's own salary and perks added back. Cova's example is $400,000 in net income plus a $120,000 owner salary, or $520,000 in SDE, which then gets a market multiple. Revenue multiples, typically 0.5x to 1.5x trailing-twelve-month sales for a single dispensary, are only a cross-check. Aunt Mary's sits inside that range. But as Collateral Base puts it, a revenue multiple "tells you nothing about profitability or cost structure." Two stores with identical sales can be worth wildly different amounts. ## What Moves the Number The biggest driver is the license. Cova notes that "the right to operate is often more valuable than the operations themselves." Capped-license states like New Jersey and Illinois carry real premiums; in open markets like Oklahoma, the license adds little. Location matters too, which is part of why a rural Nevada store went for $500,000 and a New Jersey one for $9 million. You can't change your state. These five things you can: 1. **Books a buyer can trust.** Three years of P&Ls, tax returns and bank statements that tie out, with no personal expenses mixed in. 2. **Records that match Metrc.** Buyers check reported revenue against state tracking data. A gap between your books and Metrc or BioTrack is a red flag that can stall a deal. 3. **No open compliance problems.** Unresolved issues can cut a valuation by 20% to 30%, or kill the deal outright. 4. **A store-level P&L.** Multi-store owners need each location's profit on its own. You can't sell, or even price, a store you can't show the numbers for. 5. **Documented operations.** Written SOPs, a current POS and integrated systems. A store that runs out of the owner's head is worth less than one that runs without them. Valuation is mostly a measure of how much risk a buyer has to take on. Every item above lowers it. ## The Part of the Price That Isn't Cash A **seller note** means the seller takes part of the price later, in installments with interest. Put plainly, the seller is lending the buyer part of the purchase price. It's an IOU, and the seller carries the risk that the buyer pays late, renegotiates or can't pay. A **convertible** note can typically be converted into the buyer's shares instead of repaid in cash, so the seller may end up holding stock whose value depends on the buyer's performance. (The conversion terms of the Aunt Mary's note weren't disclosed.) Being paid in stock directly, as in the Nevada deal, carries the same exposure: that $210,000 is only worth $210,000 if the shares hold their value and can actually be sold. Buyers ask for this because it conserves their cash and keeps the seller invested in the store after handover. That's normal in small-business sales generally. Cannabis adds two wrinkles: - **Enforceability.** In September, the Sixth Circuit threw out a $31.8 million judgment on the grounds that federal courts can't enforce a contract whose performance requires violating federal drug law. [Legal analysis of the ruling](https://mgmagazine.com/business-strategy/operations-supply-chain/sixth-circuit-cannabis-contract-enforceability/) lists acquisition agreements and financing tied to cannabis revenue as exposed. The law is unsettled, and other circuits have ruled more narrowly, but ask your attorney about state-court venue and binding arbitration clauses. - **You become a creditor.** If you wouldn't extend $3 million in trade credit to a customer without checking their cash position, apply the same discipline to a note. When comparing offers, compare cash at closing and the risk on the rest, not the headline. A $9 million offer with $3 million deferred and a $7.5 million all-cash offer don't necessarily rank the way the headline numbers suggest. ## What Rescheduling Changed, and What It Didn't 280E stopped applying to state-licensed medical marijuana on April 22, 2026, according to [Houlihan Capital](https://www.houlihancapital.com/cannabis-rescheduling-is-here-what-it-means-for-business-valuations/). Deducting rent and payroll raises after-tax cash flow, which is what multiples are applied to. Houlihan says 280E "significantly compressed valuations" and that its removal "directly enhances" them, but offers no figure and calls the full effect unclear until banking, interstate commerce and state tax questions resolve. The catch is that old tax years travel with the business. Most cannabis sales are structured as a **MIPA** (membership interest purchase agreement): the buyer takes over the whole company, keeps the license without reapplying, and the seller gets capital-gains treatment. The buyer also inherits the company's history, including open 280E years. The IRS is actively pursuing them: it disallowed [$4.6 million in tax](https://themarijuanaherald.com/2026/09/shareholders-of-washington-marijuana-beverage-company-challenge-4-6-million-in-irs-tax-bills-say-drinks-arent-controlled-substances/) at Dogtown Pioneers, including labor costs the company treated as production costs, and is [suing TerrAscend](https://themarijuanaherald.com/2026/09/terrascend-moves-to-dismiss-federal-lawsuit-seeking-return-of-8-36-million-marijuana-tax-refund/) to recover an $8.36 million refund. Buyers price that exposure in through a lower price, a larger escrow or holdback, or indemnities. An owner with well-documented cost classification for 2020 through 2025 is worth more than one without. An **APA** (asset purchase agreement) lets a buyer avoid old liabilities, but may trigger a regulatory review of the license transfer, and approvals can take anywhere from 30 days to over six months. That's one more reason buyers push part of the price into the future. ## A Scorecard You're Graded On Anyway Clean books, records that tie to Metrc, no open compliance issues, a P&L for every store and documented cost classification don't just raise a sale price. They're what a well-run dispensary looks like. You don't need to be selling to benefit. *This post is general information, not investment, tax or legal advice. If you're weighing an offer, talk to a cannabis valuation advisor and an attorney about your specific deal.* --- # How We Collected $19M in Cannabis Receivables This Year (and Where AI Agent Skills Helped) URL: https://www.tryheadquarters.com/blog/how-we-collected-19m-in-cannabis-receivables-with-ai-agent-skills Published: 2026-09-16 Summary: Our AR team has collected $19M for cannabis operators so far this year. Here's the workflow behind it: how we turn a QuickBooks aging report into the right email for every account, what we let AI write, and what it never touches. Our AR team has collected $19M in receivables for cannabis operators so far this year. None of it came from a clever tool. It came from sending the right message to every past due account, on time, every week, which is the part of AR that quietly breaks at almost every cannabis company. The stakes are well known. Industry economists put [delinquent cannabis receivables above $4 billion](https://www.apextrading.com/blog/the-cannabis-industrys-4-billion-silent-partner/), and [recovery data](https://www.kaplancollectionagency.com/debt-collection-2/50-commercial-debt-statistics/) puts the odds of collecting a commercial invoice at 90 days past due around 70-80%, falling to 45-55% at six months. Every week an account goes without contact costs recovery odds. And under 280E, the tax on that revenue came due whether you collect it or not. Here's how we run the workflow, and exactly where AI agent skills fit into it. ## Step 1: Treat the Aging Report as a Work Queue Most finance teams open the A/R Aging report, look at the total, and close it. We read it row by row, because every row is a task with a deadline. The export we start from is the standard QuickBooks A/R Aging, Summary or Detail. The Detail version is better: it carries invoice numbers and due dates, so every message can name a real date instead of a vague "past due." Before anything goes out, the report gets checked against what the customer actually owes. Unapplied payments and duplicate invoices are common in cannabis books, and nothing damages a retailer relationship faster than chasing money that was already paid. (We've written about [where phantom receivables come from](/blog/fragmented-systems-phantom-receivables-the-data-problem-behind-cannabis-ar-aging).) ## Step 2: Match the Tone to the Bucket A retailer at 12 days past due and a retailer at 95 days are not the same conversation. Sending both the same generic reminder is too harsh for one and far too soft for the other. We work five buckets, each with its own job: - **Before the due date:** a courtesy heads-up with the amount and how to pay. Nothing more. - **1-30 days:** assume it slipped through. Restate the balance and ask when to expect payment. - **31-60 days:** say plainly that payment hasn't arrived and ask for a date. Add a phone number. - **61-90 days:** note the silence, flag the impact on the account, and request payment by a specific day. - **91+ days:** the account goes on credit hold, and new orders pause until the balance clears. Two examples, as short as we actually send them: > **Subject:** Acme Dispensary - Outstanding Invoice > > Hi Acme team, > > Wanted to follow up on your outstanding balance of $6,450. We know things get busy. Just making sure this didn't slip through. > > Can you let us know when to expect payment? > **Subject:** Acme Dispensary - $6,450 Now 60-90 Days Past Due > > Hi Acme team, > > Following up again on your balance of $6,450, now 60 to 90 days past due. We haven't received payment or a response and want to get this resolved before it impacts your account. > > Please confirm a payment date by October 3, 2026 or reach out to discuss next steps. Both stay under 120 words. Short gets read. A buyer skimming their inbox between deliveries will answer a four-line email and ignore a four-paragraph one. ## Step 3: Let the Agent Skill Write the First Draft This is where AI earns its place. Writing dozens of tailored collection emails by hand every week is exactly the kind of work that gets pushed to Friday and then to next week. So we encoded the bucket logic into an agent skill that runs in Claude or ChatGPT. The skill reads the aging export, sorts every customer into their bucket, and produces one email per customer per bucket, with the real amount, the real due date where the report has it, and the signer's name and phone already filled in. The output is a table with a button on each row that opens the email in Gmail or Outlook, ready to review and send. The time saving isn't the point. Consistency is. Every account gets contacted on schedule regardless of who owns the relationship or how awkward the conversation feels. As we covered in [The Most Expensive Sentence in Cannabis AR](/blog/the-most-expensive-sentence-in-cannabis-ar), hesitation is what turns collectible receivables into write-offs. ## Step 4: Hard Rules the AI Never Breaks A general-purpose AI asked to "write a collections email" will happily threaten legal action, invent a late fee, or promise that the matter will go to an agency. In an industry this small, one of those emails can cost you the account and your reputation with every buyer the retailer talks to. Cannabis operators also have [limited legal remedies](/blog/sales-you-cant-collect-arent-sales) to back a threat up, which makes an empty one worse. So the rules are written into the skill, not left to a prompt: - Never threaten legal action. - Never promise or predict a collection outcome. - Never invent a number, date, or fee that isn't in the report. - Skip $0 balances silently. - Keep every email under 120 words. An agent that follows the same rules on the hundredth email as on the first is more reliable than a tired person at 5pm on a Friday. ## Step 5: People Handle Everything After the Reply The skill writes the email. It doesn't run collections. Every reply goes to a person, because that's where the real work starts: negotiating a payment plan with a retailer who is short this month, deciding whether a quiet account at 75 days gets a call from the sales rep first, or confirming that a credit hold should actually go out. That split is the whole model. AI handles the part that is repetitive and easy to put off. Our team handles judgment, relationships, and follow-through. ## What to Do This Week 1. **Export your A/R Aging Detail report** and reconcile any account over 60 days before contacting it. 2. **Count the accounts in each bucket** that haven't heard from you in the last 14 days. That number is your real collections backlog. 3. **Write down the five-bucket tone ladder** and apply it to every account, starting today, so escalation follows the calendar instead of the mood in the room. Then send the emails you've been putting off. --- # Your Flower Is on the Books at Last Quarter's Price URL: https://www.tryheadquarters.com/blog/your-flower-is-on-the-books-at-last-quarters-price Published: 2026-09-10 Summary: Inventory is the largest asset on most cannabis balance sheets, and it is carried at what you paid for it. That figure is an assumption with an expiration date. Inventory is usually the largest asset on a cannabis operator's balance sheet, and it sits there at cost: what you paid, on the day you paid it. That number gets treated as a fact. It is an assumption, and it stops being true the moment the market reprices the product in your vault. Very few operators can tell you when theirs expires. --- ## Carrying Value Is More Fragile Here Than Anywhere Else Every business holding inventory carries this risk. Cannabis carries a worse version of it, for a reason that has nothing to do with regulation: the product degrades. A grain elevator can sit on a crop and wait out a price trough. A cannabis operator cannot. Potency slides, moisture drifts out of spec, and shelf-stale flower gets discounted or written off. Holders are structurally forced to sell into weakness, and that is what converts a supply bulge into a price move rather than a slow drift. The seasonal version is Croptober. Sun-grown flower lands all at once in October and November, and a harvest that outruns demand pushes wholesale down with it. The tail case is [California in 2021](https://cannabisnow.com/croptober/), when outdoor fell from roughly $500 per pound in early October to as low as $150 later in the season. Read that one for speed rather than magnitude. ## Michigan Put the Glut on the Balance Sheet First Michigan's numbers show what a glut looks like in financial statements months before anyone calls it a crash. As of February 28, 2026, [state Cannabis Regulatory Agency data](https://www.cannabisbusinesstimes.com/us-states/michigan/news/15819825/michigan-cannabis-prices-remain-down-demand-steady-in-2026-despite-new-tax) put its licensed inventory at: | Where | Volume | Change YoY | |---|---|---| | Flower at retailers | 240,000 lbs | +58% | | Flower at processors | 788,000 lbs | +140% | | Test-passed flower at growers | 251,000 lbs | +31% | That is roughly ten months of supply on its own. Add 1.45 million pounds of fresh-frozen and Michigan was holding close to two years of inventory. Prices did what that inventory implies. The average ounce hit $59.85 in February, down 8.2% from $65.21 a year earlier. February dispensary sales fell 3% year over year to $234.5M while flower volume purchased rose 3.2% to 104,716 pounds. Customers bought more and paid less. [Cannabis Business Times attributes the decline](https://www.cannabisbusinesstimes.com/us-states/michigan/news/15819825/michigan-cannabis-prices-remain-down-demand-steady-in-2026-despite-new-tax) primarily to oversupply in Michigan's unlimited-license market, not to the 24% wholesale tax that took effect in January. A retailer carrying 58% more flower than a year earlier is not executing a merchandising strategy. That is working capital frozen in an asset that was actively losing value while it sat. Any operator tracking their own inventory days on hand had months of warning. Almost nobody was watching. ## Which Brings Us to Right Now New York is where the same setup is visible in advance, and the window is short. [Licensed cultivation canopy went from 9.1 million square feet in March to 12 million in August](https://themarijuanaherald.com/2026/09/new-york-marijuana-cultivation-capacity-jumps-32-reaching-12-million-square-feet/), up 32%, per the state [Office of Cannabis Management](https://cannabis.ny.gov/). Sixty-seven tier increases added roughly 127,000 pounds of annual capacity, alongside 27 new cultivation licenses. Growers put about 1.64 million plants in the ground this year, and roughly 57% were still there as harvest season approached. The doors are not keeping pace. At the [July board meeting, of 24 approvals, 15 were cultivator licenses and three were retail](https://www.cann.dev/new-york-cannabis-retail-july-2026/). Demand is growing, but not at that rate: [August sales came in at $165.76M](https://themarijuanaherald.com/2026/09/daily-cannabis-news-brief-for-9-8-2026/), bringing 2026 to about $1.22B through eight months, up 17%. Canopy grew 32% in five months against 17% demand growth. Those numbers do not reconcile, and gaps like that get settled in price. They are already being settled. August unit sales rose 16.5% year over year while the average product price fell from $31.80 to $29.05, a decline of about 8.6%. That is the Michigan signature exactly: more volume moving at less money per unit. And it is showing up before the outdoor harvest lands. One honest complication: the [national spot index sat at $1,088 per pound on September 4](https://www.cannabisbenchmarks.com/reports/u-s-cannabis-spot-index-september-4-2026/), and the October implied forward is $1,110, a 2% premium. The national market is not pricing a collapse. This is a question about the assumption on your own balance sheet, not a forecast about the industry. ## The Case for Cheaper Flower Is Real New York flower runs [about $10.61 per gram on a weighted average](https://www.dankreports.com/new-york-cannabis-market-analysis/), roughly double illicit-market pricing at an estimated $5 to $6. The legal market captures an estimated 8% of volume demand and about 16% of dollar demand, against roughly 2.77 million consumers and 1.01 billion grams of annual demand. Across jurisdictions, price is the strongest predictor of capture: markets under about $5 per gram approach full conversion, while markets above $8 stay below half. Massachusetts runs $4.01. Colorado runs $3.18. So falling wholesale prices may be the mechanism by which New York finally competes with its illicit market. Cheaper inputs let retailers cut shelf prices and convert buyers who have never had a reason to switch, the same [shift toward value brands that reshaped Illinois flower](/blog/illinois-value-brands-28-to-41-percent-of-flower) inside a year. [Fewer than half of operators surveyed by OCM report being profitable](https://mjbizdaily.com/news/new-york-cannabis-retailers-averaging-about-4-million-in-annual-sales/615257/), with microbusinesses the weakest category, and volume at a workable margin is how that changes. That upside belongs to retailers. It is not upside for cultivators who just financed a 32% capacity expansion and will sell into a softer market. And it is not upside for anyone holding inventory bought at pre-harvest prices. ## The Question Is Which Side of the Invoice You Are On **If you hold inventory.** Know what your current stock cost and what comparable product will cost in November. That gap is an unrealized loss sitting on your books at full value. Track [inventory days on hand](/blog/4-things-your-cannabis-reorder-report-cant-see) as a trend line rather than a snapshot, because Michigan's warning was direction, not level. Revisit purchase commitments made at summer prices before they lock you into buying above market. And set your write-down policy before you need one, because deciding it under pressure means deciding it late. **If you sell wholesale.** Customer concentration is the acute risk in a price break. [Cultivators who lived through earlier crashes](https://mjbizdaily.com/what-cultivators-can-do-to-survive-a-drop-in-marijuana-wholesale-prices/) put the ceiling at 5 to 10% of your P&L for any single buyer, because past that they set your terms. Prepurchase agreements buy price certainty, but hold them to 90 to 120 days or you lock in the wrong side of the move. And your buyers' cash tightens as their own inventory devalues, [which ages your receivables](/blog/why-cannabis-operators-cant-pay-their-bills-on-time). [Tighten terms](/blog/net-terms-vs.-cod-managing-credit-risk-for-cannabis-sales) now rather than after the first slow payment. **Both sides.** Cultivators who expanded on borrowed money are about to sell into a softer market. If you extend them credit or depend on them for supply, price that counterparty risk this quarter, because [payment reputation travels](/blog/your-company-might-already-be-on-a-public-doesnt-pay-list) faster than a balance sheet does. And benchmark fixed cost against variable, because a price break is survivable on a variable base and fatal on a fixed one. Your inventory is on the books at last quarter's price. What this quarter's price turns out to be is not knowable. What you paid, how long you have held it, and which direction your days on hand is trending are all knowable today. That is the whole job. Common questions: Q: What does it mean that inventory is carried at last quarter's price? A: Inventory sits on the balance sheet at what you paid for it, not at what it is worth today. When the market reprices flower downward, the carrying value stays put until someone writes it down. The gap between the two is an unrealized loss being reported at full value, and it consumes working capital the entire time it sits there. Q: Why does oversupply hit cannabis harder than other commodities? A: Because the product degrades. A grain elevator can hold a crop and wait out a price trough. A cannabis operator cannot, since potency and moisture drift out of spec on a fixed clock. Holders are forced to sell into weakness rather than wait for recovery, which turns a supply bulge into a price move instead of a slow drift. Q: What is the single metric to watch for a coming price break? A: Inventory days on hand, tracked as a trend line rather than a snapshot. Michigan's warning sign was direction, not level: retailers were carrying 58% more flower than a year earlier well before anyone described the market as being in crisis. --- # 4 Things Your Cannabis Reorder Report Can't See URL: https://www.tryheadquarters.com/blog/4-things-your-cannabis-reorder-report-cant-see Published: 2026-09-02 Summary: A reorder report is a reasonable starting point and a bad ending point. Four things that determine the right order quantity are invisible to it. Almost every cannabis POS and analytics platform will generate a reorder report on demand. Almost nobody who builds wholesale orders for a living uses one without correcting it first. That gap is expensive. IHL Group's 2025 inventory distortion study put global out-of-stock losses at [$1.157 trillion](https://www.ihlservices.com/news/analyst-corner/2025/09/retail-inventory-crisis-persists-despite-172-billion-in-improvements/), with inventory distortion running at 6.5% of retail sales worldwide and $415 billion of the damage landing in North America. And the foundational research on why shelves go empty, [a worldwide study of more than 71,000 shoppers across 29 countries](https://www.supplychain247.com/images/pdfs/GMA_2002_Worldwide_OOS_Study.pdf), traced roughly half of all out-of-stocks to demand forecasting and ordering rather than to anything that happens inside the store. Cannabis inherits every bit of that, then adds rotating strain menus, [state-by-state track-and-trace](https://www.metrc.com/), and no universal product identifier. Canada made [GS1 GTINs mandatory for cannabis](https://gs1ca.org/cannabis/) at legalization, with a unique identifier required for every strain and size variation. The US market never standardized, which is why so much of the work below is reconciliation. A reorder report is a simple calculation: units on hand, measured against units sold over some window. It is a reasonable starting point and a bad ending point, because four things that determine the right order quantity are invisible to it. --- ## 1. Product That Is Already on Its Way A reorder report reads current on-hand. It has no concept of an order that shipped four days ago and is sitting in a distribution warehouse, or in the back room waiting to be received. This gets worse the larger the chain. Operators running centralized distribution move product through two hops before it reaches a shelf: brand to distro, distro to store, then back room to floor. Across that window the store's on-hand reads low, the reorder report flags a stockout, and a second order goes out against inventory that already exists in the system. The correction is mechanical. Before running the numbers, treat the last submitted order as though it is already in the store. Anything the report recommends after that adjustment is a real gap. Anything it recommended before is partly a duplicate of an order you already placed. --- ## 2. The Days a SKU Was Not on the Shelf This is the costliest of the four, and the least visible. Reorder logic divides units sold by days in the period. If a SKU sold 60 units over 30 days, velocity reads 2.0 units per day. But if that SKU was out of stock for 11 of those 30 days, it actually sold 60 units across 19 selling days. True velocity is 3.16 per day, 58% higher than the report shows. Size a six-week coverage window off each figure and the divergence compounds: - **At 2.0 units/day:** 84 units ordered - **At 3.16 units/day:** 133 units ordered - **Shortfall:** 49 units, on a single SKU, at a single door The failure is self-reinforcing. A product that stocks out looks slow. Because it looks slow, it gets under-ordered. Because it is under-ordered, it stocks out again. Fast movers are the most exposed, because they are the SKUs most likely to have gone to zero in the first place. The cost is not only the units you failed to ship. The same worldwide study found that when shoppers find their product missing, 45% buy something else, 31% go to a different store, and 9% leave without buying at all. Only 15% wait. An under-ordered SKU does not hold its place on the shelf until the next delivery, it hands the sale to whatever is sitting next to it. Sell-through platforms have started correcting for this by calculating velocity against in-stock days rather than calendar days. Headset reports that retailers connected through its [Bridge product](https://www.headset.io/bridge) see 19.6% fewer stock-outs on average. The metric matters more than the vendor: if your velocity denominator is calendar days, every number downstream of it is low. --- ## 3. The Same Product Living on Two Shelf Records When a retailer receives a restock, the correct action is to add units to the existing product record. The common action, under time pressure, is to create a second record. Now one physical product occupies two rows. On-hand splits across both. Each row independently looks depleted, and a reorder report reading either one in isolation recommends a restock. Order against both and you double-ship. METRC package imports and POS migrations produce the same artifact, and analytics normalization does not reliably catch it, particularly after a state traceability update changes how package data arrives. This is not an edge case. It is a structural feature of high-churn catalogs with no standardized naming convention, and it means a reorder report can confidently recommend restocking a SKU the store already has sitting in quantity. It is the same duplication problem that [quietly erodes margin on the retail side](/blog/duplicate-skus-are-quietly-killing-your-cannabis-margins), seen from the wholesale end. --- ## 4. Whether You Can Actually Fill the Order A reorder report is computed entirely from retailer-side data. It has no visibility into what the supplier has available. So it will recommend 40 units of a SKU you sold out of last week, and it will keep recommending it. Worse, it cannot tell the difference between two situations that look identical in the data: - **A stockout**, where the store is temporarily out of a product that is coming back - **A strain gap**, where the store is out of something that is never coming back, because that phenotype is done The first is a reorder line. The second is a replacement decision, and it needs a rule agreed in advance: substitute within strain type first, then potency, then format. Without that rule, discontinued strains sit in the recommendation forever, and every order built off the report carries lines that cannot be filled. --- ## What to Use Instead Skip the reorder report and pull the raw inventory report. It is messier and it is complete, which is the correct trade. From there, four corrections turn it into something a buyer will approve: 1. **Add back in-transit product** so recent orders are not counted twice 2. **Recalculate velocity against in-stock days**, not calendar days 3. **Deduplicate shelf records** before summing on-hand 4. **Check every recommended line against your own availability**, with a pre-agreed substitution rule for what is gone for good A useful way to measure whether this is worth the effort: take last month's orders and recompute them with in-stock velocity. The delta between what you shipped and what the corrected math says you should have shipped is the revenue the reorder report cost you. On a portfolio of any size, that number tends to be larger than people expect. None of this requires new software. It requires knowing that the report is an input rather than an answer, and that the four things it cannot see are the four things most likely to be wrong. Common questions: Q: Why are cannabis reorder reports unreliable? A: They calculate units on hand against units sold, and cannot see product already in transit, days a SKU was out of stock, duplicate shelf records holding the same product, or whether the supplier can actually fill the recommended line. Q: How does out-of-stock time distort sales velocity? A: Standard reorder logic divides units sold by calendar days. A SKU that sold 60 units in 30 days but was out of stock for 11 of them has a true velocity of 3.16 units per day, not 2.0. Sizing a six-week order off the lower figure under-orders by 49 units on that SKU alone. Q: What should cannabis brands use instead of a reorder report? A: The raw inventory report, corrected four ways: add back in-transit product, recalculate velocity against in-stock days, deduplicate shelf records before summing on hand, and check each line against supplier availability with a pre-agreed substitution rule. --- # The Most Innovative Cannabis Software of 2026 URL: https://www.tryheadquarters.com/blog/most-innovative-cannabis-software-platforms-2026 Published: 2026-08-26 Summary: Cannabis operators can't get normal banking, normal card processing, or normal tax treatment. So their software vendors became the financial system instead. The ten platforms doing it, and the one that proves the point. Cannabis software gets reviewed the way ordinary software gets reviewed: feature grids, integration counts, badges on comparison pages the vendors wrote themselves. None of that explains why these particular companies matter. The ten platforms below are not winning on features. They are winning because cannabis operators cannot get normal banking, normal card processing, normal working capital, or normal tax treatment, and somebody had to build the missing pieces. So the software vendors did. A wholesale marketplace started extending trade credit. An ERP now originates loans. A payroll company spends most of its energy managing a tax position. Whitney Economics put a number on the problem underneath all of it, and LeafLink cited that number in its own announcement: late payments in cannabis totaled more than $3.8 billion in 2023, roughly 1.6 months of every legal dollar the industry sold. That is an industry running on handshake terms because the credit infrastructure everyone else uses is closed to it. Most of this list is a response to that one problem. ### LeafLink - Getting Paid When the Product Actually Sells [LeafLink](https://www.leaflink.com/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=leaflink) turned ten in February 2026, counting from its first sale on February 23, 2016, and now spans 34 U.S. markets with tens of billions in cumulative sales. Current CEO Ashwin Raj describes the company as "a critical infrastructure layer for the legal cannabis industry," which is unusually accurate for a corporate anniversary quote. The product worth studying is Payment on Sell-Through. Brands receive automated weekly payments based on the prior week's retail sell-through data, and retailers pay as product moves off the shelf rather than fronting cash for bulk inventory. It launched in September 2024 across Michigan, Mississippi, and Colorado. Call that a payments feature if you like, but it functions more like a credit instrument, built for a wholesale channel where financing options are still thin relative to demand and a brand that gets stiffed has little practical recourse. Then-CEO Artie Minson framed it as ending delinquent payments while reducing retailer upfront spend. That is the polite description of a system where both sides had learned to expect nonpayment. The company also bought Dama Financial's banking division in July 2024 and the competing marketplace Leaf Trade that November. Ten years in, the marketplace is the smallest part of what LeafLink sells. ### Aeropay - The Only Legal Rail, Built Properly Visa and Mastercard will not process cannabis. For years the industry's answer was cashless ATM workarounds that regulators kept shutting down. [Aeropay](https://www.aeropay.com/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=aeropay) took the opposite approach and built a real bank-to-bank network on ACH, with no card rails involved at any point. The bet worked. By its $20 million Series B in May 2024, led by Group 11, the company was processing over $1 billion annually, had grown revenue tenfold year over year, and had reached cash-flow profitability the previous quarter. It now sits underneath Flowhub, Jane, Dispense, and others as plumbing rather than a product operators think about. What separates Aeropay from the workarounds is that it treated the constraint as permanent and engineered for it. Everyone else treated it as a temporary inconvenience to be routed around until federal reform arrived. Federal reform did not arrive. ### Jane - Sending Money Back Down the Same Pipe Cannabis brands cannot ship direct to consumer, which denies them the loop every other consumer packaged goods company depends on: reach a shopper, fund an incentive, measure what came back. [Jane](https://www.iheartjane.com/business/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=jane) built the loop anyway. Jane Gold, which the company says runs on patented technology, lets brands fund cash back that reaches the shopper directly over ACH bank-to-bank transfer, without cutting into retailer margin. In February 2026 Jane announced the program had passed $1 million in cash back distributed. The results Jane reports are more interesting than the milestone itself. The company says Jane Gold shoppers spend 57% more per transaction when redeeming an offer, that the program has generated $1.1 million in incremental sales for brands and $3.5 million for nearly 1,000 participating retailers, and that one in ten online shoppers enrolled during a ten-market beta. Those figures are self-reported. CEO Socrates Rosenfeld's claim at launch was that this "unlocks a new paradigm for omnichannel ecommerce, something the likes of Uber, Shopify, and Amazon have yet to implement in the retail verticals they serve." Read alongside Aeropay, it is the same insight pointed in the opposite direction: Aeropay uses ACH to bring money in, Jane uses it to push money back out, and neither company picked that rail so much as ran out of alternatives. ### Distru - The ERP That Started Lending [Distru](https://www.distru.com/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=distru) raised a $6 million Series A led by Poseidon Investment Management in November 2024, at which point it was operating across 25 states, processing more than $2 billion in annual gross merchandise value, and running profitably. Its earlier investors include Felicis Ventures and Elad Gil, which says more about where serious technology money sees this category than any cannabis-specific fund would. Then there is the FundCanna integration, which puts working capital inside the ERP itself, so an operator sees a purchase order and a financing option for it on the same screen. Distru already knows that operator's inventory, order history, and payment behavior better than an outside lender could underwrite. Once you hold that data, becoming the credit channel is less a pivot than the next obvious product. ### Würk - Payroll as a Tax Position IRC Section 280E denies cannabis businesses ordinary deductions, and [Würk](https://enjoywurk.com/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=wurk) says so on its own site in unusually blunt terms, calling it "an antiquated code stating that 'no deduction or credit shall be allowed in running a business that consists of trafficking a controlled substance.'" The consequence is that how a cannabis company classifies labor determines what it can deduct. Wages tied to cultivation, processing, and packaging can flow into cost of goods sold. Wages that cannot be documented that way are simply lost. Payroll stops being an administrative function and becomes one of the largest levers on the tax bill, which is not true in any other industry. Würk built the platform around that, and it has real reach. As of a September 2024 announcement: all 50 states plus Puerto Rico, more than 5,100 jurisdictions, implementations averaging under 30 days, and clients including Curaleaf, Cresco Labs, and TerrAscend. The positioning has moved since then. In 2024, CEO Deborah Saneman described Würk as offering cannabis "a safe haven" while other providers explored new industries. Today the homepage reads "Payroll & HR Solutions for Compliance-Centric Industries" and puts cannabis at the head of a list that runs through alcohol, gaming, healthcare, and construction. Cannabis is still first and still clearly the core business. But the umbrella got wider, and Würk is not the only company on this list where that happened. ### Green Check - Compliance Good Enough to Export [Green Check](https://greencheckverified.com/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=greencheck) spent years solving one problem: giving banks enough monitoring and documentation to serve cannabis without failing an exam. It now connects financial institutions with more than 18,000 specialty businesses across 38 states. In August 2026 it announced it was taking that platform into money services businesses, fintechs, gaming, ATM operators, NGOs and charities, and other cash-intensive verticals. Co-founder and Chief Strategy Officer Mike Kennedy put it plainly: "We built Green Check by starting with one of the most demanding verticals: cannabis. That experience gave us a strong foundation to expand into other high-risk industries." Cannabis compliance turned out to be hard enough that solving it produced software sellable to industries with considerably more money in them. Green Check has also moved toward lending through a relationship with Coda Capital Advisors, which follows the same arc as LeafLink and Distru: start at compliance, end up at credit. ### Canix - Buy the Competitor, Then Open the Data [Canix](https://www.canix.com/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=canix) acquired competitor Trym on January 27, 2026, a deal Forbes covered as a marker of cannabis technology consolidation. Trym brought mobile-first crop steering, yield forecasting, sensor-driven environmental data, and task execution. Terms were not disclosed. Trym customers keep their platform for at least a year, which is a more graceful integration promise than this category usually offers. CEO Stacey Hronowski framed it as building "the most comprehensive, user-friendly operating system for cannabis operators." The more forward-looking move came six months later. On July 9, 2026, Canix launched an MCP Server, letting operators connect their Canix data directly to AI assistants including Claude and ChatGPT and ask questions in plain language: revenue comparisons, facility-level breakdowns, account health and reorder rates, SKU and sales rep performance. Inventory querying is next, and a Sales Order Agent is in alpha. Canix describes it as the point where "the data you've spent years capturing in Canix can answer your questions directly, in plain language." Most cannabis AI features are a vendor putting a conversational layer on its own dashboard, which the vendor still controls. An MCP server does close to the opposite. It hands the operator's data to whatever agent the operator chooses, and it accepts that the interface layer may end up belonging to somebody else entirely. Very few enterprise vendors in any industry have been willing to concede that yet. We have written before about [what building agent skills on cannabis platforms actually involves](/blog/building-ai-agent-skills-for-cannabis-platforms), and the hard part is rarely the model. ### Headset - Selling the Supply, Not the Dashboard [Headset](https://www.headset.io/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=headset) reports direct point-of-sale integrations with more than 3,500 cannabis retailers across the U.S. and Canada, and claims that 34 cents of every dollar spent on cannabis in both countries flows through its data. Those numbers are the company's own and are not independently audited. The decision worth copying is Vault, which delivers cannabis sales data into a customer's own analytics environment through Snowflake rather than keeping it inside a Headset dashboard. Most data companies fight to own the screen. Headset appears to have decided the screen was the replaceable part and the underlying data supply was not. Its daily tracking of hemp-derived THC beverages across 15 states and more than 45 metro areas is currently the only serious measurement of the fastest-moving channel shift in the category. If you want to know whether the beverage story is real, that is where to look. For a wider view of the tooling in this space, see our [guide to cannabis market analytics platforms](/blog/cannabis-market-analytics-platforms-guide-2026). ### Dutchie - Agentic Commerce Arrives Early, Out of Necessity On June 15, 2026, [Dutchie](https://dutchie.com/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=dutchie) launched Consumer AI across a platform it says powers more than 6,500 dispensaries and has processed over $100 billion in transactions. There are four products: Voice AI, an AI phone receptionist that takes orders and answers questions about hours, directions, and live inventory; Agentic Commerce, a shopping agent that builds carts from natural language and rebuilds regular orders from purchase history; Register Co-Pilot, which hands budtenders purchase history and pairing suggestions at the counter; and Consumer Pulse, which runs sentiment analysis across surveys and public reviews. The timing is the part to sit with. Cannabis retail shipped agentic commerce and voice ordering ahead of most of mainstream American retail, and not because the category is technically ahead. Google and Meta are effectively closed to it, so every customer interaction a dispensary owns has to work far harder than it would elsewhere. CTO Chris Ostrowski described the approach as embedding AI "into systems businesses already rely on" rather than layering on disconnected tools. That is the right instinct, and also the one most likely to get ignored across the rest of the category. ### Meadow - The Dispensary Stops Being a Place [Meadow](https://getmeadow.com/?utm_source=headquarters&utm_medium=referral&utm_campaign=most-innovative-software-2026&utm_content=meadow) has built California cannabis retail and delivery software since 2014, and supports three delivery models: hub-and-spoke, hybrid, and the one worth paying attention to, which the company calls ice cream truck delivery. Under that model a vehicle operates as an independent inventory location roaming a defined geographic zone, taking orders in real time and fulfilling them without returning to a hub between stops. Meadow describes the model as exclusive to its platform. The compliance machinery underneath handles daily Metrc uploads, real-time inventory sync, discrepancy alerts, and manifest generation, with two-way Onfleet dispatch on top. The branding is silly and the idea is not. Every other operator on this list is optimizing a store, a menu, or a supply chain. Meadow's model dissolves the store and treats inventory as something that moves toward demand instead of waiting for it. California's delivery rules are what make that legal, which makes it the clearest case on this list of a constraint producing an invention rather than preventing one. One caveat: Meadow publishes no performance data for the model and no launch date, so treat it as an idea worth understanding rather than a proven playbook. ### Metrc - The Cautionary Half of the Story Every other platform here earned its position because operators chose it. Metrc holds its position because state legislatures wrote it into law. It is the most widely used software in American cannabis and the only entry on this list that no customer selected. Metrc has continued to win and extend government contracts, including in Illinois, Virginia, Massachusetts, Kentucky, and the U.S. Virgin Islands, and it has shipped real things: Metrc says its Retail ID product reached a one million weekly QR code run rate across 21 markets, and it launched direct-to-consumer product recall in California. The company has also hired a 25-year technology veteran to lead what it describes as a technology and product transformation. That last announcement is the one to think about. A company with legally guaranteed demand telling the market it needs a product transformation says something about what happens to software when nobody can walk away from it. Study Metrc for what mandated infrastructure does to a product roadmap. Do not study it for innovation. That is the point of including it. ### The Pattern Three themes tie these platforms together: 1. **Software became the balance sheet.** Banks mostly will not lend to this industry, so the vendors did it themselves. LeafLink extends trade credit through Payment on Sell-Through. Distru puts working capital inside the ERP. Green Check moved from compliance monitoring into lending. Würk manages a tax position rather than just running payroll. Your software vendor is increasingly also your bank, and that concentration of dependency deserves more thought than it usually gets before anyone signs. 2. **Compliance stopped being a business.** Track-and-trace integration used to be the entire pitch. It is now table stakes, and the money has moved to payments and data. Canix had to buy a competitor to stay ahead of it. Metrc is the extreme version of the same truth: compliance software with no competitive pressure has no reason to get better, and doesn't. 3. **The category is buying itself.** Canix took Trym in January 2026. LeafLink absorbed Leaf Trade and Dama Financial. Metrc and BioTrack partnered in 2025. Consolidation, not AI, is the real 2026 story in cannabis software, and it means the number of vendors an operator can choose between keeps shrinking while the amount each one handles keeps growing. For operators, the useful question is not which of these to buy. It is that choosing tooling now means making a financing decision, a tax decision, and a data-ownership decision at the same time, and most back offices are still running it as a software purchase. That is usually where we come in. --- # Your Company Might Already Be on a Public "Doesn't Pay" List URL: https://www.tryheadquarters.com/blog/your-company-might-already-be-on-a-public-doesnt-pay-list Published: 2026-08-19 Summary: Cannabis built its own credit bureaus because no regulator would. One of them is public and searchable, the scoring methodology is secret, and most operators have never checked whether their own company is on it. On Monday, August 10, [Higher Love Cannabis Co. closed five of its nine Michigan stores](https://www.metrotimes.com/weed-2/dispensary-chain-blames-michigans-24-cannabis-tax-as-it-closes-five-weed-stores/), effective immediately. All five were in the Upper Peninsula. The company pointed at the state's new 24% wholesale excise tax, which took effect January 1 and stacks on top of the existing 10% point-of-sale excise and 6% sales tax, and said the added burden "has further strained the supply chain and made it increasingly difficult for responsible operators to remain viable." Somewhere in Michigan this month, a brand rep is looking at open invoices for product sitting on shelves behind locked doors. That is the part of a closure that doesn't make the trade press. [Michigan's numbers](https://mjbizdaily.com/news/michigan-lawmaker-wants-deceitful-new-cannabis-tax-thats-closing-stores-repealed/617385/) are easy to find: H1 recreational sales of $1.48B, down 5.3% year over year; 845 licensed retailers in June 2025 down to 836 a year later; $34M in tax collected through April 30 against a $105M projection. What's harder to see is where the unpaid invoices go when a store shuts. They don't go anywhere. The receivable becomes a loss the day the doors lock, and nobody calls the vendor to tell them it happened. ## Where Trade Creditors Actually Sit TerrAscend's Michigan operations went into [court-ordered receivership](https://www.cann.dev/cannabis-ma-july-2026-distress-consolidation/) this summer with vendor lawsuits pending. The filing puts roughly $210M with its lender, FocusGrowth, and roughly $6.8M in Michigan payables against $5.2M in assets. The secured lender is first in line. The brands and distributors who shipped product on net-30 are last, chasing $6.8M out of a $5.2M pot. That ratio is what an unmanaged receivable is actually worth on the day a customer fails. Michigan is not a special case. The same thing happened in Colorado, where Native Roots sold all 15 of its dispensaries at the end of July and [cut 141 jobs](https://www.denvergazette.com/2026/08/05/major-colorado-cannabis-chain-cuts-141-jobs-at-plant-after-selling-its-dispensaries/) at its Denver manufacturing plant, in a state where sales have fallen from a $2.2B peak to $1.3B. It happened in California, where two Santa Rosa manufacturers [filed WARN notices](https://mjbizdaily.com/news/mass-layoffs-at-two-california-cannabis-manufacturers/617114/) in July and one CEO described a company "sized to a scale of industry that didn't materialize." Each of those left behind a stack of invoices that no collections process was going to fix. ## Vendors Stopped Waiting for Regulators This is why cannabis has built its own credit bureaus, and there are now two of them working in different directions. The [Cannabiz Credit Association](https://www.cannabizcredit.com/), founded by Brett Gelfand after watching $500,000 walk out the door as a Colorado CEO in 2015, [relaunched as CCA 2.0](https://www.globenewswire.com/news-release/2026/04/28/3283012/0/en/The-Cannabis-Industry-Has-a-Credit-Bureau-CCA-2-0-Sets-the-Standard.html) in April with license verification, real-time collections intelligence, automatic risk flagging and a Best Payers Index by state. It has around 220 members, more than 75% of the largest MSOs among them, and has catalogued $2.6B in reported AR data. It is member based, and you have to join to see inside it. [Cannabis Credit Scores](https://www.cannabiscreditscores.com/listing/cannabis-credit-scores) works the other way. It is public and searchable by anyone. Vendors submit reports on their customers, operators get scored, and anything below 20 lands on a list that requires no membership to read. More than 100 California operators are on it now, concentrated in Los Angeles, Riverside, Sacramento and Alameda counties. High Times [covered it in May](https://hightimes.com/business/the-cannabis-shit-list-where-vendors-are-naming-californias-lowest-rated-operators/) and called it what it is: the vendor's version of a credit bureau. Aggregators republish excerpts on a recurring basis, which means the entries also travel to sites the operator has never heard of. Neither was built to punish anyone. They exist because [56% of cannabis invoices are past due](https://mjbizdaily.com/news/past-due-cannabis-invoices-expose-a-growing-credit-discipline-gap/615977/), 23.2% are past 90 days, and $60M went to collections last year. On the most recent industry estimate, 57.3% of operators told Whitney Economics that unpaid receivables hurt their business more than 280E does. Everyone in cannabis can talk about 280E. Very few operators can tell you their own DSO without opening a file. ## Nobody Stretched a Vendor Because They Wanted To Almost everyone reading this is on both sides of the invoice. The operator furious about a dispensary sitting on $40,000 is, that same week, stretching a packaging supplier to 75 days. That's not hypocrisy, it's arithmetic. A state tax lands mid-quarter. A customer stretches you first. 280E eats the cash that was supposed to cover the invoice. The alternative to paying late was missing payroll. Late payment in cannabis is usually a symptom, and most of the time the symptom is somebody else's problem arriving on your books. What changed is that the reason no longer travels with the record. A score on a public list has no footnote explaining that Michigan added a 24% wholesale tax on January 1. It is a number next to your company name, and it does not expire. ## The Objection Is a Real One A public list with a secret methodology deserves scrutiny. Cannabis Credit Scores [says its scores](https://www.cannabiscreditscores.com/about) are "based on feedback provided directly to this site from the cannabis community as well as third party indicators" and that it won't share the exact process, to prevent gaming. Its about page names no owner and no leadership. There is no visible appeals process. Some entries are stale enough to be misleading: at least one scored company has been defunct since 2024. Those objections killed the government version. California's [AB-766](https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB766) in 2023 and [AB-2888](https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2888) in 2024 would have mandated payment terms, and AB-766 drew opposition because it could have [triggered license discipline against an alleged debtor without a hearing](https://reason.com/2023/05/04/this-california-bill-would-mandate-punishment-of-marijuana-debtors-without-a-hearing/). Massachusetts regulators [opened an accounts receivable inquiry](https://talkingjointsmemo.com/cannabis-regulators-want-your-feedback-on-accounts-receivable-issues/) in June 2024, reviewed five states' approaches, and never issued a rule. New York went furthest with mandatory [delinquent payment reporting](https://cannabis.ny.gov/delinquent-payment-reporting) and a [C.O.D. list](https://cannabis.ny.gov/retailers-guide-cod-list) that cuts 30-day-late operators off from credit terms statewide, and even that is contested; a court granted a [preliminary injunction](https://www.cannabisbusinesstimes.com/us-states/new-york/news/15768134/ny-court-grants-preliminary-injunction-blocking-ocm-directives-threatening-150-cannabis-businesses) blocking OCM directives affecting roughly 150 businesses. The due process concerns are legitimate. They also don't help you. In New York, being late is a regulated status with a cure path. In California, it's a search result maintained by people who won't explain how they arrived at it. There is no appeal available, which leaves one remedy: not qualifying for the list in the first place. ## What a Credit Function Looks Like in a Company That Never Had One None of this requires a credit department. It requires treating terms as a finance decision instead of a sales one. Start with a credit application, because most operators extend credit by handshake and find out where the limit was when the account defaults. Write down a limit per account and set [terms against risk](/blog/net-terms-vs.-cod-managing-credit-risk-for-cannabis-sales) rather than against the size of the order in front of you. Then separate who sells from who collects. Today it's usually the same person, which is why terms get promised in the field and nobody chases the invoice afterward. The rep keeps the relationship. Someone else owns the calendar. Write the hold policy before you need it. A hold triggered by aging and applied to every account is a process, and a hold invented in the middle of an argument is a grudge. The second one is what [costs you the account](/blog/the-most-expensive-sentence-in-cannabis-ar). Watch payment behavior, not just balances. A customer sliding from 30 to 45 to 60 days is telling you something months before a receivership filing does, and the balance can look unremarkable the whole time they slide. That signal only surfaces if someone reads the [aging trend](/ar-dashboard) weekly. Waiting for month-end close means finding out two weeks and several shipments late. And call your suppliers before they call you, which is the half of this that never makes it onto a checklist. Tell them what you can pay and when. An operator who communicates through a bad quarter keeps the supply relationship and keeps the score. The one who goes quiet teaches their vendors the same lesson their own customers taught them. Most operators have never once checked whether their company appears on any of these lists. It takes five minutes, and it is the cheapest risk audit in the business. --- # The Most Innovative Dispensaries in the United States (2026) URL: https://www.tryheadquarters.com/blog/most-innovative-cannabis-dispensaries-2026 Published: 2026-08-10 Summary: Cannabis retailers can't buy Google, Meta, or broadcast the way ordinary retailers can. These ten built channels they own outright instead: an app, a holiday, a state fair concession, a billboard. Cannabis retail innovation gets judged on the wrong axis. The industry press rewards store design, which is the most visible thing a dispensary does and the least connected to revenue. The ten operators below are doing something harder. Unable to buy Google, Meta, or broadcast the way ordinary retailers can, each one built a distribution channel it owns outright: a first-party app with 820,000 members, a sales holiday invented from scratch, a state fair concession, a permanently leased billboard in Times Square. The store design follows from that. It isn't the strategy. ### Embarc - Bodega-Style Retail at Chain Scale Plenty of operators have piloted self-select shelving. [Embarc](https://goembarc.com/?utm_source=headquarters&utm_medium=blog&utm_campaign=most-innovative-dispensaries-2026&utm_content=embarc) built it into the operating model of all 17 California stores. Customers take a basket, browse at their own pace, and smell product at a flower bar. Staff are titled Guides, not budtenders. Fairfield markets an "innovative bodega-style setup"; Alameda promotes an "in-store bodega style shopping experience" that "allows you to shop at your own pace in a familiar, approachable way." The point is to replace the vault-and-counter layout that signals contraband with one that signals a normal store. The siting strategy is the underrated half. Co-founder and CEO Lauren Carpenter spent a decade in government and public affairs before launching the first store in South Lake Tahoe in June 2020, and Embarc deliberately targets jurisdictions that had previously refused retail licensing - Tahoe, Tracy, Fresno, Madera, Woodland - rather than fighting for saturated urban corners. The company pledges 1% of every store's revenue back into that store's own community and reports over $1.5 million given. Then there's the events business, which nobody else has matched. Embarc presented the [world's first onsite cannabis sales and consumption at a state fair](https://www.businesswire.com/news/home/20240618619663/en/) at the 2024 California State Fair, including a 30,000-square-foot 21+ consumption area, and launched ["The Smoke Show"](https://www.prnewswire.com/news-releases/embarc-launches-the-smoke-show-at-cali-roots-music-festival-a-first-of-its-kind-cannabis-experience-302134069.html) at the California Roots Music & Arts Festival. Carpenter co-produces the California Cannabis Awards. ### Trulieve - Loyalty as the Entire Acquisition Channel The headline number is the most quotable benchmark in U.S. cannabis retail: [loyalty members drove 77% of transactions in Q3 2025](https://investors.trulieve.com/2025-11-05-Trulieve-Reports-Third-Quarter-2025-Results-Demonstrating-Operational-Discipline-and-Cash-Flow-Strength), against 820,000 enrolled members, up from 68% and 625,000 two quarters earlier. Members spend 2.5x more than non-members. The mechanics are what to copy. Enrollment is a QR scan at every point of sale plus 20 bonus points, not a budtender script. Points expire in 90 days, which converts a passive balance into a recurring visit deadline and is the single most underrated design decision in the program. The [tier ladder](https://www.trulieve.com/rewards-fl) is gated on annual spend - Tru-Member, Tru-Insider at $1,250, Tru-Elite at $2,750, Tru-Icon at $4,750 - and every tier earns the same 1 point per dollar. What scales is redemption power, from 250 points for $10 at the base up to 2,000 points for $160 at the top. That's the cheaper lever, and it's airline status mechanics applied to a category that mostly still runs punch cards. All of it feeds a first-party mobile app carrying tier status and member-only offers. In an industry where paid digital is heavily restricted, an app with 820,000 enrolled users isn't a convenience feature. It's the media network. ### The Daily Green - Real Estate as the Ad Buy The most literal answer anyone has given to the advertising problem: lease the billboard building and put the store inside it. In July 2024, William Norgard signed a [20-year lease on the entire 10,040-square-foot, four-story building at 30 Times Square](https://commercialobserver.com/2024/07/william-norgard-cannabis-dispensary-lease-30-times-square/), a property Commercial Observer described as "bedecked with billboards." The store opened August 8, 2025 with a green façade, a massive digital sign, and scrolling news-ticker displays. Run the arithmetic. Times Square carries roughly 200,000 to 250,000 pedestrians a day, peaking near 400,000, with about a million people working nearby. A prime digital board there rents for $10,000 to $50,000 per day, and a single day on the Nasdaq Tower starts around $17,500. The Daily Green converted a recurring media cost into a fixed 20-year real estate cost. The concept runs all the way down, which is rarer. The brand is built on New York media history, and the loyalty program is called the Press Pass Club with three tiers named Columnist, Editor, and Publisher. Most operators pick a storefront theme and then name their loyalty tiers Bronze, Silver, Gold. Brand strategist Maggie Connors on the in-store bud bar: *"seeing the products being able to hold them be able to smell the cannabis itself just brings it to life."* ### Perfect Union - The Manufactured Holiday, With Receipts Most dispensaries have one sales holiday. Perfect Union's parent, MWG Holdings Group, built a second one from scratch - "Oil Day," every July 10 - and then did the thing almost nobody in cannabis does, which is publish the year-over-year numbers. [Oil Day 2026 versus 2025](https://www.prnewswire.com/news-releases/mwg-holdings-group-reports-continued-year-over-year-growth-across-california-retail-portfolio-following-july-10-oil-day-sales-event-302825337.html): net revenue up 61%, guest transactions up 53%, units sold up 78%. The prior year's lifts were 54%, 47%, and 71%. The gains are widening, which means the date is being learned by the customer base rather than discounted into existence. That distinction is the whole ballgame for anyone evaluating whether a promotional calendar is building equity or renting volume. Supporting credentials: BDSA ranks the Northside Sacramento flagship as the highest daily-revenue-generating dispensary storefront in California year to date in 2026, and the portfolio has posted four straight years of double-digit growth. VP of Marketing Nicole Hanratty credits the experiential layer - food trucks, live music - for beating projections. The replicable version is four steps: pick a date you can own, program it as an event, instrument it, publish the lift. ### Mint Cannabis - Throughput Instead of Dwell Time Mint's record is a list of dated operational firsts rather than a marketing posture: the nation's first cannabis kitchen in 2018, an on-site grow in 2019, a drive-thru in 2020, online ordering in 2021, shuttle service in 2022. The Commercial Cannabis Awards named it Most Innovative Medical Cannabis Dispensary. Several Arizona stores run 24 hours. The 2026 developments make the thesis unmistakable. Mint [entered Florida with 18 medical dispensaries](https://www.businesswire.com/news/home/20251218411621/en/Mint-Cannabis-Expands-Into-Florida-With-18-Community-Focused-Dispensaries) in December 2025. In August 2026 it began [converting a former Wendy's near Midtown Tampa](https://tbbwmag.com/2026/08/03/former-wendys-near-midtown-slated-for-drive-through-dispensary/) into a drive-through pickup location. In June it [partnered with the Moapa Band of Paiutes](https://www.businesswire.com/news/home/20260617064391/en/Mint-Cannabis-Partners-With-Moapa-Band-of-Paiutes-to-Open-New-Nevada-Dispensary) to open inside a travel plaza at I-15 Exit 75, in a former casino space, with a grand opening tied to the tribe's Rock the Sky festival. Taking over decommissioned quick-service real estate states the position plainly: borrow fast food's throughput model, not luxury retail's. Mint is the precise inverse of Embarc, and the contrast is the most useful strategic question on this list. Optimize for discovery or optimize for speed. The failure mode is a store that half-commits to both. ### The Travel Agency - Design as Earned Media Four New York stores - Union Square, Downtown Brooklyn, Fifth Avenue, and a SoHo flagship at 598 Broadway that opened May 2025 - designed with Leong Leong Architecture to read as galleries rather than head shops. Co-designer Chris Leong described the intent directly: *"you won't find any black plastic bag inventory, Bob Marley rolling trays, or pot leaf-patterned wallpaper. Instead you'll experience a soft minimal space more akin to a luxury jewelry or fragrance store."* SoHo carries a kinetic, data-driven installation by Andrew Zolty of Breakfast Studio and a curated bong gallery with pieces by Serena Confalonieri and Juan Manuel Carmona. The Union Square location directs more than half its proceeds to The Doe Fund, which supports people affected by incarceration and homelessness. The BIPOC-founded chain, led by co-founder and president Arana Hankin-Biggers, generates national design press that no advertising budget can buy. That's the mechanism worth naming: in a restricted category, an editorially interesting store is a media budget. ### The Artist Tree - Retail as Cultural Venue Roughly a dozen California locations built around a rotating in-store art gallery, with new exhibits every few months, a QR code under each piece, and 100% of art sales going directly to the artist. The founders' framing: *"We don't take a cut, because we believe artists should actually get paid for their work."* Two consumption lounges anchor the programming. The West Hollywood Studio lounge opened on 4/20/2022 with tableside service, non-alcoholic canna-cocktails, DJ sets, and a tabletop rosin press. The Hawthorne lounge near LAX opened in August 2024 as the first legal consumption lounge in Los Angeles County outside West Hollywood. Programming runs to open mics, "Puff, Puff, Paint" classes, sound baths, comedy, and high tea. The WeHo flagship, designed by Retail Design Collaborative, was the only applicant to qualify for all five of West Hollywood's cannabis license categories. Loyalty runs through the Canvas Club on AlpineIQ. The events calendar is what makes the loyalty program worth joining, which is the correct sequencing and the opposite of how most operators build one. ### Green Qween - Identity-Led Brand Building Downtown Los Angeles' first LGBTQ+ and BIPOC-owned social equity dispensary, co-founded by Andrés Rigal and Taylor Bazley. The Art Deco and Memphis-influenced interior by Visual Elements features a Studio 54 disco ball, arched display shelves, 25-foot vaulted ceilings, and a gender-neutral palette. It won a 2022 Clio Cannabis Bronze in Brand and Retail Design and a 2023 Clio for its "Turndown Service" collaboration with The Hoxton Hotel. The brand now runs two stores, the DTLA flagship at 1051 S Broadway and West Hollywood at 802 San Vicente, WeHo's first queer-owned dispensary, with a Patrick Church mural and signage reading "Pass Joints, Not Judgment." A third location in Sherman Oaks has since closed. The WeHo launch drew organic amplification from RuPaul, Cara Delevingne, and Demi Lovato. That last detail is the operative one. Celebrity reach arrived because the brand stood for something specific, not because it was purchased. Rigal's framing: *"Queer all year isn't our catchphrase, it's our commitment."* Worth noting for anyone benchmarking against these wins: the Clio Cannabis program has been on hiatus since 2024, so there is no active retail design award cycle right now. ### JARS Cannabis - Turning a Format Into a Campaign Deli-style flower, where customers see and select by weight from jars, is an operational choice. JARS made it a brand. Per the company, deli-style accounts for 40% of all flower sales, 12% of total revenue, and a 6% year-over-year sales increase. Then it built a holiday around it. "The Deli Day" launched May 3, 2025 across Michigan locations with a free half-ounce for the first 100 customers per store, a free eighth for every customer, and BOGO pricing on deli-style flower. The Michigan context makes the move sharper than it looks: with 840+ dispensaries and retail pricing compressed to roughly $2.96 per gram, differentiation on price is not available. Differentiation on how the product is merchandised still is. Read alongside Perfect Union's Oil Day, these are the two cleanest manufactured-holiday case studies in the industry, and both started from something the operator already did every day. ### Planet 13 - The Cautionary Half of the Story Planet 13's Las Vegas SuperStore defined experiential cannabis retail: an 18-foot LED water globe emitting fog and mist, 15-foot interactive lotus flowers, a vintage bus inside that emits "smoke" on demand. It pioneered dispensary-as-destination and, through the Dazed concept, consumption lounges. It belongs on this list for what it proved. It also belongs here for what it disproved. In February 2026 the company announced substantial completion of its California exit, closing the 55,000-square-foot Santa Ana SuperStore and divesting its Orange County retail and distribution licenses, while expanding in Florida with a Pace dispensary near Pensacola. Spectacle is expensive, and it does not travel. The Las Vegas store works because it sits in a market where tourists arrive already looking for an attraction. Rebuilt in Santa Ana, the same concept was a large fixed cost attached to a customer who wanted to be in and out in six minutes. Study Planet 13 for ideas. Do not treat it as a template. ### The Pattern Three themes connect these ten: 1. **Owned channels beat borrowed ones.** Every operator here built something it controls outright - an app with 820,000 members, a holiday, a state fair concession, a 20-year lease with signage rights. That is the rational response to a category where the paid channels are restricted, and it is why loyalty and events keep outperforming advertising spend in cannabis retail. 2. **Format is a thesis, not a floor plan.** Embarc optimizes for dwell time and discovery. Mint optimizes for throughput and access. Both work. What doesn't work is a store that hedges, and hedging is the most common condition in the category. 3. **The brand concept should reach the loyalty program.** Press Pass Club with Columnist, Editor, and Publisher tiers. Canvas Club. Cabbage Club. Most operators invest heavily in a storefront concept and then name their tiers Bronze, Silver, Gold. Carrying the idea through to the retention mechanic costs nothing and is the cheapest differentiation available. For operators planning 2027 store builds, loyalty rebuilds, or promotional calendars, this is the cohort to benchmark against. --- # Building AI Agent Skills That Actually Work in Metrc, Dutchie, and LeafLink URL: https://www.tryheadquarters.com/blog/building-ai-agent-skills-for-cannabis-platforms Published: 2026-08-05 Summary: A general-purpose AI agent has no idea that a Metrc package, a POS product, and an invoice line are three different things. Until you encode that, it will keep answering confidently and wrong. Ask a general-purpose AI agent to reconcile a month of transfers and it will confidently produce something wrong. The model is not the weak link. It simply has no way of knowing that a Metrc package, a Dutchie product, and a LeafLink invoice line are three different objects that sometimes describe the same eighth of flower. "Manifest" means a regulated transfer document in one system and a delivery batch in another. And in a state mid-migration from BioTrack, half the historical records use a different identifier scheme entirely. [MIT's 2025 study](https://www.forbes.com/sites/jasonsnyder/2025/08/26/mit-finds-95-of-genai-pilots-fail-because-companies-avoid-friction/) of 300 public AI deployments found roughly 95% failed to deliver measurable return, and the researchers put the blame on what they called the learning gap: generic tools that are impressive in a demo and brittle inside a real workflow. The deployments that worked were the ones [built into specific, high-value workflows](/blog/we-tracked-how-a-cannabis-back-office-really-uses-ai) instead of handed to people as a chat window. Agent skills are how that gap gets closed. A skill is a folder of instructions, reference files, and scripts that an agent loads when it recognizes the work in front of it. At best, it converts knowledge that currently lives in three people's heads into something applied consistently every time. At worst, it's a wordy prompt that changes nothing. ## The collisions are in the vocabulary Cannabis platforms overload the same handful of words with incompatible meanings, and every one of those collisions is a place where an agent produces a plausible wrong answer without flagging it. [Metrc](https://www.metrc.com/?utm_source=Headquarters&utm_medium=referral) is the official track-and-trace system in roughly 20 state markets, with New York currently phasing off BioTrack. In Metrc, a package is a regulated inventory unit with a tag, and a transfer manifest is the legal chain-of-custody document. In a POS, a product is a catalog entry that may map to many Metrc packages, or to none at all if someone created it manually during a busy receiving shift. In LeafLink, a line item is a commercial commitment that may not correspond to anything that has physically moved yet. So an agent asked "how much of this SKU do we have" will answer from whichever system it happened to query. All three answers are legitimately different. Without a skill telling it which system is authoritative for which question, it picks one and moves on. ## Write the gotchas, not the concepts The model already understands accounting and can read an API response. What it cannot know is your environment, which is why the specific failure points are worth more than any amount of background explanation. Compare two versions of the same instruction: ``` Weak: When reconciling inventory, compare Metrc data to POS data and identify discrepancies. Strong: Metrc package adjustments are append-only. The current state of a package is the row with the highest adjustment sequence, NOT the most recent lastModified timestamp - bulk syncs rewrite that field and will silently backdate your answer. A POS product with no metrcPackageId is not necessarily an error. Non-plant-touching accessories legitimately have none. Filter on productCategory before flagging. ``` The second version isn't more sophisticated. It's just true about your systems, and it heads off a specific wrong answer the agent would otherwise produce every time. [Anthropic's engineering guidance](https://claude.com/blog/lessons-from-building-claude-code-how-we-use-skills) makes the same point: a skill that restates what the model would do by default adds context without adding value. ## Push the deterministic work into scripts Skills are folders rather than documents, and that turns out to matter more than it sounds. Anything with a correct, repeatable answer belongs in a script the agent runs instead of prose the agent interprets. Tag checksum validation, license number format checks by state, unit conversion between grams and eighths, aging bucket math. All of it is deterministic, and every time an agent recalculates that logic from a description, it gets another chance to get it wrong. The practical split is that scripts handle computation and validation while markdown handles judgment, and the agent composes the pieces. It also cuts token consumption substantially, which matters once a reconciliation run spans thousands of records. ## Descriptions are triggers, and they should be pushy A skill that never loads is worth nothing. The description field is what the agent reads when it decides whether the current task is relevant, so write it for the model rather than for a human browsing a list. Name the actual artifacts and phrases someone would use: "Metrc", "manifest", "package tag", "transfer reconciliation", "COA mismatch", "aging report". Agents under-trigger skills far more often than they over-trigger them, so err toward including whatever vocabulary your team actually types. ## Establish a baseline before you write anything Run the task without the skill first and record exactly where the agent fails. This is the step that separates a working skill from a document nobody ever validated. Take twenty real reconciliation cases with known correct answers and run them cold. Catalog the errors: wrong authoritative source, mishandled adjustment ordering, invented package IDs. Write instructions that address those failures and nothing else, then rerun the same twenty. Track accuracy, but track runtime and token count too, because a skill that doubles accuracy while tripling cost may not be worth deploying. Most teams skip this and write skills from imagination. The result is long, comprehensive, and aimed at problems the agent never had. ## Where to start Pick one workflow your team does weekly, that has a verifiable right answer, and that currently requires someone who has been there two years. Transfer manifest reconciliation and invoice-to-manifest matching both qualify. Then write down every correction that person makes when reviewing a junior's work. Those corrections are the skill. The process documentation matters less than you'd think, because the agent can mostly infer it. What it can't infer is where this particular stack lies to you. None of this is glamorous, and none of it depends on having a better model than anyone else. The operators who compound value from AI over the next few years will mostly be the ones who wrote down what their systems actually do, in a form an agent can load at the moment it needs it. --- # Illinois Value Brands Went From 28% to 41% of Flower in a Year. Your 2027 Depends on What You Do Now. URL: https://www.tryheadquarters.com/blog/illinois-value-brands-28-to-41-percent-of-flower Published: 2026-07-29 Summary: Illinois units were up 9.3% in H1. Your revenue probably didn't move the same way. Value-tier mix is a big part of why - and what to change before 2027. Illinois adult-use dispensaries sold 27.6 million items in the first half of 2026, up 9.3% from the same stretch last year, according to the [Illinois Department of Financial and Professional Regulation](https://idfpr.illinois.gov/news/2026/adult-use-cannabis-sales-figures-released-for-january-june-2026.html). The number moved through the trade press as proof that demand is still climbing six years after legalization. Then you looked at your own numbers, and it didn't feel like a 9.3% year. You're not misreading your P&L. The state sold more units, but it also sold cheaper ones, through more doors, at deeper discounts. The headline collapses all of that into a single growth figure, and the shelf is where most of the difference sits. ## What Actually Changed on the Shelf Value brands went from [28% of Illinois flower to 41%](https://cannintel.com/business/illinois-cannabis-unit-sales-jump-14-percent-q2-2026) in twelve months. Thirteen points of the category changed price tier inside a single year, which is fast enough that most assortment plans written in 2025 are now aimed at a market that no longer exists. The rest of the mix moved with it. Pre-roll unit sales rose 22% year over year in Q2, outpacing every other category, and single-gram joints priced under $5 became the fastest-growing SKU in the state. Average retail cannabis in Illinois now sells for [$5.61 per gram](https://themarijuanaherald.com/2026/07/illinois-cannabis-sales-reach-763-million-in-first-half-of-2026-as-prices-fall-to-record-low/), down 37% from $8.67 a year earlier. Operators are describing the same thing from inside their own P&Ls. Bryan Zises, co-founder of Dispensary 33 and Spark'd Cannabis, told [Crain's Chicago Business](https://www.chicagobusiness.com/cannabis/ccb-illinois-cannabis-sales-20260721/) that his value line is "outperforming our other brands, up almost twice as much as everything else." Tim O'Hern, chief operating officer at Nature's Grace and Wellness, put the longer arc plainly in comments [reported by MJBizDaily](https://mjbizdaily.com/news/significant-jump-in-unit-sales-at-illinois-cannabis-retailers/617042): "We've experienced a lot of price compression over the last few years." The 9.3% is real growth. It landed in the cheapest part of the case. ## Why It Happened Illinois wholesale flower hit a state-record low of roughly $1,850 per pound in June, down from $2,400 a year earlier, and wholesale prices have now declined for nine consecutive months. Cultivators are sitting on an estimated 90 days of inventory, the highest level since adult-use sales began in 2020. The state issued 88 new Craft Grower licenses in 2025, adding roughly 400,000 square feet of canopy to a market that was already long on product. That glut had to go somewhere, and it went into value SKUs. Multi-state operators launched and expanded budget lines to defend share, and independents cut price because they had inventory aging in a vault. What shows up as a consumer preference on your sales report started as an oversupply problem two steps upstream. It has already started clearing the weakest players out. At least six Illinois craft growers have filed for bankruptcy or ceased operations since January. A second dilution effect on the retail side rarely gets mentioned alongside the growth number. Illinois now has 288 licensed dispensaries, about 10% more than a year ago, while statewide units grew 9.3%. Doors grew slightly faster than volume, which means units per door were essentially flat. The market expanded; the average store held still. ## Why You Can't Trust the Dollar Comparison Illinois moved its seed-to-sale tracking to Metrc during 2025, finishing the rollout in June. The new system records discounts and promotions applied at checkout, and the old one frequently didn't. IDFPR's own review found that prior months captured some pre-discount prices, which means historical revenue totals were inflated relative to what customers actually handed over. Item counts were never affected, and tax receipts reported to the Department of Revenue were always accurate. So the statewide dollar decline is partly a data correction rather than a pure market event, which makes units the only clean year-over-year comparison at the state level. Your own POS history doesn't have this problem, because it's internally consistent whatever it says. That's the reason the exercise below is worth running against your data instead of the state's, and it's a good moment to confirm your [Metrc records still reconcile to what's physically on the shelf](/blog/metrc-reconciliation-why-inventory-mismatches-become-license-risk). ## Run Your Own Numbers Pull units, gross revenue, and discount dollars by product category and price tier for January through June 2026, and the same window in 2025. Every major POS in the state will export this. Dutchie, Treez, Flowhub, Cova, and Blaze all support tier or price-band reporting, though most operators have to build the price bands themselves first. **1. Your value share of flower units.** Define value however your market does - sub-$30 eighths is the working definition behind the state number - and calculate what percentage of your flower units fell in that band each period. Compare to 41%. **2. Average selling price by tier.** Not blended ASP. Blended ASP falls when mix shifts even if you never cut a price, which is why it tells you almost nothing on its own. Run it inside each tier. If your value ASP held and your premium ASP held, you have a mix story. If the tiers themselves compressed, you have a pricing story. They call for different responses. **3. Gross margin dollars per unit, not margin percent.** This is the calculation most operators skip, and it's the one that hurts. A 45% margin on a $5 pre-roll returns $2.25, while a 30% margin on a $40 eighth returns $12. The pre-roll looks better on a margin report and is worth about a fifth as much. If your margin percentage held steady while your gross margin dollars fell, your merchandising is optimizing for the wrong number. **4. Gross margin dollars per transaction.** Your labor cost per transaction is roughly fixed, because the budtender consultation, the ID check, the compliance steps, and the packaging take about the same time whether the basket is $22 or $85. Divide gross margin dollars by transaction count for both periods. That ratio tells you whether the volume you gained is paying for the labor required to move it. **5. Discount depth as a percentage of gross.** Post-Metrc, this is finally visible and auditable at the line level. Run it by category, by daypart, and by budtender. Most operators find promotional spend concentrated in places nobody consciously decided to put it. Where you land on the first calculation is the one that needs interpretation. Well below 41% usually means you ceded unit volume to competitors who met the price. Right around it means you tracked the market, and the question becomes whether your margin dollars per transaction came along for the ride. Well above it means you may have traded down customers who would have paid more, which is the most expensive of the three outcomes and the hardest to spot, because it looks like unit growth right up until you divide. If you don't have clean tier definitions to run this against, that's the first project, and [duplicate SKUs are usually the reason the bands won't hold](/blog/duplicate-skus-are-quietly-killing-your-cannabis-margins). [Market analytics platforms](/blog/cannabis-market-analytics-platforms-guide-2026) like Headset, BDSA, and Hoodie Analytics can benchmark your mix against category-level movement, and wholesale platforms like LeafLink, Leaf Trade, and Distru will show you what you're paying into a falling cost basis. None of it helps until your own catalog has consistent price bands. ## What This Means for 2027 Two regulatory changes land before the year is out. [Senate Bill 3222](https://gov-pritzker-newsroom.prezly.com/gov-pritzker-celebrates-landmark-legislation-to-keep-the-illinois-cannabis-market-safe-and-growing) reclassifies intoxicating hemp products as cannabis on November 12, pulling delta-8 and similar items under the Cannabis Regulation and Tax Act, and the same law doubles customer purchase limits. Read that reclassification carefully, because it isn't a prohibition. Those products don't disappear on November 12; they move inside the licensed channel, where you are the one selling them. O'Hern estimates the intoxicating hemp market is roughly the size of the state's $1.5 billion regulated market. That's one operator's estimate rather than a study, but even a fraction of it arriving in dispensaries would move real volume. Doubled purchase limits push the same direction, deepening baskets among customers who were previously capped. So 2027 will likely bring you more units at whatever margin structure you have in place on November 12. Thin gross margin dollars per transaction don't get repaired by volume; they get multiplied by it. The decisions that change that outcome are being made now. What percentage of the case goes to value. Whether budtender incentives reward units or margin dollars, a distinction platforms like Sparkplug make configurable and that many operators still have pointed at units. Whether the promotions running through Alpine IQ or Springbig are discounting products that need the velocity or products that were going to sell anyway. Operators reading only the 9.3% are planning next year around growth they didn't get. The 41% is the number that tells you what actually moved, and for the first time you have six months of discount-inclusive data to check your own version of it against. That work is worth doing before November 12 rather than after. Common questions: Q: Why are Illinois cannabis unit sales growing while revenue isn't? A: Three things are happening at once. Real price compression pushed average retail cannabis to $5.61 per gram, down 37% year over year. Product mix shifted toward value brands, which went from 28% to 41% of flower sold in a single year. And Illinois' move to Metrc means reported dollars now capture checkout discounts the prior system often missed, which makes year-over-year dollar comparisons unreliable. Q: Can I compare my 2026 Illinois revenue to 2025? A: Not directly, and not against state-level dollar figures. IDFPR has said prior months collected some pre-discount prices, so historical revenue totals were inflated relative to what customers actually paid. Unit counts were unaffected and remain the clean comparison. Your own POS data is internally consistent, so your store-level revenue comparison is valid even where the state's is not. Q: What value-tier share should an Illinois dispensary be running? A: There is no single correct number, but 41% of flower units is the current state benchmark. Landing well below it usually means lost unit volume to competitors. Landing well above it usually means traded-down baskets and compressed gross margin dollars. The more useful test is whether your gross margin dollars per transaction held up year over year, regardless of where your tier mix landed. --- # Metrc Reconciliation: Why Inventory Mismatches Become License Risk URL: https://www.tryheadquarters.com/blog/metrc-reconciliation-why-inventory-mismatches-become-license-risk Published: 2026-07-22 Summary: A Michigan processor just lost its license permanently. Among the findings: 32,250 vape cartridges tagged into inventory that weren't there. A surrendered cannabis license does not come back. A Michigan adult-use processor gave one up permanently on July 13, under a [consent order](https://www.michigan.gov/lara/news-releases/2026/07/15/press-release-gcm-waypoint-to-surrender-processor-license-permanently-close-under-cra) specifying that it "shall not be renewed, reinstated, reissued, or reactivated, limited or otherwise, at any future date." Operations cease July 28. The case also involved interstate transport, which is its own category of problem. The part that should concern every operator is what investigators say they found on the floor: a seed-to-sale system that had stopped describing reality, and had been drifting for a long time before anyone came looking. --- ## Four Months From Inspection to Permanent Closure The investigation opened in March 2026. Inspectors visited the facility on March 11. By June 4 the state had [issued a formal complaint](https://www.michigan.gov/lara/news-releases/2026/06/09/press-release-cannabis-regulatory-agency-files-formal-complaints-against-ground-control-michigan) carrying 12 counts. The consent order was signed July 13. Twenty-eight days after that, the business is closed for good. Four months, start to finish. There was no remediation window and no negotiated path back to operating. The company pled no contest, waived its right to a hearing, and agreed the agency could treat the allegations as true for purposes of resolving the complaint. It admitted nothing, and none of the allegations have been adjudicated. That posture matters legally. It doesn't change the operational lesson: by the time a regulator is on your floor comparing packages to your records, the window for fixing your data has closed. --- ## What the Mismatches Actually Looked Like According to the state's complaint, as reported by [Ganjapreneur](https://ganjapreneur.com/michigan-cannabis-brand-forced-to-close-after-investigation-finds-inventory-discrepancies-transport-of-products-across-state-lines/) and [MMJ Daily](https://www.mmjdaily.com/article/9858887/gcm-waypoint-surrenders-michigan-processor-license-after-interstate-transport-allegations/), investigators documented: - **32,250 vape cartridges** that had been previously impounded by state police but were tagged as accepted into inventory - **360 cases** of vape cartridges that were empty boxes - **Two untagged one-liter bottles** of distillate - **Hundreds of items** listed in the seed-to-sale system that could not be physically located - Roughly **317 grams** of untagged marijuana biomass - Products entered into Metrc as trade samples only *after* another state's regulators had already flagged them Read as a list of infractions, this looks like a company hiding something. Read as an operating record, it looks more mundane. Nobody owned the job of keeping the system matched to the building. Take the first item. Impounded product is a known, documented, dated event. Those packages should have been sitting in a status that made them unavailable. Instead they were transitioned to accepted, and somebody performed that transition, either deliberately or by working through a queue without reading it. Thirty-two thousand units went from "seized by law enforcement" to "available to sell" because of how a record was handled. The trade-sample entries are the same failure wearing different clothes. When product enters Metrc only after an outside party flags it, the system has stopped recording what happened and started producing paperwork about it afterward. --- ## Inventory That Doesn't Exist Still Costs You Forget the compliance exposure for a moment. The financial damage lands whether or not a regulator ever shows up. Hundreds of unlocatable packages means every downstream number built on that inventory is wrong. Availability quoted to buyers is wrong, so sales commits against product that can't ship. Reorder points are wrong, so purchasing either double-buys or starves a line. Margin analysis is wrong, because cost is sitting against units that will never generate revenue. And the balance sheet carries value for product that gets written off eventually, on someone else's timetable rather than yours. Under 280E, cannabis operators already absorb a tax burden most industries never face, which means product that evaporates between the system and the shelf costs more here than the same shrink would in conventional CPG. None of that requires an enforcement action to hurt. It just requires nobody noticing. --- ## Most of This Was Visible From a Desk Most of these findings did not require anyone to be in the building. Impounded lots showing as accepted is a state-transition error, fully visible in Metrc to anyone reviewing status changes against known events. Hundreds of packages that can't be found announce themselves long before a physical count, as zero-movement exceptions: quantities that never change, month over month, while everything around them turns. Trade samples entered weeks late surface in any report measuring the lag between when an event happened and when it was recorded. [Divergence between Metrc, POS, and accounting](/blog/duplicate-skus-are-quietly-killing-your-cannabis-margins) is, by definition, a desk finding. Two of them genuinely required eyes on product. You can't tell from a screen that 360 sealed cases are empty, and untagged distillate is invisible to any system precisely because it was never entered into one. No amount of data discipline substitutes for someone physically present. That's two items. The rest were sitting in the data, waiting on somebody whose job it was to look. A physical count confirms a discrepancy the system has usually been showing for months. --- ## Reconciliation Is a First-Tier Process Most operators treat Metrc as a filing obligation, something you satisfy the way you satisfy a tax return. The ones who stay out of consent orders treat it as an operating system that has to stay true, which means boring, recurring work. **Close entries same-day.** Every day of lag between a physical event and its record is a day the two versions can drift apart unwatched. You can measure that lag. Most operators never do. **Treat status transitions as controlled decisions.** Moving a package into accepted, or out of quarantine, carries legal weight. It needs a reason and a reviewer, not just a permission setting. **Tie out across systems on a fixed cadence.** Metrc against POS, POS against accounting, accounting against the distributor's records. Weekly beats monthly. The number worth tracking is how long a discrepancy survives before somebody catches it. **Run exception reports nobody has to request.** Zero-movement packages, quantity variances, entries recorded more than 24 hours after the event, packages assigned to locations that don't exist. These should arrive on a schedule, not on request. **Name an owner.** A person, not a department, whose performance is measured on whether the system matches the building. The consent order that closed this business contained one operational requirement before the license could be surrendered: reconcile any inventory remaining in Metrc. The last thing the state asked of this company was the habit that would have kept it open. Common questions: Q: Can inventory discrepancies actually cost a cannabis license? A: Yes. A Michigan adult-use processor permanently surrendered its license in July 2026 under a consent order specifying it could never be reinstated. The investigation ran four months from first inspection to permanent closure, with no remediation window and no negotiated path back to operating. Q: How often should Metrc be reconciled against physical inventory? A: Weekly at minimum for high-velocity categories, with a full physical count monthly. Monthly-only reconciliation guarantees discrepancies surface after the period they originated in has closed, which is what converts a correctable data error into a compliance finding a regulator discovers first. Q: What is the highest-severity reconciliation failure to guard against? A: Unguarded status transitions. Product in a non-sellable state such as impounded, quarantined, or on hold should require a second approval before it can be transitioned. Most catastrophic findings trace back to one person changing a status while working through a queue without reading it. --- # The Most Expensive Sentence in Cannabis AR: "I Know the Guy" URL: https://www.tryheadquarters.com/blog/the-most-expensive-sentence-in-cannabis-ar Published: 2026-07-08 Summary: Cannabis is a handshake industry, and the handshake is financing the delinquency. Operators sit on receivables for six months to a year out of respect for the relationship, and by then most of the money is gone. Cannabis is a handshake industry, and the handshake is financing the delinquency. Everyone knows everyone. The retailer who's 90 days past due was at your launch party, and the account your sales rep won't let you call is the reason he made quota last year. That closeness built the industry. It's also why operators sit on receivables for six months to a year before doing anything, and by then most of the money is gone. The math on waiting is well documented. [Industry recovery data](https://www.kaplancollectionagency.com/debt-collection-2/50-commercial-debt-statistics/) puts the odds of collecting an invoice at 90 days past due around 70-80%. At six months it's 45-55%. At a year, 20-30%, and every week of inaction shaves roughly another point off. So the operator who waits eight months out of respect for the relationship has quietly turned a collectible receivable into a coin flip. And as we covered in [Sales You Can't Collect Aren't Sales](/blog/sales-you-cant-collect-arent-sales), the tax on that revenue came due months ago regardless. ## Why Operators Wait Anyway Nobody waits eight months because they think it improves their odds. They wait because escalating feels like a betrayal, and the industry's structure makes that feeling worse. Start with the sales rep, who owns the relationship and whose income depends on it. Ask anyone doing AR in cannabis what happens when they want to make a hard call to a delinquent account. What they'll describe is a negotiation with their own sales team before the retailer ever hears a word. So the delinquent account gets handled gently, month after month, while the invoice ages past the window where gentle still works. Then there's reputation. The industry is small, word travels, and operators worry that escalating one account tells every buyer in the state they're difficult to work with. This fear runs exactly backwards. Retailers with limited cash triage their vendors, and the brands known for tight, consistent AR get paid first. The vendor who never follows up goes to the bottom of the stack. Being easy to owe money to is also a reputation. And some of it is pride. It's the owner's money and the owner's relationship, so they want to collect it personally. Which is how a founder ends up spending months chasing an account that stopped responding in March, at the exact moment their attention was the scarcest resource in the company. ## The Test a Real Relationship Passes A business relationship is mutual or it isn't one. A customer who buys your product, tells you when cash is tight, and works out a payment plan is a partner having a hard quarter. A customer who takes delivery, goes dark for four months, dodges every call, and resurfaces only when they happen to have money isn't protecting any relationship with you. They're using you as a free credit line, and the friendliness when they finally do pay is part of how they keep the line open. The tell is communication rather than payment. An account that's struggling but responsive ("we're short this month, here's what we can do") is worth patience, because an update is an update even when it's a negative one. An account with money that ghosts is a different problem entirely, and every month of politeness extended to it costs recovery odds. Patience is an investment you make in accounts that communicate. It shouldn't be the default you extend to everyone who went quiet. There's a harder version of this test, and it points at you rather than the customer. If losing the account feels unsurvivable, if "I need this customer" is the reason you won't send a final demand, then the receivable isn't the biggest problem on your books. Concentration is. A customer you can't afford to lose is a customer who controls your terms, and operators who take exceptional care of accounts that show them none are usually describing the length of their own runway. ## Escalation Is a Calendar The way out of the relationship trap isn't aggression. It's making escalation impersonal before any specific account needs it. That means an escalation path that exists in writing and runs on dates: reminder at day 5, call at day 15, terms paused at day 45, final demand with a hard date at day 75, escalation after that. When the policy was set in advance and applies to everyone, no retailer can take it personally, no rep can negotiate exceptions account by account, and no owner has to decide, angry and eight months late, whether today is the day the friendship ends. That decision got made calmly, once, before it was about anyone in particular. It also means splitting the roles instead of the loyalties. The rep keeps the relationship, meaning the store visits and the reorders and the sell-through conversations. AR runs the process, on the calendar, every account the same. This split only works on trust in both directions: sales has to trust that AR won't torch a hard-won account with a clumsy call, and AR has to trust sales to pass along what they see in the field, because a rep who's in the store every week knows an account is in trouble long before the [aging report](/ar-dashboard) does. Where that trust exists, the old war between sales and AR becomes the best intelligence channel in the company. One more thing, because in this industry the brand chasing retailers is usually also stalling its own vendors somewhere: the same rule applies in reverse. Call your vendors before they call you. Tell them what you can pay and when. Operators who communicate proactively through a rough stretch keep their supply relationships. The ones who go quiet teach their vendors the same lesson their retailers taught them. ## The Real Fix Three things worth doing this month: 1\. Write the escalation calendar down and apply it to every account, starting with the ones opened next week rather than the ones already 200 days old. A policy adopted in advance is a process. A policy invented mid-dispute is a grudge. 2\. Grade every past-due account on responsiveness, separately from balance. Communicative accounts get worked with. Silent accounts get the calendar, regardless of history or golf. 3\. Check your concentration. Any account whose loss feels unsurvivable deserves a plan for reducing exposure to it, because that fear is priced into every late payment they make. The relationships worth protecting in this industry survive a final demand. The ones that don't were never mutual to begin with. --- # Headquarters Partners with High Times to Help Cannabis Operators Staff Back-Office Roles URL: https://www.tryheadquarters.com/blog/headquarters-partners-with-high-times-for-cannabis-staffing Published: 2026-07-07 Summary: We're now featured on High Times for cannabis staffing - a dedicated page connecting operators to Headquarters for the back-office roles that keep cannabis businesses running. We're now featured on High Times for cannabis staffing. High Times has been the reference point for cannabis culture and industry coverage for over 50 years. As of this month, cannabis operators browsing hightimes.com can find Headquarters on a [dedicated staffing page](https://hightimes.com/staffing/), connecting them directly to our back-office staffing services. For us, it's a straightforward signal: the industry's most recognized media brand chose to point its audience toward Headquarters when the topic is staffing the roles that keep cannabis businesses running. ## Why Back-Office Staffing, and Why Now Most cannabis staffing conversations focus on the front of the house - budtenders, trimmers, delivery drivers. The harder problem sits behind the counter: accountants who understand 280E, AR specialists who can chase invoices in a market where credit terms routinely stretch past 60 days, inventory and compliance staff who can reconcile METRC against the POS without creating audit exposure. These roles are difficult to fill for structural reasons: - **Cannabis experience is scarce.** A bookkeeper who has never dealt with 280E or state-mandated seed-to-sale reporting has a steep, expensive learning curve. - **Margins are compressed.** With wholesale prices falling in most mature markets, operators can't carry bloated G&A. Full-time hires for part-time workloads don't pencil out. - **Turnover is costly in ways that don't show up on the P&L.** A departing controller mid-audit or an AR lead leaving with collections knowledge in their head sets an operator back months. That's the gap Headquarters fills - trained, cannabis-specific back-office talent for accounting, AR management, inventory operations, and administrative functions, without the overhead of building those teams in-house. ## What It Means for Operators If you're an operator, the practical takeaway is simple: the back-office talent problem is common enough, and painful enough, that High Times decided its audience needed a dedicated resource for it. Whether you find us through their page or ours, the offering is the same - cannabis-literate staffing for the functions where generic hires fail. We're proud of the association. High Times has outlasted nearly every institution in this industry. Being their featured staffing partner puts Headquarters in front of the operators we're built to serve, at the moment they're looking for exactly what we do. --- # Sales You Can't Collect Aren't Sales URL: https://www.tryheadquarters.com/blog/sales-you-cant-collect-arent-sales Published: 2026-07-01 Summary: Operators are extending credit on terms no lender in America would accept, to counterparties no bank will touch, in an industry where the debt can't even be resold. Under [Section 280E](https://content.govdelivery.com/accounts/USIRS/bulletins/3a591a2), federal tax is owed on revenue when it's booked, not when it's collected. A brand that ships $500,000 on net-30 terms owes tax on that revenue this quarter, even if the cash shows up 300 days later, or never. Operators are paying real taxes on phantom income while the money sits in their customers' bank accounts. That's why the standard framing of extended terms undersells the problem. A $100,000 order on terms isn't a sale waiting to settle. It's a loan, and a uniquely bad one: no underwriting, no collateral, zero interest, and, because cannabis remains federally illegal, often no practical legal recourse across state lines. Operators are extending credit on terms no lender in America would accept, to counterparties no bank will touch, in an industry where the debt can't even be resold. The stakes are compounded by margins that leave no room for error: only 24.4% of U.S. cannabis operators are profitable on an after-tax basis, compared to [47% of U.S. employer firms](https://fred.stlouisfed.org/release/tables?eid=1240565&rid=1), and 280E compresses net margins to 5-12% before a single invoice goes unpaid. ## The Metric Nobody's Tracking Most cannabis brands report sales the way retail reports foot traffic: a top-line win, independent of whether the cash ever showed up. Ask a sales team for its monthly number and you'll get gross bookings. Ask the same team for its collections-to-sales ratio (cash actually collected, divided by sales booked in the same period) and most can't answer. Nobody's calculating it. That ratio, not gross sales, is the number that predicts whether growth is real. For a steady-state brand it should sit near 1. One caveat before anyone panics: a brand growing fast will run below 1 by construction, because this month's collections trail last month's smaller sales. A sub-1 ratio isn't automatically a red flag. The signal is the ratio falling while sales are flat, or the gap widening faster than the growth rate explains. A brand booking $500,000 a month with flat sales and collecting $350,000 is running a 0.7 ratio with no growth alibi, and that $150,000 gap isn't "aging AR" parked in a spreadsheet waiting to be worked. Once carrying costs are priced in, it was never a real sale to begin with. It just hadn't been marked down yet. This is also where the complaints piling up on LinkedIn actually come from: retailers stretching payment to 90 or 120 days "if it gets paid at all," sales reps extending terms to hit a number with no read on whether the buyer can pay, brands matching competitors' looser terms to protect shelf space and then watching those terms stretch even further the next quarter. All of it traces back to the same root cause: nobody is tracking what fraction of booked sales actually land as cash, so nobody catches the problem until an invoice is already 90 days old. ## The Shelf-Space Trap Is Real. The Answer Is Pricing, Not Refusal The obvious objection to "tighten your terms" is that terms are how shelf space gets won. Refuse net-30 and a competitor offers net-60, and now your product is off the menu. That objection is correct, and it's why generic advice to "just extend less credit" fails in cannabis wholesale. The way out is to stop treating terms as a binary. Terms are a pricing decision. If a retailer's payment history says they pay in 90 days, the cost of carrying them for 90 days belongs in their price. At the double-digit effective cost of capital most cannabis operators face, carrying a $100,000 order for a quarter costs $2,500 to $4,000. A brand that knows this prices the slow payer accordingly, or offers an early-payment discount that beats what a factor would charge. A brand that doesn't is giving away free credit and calling it a sales strategy. You don't have to refuse terms to stop being the cheapest lender in the industry. You have to stop quoting net-30 prices to customers who behave like net-120. ## Why Booked Revenue Lies The decay is measurable. A receivable 30 days past due is worth roughly 80 cents on the dollar in expected recovery. At 180 days it's worth 20 to 40 cents. Past two years, under 10. And recovering anything at that age typically means handing 25-40% of whatever comes back to a third party. Every month an invoice ages, the sale it represents gets marked down, whether or not the books say so. 280E hits the same receivable twice. The tax on the booked revenue was owed up front, and if the invoice eventually becomes a bad-debt write-off, the deduction rarely offsets cleanly what was already paid. By the time a net-30 invoice becomes a net-120 invoice, the margin it was priced at no longer exists. The sale has moved from profitable to breakeven to a net loss, but the income statement still shows it as revenue recognized on day one. [Booked revenue measures intent to get paid](https://viewpoint.pwc.com/dt/us/en/fasb_financial_accou/trg_revenue/trg_revenue_US/collectibility_13_US.html). It doesn't measure whether anyone actually did. ## What Sales-Aligned Collections Actually Looks Like Operators who manage this well share three practices. First, every account gets classified by actual payment history instead of gut feel or the sales rep's relationship with the buyer. The classification that matters most is means versus motive: an account that can't pay right now and an account that won't pay are different problems requiring opposite responses. The retailer who is genuinely short on cash but communicates gets a payment plan and a preserved relationship, because they usually come back. The retailer who has the money and ghosts gets escalated immediately, because every month of politeness costs recovery odds. Misdiagnosing one as the other is expensive in both directions: you burn a good account with premature aggression, or you spend six months being patient with someone who was never going to pay. Second, sales compensation gets tied to collected cash instead of booked orders. Done naively, this backfires: reps stop selling to slow-but-reliable accounts that are perfectly profitable once priced correctly, and start sandbagging orders near quarter-end. The version that works uses holdbacks rather than clawbacks (the bonus vests when the cash lands, instead of being revoked on default), and pairs the comp change with the account classification above, so a rep selling to a finance-approved slow payer isn't punished for finance's pricing decision. The point isn't to make reps afraid of terms. It's to make the cost of terms show up in the same place the commission does. Third, the tracking has to happen in real time, not once a quarter. A spreadsheet updated monthly can't catch a ratio sliding from 1.0 to 0.7 while it's still fixable, and it can't show aging buckets migrating (current invoices sliding to 30, 30 sliding to 60) which is the earliest signal an account is drifting toward trouble. A system that surfaces aging, contact history, and payment classification per account, updated continuously, turns the ratio from a year-end surprise into a number someone checks every week. ## The Real Fix Three things worth doing this quarter: 1\. Calculate the collections-to-sales ratio monthly, adjusted for growth. Two consecutive months below 1 with flat sales means it's time to revisit terms and underwriting, before it turns into a bigger collections push. 2\. Reprice your slowest payers. Pull the ten accounts with the worst payment history and check whether their pricing reflects their real payment behavior. If a net-120 customer is paying net-30 prices, the carrying cost is coming out of your margin. 3\. Tie sales incentive compensation to collected cash, using holdbacks paired with account classification, so reps and finance are pricing the same risk instead of fighting over it. Revenue realized beats revenue recognized. Until the cash lands, a sale is just an open question, with the product, the payroll, and the tax bill on the other side of it already spent. Common questions: Q: Why is booked revenue misleading in cannabis? A: Under Section 280E federal tax is owed on revenue when it is booked, not when it is collected. A brand shipping $500,000 on Net 30 owes tax on that revenue immediately and may wait months for payment. Booked revenue overstates the business by whatever is trapped in aging receivables. Q: Should sales compensation be tied to collections? A: Yes, above a certain scale. Holding 20 to 30% of commission until payment receipt, with bad-debt charge-back on write-offs within twelve months of origination, aligns the sales team with cash. While commission pays on booked revenue, reps stay economically indifferent to whether the invoice is ever collected. Q: What does sales-aligned collections look like in practice? A: First contact moves before the due date rather than after it. A brief confirmation around Day 20 on Net 30 terms verifying the invoice was received, matched, and scheduled resolves a meaningful share of what would otherwise age, because much late payment in cannabis is administrative rather than adversarial. --- # The Cannabis Finance Tax: Why Your Back Office Costs 2–4x More and Never Catches Up URL: https://www.tryheadquarters.com/blog/the-cannabis-finance-tax-why-your-back-office-costs-more Published: 2026-06-17 Summary: Cannabis operators spend 16–20% of revenue on finance versus 4–6% for conventional retail, and the premium traps finance teams in permanent reactivity. A vertically integrated cannabis retailer spends an estimated 16 to 20% of revenue running its finance function. A conventional retailer the same size spends 4 to 6%. That gap of 10 to 14 points isn't waste, and it isn't bad management. It's the structural cost of keeping a compliant finance department alive in an industry where the federal government taxes your gross profit, banks won't hold your cash, and every license you operate is its own separate set of books. Call it the finance tax. Operators pay it before they sell a single gram, on top of a 280E burden that already pushes effective federal rates toward 70 to 90% of gross profit. The real cost isn't the dollars, though. It's what the dollars buy. A finance team this expensive spends almost all of its time on survival work: closing the books, reconciling cash, defending COGS allocations, untangling intercompany transactions. There's nothing left over for forecasting, modeling, or catching the next cash crunch before it lands. So the premium does two things at once. It squeezes already thin margins, and it locks operators into permanent reactivity at the exact moment the industry punishes that hardest. ## The 280E engine No single rule bends cannabis finance further out of shape than IRC Section 280E. Because cannabis is still a Schedule I substance, operators can't deduct ordinary business expenses (rent, salaries, marketing, insurance) against federal taxable income. Picture two retailers with identical books: $3M in gross profit, $2M in operating expenses. The conventional one pays federal tax on $1M of net income. The cannabis one pays on the full $3M. [The Wall Street Journal estimates](https://www.wsj.com/business/cannabis-companies-profits-taxes-3f8bbee0) licensed U.S. cannabis companies hand over roughly $2.3 billion a year in federal tax they wouldn't owe under normal rules. The [April 2026 DOJ order](https://www.federalregister.gov/documents/2026/04/28/2026-08177/schedules-of-controlled-substances-rescheduling-of-marijuana) changed less than the headlines made it sound. It moved state-licensed medical cannabis and FDA-approved products to Schedule III, which lifts 280E for those operators. Everything else, meaning all adult-use and recreational cannabis, stays on Schedule I and stays fully subject to 280E. The broader DEA rescheduling hearing only opens June 29, 2026, and that process could easily drag into 2027. For the retailers and vertically integrated adult-use operators who make up most of the legal market, nothing has actually changed. In practice, 280E turns COGS maximization into a full-time job. Cost of goods sold is the only legitimate offset, so every defensible dollar of direct labor, cultivation inputs, packaging, and freight has to be classified, documented, and defended as COGS in a way no ordinary retailer ever has to think about. Operators using IRC 471(c) inventory strategies pile on Form 8275-R filings and a methodology that has to survive an exam. Operators in decoupled states like New Jersey carry separate federal and state positions and do the work twice. None of it produces a single insight about the business. It's compliance overhead, and it never lets up. ## Complexity by design Cannabis operators don't get to pick a tidy corporate structure. States license at the entity level, not the brand level, so a group running cultivation, manufacturing, and retail across three states can find itself operating 9 to 15 separate licensed entities. Each one needs its own books, tax returns, bank account (where one even exists), seed-to-sale reporting, and payroll. Every transfer between them has to be priced at arm's length, papered with a transfer pricing agreement, then eliminated again at consolidation. For a 10-entity group, the eliminations alone can eat dozens of hours a month. A single-entity retailer does none of this. Vertical integration stacks another layer on top. A grower is holding inventory as live plants in veg, plants in flower, harvested material, work-in-process extract, and finished goods, each with its own cost basis and its own way of going to zero. Plants die. Extract fails testing. Cultivation labor and facility costs have to be capitalized into the plant and split between deductible COGS and non-deductible overhead, with documentation an auditor can't pull apart. And under all of it runs the seed-to-sale reconciliation: every wet weight, harvest, and package move in Metrc or BioTrack has to match a financial entry, every single day. When the two don't agree, it isn't a bookkeeping slip. It's a compliance violation that can cost you the license. Off-the-shelf accounting software treats inventory as one line. Cannabis snaps it into a dozen. Then there's the cash. Most banks still won't touch the industry, since the [SAFER Banking Act remains stuck in Congress](https://www.congress.gov/bill/118th-congress/senate-bill/2860), so operators run largely on cash. A professional cash management program runs $25,000 to $60,000 to set up and another $15,000 to $30,000 a year to keep going, before bank fees that often clear $500 a month per account. Cash means somebody reconciles register counts, vault counts, and deposits by hand every day, with two-person sign-offs to keep theft honest. Plenty of operators pay staff in cash too, which turns payroll into its own small compliance project. A retailer that takes cards never sees any of this. ## The audit premium and the 15-day close The IRS audits cannabis businesses at [4.7 times the rate](https://thecannabisindustry.org/committee-blog-cannabis-companies-be-ready-and-prepared-for-an-irs-audit/) of comparable conventional companies. That one fact reshapes the whole job. A cannabis controller can't just close the month and move on, because every close has to be built as though an examiner will eventually read it: contemporaneous COGS documentation, records kept for ten years, written SOPs, sales and inventory logs that tie out. A conventional controller might give 10 to 15% of the month to this. A cannabis controller gives 30 to 40%. And it all lands at month-end. Even in conventional industries, [half of finance teams already take six or more business days to close](https://www.cfo.com/news/50-of-finance-take-week-to-close-books-ledge-month-end-close-time-cfo-three-day-close-myth-/746085/). Now add seed-to-sale reconciliation, multi-stage inventory valuation, 280E expense segregation, activity-based payroll allocation, and entity-by-entity eliminations. A moderately complex operator's close stretches to 15 or 20 business days. When the close swallows two-thirds of the month, the forward-looking work is always the casualty. The rolling forecast, the scenario model, the SKU-level margin read. None of it gets done. ## The reactive trap This is the point where the finance tax stops being a cost line and turns into a strategic problem. When the team is permanently a step behind, the things anyone could have seen coming show up as emergencies instead. The damage is visible across the whole industry. [Verdant Strategies](https://verdantstrategies.com/blog/cannabis-cash-flow-how-to-forecast-track-and-stay-solvent-in-a-volatile-market) pegs unpaid invoices at around $4 billion, some real fraction of which traces back to [teams that can't keep AR moving while they're buried in compliance work](/blog/why-cannabis-operators-cant-pay-their-bills-on-time). [HBK counts roughly $3 billion in cannabis debt maturing in 2026](https://hbkcpa.com/insights/cannabis-debt-maturity-2026-strategic-guide/), much of it underwritten on rescheduling timelines that never arrived. The operators who modeled their covenants and watched their maturities walked into refinancing early and from a position of strength. The ones running reactively are learning about those maturities with no runway left to do anything about them. It bites at smaller scale too. The operator who can't pin down 280E liability until the CPA finishes the return gets blindsided by a Q1 tax bill, right after Q4 inventory drained the bank account. The retailer with no 13-week cash forecast doesn't see the 4/20 build coming until the shelves are already short. The brand with no FP&A keeps promoting a product line that loses money once 280E-adjusted COGS is in the math, because nobody has time to run the numbers. And new taxes land hardest on the operators least able to model them ahead of time: [Michigan's 24% wholesale excise took effect January 1, 2026](https://www.michigan.gov/treasury/news/2026/03/17/michigan-treasury-releases-guidance), stacked on a 10% retail excise and a 6% sales tax. ## The way out You can't repeal the finance tax. You can go after the reactivity it breeds, and the lever there is automating the rules-based work. Bank reconciliation, seed-to-sale matching, transaction categorization, cash application, AR and AP aging: this is repetitive, automatable stuff, and clearing it off the plate can give back 45 to 90-plus hours a month per role. Every hour pulled out of reconciliation is an hour you can put into forecasting. That takes a cannabis-native stack, not conventional software duct-taped into shape. Metrc and BioTrack feeding the GL through an API. POS and distribution data from Nabis or LeafLink flowing straight into revenue and AR. Bank data that reconciles itself instead of by hand. All of it sitting on an ERP already set up for multi-entity consolidation and 280E allocation. Build the [controllership](/fa-services) data layer first, because FP&A on top of unreliable books is worse than no FP&A at all. Once the data is clean, the close compresses and the controller goes back to the part of the job that actually needs a person: judgment. For operators under about $10M in revenue, building all of this in-house makes no economic sense. A cannabis-specialized eight-person finance team, full controllership plus FP&A, costs north of $850,000 a year in salary before you add a dollar of cash handling, software, or outside accounting. Cannabis-native outsourced providers like [Headquarters](https://www.tryheadquarters.com/fa-services) spread that expertise across a roster of operators and deliver the same function for roughly half the price. That frees up $400,000 or more a year to put toward growth, or toward the cash reserves that keep the next crunch from turning into a crisis. The finance tax is real, and in a market with margins this thin it can be the thing that ends you. The operators who make it through the next credit cycle won't be the ones who spent the least on finance. They'll be the ones who stopped paying for reactivity and started paying to see what's coming. Common questions: Q: How much more does cannabis finance cost than conventional retail? A: A vertically integrated cannabis retailer spends an estimated 16 to 20% of revenue running its finance function, against 4 to 6% for a conventional retailer of the same size. That gap of 10 to 14 points is the structural cost of operating under 280E with restricted banking and multi-entity licensing. Q: Did rescheduling eliminate 280E? A: Not for most operators. The April 2026 DOJ order moved state-licensed medical cannabis and FDA-approved products to Schedule III, lifting 280E for those businesses. All adult-use and recreational cannabis remains Schedule I and fully subject to 280E, which covers most of the legal market. Q: What is the real cost of the cannabis finance premium? A: Not the dollars, but what they buy. A finance team this expensive spends nearly all its time on survival work such as closing books and defending COGS allocations, leaving nothing for forecasting or catching the next cash crunch. The premium locks operators into permanent reactivity. --- # A Cannabis Operator's Guide to Market Analytics Platforms (2026) URL: https://www.tryheadquarters.com/blog/cannabis-market-analytics-platforms-guide-2026 Published: 2026-06-12 Summary: BDSA, Headset, Hoodie Analytics, and Lit Alerts look interchangeable from the outside. They run on different data, serve different users, and cost very different amounts. Here's how to match the tool to your actual question. Most cannabis operators shopping for a [market analytics platform](/cannastack/category/market-analytics) aren't short on options. They're short on clarity about which question they actually need answered. From the outside, the four major platforms look interchangeable: dashboards, market share charts, pricing data, big menu coverage numbers. Underneath, they run on different data, serve different users, and cost very different amounts. A platform an MSO strategy team can't live without can be a bad purchase for a brand that just needs to know which dispensaries to call this week. This guide maps BDSA, Lit Alerts, Hoodie Analytics, and Headset to the business question each one was built to answer. It isn't a ranking or a critique. All four companies have built something genuinely useful, and the differences come down to fit. If you're a brand, wholesaler, or multi-state operator who hasn't committed to a data tool yet, the goal is to walk into your first demo already knowing what to ask. ## First, Understand the Two Data Foundations Almost every meaningful difference between these platforms traces back to one thing: where the data comes from. **POS-verified transaction data** comes from direct integrations with retailers' [point-of-sale systems](/cannastack/category/pos). It records what actually sold, at what final price, in what basket. It's the most accurate data available in the industry, but it depends on retailers agreeing to participate, and market totals are statistical projections built from a panel of participating stores rather than a count of every transaction in the state. **Menu-based data** comes from crawling the public dispensary menus consumers already see on [Dutchie](https://www.dutchie.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog), [Jane](https://www.iheartjane.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog), and [Weedmaps](https://weedmaps.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog). It captures what's listed and at what price, refreshed throughout the day, no integration required. That makes it broad and fast. The catch: listed isn't sold. Sales figures derived from menu data are estimates, inferred from inventory changes. Lit Alerts' CEO has put typical accuracy for this kind of methodology at 70 to 90 percent, and the company's own FAQ describes its output as "a compass, not a GPS." Headset and BDSA are anchored in POS panels (both added menu layers in 2024 and 2025 for breadth). Hoodie and Lit Alerts are anchored in menu data, though Hoodie supplements it with POS, ERP, and seed-to-sale integrations plus foot traffic signals to power its sales models. Neither foundation wins in the abstract. POS data buys precision. Menu data buys breadth and speed. Which one you need depends on what you're trying to learn. ## "How big is this market, where is it going, and how does my brand compare at the macro level?" → BDSA [BDSA](https://bdsa.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog) is a market research firm first and a dashboard second. Founded in 2015 by alumni of the syndicated retail-tracking world (NPD, Leisure Trends), the company set out to give cannabis the same data infrastructure Nielsen and IRI gave traditional CPG, and the product suite still reads that way. The core assets: a POS panel covering 15 U.S. states with daily updates, a twice-annual consumer survey of roughly 20,000 respondents per wave, and a five-year rolling market forecast spanning more than 40 countries, updated quarterly. The metrics are CPG-native too. Velocity, %ACV, share of shelf. If your leadership or your investors grew up reading Nielsen reports, the vocabulary will be familiar. This is the data most often cited in investor decks and market entry analyses. BDSA's forecasts (the firm projects the U.S. market reaching $44.4 billion by 2029) are reference points across the industry. And its Consumer Insights segmentation sizes not just current consumers but the "Acceptors" who haven't bought yet and say they're open to it. No transaction dataset can give you that demand-side view. **Built for:** MSOs planning market entry, investors and lenders sizing opportunities, and brands benchmarking share and category position across states. **Pricing signal:** Enterprise subscriptions are custom-quoted. The public reference points are one-time Brand Assessment reports at $3,500, Market Dashboards valued around $3,000 per year (free with [NCIA](https://thecannabisindustry.org/?utm_source=headquarters&utm_medium=referral&utm_content=blog) membership), and a free Dispensary Playbook tool launched in late 2025. **You'll know this is your tool if** you're making a market entry or capital allocation decision and need numbers that hold up in a boardroom or a diligence process. ## "What are competitors pricing and stocking right now — and what changed overnight?" → Lit Alerts [Lit Alerts](https://litalerts.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog) is the most deliberately simple platform of the four, and that's the point. Launched in Massachusetts in late 2023 and now covering 15 state markets across the Northeast, Mid-Atlantic, and Midwest (plus Nevada), it crawls public dispensary menus throughout the day and converts the changes into one flagship deliverable: a morning email, in your inbox by 6am, listing which accounts went out of stock, which are running low, which competitors dropped prices, and which products are moving suspiciously slowly. The pitch is operational rather than analytical. Your reps have a call list before the 9am stand-up. Behind the email sits a full dashboard: distribution mapping, competitor price comparisons by store, estimated sell-through velocity, account prospecting filters with CSV export, an embeddable store locator for brand websites, and API access. All of it comes in a single tier. The company is unusually candid about its methodology's limits (estimated data, "a compass, not a GPS"), and equally candid about price, which is rare in this category. **Built for:** Brand reps and lean wholesale teams in eastern and midwestern markets who need daily prioritization without an enterprise procurement cycle. **Pricing signal:** The transparency outlier. $500 per state market per month, published on the website, with unlimited user accounts, no annual contract, and a 30-day free trial. A LITE alerts-only tier runs about $199 to $200 a month through partner channels like [Apex Trading](https://www.apextrading.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog) and [SpringBig](https://springbig.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog). **You'll know this is your tool if** you want competitive intelligence showing up in your inbox every morning, priced so a single won account covers the subscription. ## "Which specific dispensaries are moving my product — and my competitors' — and where should my sales team focus?" → Hoodie Analytics [Hoodie Analytics](https://www.hoodieanalytics.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog), founded in 2020 in Chicago, applies the CPG measurement playbook one level deeper than the state aggregate: at the individual store. The founding team comes out of IRI, Nielsen, NPD, SPINS, and Numerator, and the platform's signature metrics show it. Weighted distribution tells you what share of a market's dollar volume flows through the doors that carry you. Store-level velocity tells you how fast your product moves where it's actually stocked. Together, those two numbers answer something raw door counts can't: are you in the stores that matter, and are you winning inside them? The data engine mines menus from more than 10,000 licensed retailers across the U.S. and Canada, roughly 9 million SKUs, and layers in POS and ERP integrations for regression-based sales modeling, plus anonymized foot traffic signals and demographic profiles for every dispensary. The practical output is tactical. Which dispensaries carry your competitors but not you. Which accounts are slipping. Where the next ten doors should be. Hoodie's modeled market data is credible enough that institutional equity research uses it for monthly U.S. market totals. **Built for:** Brands focused on sell-in and sell-through, wholesale teams managing multi-state territories, and operators who want CPG-grade distribution metrics down to the individual door. **Pricing signal:** No published pricing. The platform is demo-required and appears to be priced per module. Hoodie Connect, its retailer-brand inventory sync product, is free for retailers. **You'll know this is your tool if** your bottleneck is territory strategy: knowing which doors to win next and which existing accounts need attention before they churn. ## "What's actually selling — verified at the register — and how do I act on it?" → Headset [Headset](https://www.headset.io/?utm_source=headquarters&utm_medium=referral&utm_content=blog), founded in 2015 by the team that built Leafly, has the deepest transactional data infrastructure in the industry: roughly 4,000 direct POS connections across more than 30 point-of-sale systems, covering 50 legal markets in the U.S. and Canada. By the company's own measure, about 34 cents of every dollar spent on legal cannabis in North America flows through its platform. A 2025 expansion added 7,000-plus e-commerce menu endpoints, pushing total data sources past 11,000. POS data for precision, menu data for breadth. Headset also goes further past observation into execution than anyone else in the category. Insights is the flagship intelligence product for brands tracking share, pricing, and category trends from verified transactions, with data current to yesterday. Bridge streams live POS and inventory data from consenting retailers to their brand partners. Bridge Nexus adds AI-generated purchase orders on top of that stream; the company reports an average 19.6 percent reduction in stock-outs, and its mFused case study describes vendor-managed inventory running across 300-plus stores with a 20 percent average sales lift. For enterprise data teams, Vault delivers the normalized dataset straight into a [Snowflake](https://www.snowflake.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog) warehouse, queryable from [Tableau](https://www.tableau.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog), [Power BI](https://www.microsoft.com/en-us/power-platform/products/power-bi?utm_source=headquarters&utm_medium=referral&utm_content=blog), or Python with no ETL work. **Built for:** Brands that need POS-verified share and pricing benchmarks, distributors running replenishment at scale, and MSO data teams blending market data with their own. **Pricing signal:** A free Retailer tier (premium from $250/month), Bridge from $25/month, and custom-quoted Insights and Vault subscriptions. Headset also publishes a fair amount of free public data, including state pricing benchmarks and its annual 4/20 live sales dashboard. **You'll know this is your tool if** you need ground-truth sales data and want to do something with it operationally, not just look at it. ![Positioning map of BDSA, Headset, Hoodie Analytics, and Lit Alerts: market-level vs. store-level view on the vertical axis, strategic planning vs. daily action on the horizontal axis](https://res.cloudinary.com/dhtmyzerx/image/upload/v1781258668/analytics-platforms-quadrant-map_okhqej.png) ## The Same Four Tools, From Your Seat If the four questions tell you what each tool is, here's what that looks like from where you sit. **"We're a brand planning entry into a new state."** Start with BDSA. Market forecasts, category sizing, and consumer adoption data are what an entry decision runs on. Once you're in-market, Headset Insights becomes the operational complement for tracking how the launch actually performs. **"Our reps need to know which accounts to call this morning."** Lit Alerts was purpose-built as a daily call-list generator. The 6am email turns hours of manual menu review into a prioritized account list before the workday starts. **"We're live in three states and don't know which doors we're losing."** This is Hoodie's home turf. Weighted distribution and store-level velocity show precisely which dispensaries carry your competitors but not you, and which of your existing accounts are decelerating. **"We're an MSO data team that wants market data inside our own warehouse."** Headset Vault delivers transaction-level data via Snowflake share with no ETL buildout. BDSA Direct Connect is the equivalent pipe if your priority is forecast and consumer-survey context rather than transactional depth. **"We're a distributor drowning in manual reorder workflows."** Headset Bridge and Bridge Nexus are the most developed vendor-managed inventory tools in the category: live retailer inventory plus AI-generated purchase orders, with an ERP integration path through [Distru](https://www.distru.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog). ## Side by Side A condensed view, with the caveat that coverage figures are company-reported as of mid-2026 and change frequently: | | **BDSA** | **Lit Alerts** | **Hoodie Analytics** | **Headset** | |---|---|---|---|---| | **Core question** | How big is the market and how do I compare at the macro level? | What changed on competitor menus overnight? | Which specific doors should my sales team focus on? | What's verifiably selling, and how do I act on it? | | **Data foundation** | POS panel + consumer surveys + menu layer | Public menu crawls + ML estimation | Menu mining + POS/ERP integrations + foot traffic | Direct POS integrations + e-commerce menu layer | | **Coverage** | 15 states tracked; 40+ countries forecast | 15 states (Northeast/Mid-Atlantic/Midwest + NV); 3,000+ retailers | U.S. + Canada; 10,000+ retailers | 50 U.S./Canadian markets; 11,000+ sources | | **Signature products** | GreenEdge, Consumer Insights, Market Forecasts | Daily alert email, Brands Explorer, API | Market Intelligence, Dispensary Analytics, Connect | Insights, Bridge/Bridge Nexus, Vault | | **Pricing signal** | Custom; $3,500 one-time reports | $500/state/mo, published | Demo-required | Free–$250/mo retail tiers; custom Insights | | **Calibrated for** | Strategy teams, investors, enterprise brands | Sales reps and lean teams | Brand and wholesale territory teams | Brands, distributors, MSO data teams | ## How to Actually Choose Three heuristics cut through most of the deliberation. **Match the tool to your most expensive open question.** Not every data gap costs the same. A wrong market entry call costs millions. A missed restock costs a few thousand. If your costliest unknown is strategic (which market, which category, how big), start with BDSA. If it's performance truth (what's really selling, at what price), start with Headset. If it's territory (which doors), start with Hoodie. If it's daily awareness (what changed), start with Lit Alerts. **Match the tool to your team's altitude.** These platforms are calibrated for different users at different elevations. BDSA for the boardroom and the deck. Headset for the analyst and the supply chain manager. Hoodie for the sales director planning territories. Lit Alerts for the rep in the field on Tuesday morning. A common buying mistake is purchasing at one altitude and expecting it to serve another. **These aren't mutually exclusive, but watch the overlap.** Operators with larger budgets routinely pair them. BDSA plus Headset is the common enterprise stack: macro context plus operational truth. Headset or Hoodie plus Lit Alerts adds a daily alert workflow on top of deeper benchmarks for a relatively small incremental spend. One caution before stacking subscriptions: BDSA and Headset both added daily menu-intelligence layers in 2024 and 2025 that partially overlap with what Hoodie and Lit Alerts do. If you already subscribe to one of the larger platforms, check whether its menu layer covers your need before buying a standalone tool. And before committing budget at all, use the free entry points. Headset's free Retailer tier, Lit Alerts' 30-day trial, BDSA's Dispensary Playbook. A few weeks inside a platform answers fit questions no comparison guide can. ## The Question Comes First These four platforms are less competitors than four answers to four different questions. The most productive first step isn't booking demos. It's writing down the unanswered question that's costing your business the most money right now, then matching the tool to it. Operators who do that buy once and use the platform daily. Operators who skip it end up with an expensive dashboard nobody logs into. Common questions: Q: What is the difference between POS-verified and menu-based cannabis data? A: POS-verified data comes from direct point-of-sale integrations and records what actually sold at what final price, but market totals are projections from a participating panel. Menu-based data crawls public dispensary menus, which is broader and faster, but listed is not sold and sales figures are inferred estimates. Q: How accurate is menu-based cannabis sales data? A: Lit Alerts' CEO has put typical accuracy for this methodology at 70 to 90 percent, and the company's own FAQ describes its output as a compass rather than a GPS. That is useful for prioritization and direction, and insufficient for capital allocation decisions that need defensible numbers. Q: Which cannabis analytics platform should a brand entering a new state use? A: Start with BDSA for market forecasts, category sizing, and consumer adoption data, which is what an entry decision runs on. Once in-market, Headset Insights becomes the operational complement for tracking how the launch actually performs against verified transactions. --- # We Tracked How a Cannabis Back Office Really Uses AI - Here's the Data URL: https://www.tryheadquarters.com/blog/we-tracked-how-a-cannabis-back-office-really-uses-ai Published: 2026-06-02 Summary: AI adoption across our back office went from 9% to 88% in five months. The activity data shows which tools teams actually reach for - and how cannabis operators can turn AI into real leverage. Most commentary on AI in cannabis is guesswork - vendor surveys, conference anecdotes, and predictions about what teams might eventually do. We are in a position to do something different. We can measure it. Headquarters runs the back office for some of the largest cannabis enterprises in the world, and we track application and URL activity across our teams through [Hubstaff](https://hubstaff.com/?utm_source=headquarters&utm_medium=referral&utm_content=blog), the productivity platform we use to see where working time actually goes. So we don't have to guess which AI tools our people reach for, how long they spend inside each one, or how quickly adoption spread. We have the activity data. Here is what it shows - and what it suggests for any operator trying to turn AI into real leverage. ## From 9% to 88% in five months In January 2026, 9% of the organization used AI tools in a measured period. By May 2026, that figure was 88% - a standing start to near-universal adoption in a single quarter and change. ![Share of Headquarters team using AI tools, January 2026 (9%) to May 2026 (88%)](https://res.cloudinary.com/dhtmyzerx/image/upload/v1780421014/chart_1_adoption_curve_rs3otx.png) Adoption that fast is not a procurement story. Buying licenses takes an afternoon; getting an entire back office to change how it works takes something else - which is exactly where most organizations stall. McKinsey's 2025 survey shows most organizations now use AI somewhere in the business, yet far fewer capture real value - BCG places only about 5% in the "future-built" cohort that sees outsized returns, while the majority report minimal gains. The differentiator is never the model. It is whether the work gets redesigned around the tool. The climb from 9% to 88% happened because specific workflows got rebuilt around AI, not because people were handed logins. ## Which tools the team actually reaches for Adoption is not uniform across tools, and the split is the most instructive part of the data. ![AI tool usage by share of time spent: ChatGPT 28%, Claude 22%, Gemini 18%, Codex 14%, Perplexity 11%, Cursor 7%](https://res.cloudinary.com/dhtmyzerx/image/upload/v1780421014/chart_2_tool_usage_vq37yk.png) ChatGPT, Claude and Gemini are the three most-used platforms. They are the general assistants and research grounding for daily work: quick answers, summaries, the first stop for fact-finding. They are the backbone, and for most people they are the entry point into using AI at all. The agentic tools - Claude Desktop, Codex, and Cursor - are seeing the sharpest recent growth, and they are where the heavier work happens. A chat assistant answers a question; an agent completes a task, navigating and extracting and drafting until it hands back a finished artifact. ## Question that defines AI in cannabis If the highest-value work is agentic, completed inside real systems, how do those agents reach the platforms where cannabis data lives? The answer is where cannabis diverges from the rest of the software economy, and most operators have not priced it in yet. In mainstream commerce, the agent-native layer is arriving fast. Shopify now ships [built-in MCP support](https://shopify.dev/docs/apps/build/storefront-mcp) on every store by default - a storefront server an AI agent can use to search the catalog, build a cart, and hand back a checkout link, with no custom setup. BigCommerce offers its own [first-party Storefront MCP server](https://www.bigcommerce.com/blog/storefront-mcp/) for the same kind of agent-driven shopping. The pattern is consistent: the platform meets the agent halfway, and the integration is clean. Cannabis platforms are earlier in that build cycle. Across dispensary POS, wholesale B2B marketplaces, and market-analytics providers, agent-native connectors are largely still on the roadmap rather than in production. This is not a knock on the vendors - [cannabis software](/cannastack) serves a smaller, more fragmented, heavily regulated market, and the [open standard behind these connectors](https://modelcontextprotocol.io) is itself less than two years old. The connectors will come. They are simply not here yet. That leaves a gap between now and then. Operators who treat the gap as a reason to wait are leaving real, available gains on the table. The bridge is browser-use. When a platform does not yet offer an agent connector, a browser-based agent can still operate the software the way a trained analyst does - logging in, applying the right filters, navigating to the correct report, and exporting the data. It is less elegant than a native connector and it requires thoughtful setup, but it works today, on the systems cannabis teams already pay for. Browser-use is how cannabis teams close the connector gap themselves, one workflow at a time, without waiting for a vendor release. ## Skills are the new SOPs The tool is only half the story. The durable asset is the skill. A skill is a documented, repeatable procedure that an agent executes - the standard operating procedure, except it runs itself. Instead of a static SOP buried in a shared drive that a new hire reads once and forgets, a skill [encodes](/blog/legacy-what-is-rag-20250625) the exact steps, context, and judgment of the team's best operator, and any team member can invoke it on demand. Tools change every quarter. The skill library compounds. This is not a cannabis-specific insight; it is simply arriving in cannabis now. Bain & Company runs an internal "GPT Olympics" where employees have built more than 2,000 custom tools, with the best promoted into a firm-wide marketplace - one of them, "Answer Copilot," surfaces senior-partner expertise that used to live locked in individual inboxes. McKinsey built Lilli, a research assistant that synthesizes the firm's institutional knowledge for 40,000 consultants. The pattern is consistent across professional services: capture the repeatable expert work as a reusable asset, and the whole organization levels up. The evidence that this lifts the floor, not just the ceiling, is strong. The landmark [BCG/Harvard study](https://www.thecrimson.com/article/2023/10/13/jagged-edge-ai-bcg/) of knowledge workers found that those using AI completed tasks 25% faster and produced work rated more than 40% higher in quality. The lowest-performing workers improved the most, gaining 43% against a 17% lift for top performers. Skills are how that effect scales: the best analyst's method becomes everyone's baseline. ## What it looks like on the ground The clearest way to understand the cannabis AI playbook is to watch it run inside the departments where it has taken hold. In our organization, by Hubstaff's intensity data, the top departments by usage are **Marketing, Inside Sales, Engineering, Operations, and Recruiting.** Marketing indexes highest on usage. But Inside Sales shows the playbook most vividly, because its core workflow is the connector gap made concrete. ### Inside Sales: from data retrieval to insight Market-analytics platforms - Hoodie Analytics, Headset, and LitAlerts among them - are where most competitive intelligence in cannabis starts. They aggregate menu and sell-through data across markets into the dashboards brands and retailers use to understand share, pricing, and velocity. They are genuinely valuable, and they are HQ partners. The work of turning those dashboards into a partner-ready insight has historically been a retrieval grind. An analyst logs into each platform, applies a specific set of filters, exports raw CSVs, and only then begins the actual job - reconciling the data and shaping it into something a Head of Sales can act on. The retrieval consumes hours that should go to interpretation. Browser-use collapses the retrieval step. Two skills now carry the load: - A **data-extraction skill** drives the analytics platform through the browser - applying the right filters and pulling the raw reports automatically, across these platforms and others in the stack. - A **competitive-insights skill** takes that raw data and applies cannabis-specific context - category dynamics, brand positioning, market-by-market nuance - to produce the actionable read a Head of Sales actually needs. The analyst stops spending most of the cycle on retrieval and starts spending it on judgment. That is the connector gap closed by hand. It is also the pattern that travels best: find a report you rebuild constantly, automate the extraction with browser-use, and encode the interpretation as a skill. ### Marketing: the highest-intensity team The applied results outside cannabis set the benchmark. BCG's 2026 study of CPG marketing leaders found that teams adopting custom GenAI workflows spent 25% to 40% less time on key marketing tasks and brought work to market roughly twice as fast, with documented marketing-ROI gains of up to 50%. Inside cannabis, the agency [NisonCo reported](https://zapier.com/blog/how-nisonco-fuels-business-growth-with-zapier-agents/) a 48% increase in weekly leads - from 270 to nearly 400 - while reducing its research headcount, alongside roughly $30,000 in annual savings from automating research, outreach, and follow-up. This is the work behind the marketing team's outsized use of Codex and Cursor: generating email-template variations and surfacing [loyalty insights](/blog/4-20-2026-in-review-53-percent-retention-jump) at a volume manual builders cannot match. Around it sit skills for first-draft SEO content and product descriptions, and - distinctive to this industry - skills tuned to write compliant copy for a restricted category, where a careless health claim is a regulatory problem, not just a brand one. The human still owns voice, judgment, and final approval. The agent owns the draft and the grunt work. ### Recruiting: where AI ramps the new hire Recruiting sits lower on the intensity chart, but it is where we have been most deliberate, because the stakes of a bad call are high and the work is repetitive enough to automate well. Three workflows are live: - **Resume screening.** Rather than a recruiter eyeballing hundreds of resumes against a job description, a skill parses each one against the role's real requirements and returns a ranked shortlist with the reasoning attached, so a human can check why a candidate scored where they did. The recruiter reviews a shortlist instead of a pile. - **Interview scoring for grounding.** Every interview is scored against the same structured rubric, so the evaluation stays consistent from candidate to candidate and interviewer to interviewer. The score is grounding, not a verdict. It gives the hiring team a shared, evidence-based reference point and flags where a gut read diverges from the rubric, which is usually where unexamined bias hides. A consistently applied structured rubric is one of the better-documented ways to keep individual interviewer bias out of the decision. - **Sourcing and outreach.** Candidate research, background checks, screening-call summaries, and outreach sequencing - the high-volume work that used to eat a recruiter's week. The BCG finding applies cleanly here: AI lifts the lowest performers most. A new recruiter equipped with the team's best screening and research skills works closer to a veteran's baseline from week one. The skill library is institutional onboarding that runs itself, and because the scoring is structured and the reasoning is always attached, the output stays reviewable rather than a black box. ### Engineering, Design, and Operations: the engine room The agentic-coding tools live here. Cursor and Codex handle development work - and the [University of Chicago found](https://leaddev.com/ai/cursor-claims-its-tools-are-a-massive-productivity-hack-for-devs) that engineering teams defaulting to an AI coding agent merged 39% more pull requests with no rise in revert rates. Just as important, this is where the browser-use agents and skills that the other departments rely on actually get built and maintained. Operations runs the same agentic tools across client meeting transcripts - turning raw calls into extracted action items, sentiment scores, and customer-success follow-through - and leans on Claude for analytics and internal tooling. The engine room is what turns a clever one-off prompt into a skill the whole company can run reliably. ## Where to start The connector gap is temporary. Cannabis platforms will ship agent-native connectors, and when they do, the integrations will get cleaner and faster. But the teams that build the browser-use and skills muscle now are the ones positioned to exploit those connectors the moment they land - and in the meantime, they are capturing the gains while everyone else waits. For an operator deciding where to begin, the path is concrete: 1. **Inventory the stack.** List the platforms your teams touch daily and note which expose an agent-native connector and which do not. The "not yet" list is your browser-use opportunity map. 2. **Pick one high-frequency, measurable workflow.** The report you rebuild every week is the obvious first target - the Inside Sales extraction pattern generalizes to almost any recurring data pull. 3. **Build it as a skill, not a one-off.** Encode the steps and the context so the work is repeatable by anyone, and so it survives the analyst who built it. 4. **Measure against a baseline.** Capture today's hours-per-report and adoption rate before you start. The organizations that document the before-and-after are the ones that get from 9% to 88% on purpose. The research keeps landing on one point: the value of AI does not come from the model. It comes from redesigning the work around it. In cannabis, where the connectors have not arrived yet, that redesign starts with a browser, a skill, and a decision not to wait for the vendors. --- # The $7B Map: Pennsylvania, Virginia, and the MSOs Racing to Be Ready URL: https://www.tryheadquarters.com/blog/the-7b-map-pennsylvania-virginia-and-the-msos-racing-to-be-ready Published: 2026-05-21 Summary: Pennsylvania and Virginia are the next two adult-use cannabis markets on the East Coast. Together, they're the last expansion window of size left in the region, with combined annual sales projected to reach roughly $7 billion at maturity. Pennsylvania and Virginia are the next two adult-use cannabis markets on the East Coast. Together, they're the last expansion window of size left in the region, with combined annual sales projected to reach roughly $7 billion at maturity. The open question isn't whether these markets open. It's which operators are ready when they do. The timing just shifted. On May 19, 2026, Governor Abigail Spanberger [vetoed the Virginia legislation](https://www.marijuanamoment.net/virginia-governor-vetoes-marijuana-sales-legalization-bill-after-lawmakers-rejected-her-amendments/) that would have opened adult-use retail on January 1, 2027. Virginia's realistic launch now sits in 2028. That delay reshuffles the order. Pennsylvania, despite its own legislative gridlock, is now the more plausible first mover. Either way, the operators that capture Day 1 will be the ones already capitalized, licensed, and physically in place. The race is to be ready, not to legalize. ## The $7 billion opportunity, sized honestly Pennsylvania is the larger prize on every dimension. The state has 13 million residents, a $1.2 billion existing medical market across 186 dispensaries, and five legal-cannabis neighbors quietly siphoning consumer dollars. [FTI Consulting's base case](https://s43720.pcdn.co/wp-content/uploads/2024/06/FTI-PA-Adult-Use-Market-Economic-Impacts-06.17.2461.pdf) projects $2.1 billion in Year 1 adult-use sales, with a [high case at $2.8 billion](https://www.greenmarketreport.com/report-adult-use-cannabis-in-pennsylvania-could-hit-2-8-billion-in-sales/). New Jersey border dispensaries have reported that as much as 60% of their customers are Pennsylvania residents. That demand repatriates the moment Pennsylvania retail opens. Virginia is smaller but underpenetrated in a way that matters. The state's 8.88 million residents are served by only 23 medical dispensaries, capturing roughly 4% of total cannabis demand. The legal market sits alongside an estimated $4.4 billion illicit channel. Projections range from $780 million in Year 1 to $1.9 billion at maturity, with the limited-license model concentrating early revenue in a handful of incumbents. The knock-on effects spill past the two state lines. New Jersey ([projected $1.16 billion in 2025](https://newjerseystatecannabis.org/business/sales)) and New York ([$869 million in 2024](https://cannabis.ny.gov/system/files/documents/2025/06/2024-ocm-market-report-6-26-25.pdf)) will both absorb revenue cannibalization. New Jersey's northern and western dispensaries built customer bases on Pennsylvania crossover traffic, and that traffic reverses when Pennsylvania opens. Maryland, which [hit $99 million in monthly sales by April 2026](https://themarijuanaherald.com/2026/05/maryland-marijuana-april-2/), faces the same dynamic on its Virginia border. The East Coast cannabis map is about to be redrawn, and not every existing operator wins. ## The frontrunners ### Pennsylvania (largest medical footprint defines the winners) **1. Trulieve.** 22+ dispensaries, the largest single-operator footprint in the state. [Spent $210,000 on Pennsylvania lobbying in 2024 alone](https://www.spotlightpa.org/news/2025/03/marijuana-cannabis-weed-lobbying-millions-recreational-legalization-pennsylvania/), the largest cannabis-company line item that year. The conviction is plain. **2. Cresco Labs (Sunnyside).** 13 dispensaries across Pittsburgh, Philadelphia, and central PA. Disciplined operator with broad geographic coverage and real brand recognition in state. **3. Green Thumb Industries (RISE).** The same conservative capital structure that funded GTI's Illinois dominance is available for the Pennsylvania conversion buildout. **4. Curaleaf.** Multiple PA stores, the deepest capital markets access among MSOs, and a track record of acquiring conversion-ready assets ahead of launches. The likely consolidator if smaller PA operators stumble. ### Virginia (the only five operators that can legally convert) **1. Green Thumb Industries (RISE) — HSA III, Southwest Virginia.** The only major MSO posting consistent net income. [$114.1 million in 2025 net profit on $1.2 billion in revenue](https://investors.gtigrows.com/news-releases/news-release-details/green-thumb-industries-reports-fourth-quarter-and-full-year-2024). Conservative balance sheet, a proven Illinois conversion playbook, and a $10M fee that's effectively rounding error. The benchmark. **2. Jushi Holdings (Beyond Hello) — HSA II, Northern Virginia / DC corridor.** Six dispensaries in the highest-income, densest consumer region in the state. Premium pricing power, but the thinnest balance sheet of the five incumbents. If launch slips again, the $10M conversion fee gets materially harder to absorb. **3. Verano Holdings (Zen Leaf) — HSA V, Hampton Roads.** [Bought the license from Cannabist for $90 million in 2024](https://www.cannabisbusinesstimes.com/us-states/arizona/news/15686542/verano-to-acquire-virginia-license-assets-from-the-cannabist-co-for-90m) and has openly told investors it's ready to convert. Zen Leaf already executed adult-use conversion in Maryland and New Jersey. Q1 2025 revenue was down 5% year-over-year, so Verano needs this market more than most. **4. Curaleaf (gLeaf) — HSA IV, Greater Richmond.** [Acquired the gLeaf Virginia subsidiary for $110 million in early 2026](https://www.cannabisbusinesstimes.com/us-states/virginia/news/15773113/curaleaf-strikes-110m-deal-to-acquire-virginia-assets-from-the-cannabist-co), after initially backing out at the end of 2025. Five retail locations plus 82,000 square feet of cultivation. Largest U.S. cannabis operator by revenue at $1.27 billion. Capital access isn't the constraint. **5. AYR Wellness / New AYR — HSA I, Northwest Virginia / Shenandoah Valley.** The wildcard. AYR's Virginia assets went through a [foreclosure sale in November 2025](https://www.globenewswire.com/news-release/2025/11/11/3185325/0/en/AYR-Wellness-Announces-Result-of-Article-9-Public-Auction-Initiation-of-Sale-of-Core-Assets-to-its-Senior-Lenders.html), and a restructured entity controlled by senior noteholders now holds the license. Lower-density region, restructured cap table, and real operational questions about Day 1 readiness. ## Two states, two models, and the question that matters more than the vote Most headlines focus on whether each state will legalize. The more consequential question is how. Retail-model design determines whether multi-state operators capture the upside or get cut out entirely. Virginia is heading toward private retail with hard caps. The vetoed bill, and any 2027 successor, runs a private licensing model with a 350-store cap, a $10 million medical-to-adult-use conversion fee per operator (payable over three years), and a five-license limit per entity for vertical integration. Combined tax rate lands at roughly 12 to 14%. Only five companies hold pharmaceutical processor licenses, one per Health Service Area, and those five will define the early market. Pennsylvania is still arguing about the model itself. [HB 1200](https://www.mpp.org/states/pennsylvania/pennsylvanias-state-run-cannabis-stores-bill-summary-of-hb-1200/), the state-run framework that would have routed sales through the Pennsylvania Liquor Control Board, passed the House by a single vote in May 2025 and was [killed 7-3 in the Senate Law and Justice Committee](https://www.cannabisbusinesstimes.com/us-states/pennsylvania/news/15745789/pennsylvania-senate-kills-houses-cannabis-legalization-plan) a week later. The bipartisan [Laughlin-Street Senate framework](https://www.mpp.org/states/pennsylvania/pa-bipartisan-senate-cannabis-regulation-bill-sb-120-detailed-bill-summary/) and HB 20 both propose private retail under a new Cannabis Control Board, with a 12% excise tax. The state-run model is the structural loser scenario for MSOs. Under HB 1200, existing medical operators could convert only if state stores ran short, which would relegate private companies to wholesale supply contracts with a single buyer. Brand equity and retail margins collapse under that architecture. Republican Senate resistance to HB 1200, ironically, is the most pro-MSO political force in the state today. ## The race isn't to legalize. It's to be ready. We looked at [Maryland's July 2023 launch](https://governor.maryland.gov/news/press/pages/governor-moore-announces-more-than-11-billion-in-total-sales-during-for-first-year-of-cannabis-legalization.aspx) as the baseline. Roughly 100 existing medical dispensaries converted to dual-use on Day 1. Combined sales hit $1.1 billion in the first 12 months. Ohio replicated the pattern in August 2024 with [$90 million in adult-use sales over the first seven weeks](https://mjbizdaily.com/ohio-recreational-marijuana-sales-near-90-million-in-7-weeks/). In both states, the operators that captured the launch were the ones with the infrastructure already in place. The first 12 to 18 months after launch is the highest-margin window the cannabis industry offers. Demand outstrips supply, license caps suppress competition, and consumer loyalty forms before new entrants can build. By the time new licenses issue 18 months later, incumbents have already taken the market. The MSOs preparing for Virginia and Pennsylvania today aren't really betting on a launch date. They're buying optionality on the only two adult-use markets left worth fighting for on the East Coast, while accepting that the date will slip and the model may change. Whoever holds the conversion license on Day 1 collects the premium that follows. --- # 7 Nabis Reports Every Cannabis Finance Team Should Be Reviewing Weekly URL: https://www.tryheadquarters.com/blog/7-nabis-reports-every-cannabis-finance-team-should-be-reviewing-weekly Published: 2026-05-14 Summary: Nabis powers a significant portion of cannabis distribution in California. These seven reports help finance teams turn platform data into a clean weekly view without hours of manual reconciliation. Nabis powers a significant portion of cannabis distribution in California, and for most operators, it already contains an enormous amount of valuable data. The challenge for most finance teams isn't access to information - it's turning that information into a clean financial view without spending hours exporting reports and reconciling spreadsheets manually. Operator-led brands in the $5–20M range feel this constantly. The operational numbers look healthy, sales activity is moving, receivables appear strong - but translating that into a clear understanding of upcoming deposits, margins, retailer payment behavior, and actual cash movement still takes work. What follows are seven of the most useful finance and operational reports operators can build from their Nabis data each week. Some already exist within the platform in operational form. Others require layering additional calculations or combining multiple datasets. ## 1. Next Remittance Forecast This is usually the most important number for finance teams to nail week to week. The standard cash view inside Nabis provides strong operational visibility into receivables and order activity. Finance teams often need a more refined forecast that also accounts for fees, returns, credits, excise timing, and payment cadence tied to upcoming deposits. For a brand processing $400K/month through Nabis, that difference can reach $60–80K in a typical remittance cycle - meaningful when you're timing payroll or inventory POs. The calculation isn't necessarily difficult, it just requires pulling together multiple moving pieces consistently: * Invoices landing in the next remittance window * Marketplace fees * Expected returns and credits * Excise timing * Deposit cadence Operators who build this report well make cleaner decisions around payroll timing, inventory purchasing, and cash planning. ## 2. Real Discount Percentage Nabis tracks wholesale discounts extremely well from an operational pricing standpoint. Finance teams often need a broader net revenue view that also incorporates credits, free-fill replacements, damage adjustments, and miscellaneous concessions tied to retailer relationships. Once those additional adjustments are layered in, the true effective discount rate is often materially higher than the standard wholesale discount line alone - a figure showing 8% operationally may translate closer to 14–18% once all downstream adjustments are included. Calculation: *(wholesale discount + credits + miscellaneous discounts) ÷ gross sales*, sliced by retailer, by rep, and by SKU. The real value isn't just the percentage itself - it's the follow-up questions it forces: which rep is driving the highest credit volume? Which retailer consistently requires concessions? Which SKU carries the most margin pressure? That's where the more meaningful decisions usually live. ## 3. Year-Over-Year on Six Key Metrics Week-over-week data tends to create noise. Year-over-year is the comparison that tells you whether the brand is growing, holding, or quietly shrinking. The six metrics worth pulling against the same week last year: gross sales, net sales, order discount %, credit %, total discounts, and AOV. Nabis contains the underlying data, but most teams still need to export current and historical periods separately to build the comparison cleanly - which is why most brands can't quickly answer "are we actually growing" without a 20-minute exercise. Two patterns tend to matter most: AOV down with net sales flat usually signals retailer working-capital pressure. AOV up with order count down usually means SKU mix has shifted. Both are useful indicators long before they become larger financial problems. ## 4. AR Aging by Retailer Nabis exposes AR data well operationally. Finance teams benefit from seeing it segmented clearly by aging bucket and retailer behavior: 0–30, 31–60, 61–90, and 90+, sorted by retailer with the 60+ balances prioritized at the top. California's BPC 30-day payment rule has been on the books since 2022, but many brands still struggle to operationalize collections consistently because the reporting workflow remains manual. Once the data is organized correctly, the collections list usually becomes obvious - five names, often the same five names every month. ## 5. Rolling DSO Over 90 Days Point-in-time DSO snapshots rarely tell the full story. A 90-day rolling DSO is a trend line, and the trend is what matters. Formula: *(AR balance ÷ net sales over the period) × 90.* Run it weekly and chart it. A gradual drift from 38 to 45 days over a quarter may not feel dramatic in the moment, but it means the business is quietly financing a substantially larger receivables balance than it was three months ago - and that money has to come from somewhere. Rolling DSO also tends to be the leading indicator of future remittance pressure. The remittance forecast tells you what's landing next cycle. Rolling DSO helps explain why those deposits may be tightening over time. ## 6. Sales Rep Performance vs. Individual Targets Team averages hide both top performers and underperformance inside the same number. The most actionable version of this report plots each rep's MTD or QTD revenue against their individual quota. Nabis already surfaces revenue by rep. Layering in quota data - a five-minute addition since the platform doesn't store internal targets - transforms it into a much more actionable management tool. Reps sitting below 70% of target by week three rarely fully recover by month-end. The report won't tell you whether the issue is coaching, territory allocation, compensation structure, or account mix - but it will tell you where to start looking. ## 7. Marketplace vs. Rep-Sourced Revenue Every Nabis order carries an origin tag: marketplace, rep-driven, or reorder. Marketplace orders carry the full Nabis fee. Rep-driven orders carry fully loaded rep costs - salary, commission, benefits, and management overhead. The exercise: split revenue by origin, apply the effective fee rate to the marketplace portion, and compare against fully loaded rep cost per dollar of revenue. The output helps operators evaluate hiring decisions, marketplace reliance, rep efficiency, and channel strategy. For most founders, this report produces surprisingly different conclusions than expected. ## The operational reality All seven of these reports can be built from data already flowing through Nabis. The challenge for most finance teams is simply bandwidth. Exporting data, normalizing reports, layering calculations, and rebuilding the same spreadsheets every week is a real time commitment - and it's why many teams default to standard portal reporting. Not because the data isn't available, but because operational reporting and finance-ready reporting are often solving slightly different problems. The operators getting the most value out of Nabis today are the ones building additional reporting layers around the data already inside the platform. --- # 4/20 2026 in Review: What a 53% Retention Jump Says About Cannabis Retail URL: https://www.tryheadquarters.com/blog/4-20-2026-in-review-53-percent-retention-jump Published: 2026-05-06 Summary: Returning customers outpaced new customers by 53% on April 20, 2026, changing what the holiday actually does for cannabis retailers. Returning customers outpaced new customers by 53% on April 20, 2026. This gap keeps increasing year-over-year, and operators without retention infrastructure feel the change the most. BDSA tracked $159 million in U.S. cannabis sales on 4/20 2026, up 20% from $133 million the prior year. Jane Technologies, comparing same stores year-over-year, reported a 46.9% sales lift and a 46.6% transaction lift. Green Check (transaction network) recorded a 120% increase versus an average Monday and a 19% YoY gain in sales per CRB. This year's calendar made the read unusually clean. 2024's 4/20 fell on a Saturday and inflated by default. 2025's collided with Easter and suppressed. 2026's was a Monday - no weekend multiplier, no holiday competition. What's left is a relatively noise-free read on what 4/20 actually drives. For dispensary operators and MSO leadership planning 2026 Q3-Q4 capital allocation, six findings matter more than the rest. ## 1. The Retention Inflection: 4/20 Is Now a Loyalty Validation Event The defining behavioral data point from 4/20 2026 came out of Green Check's transaction network: returning customers outpaced new customers by 53%. In earlier years of the legal era, 4/20 functioned as the cannabis industry's largest annual acquisition funnel - the day curious or lapsed consumers tried a dispensary for the first time. In 2026, the majority of the day's revenue came from customers choosing to return to a specific store. Industry data shows one-time shoppers account for 52% of customers but only 8% of revenue. Customers with 10+ visits drive 70%+ of sales. AIQ's certified-partner data shows loyalty members generate 3.6x higher lifetime value and shop 10.8% more frequently than non-members, and at many dispensaries loyalty members already account for over half of total revenue. In summary, 4/20 2026 was not primarily a sales day. It was a loyalty validation day. The customers who showed up are disproportionately the ones who matter to next year's revenue line. The strategic implication is that 4/20 ROI cannot be measured by day-of revenue alone. The relevant questions are: how many loyalty members activated, what share of revenue came from top-tier loyalty cohorts, how many lapsed customers reactivated, and how many first-time visitors were converted into loyalty members at the point of purchase. Operators who measured 4/20 by traffic counts walked past the more durable scoreboard. ## 2. The Maturity Map: One Holiday, Three Different Markets Market maturity is the most useful lens on 4/20 2026. License age, retail density, wholesale supply saturation, pricing levels, and consumer habituation all shape how the holiday performs. States cluster into three cohorts (mature, scaling, and emerging), and the holiday played out differently in each. **Mature markets defended margins as revenue compressed.** California, the world's largest legal cannabis market, recorded $311 million in April 2026 sales on 17.3 million units sold. Year-over-year April sales declined 7.1%, and average item prices fell from $18.89 to $17.91, a 5.2% YoY compression. Jane Technologies measured California's 4/20 same-store sales at +25.8%, but that figure benefits from the easy 2025 comparison Easter created. The broader April trend is the more honest read. Colorado's 4/20 same-store sales declined 7.1% YoY in Jane's data, even as the state recorded a single transaction of $4,863. The premium customer segment persists in saturated markets even when the commodity tier has gone flat. Michigan offers the most pointed warning. With 840+ dispensaries and 1,000+ grower licenses serving roughly 10 million people, retail pricing has compressed to about $2.96 per gram, the lowest in the country. January 2026 dispensary sales fell 8.3% YoY despite record unit volume, the textbook price-volume trap. A new 24% wholesale tax effective January 1, 2026 added upstream cost pressure that the market structure may not let operators recover downstream. **Scaling markets produced the strongest 4/20 percentage gains, but with caveats.** New York is the defining story of the 2026 cannabis landscape. Monthly sales hit $163.5 million in February, up 54.8% YoY. The state expanded from 41 dispensaries to over 300 by mid-2025 and is projected to exceed 625 retailers by year-end. Jane Technologies' +15.8% same-store 4/20 figure understates true growth because it deliberately excludes the rapidly expanding population of newly opened stores. Average item prices sit near $30.62, among the highest in the country, a function of supply constraints (fewer than 300 licensed cultivators versus Michigan's 1,000+). Illinois posted the strongest state-level 4/20 result in Jane's dataset at +44.5%, driven by limited-license discipline. With 242 dispensaries serving 12.6 million people, per-store revenue floors hold in ways saturated markets cannot match. Maryland gained 31.5%. New Jersey was the outlier. Despite crossing $1.15 billion in 2025 sales, Jane data shows New Jersey 4/20 same-store sales declined 1.1% YoY, and Lit Alerts confirms 4/20 does not rank among the state's top ten sales days. The cause was specific: an April 13, 2026 regulatory deadline pulled non-compliant hemp products off shelves a week before 4/20, disrupting consumer demand right when the holiday cycle should have been peaking. **Emerging markets showed directional strength on small bases.** Ohio crossed $1 billion in adult-use sales during 2025, its first full year of legal operation, and posted +25.9% YoY 4/20 growth in Jane's data. Average item prices at $30.59 reflect supply constraints (37 licensed cultivators) that will ease as the state issues more licenses. Minnesota, with only 96 active retail sites against 1,400+ preliminary approvals, recorded a 150% same-store 4/20 gain. The directional signal is real. The magnitude is base-effect distortion. | State | Cohort | 4/20 2026 YoY | Operative Dynamic | | --- | --- | --- | --- | | Illinois | Scaling | +44.5% | License scarcity, per-store strength | | Maryland | Scaling | +31.5% | Steady Northeast expansion | | California | Mature | +25.8% | Price compression, illicit competition | | Ohio | Emerging | +25.9% | First full adult-use year | | New York | Scaling | +15.8% | Rapid license expansion | | New Jersey | Scaling | -1.1% | Hemp shelf disruption pre-4/20 | | Colorado | Mature | -7.1% | Holiday gravity normalized | | Michigan | Mature | -8.3% (Jan YoY) | Oversupply, price-volume trap | The practical conclusion is that a 4/20 playbook built for California's dynamics will underperform in Ohio, and one built for New York will burn margin in Michigan. Strategy has to be calibrated to where each market sits on the maturity curve, not applied uniformly across a portfolio. ## 3. Discount Paradox: 85% Discounted, AOV Flat Promotional intensity hit a record. 85% of 4/20 transactions were discounted, up from 80% in 2025. Cova's data from 2,000+ dispensaries shows 27.7% of transactions used a promo and 50% of retailers ran some form of discount, versus 10-11% on a typical day. At the portfolio level, margins held, declining only 0.8 percentage points despite the discount depth. The dispersion within that portfolio is where the actual story sits. Average order value on 4/20 2026 was essentially flat (-0.6% YoY), and items per cart declined approximately 11% since 2024, the third consecutive year of decline in basket depth. More transactions, smaller baskets. Operators who simply stacked promotions and chased traffic eroded their AOV. Operators running engineered discount architectures held or grew it. [BLAZE's 4/20 2026 retail report](https://www.blaze.me/blog/dispensary-tips/top-4-20-takeaways-for-cannabis-dispensaries-in-2026/) tells an interesting story: dispensaries using the BLAZE AI recommendation engine recorded a 56% AOV lift on 4/20 versus non-AI-assisted transactions on the same day. The promotional architecture that separated winners from average performers was consistent across multiple data sets. House brand promos came first, preserving operator margin. Threshold-based offers ("spend $75, get $15 off") came second, protecting margin on small baskets while pushing incremental spend. Loyalty-gated exclusives came third, rewarding existing members and creating a visible enrollment incentive for new ones. Blanket store-wide discounts were a last resort rather than the headline. Operators who led with percentage-off-everything captured traffic and gave back margin in equal measure. ## 4. Product Mix Is a Retention Signal: Pre-Rolls, Edibles, and Beverages Are Eating Flower's Share Pre-rolls reached 15.9% of total U.S. cannabis sales in Q1 2026 per Headset, up 9.8% YoY - the only major inhalable category gaining share. The category generated $3.6 billion in 2025 across 383 million units. Infused pre-rolls are doing the premium work; one brand reported 500% sales growth in its infused line from Q1 2024 to Q1 2026. Edibles revenue rose 54% YoY on 4/20 2026 in Green Check's data - the single fastest-growing category in the dataset, outpacing flower's 40% gain. Beverages were the only major category posting positive YoY growth in California's declining April market: +8.0% in sales and +14.6% in units, against -10.6% for flower, -5.5% for vapes, and -3.8% for edibles. Average California beverage prices fell from $7.52 to $7.09, yet units climbed double-digits - a category actively expanding its consumer base, not just maintaining it. Flower remained the 4/20 cultural anchor at 43% of holiday sales per Jane data, followed by vapes at 27%, edibles at 14%, pre-rolls at 10%, and concentrates at 6%. Even in markets like California where vapes dominate every other week of the year, flower leads on the holiday. But the trend lines are clear: Convenience and effect-predictable formats - pre-rolls, edibles, beverages - are the categories that build loyalty cycles. They are dose-reproducible, easy to reorder, and ideal anchors for automated replenishment flows and loyalty tier thresholds. Operators planning 2027 merchandising should weight infused pre-rolls, edibles, and beverages disproportionately in their loyalty-gated assortment, and use flower as the cultural traffic driver it remains. ## 5. The 10/40 Problem: The Operator Gap Is Widening Per [Green Check data](https://www.businesswire.com/news/home/20260422477424/en/Green-Check-Data-Signals-Cannabis-Market-Stabilization-as-420-Shifts-to-Loyalty-Driven-Event), top 10% of dispensaries captured roughly 40% of total 4/20/2026 sales. Up from 28% in 2024. This is not primarily a function of store count or location. It is the compound effect of loyalty infrastructure, data sophistication, and operational discipline showing up on the highest-leverage day of the year. The median CAC for a cannabis dispensary loyalty member is $82, with top-quartile programs at $54.18. Loyalty members deliver 3.6x higher LTV and shop 10.8% more frequently. Even a $150 CAC for a loyalty conversion event clears positive expected value against the LTV multiplier. On 4/20 specifically, when a meaningful share of customers are first-timers, lapsed returners, or once-a-year deal seekers, the holiday is the lowest CAC window in the calendar year for loyalty acquisition. The customer has already self-selected into the experience. The conversion cost is the offer plus the operational lift to enroll them. First Citizens Bank's 2026 State of the Cannabis Industry report shows 87% of surveyed cannabis companies expect positive revenue growth in 2026. That optimism is concentrated, not distributed. Whitney Economics forecasts U.S. cannabis revenue at $30.5 billion in 2026, a 4.9% gain after 2025's first-ever YoY decline. The market is growing. The share of that growth available to operators without loyalty programs, CRM infrastructure, or multi-channel marketing capabilities is shrinking. The 10/40 ratio is what that bifurcation looks like on a single day. ## 6. The 30-Day Window Most Dispensaries Are Wasting The most underutilized strategic window in cannabis retail opens the morning after 4/20. First-time shoppers acquired on the holiday hit peak conversion probability in the first two to three weeks following their visit, then decay quickly. Most dispensaries do nothing in that window. A 4/20 first-time buyer who receives no follow-up communication has roughly an 8% probability of returning within 30 days at industry baseline. A first-time buyer enrolled in the loyalty program who receives a personalized SMS within 48 hours of their visit, followed by a targeted email sequence, converts at materially higher rates. The mechanics are straightforward and underexecuted. Behavioral flows in Klaviyo or a comparable platform triggered on first purchase. Lapsed-customer reactivation segments built from purchase data, including what they bought, what they browsed but didn't buy, and which category they're due to repurchase. AI-personalized product recommendations that get smarter with every transaction the model sees. None of this is speculative. It is shipping product across multiple cannabis-friendly platforms. The constraint is operator execution, not technology availability. For operators reading 4/20 2026 with a budget calendar in hand, the practical reframe is this: 4/20 ROI is measured in May. The day itself is a data acquisition event. The customer captured on April 20 (their email, phone number, first purchase profile, category preference) is the input. The 30-day reactivation sequence turns that input into a multi-year revenue line. Operators who treat 4/20 as a transaction lose the upside the data is offering them. Operators who treat it as the opening of a relationship are the ones already on the right side of the 10/40 split. The market is bifurcating, and 4/20 2026 is the cleanest snapshot of which side of that split each operator is on. The next month is where most of this year's holiday value will actually be captured. --- # How Vireo Growth Became the Story of 2026 Cannabis URL: https://www.tryheadquarters.com/blog/how-vireo-growth-became-the-story-of-2026-cannabis Published: 2026-05-01 Summary: Between January and late April 2026, Vireo closed or announced six separate acquisitions. The disclosed value of those deals exceeds $350M. Six months ago, you could say that Vireo Growth was a regional operator with a few state licenses and a quiet balance sheet. Today it is the seventh-largest US MSO by revenue, with operating footprints in California, Colorado, Florida, Minnesota, Missouri, Nevada, New Mexico, and Utah, and it got there through one of the most aggressive consolidation runs the industry has ever seen. Between January and late April 2026, Vireo closed or announced six separate acquisitions - [Schwazze's Colorado and New Mexico assets](https://investors.vireogrowth.com/news/news-details/2026/Vireo-Growth-Inc--Announces-Closing-of-Acquisition-of-Assets-of-Schwazze/default.aspx), [Hawthorne Gardening](https://investors.vireogrowth.com/news/news-details/2026/Vireo-Growth-Inc--Announces-Acquisition-of-The-Hawthorne-Gardening-Company-from-The-Scotts-Miracle-Gro-Company/default.aspx), Eaze, [PharmaCann's Colorado retail](https://investors.vireogrowth.com/news/news-details/2025/Vireo-Growth-Inc--Enters-into-Definitive-Agreement-to-Acquire-Certain-Assets-of-PharmaCann-Inc-/default.aspx), [FLUENT in Florida](https://investors.vireogrowth.com/news/news-details/2026/Vireo-Growth-to-Acquire-FLUENT-in-All-Stock-Transaction/default.aspx), and the [still-pending Flowery transaction](https://investors.vireogrowth.com/news/news-details/2024/Vireo-Growth-Inc.-Announces-75-Million-Financing-andAcquisitions-of-Four-Single-State-Operators/default.aspx). The disclosed value of those deals exceeds $350M. ## The Playbook **Credit bids on distressed paper.** When [Schwazze's senior secured notes traded down](https://investors.vireogrowth.com/news/news-details/2025/Vireo-Growth-Inc--Announces-Closing-of-Acquisition-of-Outstanding-Senior-Secured-Convertible-Notes-of-Schwazze/default.aspx), Vireo bought them. Then it converted the notes directly into ownership of 45 dispensaries and two manufacturing facilities - a roughly $111M deal closed in March without writing a check for the equity. That structure is repeatable, and there is more distressed cannabis paper trading at discounts than there are buyers willing to take operating risk. **All-stock consideration with disciplined dilution.** The [Eaze deal](https://investors.vireogrowth.com/news/news-details/2026/Vireo-Growth-Inc--Announces-Closing-of-Acquisition-of-Eaze-Inc-/default.aspx) (about $47M), the [FLUENT deal](https://investors.vireogrowth.com/news/news-details/2026/Vireo-Growth-to-Acquire-FLUENT-in-All-Stock-Transaction/default.aspx) (about $30M), and the [PharmaCann Colorado deal](https://investors.vireogrowth.com/news/news-details/2025/Vireo-Growth-Inc--Enters-into-Definitive-Agreement-to-Acquire-Certain-Assets-of-PharmaCann-Inc-/default.aspx) (about $49M) are all stock transactions. None of them required Vireo to deplete cash reserves. **Strategic asset plays, not roll-ups.** The [Hawthorne acquisition](https://investors.vireogrowth.com/news/news-details/2026/Vireo-Growth-Inc--Announces-Acquisition-of-The-Hawthorne-Gardening-Company-from-The-Scotts-Miracle-Gro-Company/default.aspx) - closed in April, valued at roughly $120M - is the most interesting move on the board. Hawthorne is the cannabis-cultivation arm of Scotts Miracle-Gro. Vireo issued shares and warrants and received approximately $110M in cash and net working capital in return. That transaction strengthened Vireo's balance sheet rather than weakening it. ## Why This Is Bullish for the Industry Cannabis M&A volume has been flat for two years. The 2026 surge - concentrated in Vireo but extending well beyond it - signals something new: capital is finding its way back into the industry, and the operators putting it to work are using structures that would not have been possible in 2022. The largest disclosed deal of the year so far is [Millstreet Credit Fund's $130M cash acquisition of Cannabist's Virginia operations](https://www.businesswire.com/news/home/20260205531609/en/The-Cannabist-Company-Announces-Closing-of-Transaction-for-the-Sale-of-Virginia-Assets-to-an-Affiliate-of-Millstreet), which closed in February. Five retail locations and 82,000 sq ft of cultivation in Richmond, paid in real money to a real seller. Cannabist had a prior agreement with Curaleaf and walked away to take Millstreet's higher offer. That kind of competitive bidding tension was almost absent in 2024 and 2025. Below the headline, the deal pipeline has been steadily active. [TerrAscend took a 35% stake in New Jersey's Union Chill](https://ir.terrascend.com/news-events/press-releases/detail/274/terrascend-increases-retail-footprint-in-new-jersey-with-closing-of-union-chill-dispensary-transaction) for $13M. [Planet 13 picked up a Strip-adjacent Las Vegas dispensary](https://www.cannabisbusinesstimes.com/us-states/nevada/news/15686441/planet-13-enters-agreement-to-acquire-las-vegas-dispensary) for $6.9M. [Cannabist's Florida exit totaled $16.4M](https://www.cannabisbusinesstimes.com/us-states/florida/news/15686483/the-cannabist-co-enters-164-million-definitive-agreements-for-florida-assets), including a [MINT Cannabis and Shango purchase](https://www.businesswire.com/news/home/20241106328681/en/The-Cannabist-Company-Announces-Closing-on-Sale-of-Florida-Assets-to-MINT-Cannabis-and-SHANGO) of Cannabist's Florida retail and cultivation portfolio. [SNDL committed $32.2M in cash](https://www.sndl.com/news/news-details/2025/SNDL--1CM-Provide-Update-Regarding-Arrangement/default.aspx) to acquire 32 retail stores from 1CM in a phased close. On the brand side, [Wyld's pending acquisition of Grön](https://www.globenewswire.com/news-release/2026/01/05/3212817/0/en/wyld-acquires-gr%C3%B6n-in-major-industry-transaction.html) creates an edibles platform with [combined revenue around $440M](https://www.highlyobjective.com/p/deep-dive-wyld-acquires-gron-undisclosed) - roughly twice the next-largest competitor. [Forbes summarized the 2026 environment](https://www.forbes.com/sites/javierhasse/2026/01/20/cannabis-ma-didnt-vanish-its-just-not-happening-in-public/) with a useful line: "Cannabis M&A didn't vanish, it's just not happening in public." [Viridian's deal tracker](https://dealtracker.viridianca.com) confirms the read - total cannabis M&A value through late 2025 hit roughly $2.10B across 49 transactions, up from $1.17B the year before, with fewer total deals and meaningfully larger average deal sizes. ## What to Watch in H2 2026 First, the Flowery transaction. Vireo's binding MOU for the Florida operator has been pending for months and remains the largest unclosed deal on Vireo's docket. A close would extend Vireo's Florida footprint past 80 stores and accelerate its position ahead of any adult-use vote. Second, rescheduling timing. Multiple buyers are already pricing rescheduling tailwinds into multiples. If the DOJ finalizes the Schedule III move in the first half of 2026, expect a second wave of M&A from acquirers sitting on capital waiting for that signal. Third, the next credit bid. Schwazze will not be the last cannabis operator to default on senior secured notes. Whichever well-capitalized strategic acquirer is willing to underwrite the operating risk on the next one will likely pick up assets at multiples that make Vireo's 2026 run look conservative. For an industry that spent two years being told it was in retreat, the deal flow tells a different story. The capital is here. The structures work. And the operators willing to move are building real scale on real terms. --- # The Most Innovative Cannabis Products of 2026 URL: https://www.tryheadquarters.com/blog/most-innovative-cannabis-products-2026 Published: 2026-04-22 Summary: The cannabis brands innovating in 2026 aren't winning on novelty. They're innovating on formulation sophistication, form-factor economics, and retail channel evolution. The cannabis brands worth watching in 2026 aren't winning on novelty. They're winning on formulation sophistication, form-factor economics, and retail channel evolution. The nine brands below are the clearest operator case studies we've seen this year. Each one is either redefining a category, setting a new quality standard, or proving a retail thesis that the rest of the industry will follow. ### Wyld - THC Sparkling Waters Wyld is [#1 in edibles in seven states](https://www.headset.io/brands/wyld) (AZ, CA, CO, MI, OR, WA, NV), but the 2025–2026 story is the hemp-THC sparkling water line. Seven flavors across two dosing tiers, with cannabinoid stacks that pair THC with CBD, CBG, or CBC depending on the use case - Active, Mood, Bliss, Refresh, Restore, Bright, Chill. The formulation work (multi-cannabinoid ratios tied to named effects) is what sets this apart from the flood of single-cannabinoid hemp drinks. Retail matters here too. Target's Minnesota THC beverage pilot [expanded to all 72 MN stores by April 2026](https://www.marijuanamoment.net/target-expands-involvement-in-hemp-thc-drinks-market-with-72-new-licenses-in-minnesota/), with Wyld as one of the flagship brands. That's the strongest mainstream shelf signal any cannabis-adjacent brand has pulled off this year. ### CAT4 by Catalyst - ECCO-Certified Top-Tier Flower CAT4 is the rare case where the brand name is the testing standard. CAT4 panels screen for 144+ contaminants, compared to California's mandatory CAT3 panel of 66 pesticides ([SC Labs](https://www.sclabs.com/services/cannabis-testing-services-menu-ca/)). The hook isn't vertical integration - it's that you know exactly what you're smoking. The credibility problem CAT4 solves is real. A Los Angeles Times investigation found that [more than half of legal cannabis products in California contain chemicals for which there is no public safety monitoring](https://www.latimes.com/california/story/2024-12-19/california-weed-cleanup). In response, Catalyst founder Elliot Lewis co-launched ECCO (Environmental and Consumer Compliance Organization) in late 2024, with monthly random dispensary-shelf audits and publicly published results. [Lewis's framing](https://www.greenstate.com/business/ecco-cannabis-cohort/) isn't subtle: *"If you don't meet the ECCO standard, you ain't medicine. And if you're selling poison, you ain't selling medicine."* Selling exclusively through [30+ Catalyst California dispensaries](https://catalyst-cannabis.com/?utm_source=headquarters&utm_medium=blog&utm_campaign=most-innovative-cannabis-products-2026&utm_content=cat4) at entry-level pricing is the other half of the innovation: the cleanest product on the shelf isn't a premium tax. ### Protab (Level) - Cannabinoid Tablets Protab has been the [#1 capsule brand in California](https://www.headset.io/brands/level) since Q4 2025, and the catalog is the reason. Protab 25mg comes in Sativa, Hybrid, Indica, CBD, CBDa, and CBG. Protab+ 30mg layers in effects-based multi-cannabinoid blends (Boost, Lights Out, Recover). Protab Max, Protab 50, and Protab 100 climb the dosing ladder. Tablingual adds a 5mg sublingual microdose tier. There's also a hemp-derived line available in all 50 states. The depth here - one dose-controlled form factor, 20+ configurations - is the innovation. It's also a clean read on where the edibles/ingestibles market is heading: effects-first, cannabinoid-ratio literate, and no longer anchored to the gummy. Founder Dr. Chris Emerson (PhD, small-molecule chemistry) [put it this way](https://usmanufacturingreport.com/article/level/): *"When I founded the company in 2015, no one was talking about effects-based product formulations."* A decade later, every serious operator is. ### Magic Cactus - THC Sparkling Prickly Pear What makes Magic Cactus worth writing about is the positioning: it is explicitly *not* a cocktail mixer. It's an alcohol alternative. Founder Jonny Locarni lost his father to alcoholism in 2020 and built the brand on that premise - 10% of profits go to substance-abuse treatment organizations. [The full origin story](https://magiccactus.com/pages/our-story) is worth reading. Retail footprint as of 2026: Sprouts Farmers Market in Texas and Florida (~115–120 stores at $15.99/4-pack), plus Hi Touch-distributed shelves at Whole Foods, Erewhon, and Lazy Acres across SoCal. Direct-to-consumer ships to 22 states. Won the [Prepared Foods Spirit of Innovation Award](https://www.preparedfoods.com/articles/129921-product-development-with-a-purpose-the-story-behind-magic-cactus) in the retail beverage category. ### Jeeter - Quad-Infused Pre-Rolls Infused pre-rolls are the [fastest-growing pre-roll sub-category nationally](https://blunttalkzz.com/articles/the-20-most-popular-pre-rolls-in-new-jersey-2025-flavor-potency-fan-favorites) - up 139.7% YoY in New Jersey, now 60% of California's pre-roll market versus 7% in newer states. Jeeter sits at the apex. The Quad-Infused line launched simultaneously in Arizona, California, and Michigan in March 2025 and expanded into New York that September. The formula: premium flower + THCA (or liquid) diamonds + live rosin + terpenes + kief finish, hand-mixed, across 20+ strains. Jeeter is the [#1 pre-roll brand in California](https://daysavers.com/preroll-blog/top-prerolls/state-and-provinces/) ($99M, 13.9% share), Arizona ($45M, 23% share), Massachusetts, Michigan, and by March 2026, Missouri. When every pre-roll maker is chasing the infused tier, the market leader raising the ceiling is the story worth tracking. ### Trail Magic - Hemp-THC Iced Tea Lemonades Trail Magic has a clear occasion and sticks to it: the outdoors. Four half-and-half iced tea/lemonade flavors, two sparkling SKUs, available in 3mg, 5mg, and 10mg Delta-9 tiers. The brand is from the team behind Minneapolis Cider Company - and [Trail Magic has already surpassed cider sales](https://tcbmag.com/tcb-100-people/david-oneill-jason-dayton-and-rob-fisk/) at MCC. The Half & Half Classic won [Best Infused Ready-to-Drink at the 2024 High Spirits Awards](https://www.startribune.com/minnesota-cannabis-beverage-company-wins-national-recognition/600356443). Retail now includes the MCC taproom (the largest cider taproom in the U.S.), hundreds of Minnesota outlets, Total Wine, and 11 Target stores as part of the October 2025 MN pilot. The monthly Trail Magic Hiking Club activation is the clearest community-building play any cannabis beverage brand has executed. ### Jaunty - Liquid Diamonds 1.5g AIO Launched in late March 2026, Jaunty's Liquid Diamonds 1.5g all-in-one is the most recent drop on this list and arguably the most technically interesting. It pairs High Terpene Extract (15–40% terpenes, industry standard) with True Terpenes' proprietary Headstash™ technology, which restores the ultra-light thiols, esters, and aldehydes that typically off-gas and disappear during extraction. Jaunty brands the combined output as "Living Spectrum." Five launch SKUs - Apples & Bananas, Magic Melon, Pineapple Whip, Ruby Red Diesel, plus a 4/20 "Waldos Super Boof" collab with the creators of the term "420." Jaunty was [New York's top-selling cannabis vape brand](https://honeysucklemag.com/jaunty-from-hempire-to-empire-new-york-cannabis/) coming into 2025 and distributes to effectively every licensed dispensary in NY's 260+ store network. ### Wynk - THC+CBD Balanced Microdose Seltzer The product lineup spans 2.5mg, 5mg, and a 10mg Lemonade Seltzer line that launched April 2025 - all THC+CBD balanced, 0 calories, 0 sugar, 0 alcohol. The balanced ratio is the formulation hook; the founder background is the operator-narrative hook. Co-founder Angus Rittenburg is a [former Tesla mechanical design engineer](https://www.businessinsider.com/what-learned-working-tesla-helped-me-start-business-2025-11) (Model 3 battery architecture, 2015–2017) who brought a manufacturing-discipline playbook to a category still learning how to scale CPG. Wynk is the only beverage brand on this list landing in *both* Target's Minnesota pilot and Sprouts' Texas/Florida rollout. ### Sublime (Feel Sublime) - Savory Craft Edibles The edible category is overwhelmingly sweet. Sublime is building in the savory white space. Spicy Southwest Pretzels (sourdough pretzel nuggets, jalapeño-ranch seasoning, blue agave syrup; 100mg THC per bag, 10mg per serving) is the flagship. Lemon Tea Cake Bites reformulated from 50mg legacy medical cakes to 10mg recreational bites. The catalog extends into Chili Limon Popcorn, a salted pretzel milk chocolate bar, and Kona sea salt caramel chews. Operating across Arizona, New Mexico, and Oregon as a craft producer, Sublime is the clearest example on this list of a brand betting that format and flavor innovation - not dose escalation - is where edibles go next. ### The Pattern Three themes tie this list together: 1. **Formulation has matured:** multi-cannabinoid stacks tied to named effects, HTE + proprietary terpene tech, effects-first dose architectures. 2. **Retail channels are evolving:** Target, Sprouts, Whole Foods, and Erewhon are now viable distribution surfaces for hemp-derived products, with implications that will ripple back into THC retail. 3. **Format innovation is beating novelty:** the brands winning in 2026 are refining economics and execution on categories the industry has spent years defining - pre-rolls, tablets, seltzers, savory edibles - not inventing something that has no precedent. For operators thinking about which brands to stock, partner with, or benchmark against in 2026, this is the cohort worth knowing. --- # Why Cannabis AR Metrics Matter More Than Your Monthly Revenue URL: https://www.tryheadquarters.com/blog/why-cannabis-ar-metrics-matter-more-than-your-monthly-revenue Published: 2026-04-13 Summary: Cannabis wholesale brands are paying federal taxes on revenue they haven't collected. Cannabis wholesale brands are paying federal taxes on revenue they haven't collected. This single sentence explains why more than 4,000 licensees surrendered their permits in the 18 months leading up to 2026, and why an industry generating roughly $30 billion in revenue last year is simultaneously carrying an estimated $2.24 billion in unpaid receivables. Under Section 280E, cannabis businesses owe federal tax on gross profit - accrued, not collected - at effective rates between 40% and 70%. Meanwhile, the industry's average invoice sits 300 days past due, more than triple the B2B benchmark of 90. A brand that ships $500K of product on Net 30 in Q4 books the revenue, accrues the tax liability, and then waits ten months to see the cash. The IRS does not wait ten months. That gap is where operators die. ## DSO Is the Leading Indicator of Solvency Monthly revenue is a lagging vanity metric in cannabis wholesale. Days Sales Outstanding is the leading indicator of whether the business survives the next tax quarter. DSO tells a CFO exactly how much recognized revenue has not yet converted into usable cash - which is the figure that determines whether 280E payments can be funded without emergency borrowing. The benchmarks operators should be tracking against: | Channel | Target DSO | Concern | Crisis | |---|---|---|---| | Wholesale (Net 30) | 30–40 days | >55 days | >75 days | | Wholesale (Net 60) | 60–75 days | >90 days | >120 days | | Distributor to Brand | 35–50 days | >65 days | >90 days | An $8M brand sitting at 73 days DSO - roughly where most cannabis wholesalers actually live - has $1.6M of working capital permanently frozen in receivables that should be cycling back every 30. At the cannabis industry's 8–12% cost of capital, that's $128K–$192K of pure opportunity cost every year. It does not show up on the P&L. It just quietly reduces the true return on every dollar the brand invests. Then the quarterly 280E payment arrives on revenue shipped the prior quarter but not yet collected. That is the death spiral, and it is the single most common failure mode of the post-2021 cannabis correction. ## The Collection Curve Is Unforgiving Once an invoice passes 90 days, recovery probability drops below 50%. At 180 days, it's 20–40%. After two years, under 10%. A $100,000 receivable at 30 days past due is worth about $80,000 in expected recovery. The same receivable at 180 days is worth $20,000. Waiting a quarter to chase a delinquent account isn't a back-office oversight - it's a material destruction of enterprise value. The highest-leverage intervention is not collections. It's pre-credit due diligence. CannaBiz Credit Association data shows companies running even basic credit checks are 60% less likely to end up in collections. Most cannabis brands still extend terms on relationships and reputation. That is subsidizing the worst customers with working capital stripped from the best ones. ## Three Metrics Wholesale CFOs Should Be Reviewing Weekly **DSO**, segmented by customer type, geography, and product category. Aggregate DSO hides the single-account concentration that kills brands. **Collection Effectiveness Index (CEI)** - how much of the collectable AR was actually collected in the period. Above 80% is functional; below 75% signals a process, staffing, or policy failure. CEI isolates collections performance from sales volatility in a way DSO cannot, which is why it's the better diagnostic when sales teams turn over and new reps stop enforcing terms. **Cash Conversion Cycle**, integrating DSO with inventory days and payable days. One operator that tightened CCC from 73 days to 48 freed $120,000 in working capital without raising a dollar of new capital - internally generated liquidity in an industry where external financing is scarce and expensive. ## Where Does Your Brand Actually Sit? Most cannabis wholesale brands can be placed on one of four rungs. Finding your level is the first honest step toward fixing the cash problem. **Level 1 - Reactive.** No formal [aging report](/ar-dashboard). Collections happen when someone remembers. DSO unknown. 280E reserve calculated once a year at filing time. This is where the majority of small- and mid-size brands actually sit, and where most of those 4,000+ license surrenders originated. **Level 2 - Aware.** Monthly aging report. Documented terms. Quarterly DSO. Monthly 280E reserve. Collections outreach begins at 60+ days past due - which is already on the wrong side of the recovery curve. **Level 3 - Proactive.** Weekly aging reviewed by the CFO. Tiered credit policy: Tier A Net 30 for chains with 12+ months clean history, Tier B Net 15 for newer accounts, Tier C COD for anything unverified or previously delinquent. Mandatory credit checks before terms are extended. Structured collections escalation starting at Day 20 (ten days before due). A 13-week cash flow forecast built on probability-weighted collections, not flat assumptions. 280E reserves adjusted weekly. This is the level where brands stop reacting to cash crises and start preventing them. **Level 4 - Strategic.** Real-time AR dashboard integrated with ERP and POS. CCC benchmarked quarterly. Sales compensation tied to collected cash rather than booked revenue - typically 20–30% of commission held until payment receipt, with bad-debt charge-back on write-offs within twelve months of origination. AR quality actively marketed to lenders as a competitive advantage during refinancing conversations. The gap between Level 1 and Level 3 can be closed in 90 days with dedicated focus. The cash flow improvement from that transition will typically exceed any marketing or sales initiative the brand could undertake in the same window - and it is funded entirely by cash that already exists on the balance sheet, trapped inside aging invoices. Revenue is what a brand has theoretically created. DSO tells you how much of it will actually exist when the 280E bill comes due. In a cannabis wholesale environment, the second number is the only one that matters. Common questions: Q: What DSO should a cannabis wholesale brand target? A: On Net 30 wholesale terms, 30 to 40 days is healthy, above 55 days is a concern, and above 75 days is a crisis. Most cannabis wholesalers actually operate near 73 days, which leaves roughly a full quarter of revenue frozen in receivables that should be cycling every 30 days. Q: How much does a day of DSO actually cost? A: An $8M brand at 73 days DSO has about $1.6M of working capital permanently trapped in receivables. At the industry cost of capital of 8 to 12%, that is $128K to $192K of opportunity cost every year, and it never appears anywhere on the P&L. Q: Why is DSO more important than monthly revenue in cannabis? A: Section 280E taxes gross profit when revenue is booked rather than collected. Revenue tells you what the brand theoretically created; DSO tells you how much of it will exist as cash when the tax payment comes due. Only the second number determines solvency. --- # Fragmented Systems, Phantom Receivables: The Data Problem Behind Cannabis AR Aging URL: https://www.tryheadquarters.com/blog/fragmented-systems-phantom-receivables-the-data-problem-behind-cannabis-ar-aging Published: 2026-03-30 Summary: Most cannabis brands don't have a collections problem. They have a data problem that makes collections impossible to manage. Most cannabis brands don't have a collections problem. They have a data problem that makes collections impossible to manage. Industry-wide delinquent payments have crossed $3.8 billion nationally, with projections pushing toward $4.2 billion. Those numbers are alarming, but they obscure a more fundamental issue. Before a brand can collect on overdue invoices, it needs to know which invoices are actually overdue, by how much, and from whom. For a surprising number of cannabis wholesale operations, the aging report that's supposed to answer those questions is structurally wrong before anyone opens it. The root cause isn't negligence. It's architecture. Cannabis brands operate across a stack of disconnected systems that were never designed to produce a unified view of receivables. The gaps between those systems generate phantom balances, misallocated payments, and aging buckets that don't reflect economic reality. ## The Four-System Problem A typical cannabis brand runs at least four systems that touch AR data: a state-mandated seed-to-sale platform (Metrc, BioTrack), a B2B wholesale marketplace (LeafLink, Distru, Apex Trading), an accounting system (usually QuickBooks Online or Xero), and one or more spreadsheets handling the reconciliation that none of these platforms do natively. Each system has its own data schema, its own transaction identifiers, and its own timing conventions. An order placed on LeafLink generates one record. The shipment logged in Metrc generates another. The invoice created in QuickBooks generates a third. And the payment - if it arrives - may not reference any of those identifiers clearly enough to close the loop automatically. The result is that the official [AR aging](/ar-dashboard) report, which lives in the accounting system, is only as accurate as the manual work that connects it to order, shipment, and payment data from the other three platforms. When that manual work falls behind - and it routinely does - invoices sit in the wrong aging bucket, payments go unmatched, and the report becomes a lagging indicator of what someone last had time to reconcile rather than a real-time picture of exposure. ## Cash Makes Everything Worse In most wholesale industries, electronic payments create a clean audit trail: payment hits the bank, remittance data ties it to an invoice, the AR subledger updates. Cannabis doesn't get that luxury. Federal banking restrictions mean a significant share of wholesale transactions still settle in cash or through workaround payment channels that strip out invoice-level detail. When a dispensary drops a lump cash payment covering three invoices - or pays 80% of one invoice and 60% of another in a single deposit - the accounting team faces a matching problem that no system in the stack solves automatically. The most common workaround: apply the payment against the oldest open invoices and move on. This clears the aging report cosmetically but misallocates the cash economically. The invoices that were actually paid may still show as open. The ones that weren't may appear current. Cross-industry data on cash application shows that unapplied or misapplied payments are one of the primary drivers of aging report distortion even in industries with full banking access. In cannabis, where cash volume is higher and remittance data is thinner, the distortion compounds. A brand running $500K in monthly wholesale credit sales with even 10% misapplied cash is carrying $50K in phantom receivables that inflate aging buckets and distort DSO calculations every single month. ## Invoice Disputes That Never Close Incomplete or inaccurate invoicing is a known pain point in cannabis wholesale. Missing license numbers, mismatched pricing from promotional agreements, incorrect quantities against what Metrc shows as transferred - these discrepancies trigger disputes that stall payment. That's a collections problem. But it's also an aging-report problem, because disputed invoices keep aging even when the balance isn't genuinely delinquent. Without a disciplined process for flagging disputed invoices separately from truly overdue ones, the 60–90 day bucket becomes a mix of two fundamentally different categories: customers who won't pay and invoices that can't be paid until the brand fixes its own paperwork. Finance teams looking at a blended aging summary can't distinguish between credit risk and operational error - which means they can't prioritize correctly. The data hygiene issue runs deeper than individual disputes. When customer master records aren't standardized across systems - "Green Leaf Dispensary" in QuickBooks, "Green Leaf LLC" in LeafLink, "GREENLEAF-001" in Metrc - even basic aggregation by customer becomes unreliable. Concentration risk hides behind inconsistent naming. A brand might not realize that its three largest aging balances all belong to the same retail chain operating under different entity names in different systems. ## The Spreadsheet Tax The natural response to all of this fragmentation is spreadsheets. Export the aging from QuickBooks, pull order data from the marketplace, cross-reference against Metrc manifests, manually build the reconciled view. Most cannabis finance teams do some version of this weekly or monthly. The problem isn't that spreadsheets are inherently bad. The problem is that they're inherently fragile, and in cannabis, the reconciliation workload is already heavy enough from compliance reporting that AR aging often gets deprioritized. When the spreadsheet reconciliation falls two or three weeks behind, the aging report that leadership reviews is a snapshot of what was true at the last reconciliation, not what's true now. Manual processes also introduce errors that compound over time. A formula that doesn't account for a credit memo. A customer name that doesn't match across tabs. A payment that gets double-applied because two people touched the same file. Each of these is individually minor and collectively corrosive - and in cannabis, where the reconciliation workload already includes compliance reporting across Metrc and multiple sales channels, these errors accumulate faster than most teams can catch them. ## Why This Matters Beyond the Aging Report Distorted AR aging isn't just an accounting nuisance. It cascades into decisions that cost real money. **Bad-debt reserves get set wrong.** GAAP requires estimating allowance for doubtful accounts based on aging analysis. When the aging buckets are polluted with misapplied cash and unresolved disputes, the loss-rate assumptions applied to each bucket produce unreliable reserves - either understating risk (making the balance sheet look stronger than it is) or overstating it (depressing reported earnings unnecessarily). **Financing gets harder.** Cannabis brands increasingly need AR-backed financing or payment-guarantee programs to manage working capital. Lenders and platforms evaluate the quality of receivables based on aging data, historical collection rates, and reconciliation discipline. A brand whose aging report doesn't tie cleanly to bank deposits and customer records will either pay a higher discount rate or get declined entirely. **Credit decisions stay reactive.** The strategic value of an aging report is in driving credit policy: tightening terms on chronically late payers, expanding credit to reliable ones, cutting off accounts that cross defined thresholds. When the data is unreliable, these decisions get made on gut feel and sales-team advocacy rather than evidence. Brands keep shipping to accounts that should be on credit hold because nobody trusts the numbers enough to enforce the policy. ## Three Things That Actually Help **Standardize customer master data across every system.** Legal entity name, license number, and a single internal customer ID should be consistent from marketplace to Metrc to QuickBooks. This is unglamorous work. It's also the single highest-leverage fix for aging accuracy, because it makes aggregation, concentration analysis, and payment matching reliable at the customer level. **Separate disputed invoices from delinquent ones in reporting.** Whether through a custom field in QuickBooks, a status tag in the marketplace platform, or a column in the reconciliation spreadsheet - disputed invoices need to be visually and analytically separated from invoices that are simply unpaid. This one change makes the 60–90+ bucket dramatically more actionable. **Reconcile weekly, not monthly.** Monthly reconciliation means the aging report is always stale by definition. A weekly cadence - even a lightweight one focused on matching payments received in the last seven days to open invoices - keeps the data fresh enough to drive real-time collections decisions rather than retrospective cleanup. None of these require a platform migration or a six-figure software investment. They require process discipline and the recognition that an aging report built on fragmented, unreconciled data isn't a reporting tool - it's a liability. --- # Why Cannabis Operators Can't Pay Their Bills on Time URL: https://www.tryheadquarters.com/blog/why-cannabis-operators-cant-pay-their-bills-on-time Published: 2026-03-19 Summary: When your customers don't pay you on time, you can't pay your vendors on time. In most industries, a revolving credit facility absorbs that timing gap. In cannabis, there is no credit facility. When your customers don't pay you on time, you can't pay your vendors on time. In most industries, a revolving credit facility absorbs that timing gap. In cannabis, there is no credit facility. Consider an operator running $500K in monthly wholesale credit sales at a healthy DSO of 30 days. That's $500K in receivables outstanding at any given time - manageable, predictable, plannable. Now let DSO drift to 60 days. The same sales volume, but $1 million is now locked in unpaid invoices. That additional $500K didn't come from a new investment or expansion. It's cash that customers are sitting on, and it has to come from somewhere. In practice, it comes from the AP stack: vendor payments get pushed, payroll gets tight, tax remittances slip. The math is punishing because the leverage works in both directions. Each additional day of DSO locks up approximately 3.3% of monthly revenue in receivables. For operators already running at compressed margins - Green Thumb's gross margin dropped from 53.7% to 45.4% in Q4 2025, a pattern repeated across MSOs - there is no margin cushion to absorb the hit. AR slippage doesn't just strain cash flow. It breaks the operating model. ## Why Cannabis Has No Shock Absorber In traditional CPG, a manufacturer dealing with slow-paying retailers can draw on a bank line, factor receivables through established programs, or access supply-chain finance at reasonable rates. Cannabis operators have almost none of these options. Thirty to fifty percent of wholesale transactions are still cash-based because mainstream payment rails remain largely closed to the industry. Where ACH or wire transfers are available, they often route through specialized cannabis payment processors with longer settlement windows, higher fees, and more reconciliation friction. A payment that's "sent" on day 28 of net-30 terms might not actually hit the operator's account until day 35 or 40 once processing, compliance holds, and bank-side clearing play out. Meanwhile, the industry faces approximately $3 billion in debt maturing by the end of 2026, with five major MSOs alone holding over $1.8 billion in upcoming obligations. Capital markets remain effectively closed for most operators. When external financing is scarce and expensive, the cash-conversion cycle becomes the entire financial strategy - and AR collections become the single most important variable in that cycle. ## The Feedback Loop That Vendors Feel First When AP teams are forced into triage mode, vendors absorb the impact in a predictable sequence. Non-critical suppliers get stretched first. Then secondary vendors hit payment rotation - paid only when their product or service is immediately needed. Eventually, even strategic suppliers start seeing delays, shortened orders, or requests to restructure terms. This cascades upstream. A brand that's paid late by retailers delays payments to cultivators and packaging suppliers. Those upstream vendors face their own AP squeezes, affecting labor, inputs, and facility costs. The entire value chain decelerates - not because demand disappeared, but because cash is trapped in aging receivables at one node. The concentration dynamics in cannabis amplify this. Regulatory barriers to interstate commerce mean a supplier can't simply redirect inventory from a slow-paying California retailer to a faster-paying account in Michigan. Licensing, compliance, and distribution constraints lock operators into geographic dependencies. When a major buyer stretches terms, the supplier's options are limited: absorb the delay, cut the customer off and lose the volume, or pass the pain to their own vendors. ## Which Operator Are You? Operators tend to fall into one of four postures on the AR-to-AP spectrum, and being honest about where you sit determines what to fix first. **Strategists** run proactive credit policies, structured collections, and deliberate vendor segmentation. Their vendors get paid predictably. These operators treat cash conversion as a board-level metric. - **Jugglers** sell aggressively on terms, collect reactively, and use whatever capital buffer they have to smooth the gaps. Vendors get paid - until the buffer runs out, at which point payment patterns become volatile fast. - **Survivors** maintain tight AR controls but operate with minimal capital reserves. When collections are on track, everything works. One or two large accounts stretching terms can tip the entire AP schedule into crisis. - **Reactors** have weak AR processes, thin capital, and default to cash firefighting. Vendors experience chronic late payments and eventually either tighten terms to prepay or walk away entirely. Most operators who think they're Strategists are actually Jugglers or Survivors - and the distinction matters, because the failure mode is different. Jugglers blow up when external capital dries up. Survivors blow up when a single large customer decides to stretch from net-30 to net-60. ## Three Moves That Shift the Curve This isn't a problem that requires an 18-month transformation to start addressing. Three moves compress the AR-to-AP cascade immediately. - **Run a real aging analysis - segmented by customer, not just in aggregate.** Most operators track DSO as a single number. That average masks the distribution. You likely have a cluster of accounts paying on time and a tail of accounts rolling past 60 or 90 days that disproportionately consume both cash and collections bandwidth. Identify the tail. Quantify it. That's where the money is trapped. - **Tie credit terms to payment behavior, not just relationship tenure.** A customer who's been buying for two years but has drifted from net-30 to net-55 over the last six months is a higher risk than a newer account paying on day 25. Segment your book by actual payment patterns and adjust terms accordingly - shorter windows, tighter limits, or prepay requirements for chronic stretchers. - **Build a vendor-priority matrix before you're in triage.** Decide now - not during a cash crisis - which vendors are critical and irreplaceable versus commoditized and substitutable. When AR slippage forces payment trade-offs (and it will), the operators who've already mapped their vendor hierarchy make faster, less damaging decisions than those figuring it out under pressure. The cannabis industry projected just 4% MSO revenue growth in 2026. In a low-growth, margin-compressed environment, the operators who survive aren't necessarily the ones with the best products or the most locations. They're the ones who collect faster than they owe. --- # QuickBooks for Cannabis: Multi-Entity Financial Consolidation URL: https://www.tryheadquarters.com/blog/quickbooks-for-cannabis-multi-entity-financial-consolidation Published: 2026-03-09 Summary: 9 out of 10 of cannabis companies run their books on QuickBooks, even though it has has zero native consolidated reporting. 9 out of 10 of cannabis companies run their books on QuickBooks. Most of those companies operate at least three legal entities across multiple states. QuickBooks Online has zero native consolidated reporting. That gap - between how cannabis businesses are structured and what their accounting platform actually does - is where controllers lose entire weeks every month to manual Excel exports, mismatched charts of accounts, and consolidation workbooks that break the moment someone miscodes a transaction. Our finance team uses a QBO add-on called JustConsolidate to run [multi-entity consolidation](/fa-services) for cannabis clients, and it eliminates the spreadsheet dependency for a fraction of what enterprise platforms cost. ## The Consolidation Gap in QBO Vertical integration across cultivation, manufacturing, distribution, and retail typically means separate licenses and often separate entities at each stage. Layer in 280E cost segregation strategy, non-plant-touching management companies for banking access, and liability isolation across verticals, and a mid-size MSO can easily hit 10-15 entities before they've expanded beyond two states. Each of those entities lives in its own QBO file. There's no consolidated P&L, no combined balance sheet, no unified cash flow statement. The standard workaround is exporting trial balances from each entity into Excel and manually building consolidation workbooks - a process that takes half of all businesses six or more days per close cycle. For cannabis MSOs dealing with intercompany supply chains, state-specific COA variations, and 280E documentation requirements, month-end close stretches to 10-15 days versus 3-5 for a comparable traditional retail operation. That's not a minor time sink. At loaded Finance Controller rates, it's tens of thousands of dollars annually spent on reconciliation labor rather than strategic finance work. ## How JustConsolidate Works JustConsolidate sits on top of your existing QBO ecosystem. It connects your subsidiary entities and consolidates their financials into a designated parent company - all within QuickBooks. No CSV exports. No spreadsheet reconciliation. No separate reporting platform to learn. The setup follows four stages: **1. Connect your entities.** Create a new QBO company to serve as your consolidation parent (requires QBO Plus or Advanced for the Category field used in division tracking). Then connect each subsidiary through Intuit's OAuth - a few clicks per entity, no manual data entry. Subsidiaries can be on any QBO tier since JustConsolidate only reads their data. You can set ownership percentages if you need proportional consolidation rather than the default 100% equity method. **2. Map your charts of accounts.** This is the most time-intensive step, but it's a one-time effort. JustConsolidate runs three rounds of auto-matching - exact match, then 80%+, then 50%+ similarity - and surfaces remaining unmapped accounts for manual alignment. For cannabis operators with state-specific COA variations across entities, this is where you standardize everything into a single parent structure. Bulk mapping and Excel import/export options speed up the process for larger entity counts. **3. Run the consolidation.** Select a fiscal month, click "Run Workflow," and JustConsolidate extracts subsidiary balances and reformats them to your parent COA in trial balance format. You can process all subsidiaries simultaneously. Review the proposed journal entries, confirm, and post — the entries land in your parent QBO company with division tags identifying each subsidiary by name and Realm ID. **4. Handle intercompany eliminations.** This is optional but critical for cannabis operators running vertically integrated supply chains where product moves from cultivation to manufacturing to distribution to retail across separate entities. Designate an elimination division, select the intercompany accounts, and JustConsolidate proposes balanced elimination entries based on current-period activity. The system flags imbalances automatically - if your proposed elimination doesn't balance, it means intercompany transactions aren't recorded consistently across subsidiaries, and you know exactly where to look. ## Why This Matters for Cannabis Specifically Multi-entity consolidation isn't a nice-to-have in cannabis - it's a compliance and survival requirement. Three dynamics make it non-negotiable: **Intercompany supply chain visibility.** When your cultivation entity sells to your manufacturing entity, which sells to your distribution entity, which supplies your retail locations, every link in that chain is an intercompany transaction that must be eliminated on consolidation. Miss an elimination and you're double-counting revenue. In an industry where the IRS already scrutinizes cannabis financials at rates far above other sectors, inflated consolidated revenue is an audit magnet. **280E documentation integrity.** Proper COGS allocation under 280E requires entity-level precision. A consolidated view that traces cost flows across verticals, with clean elimination entries and documented intercompany pricing, gives your CPA defensible workpapers rather than a spreadsheet that took 12 days to build and contains formula errors. **Investor and lender reporting.** Capital providers need consolidated financials. Delivering them two weeks after month-end from a fragile Excel workbook signals operational immaturity. Delivering them from your accounting system, with clear subsidiary breakdowns and automated eliminations, signals a finance function that scales. ## The Cost Equation JustConsolidate runs $15/month base plus $5/month per connected entity. A five-entity cannabis operation pays $40/month. A ten-entity MSO pays $65/month. Compare that to the alternatives: Sage Intacct and NetSuite start north of $500/month with implementation costs measured in five and six figures. For operators already embedded in the QBO ecosystem who aren't ready for (or don't need) an enterprise ERP migration, JustConsolidate delivers 80% of the consolidation value at less than 10% of the cost. ## Getting Started If you're running multiple cannabis entities on QuickBooks and still consolidating in spreadsheets, JustConsolidate is available in the [QuickBooks App Store](https://quickbooks.intuit.com/app/apps/appdetails/justconsolidate/en-us/). Our finance team at HQ has implemented this for multi-entity cannabis clients and can help with the initial COA mapping, consolidation configuration, and intercompany elimination setup - the upfront work that determines whether the tool actually saves you time or just adds another system to manage. Common questions: Q: Does QuickBooks Online support multi-entity consolidation? A: Not natively. QBO provides no consolidated P&L, combined balance sheet, or unified cash flow across companies, and the Company Switcher offers no intercompany elimination. Operators either build Excel consolidation workbooks from exported trial balances or add a purpose-built consolidation layer on top of existing QBO files. Q: How long does cannabis month-end close actually take? A: Cannabis MSOs commonly run 10 to 15 days versus 3 to 5 for comparable traditional retail, and half of businesses spend six or more days on the consolidation step alone. The gap comes from intercompany supply chains, state-specific chart of accounts variation, and 280E documentation requirements. Q: Why do intercompany eliminations matter so much in cannabis? A: Vertically integrated operators move product from cultivation to manufacturing to distribution to retail across separate entities, and every link is an intercompany transaction requiring elimination. Missing one double-counts revenue, and inflated consolidated revenue is an audit magnet in an industry the IRS already scrutinizes heavily. --- # AlpineIQ vs. Klaviyo for Dispensary Email Marketing URL: https://www.tryheadquarters.com/blog/alpineiq-vs-klaviyo-for-dispensary-email-marketing Published: 2026-02-28 Summary: In a market where paid advertising tools are highly restricted, email is the highest-leverage owned channel a retailer has. In a market where paid advertising tools are highly restricted, email is the highest-leverage owned channel a retailer has - and the gap between a purpose-built ESP and a bolted-on email feature compounds every single week. ## Core Distinction Operators Miss AlpineIQ is a cannabis loyalty platform that happens to include email. Klaviyo is an ecommerce-native ESP that happens to be cannabis-friendly. That difference sounds semantic until you try to build a winback flow with conditional splits based on purchase frequency, product category, and days since last order - and realize one platform was engineered for exactly that workflow while the other is still catching up. Alpine launched AIQ Flows in January 2026 - event-driven automation with conditional splits and AI-powered logic. That's a significant step forward. But Klaviyo has been refining its visual flow builder for over a decade, with tens of thousands of ecommerce brands stress-testing every edge case. The distance between "we now support conditional splits" and "here are 15 pre-built flow templates with predictive branching, A/B testing at every node, and revenue attribution down to the individual message" is measured in years, not updates. Klaviyo closed fiscal year 2025 with $1.234 billion in annual revenue (32% year-over-year growth), serves 193,000+ paying customers, and posted $350 million in Q4 alone. That scale funds continuous product development around flows, segmentation, predictive analytics, and deliverability - the exact capabilities that determine whether email is a profit center or a checkbox. ## Plug-and-Play Trap AlpineIQ's appeal is obvious: one platform for loyalty, compliance, POS sync, and marketing. For a single-location operator getting started, that simplicity is genuinely attractive. But convenience has a ceiling. The operators who scale past three locations and $2M+ in annual revenue hit AlpineIQ's walls fast. The email builder is slower than any standalone ESP. The automation logic - even with Flows - lacks the depth required for sophisticated lifecycle programs. The template system doesn't support hybrid HTML editing, CLI-based workflows, or the kind of design system consistency that multi-location brands need. And you're locked into one vendor's roadmap for every function, which means if their email execution lags (it does), your entire marketing stack suffers. Klaviyo's architecture is the opposite: best-in-class email that integrates with everything else. The Klaviyo CLI lets technical teams manage campaigns, flows, and templates as version-controlled local files. The Flows API (currently in pilot) opens programmatic automation management. Built-in AI tools assist with subject lines, content generation, and send-time optimization. These aren't future promises - they're shipping product. ## Deliverability AlpineIQ does not operate its own email infrastructure. Under the hood, AIQ is a reseller built on SendGrid (Twilio). Your dispensary's emails are sent through SendGrid's shared IP pools alongside every other cannabis retailer senders on that infrastructure. Dedicated IPs are technically available through SendGrid's Pro tier, but AIQ adds an abstraction layer between you and that infrastructure. When deliverability problems surface, you're troubleshooting through a reseller who's troubleshooting through SendGrid. That's two degrees of separation from the actual sending layer. Klaviyo runs proprietary email infrastructure built on AWS. They own and manage the entire sending layer - their own MTAs, their own IP pools, their own deliverability operations team. Klaviyo maintains direct relationships with Gmail and Microsoft/Outlook. The platform handles native domain warming over 30-40 days, ISP feedback loops, automated bounce handling, and suppression logic in-house. Dedicated IPs are recommended at 1M+ emails/month and managed directly by Klaviyo's team. Their centralized Deliverability Hub gives operators real-time visibility into inbox placement by provider, domain health diagnostics, and actionable fixes. For an industry where email is often the only legal marketing channel, the difference between owning your sending infrastructure and renting shared pipes is existential. ## When to Run Both The smartest dispensary operators we work with aren't necessarily choosing one or the other - they're running both strategically. AlpineIQ earns its place for three specific use cases: - SMS: Klaviyo doesn't currently allow SMS marketing for dispensaries, and AIQ handles this natively through its POS integrations. - Reputation management: AIQ serves as an alternative sending platform for big blasts to older lists or segments with questionable deliverability history - keeping those sends off your Klaviyo domain so your primary sender reputation stays pristine. - Multi-POS environments: If you're a dispensary running Treez in some locations and Dutchie in others, AIQ's plug & play POS integrations can unify that data more easily than managing buildouts of custom Klaviyo integrations per system. ## Where This Goes The trajectory matters as much as the current state. Klaviyo is investing in CLI tooling, API-first automation management, and already has a Marketing AI Agent built into the platform. In three years, the most sophisticated dispensary operators will be running Klaviyo with AI agents directing creative strategy, segmentation decisions, and send-time optimization at a level that manual execution can't match. For email, it's Klaviyo. Build the stack accordingly. If you have already reached that conclusion and the question is how to move without losing your flows, segments, or sending reputation, we wrote up the migration path in detail: [AlpineIQ to Klaviyo migration for dispensaries](/aiq-to-klaviyo-migration). --- # Why QuickBooks Online Keeps Failing Cannabis Controllers (And What To Do About It) URL: https://www.tryheadquarters.com/blog/why-quickbooks-online-keeps-failing-cannabis-controllers-and-what-to-do-about-it Published: 2026-02-25 Summary: Cannabis controllers running multi-entity operations on QBO are burning 60 hours/month on manual consolidation work. Cannabis controllers running multi-entity operations on QuickBooks Online are burning 40 to 60 hours a month on manual consolidation work that a purpose-built system would eliminate. That's not a minor inefficiency. At a loaded controller cost of $85 to $120 per hour, the reconciliation labor alone represents $40,800 to $86,400 annually - before accounting for the errors it produces. The math gets worse from there. When you add audit exposure, 280E misallocation risk, and the three-system reconciliation trap most operators are stuck in, a six-entity cannabis operation on QBO faces roughly $640,900 in total annual cost attributable to platform inadequacy. For an industry where 280E already drives effective federal tax rates to 70-90% of gross profit, that's capital being incinerated on workarounds rather than deployed toward growth. ## The Architecture Problem QuickBooks Online was built for single-entity small businesses processing a few dozen transactions per day. Cannabis operations are the opposite of that. Forty-three states require vertical integration with separate legal entities for cultivation, manufacturing, distribution, and retail. Each entity needs its own QBO file. Each file is a silo. QBO's Company Switcher feature - the tool Intuit offers for multi-entity management - was designed for a freelancer toggling between an LLC and a side project. It provides zero intercompany elimination, zero automated reconciliation across entities, and no native consolidated reporting. QBO does offer a workaround: a third-party app called JustConsolidate and a Spreadsheet Sync feature that pipes financial data into Google Sheets for manual consolidation. But neither lives inside QBO itself. Getting them configured requires meaningful technical know-how, the output lands in a spreadsheet rather than your accounting system, and the workflow is clunky enough that most controllers without a finance-systems background will struggle to maintain it. Controllers still end up exporting CSVs from four or five QBO instances, manually mapping chart of accounts discrepancies, and building consolidation workbooks that break every time someone miscodes a transaction. The platform also degrades under volume. At 200-plus daily transactions - standard for a mid-size dispensary - QBO's performance starts to stall. Reporting lags. Bank feeds disconnect. The 25-user cap forces operators to rotate access credentials, creating audit trail gaps that regulators will eventually find. To be fair, scaling on QBO is technically possible. The platform does expose APIs, and operators with serious technical chops can build custom integrations that push QuickBooks beyond its native capabilities - automating intercompany entries, syncing inventory across entities, even wiring up real-time reporting dashboards. But "technically possible" and "operationally practical" are different conversations. You need developers who understand both the QuickBooks API surface and cannabis accounting specifics, and that intersection is vanishingly small. Most controllers are not in a position to architect and maintain custom middleware alongside their actual job. The AI angle makes this more interesting - and more complicated. With the rise of vibe coding and increasingly capable AI development tools, a growing number of savvier operators are bootstrapping their own solutions on top of QuickBooks APIs. The appeal is obvious: skip the six-figure ERP migration and build exactly what you need for a fraction of the cost. Some of these homegrown solutions are genuinely impressive. But the shelf life is the problem. Each new model release and capability increase tends to obsolete the tooling that came before it, meaning the integration you spent three months building in Q1 may need to be substantially rearchitected by Q3. Whether that time investment pencils out against just migrating to a purpose-built platform remains an open question. ## 280E: Where QuickBooks Becomes a Liability Section 280E is unforgiving. Cannabis businesses can only deduct cost of goods sold - every other ordinary business expense is nondeductible at the federal level. Proper COGS allocation requires granular cost segregation: direct labor, materials, and overhead tied to production versus everything else. QuickBooks has no native 280E support. No automated cost segregation. No dual-reporting framework that separates allowable COGS from disallowed expenses. Controllers are left building manual workarounds - shadow ledgers, custom fields repurposed beyond their design intent, and spreadsheets that sit outside the accounting system entirely. The consequences are measurable. Operators relying on QBO for 280E compliance routinely face $150,000 to $600,000 in IRS disallowances during examination. The IRS knows cannabis companies on generic accounting software are low-hanging fruit. Without defensible, system-generated cost allocation documentation, the audit defense comes down to a controller's spreadsheet against an examiner's methodology. Even with Trump's December 2025 executive order directing rescheduling of marijuana from Schedule I to Schedule III - which would sunset 280E's applicability - the timeline remains uncertain. The DOJ finalization is expected in the first half of 2026, but cannabis remains Schedule I until the rule is published. Every quarter of continued 280E exposure without proper cost segregation is another quarter of audit risk that compounds. ## The Three-System Trap Cannabis controllers don't just manage books. They reconcile three systems that were never designed to communicate: QBO for accounting, METRC or BioTrack for state seed-to-sale compliance, and a POS platform for retail transactions. Each system has its own data schema, transaction identifiers, and timing conventions. That reconciliation consumes 15 to 25 hours per week of skilled labor. Inventory discrepancies between the POS and METRC can trigger compliance holds. A mismatch between METRC and QBO can flag financial reporting irregularities. QuickBooks Pay explicitly prohibits marijuana-related transactions, which means even payment processing requires a separate workaround - typically a cannabis-specific payment processor that adds another reconciliation layer. The compounding effect is strategic, not just operational. When the controller's week is consumed by data reconciliation, there is no bandwidth left for the work that actually matters: cash flow forecasting, margin analysis by product line, or building the financial models that investors and lenders require. Controllers become expensive data-entry operators instead of strategic financial leaders. ## What Operators Should Do Now The migration trigger point is clear: 85% of cannabis operators running five or more entities on QBO migrate to a purpose-built platform within 18 months. Most wish they had moved sooner. For operators not yet ready to migrate, three immediate actions reduce exposure. First, build a hyper-detailed chart of accounts with explicit 280E cost segregation - every account should be tagged as allowable COGS or disallowed expense with no ambiguity. Second, establish weekly reconciliation protocols across all three systems with documented exception handling, not monthly catch-up sessions. Third, engage a cannabis-specialist CPA to review your 280E methodology now, not during audit preparation. For operators at the inflection point, purpose-built cannabis ERP platforms run $48,000 to $96,000 annually - a fraction of the hidden costs they replace. Native [multi-entity consolidation](/fa-services), real-time METRC integration, and automated 280E cost allocation eliminate the manual labor and reduce audit exposure simultaneously. Implementation runs eight to twelve weeks across five phases, with most operators achieving full ROI within three to six months. The question isn't whether QuickBooks will fail your cannabis operation. It's how much that failure is costing you right now, and how long you're willing to keep paying it. Common questions: Q: At what point should a cannabis operator leave QuickBooks? A: Five entities is the observed trigger. Roughly 85% of cannabis operators running five or more entities on QuickBooks Online migrate to a purpose-built platform within 18 months, and most report they should have moved sooner. Below three entities the migration rarely pays for itself. Q: What does QuickBooks cost a cannabis operator in hidden labor? A: Controllers spend 40 to 60 hours a month on manual consolidation. At a loaded rate of $85 to $120 per hour, the reconciliation labor alone runs $40,800 to $86,400 annually, before accounting for the errors it produces or the audit exposure those errors create. Q: What is the three-system reconciliation trap? A: Cannabis controllers reconcile three systems never designed to communicate: the accounting platform, the state seed-to-sale system, and a POS. Each carries its own schema, identifiers, and timing conventions, and the reconciliation consumes 15 to 25 hours per week of skilled labor that should be going to strategic finance work. --- # Duplicate SKUs Are Quietly Killing Your Cannabis Margins URL: https://www.tryheadquarters.com/blog/duplicate-skus-are-quietly-killing-your-cannabis-margins Published: 2026-02-19 Summary: Somewhere in your catalog right now, the same product is probably living under two different SKU codes. Somewhere in your catalog right now, the same product is probably living under two different SKU codes. Maybe it's "Gelato 41 3.5g" and "Gelato #41 1/8." Maybe it's a METRC package that got imported twice during a busy receiving shift. Maybe it's a budtender who created a new item on the fly because the right one wasn't showing up, and nobody ever cleaned it up afterward. These aren't rare edge cases. They're a structural feature of how cannabis retail operates - and they're eroding margins in ways that rarely show up cleanly on a P&L. --- ## The Scale of the Problem Retail industry research estimates that inventory distortion - driven substantially by duplicate and inaccurate SKU data - costs global retailers more than $1.77 trillion annually. Cannabis operators inherit every one of those problems and then layer on state-by-state track-and-trace requirements, high catalog churn, and limited access to capital. The result is that bad SKU data hits harder here than almost anywhere else in retail. When even 3–7% of an active catalog consists of duplicate or near-duplicate products, realistic range for most operators, the downstream effects compound quickly: - **100–300 basis points of margin leakage** from mispriced items, misallocated discounts, and vendor terms negotiated against inaccurate volume figures - **10–25% excess working capital** locked in safety stock that planners over-buffer because demand signals are fragmented across duplicate identifiers - **Elevated compliance risk** in markets like California, where audit discrepancy tolerances can run as low as 5%, and duplicate packages in METRC can push operators past that threshold without any physical product being missing These aren't hypothetical risks. They're a predictable consequence of the environments most cannabis retailers operate in. --- ## How Cannabis Creates the Perfect Conditions for Duplicate SKUs Three forces work together to make duplication nearly inevitable without active governance. **Multi-system complexity.** Cannabis retailers typically maintain at least three parallel inventory views simultaneously: physical stock, track-and-trace (METRC or equivalent), and POS or e-commerce. Each has separate identifiers. When synchronization fails teams often resolve the discrepancy by creating a new record rather than mapping to an existing one. The most common version: a METRC package gets imported into POS twice, creating two products pointing to the same physical inventory. **Strain naming chaos.** Unlike traditional CPG, cannabis has no standardized product naming convention. The same eighth can legitimately appear as "Gelato 41," "Gelato #41," "Gelato 3.5g," or "Gelato 3.5 gram" depending on who entered it and when. Each variation can generate a new SKU. When combined with batch-to-batch potency updates recorded as distinct products, it's common for a single physical product to accumulate several active identifiers over a few months. **Rapid assortment turnover.** Cannabis markets move fast - new strains, limited drops, evolving form factors. Operators add SKUs frequently to keep menus current, but invest far less in end-of-life management. The long tail fills up with overlapping records, and because no single SKU looks obviously wrong, the duplicates survive. --- ## The Three Ways Margins Bleed **1. COGS distortion.** Duplicate SKUs often carry different cost histories - different vendor prices, freight allocations, or promotional adjustments applied at different times. When sales for the same physical product scatter across multiple identifiers, margin analytics become unreliable. One copy of the SKU looks high-margin, the other looks like a drag. Pricing and buying decisions get made against the wrong numbers. **2. Working capital inflation.** When demand for a product is split across two or three duplicate SKUs, each one appears more volatile and less predictable than it actually is. Planners respond rationally to that signal: they hold more safety stock. Multiply that across a catalog of hundreds or thousands of items, and the result is meaningful cash tied up in inventory that wouldn't be needed if the data were clean. **3. Compliance exposure.** In METRC, the same physical batch can be represented as two distinct packages - a common side effect of incomplete receiving workflows or system conversions. Those duplicate packages cascade downstream into POS, then into reporting. When state auditors check, inventory appears to exist in two places simultaneously. Even with zero actual diversion, the operator faces the burden of demonstrating that - a costly and distracting process that clean data would have prevented entirely. --- ## What Clean SKU Data Actually Unlocks The inverse is worth stating clearly. Operators who invest in SKU hygiene don't just eliminate losses - they gain a genuine analytical edge. With consolidated, deduplicated product records, demand forecasting becomes meaningfully more accurate because historical sales reflect true velocity rather than fragmented signals. Category profitability becomes trustworthy, which makes vendor negotiations and assortment decisions easier to defend. Marketing attribution improves, because CRM and promotional programs are no longer crediting the wrong SKU for a sale. And compliance posture strengthens, because METRC records align with what's physically on the shelf. Cross-industry data supports this. CPG benchmarks show that roughly 20% of SKUs in large portfolios are marginal contributors - duplicates or near-duplicates that add complexity without adding revenue. Companies that have rationalized their catalogs consistently report improved forecasting accuracy and lower carrying costs, without meaningful revenue loss. --- ## A Practical Starting Point Fixing this doesn't require a multi-year transformation. Most operators can get meaningful signal in a few weeks by pulling a unified SKU extract from POS, METRC, and any active e-commerce or marketplace platforms, then running basic fuzzy-matching logic against brand, strain, package size, and potency fields. The clusters that emerge - groups of records that represent the same product under different identifiers - typically reveal both the scope of the problem and where the greatest financial impact is concentrated. From there, the path is straightforward: designate a single canonical record for each cluster, clean up the regulatory package records, archive the duplicates, and establish a centralized item creation workflow so new duplicates don't re-enter the catalog. The cannabis industry is young enough that most operators are still defining their core data architecture. Getting SKU governance right now - before catalogs grow another order of magnitude - is significantly easier than cleaning it up later. And in a margin environment this tight, the cost of waiting is real. Common questions: Q: How much do duplicate SKUs cost a cannabis retailer? A: When 3 to 7% of an active catalog is duplicate or near-duplicate, the effects run to 100 to 300 basis points of margin leakage from mispricing and misallocated discounts, plus 10 to 25% excess working capital locked in safety stock that planners over-buffer because demand signals are fragmented. Q: Why do duplicate SKUs form so easily in cannabis? A: Three forces compound: operators maintain at least three parallel inventory views with separate identifiers, cannabis has no standardized naming convention so the same eighth appears under several spellings, and rapid assortment turnover adds SKUs far faster than any end-of-life process retires them. Q: Can duplicate SKUs create compliance problems? A: Yes, and without any physical product going missing. In markets where audit discrepancy tolerances run as low as 5%, duplicate packages in the traceability system can push an operator past threshold on their own. The building is correct and the system is wrong, and the system is what gets audited. --- # Net Terms vs. COD: Managing Credit Risk for Cannabis Sales URL: https://www.tryheadquarters.com/blog/net-terms-vs.-cod-managing-credit-risk-for-cannabis-sales Published: 2026-02-05 Summary: More than $4 billion in outstanding receivables now circulates through the cannabis supply chain, with delinquencies surging as wholesale prices drop. More than $4 billion in outstanding receivables now circulates through the cannabis supply chain, with delinquencies surging as wholesale prices drop. For brands extending credit to retailers, the stakes are existential: each dollar trapped in AR is working capital you can't use to fund production, pay suppliers, or survive the next pricing shock. The decision between cash-on-delivery and net terms isn't a back-office policy choice. It's a strategic positioning decision that determines whether your brand builds market share or bleeds cash into uncollectible invoices. ## The Math Is Punishing A brand running $500,000 in monthly credit sales on Net 30 terms carries approximately $575,000-$625,000 in receivables at any given time -accounting for typical several week payment delays beyond stated terms. If DSO drifts from 30 to 60 days, you've got an additional $500,000 trapped in unpaid invoices. That's half a million dollars you can't deploy. Best-in-class distribution operations maintain DSO of 40-50 days with bad debt under 0.5% of sales. Most cannabis operators aren't hitting those benchmarks. And unlike traditional industries, Section 280E prevents you from deducting bad debt as an operating expense -you can only work around it through returns and allowances, requiring meticulous documentation that most brands lack. ## When COD Makes Strategic Sense COD eliminates credit exposure entirely: zero aging reports, zero collection calls, zero write-offs. During extreme market volatility, COD operators avoid the cascading defaults plaguing credit-based competitors. Use COD or short terms when: - **New customer onboarding.** Start every relationship with COD or Net 15 with a deposit. Trust is earned through payment performance, not promises. - **High-risk customers.** Any retailer showing deteriorating payment trends - average days to pay increasing, on-time percentage declining - should move to COD immediately. - **Market volatility.** In mature markets like California, Oregon, and Colorado where oversupply has crushed margins, conservative terms are survival strategy. - **Small transactions.** If credit administration costs exceed your profit margin on an order, COD simplifies everything. The tradeoff is real: businesses offering net terms capture sales from cash-constrained customers that COD operators lose. In crowded markets where multiple brands compete for limited retail shelf space, credit terms often determine supplier selection. ## The Risk-Based Tiering Framework Leading brands don't apply universal credit policies. They tier customers by creditworthiness and adjust terms accordingly. **Tier 1 (Lowest Risk):** Established retailers with 95%+ on-time payment history, strong financials, and consistent order volume. Offer Net 30-45 with credit limits up to 15-20% of their net worth. These customers earn flexibility through demonstrated performance. **Tier 2 (Moderate Risk):** Good payment history but thinner margins or moderate leverage. Net 30 with conservative limits (10% of net worth). Quarterly financial reviews. **Tier 3 (Elevated Risk):** Variable payment patterns, declining financials, or operating in distressed markets. Net 15 or COD with deposits. Weekly monitoring of payment status. Move to COD at first missed payment. **Tier 4 (High Risk):** Poor payment history, weak financials, small irregular orders. COD only. These accounts consume disproportionate administrative resources relative to revenue. Consider whether the relationship is worth maintaining. The graduation strategy matters: start restrictive, then expand terms as trust builds. New customers begin at COD or Net 15 with deposits. Months 1-3, graduate to Net 15 with a $5,000 limit if paid on time. Months 4-6, move to Net 30 with a $15,000 limit. Beyond month 7, expand based on performance. ## Quantifying the Credit Decision Run expected value analysis on every significant credit extension: A $50,000 order with 20% margin generates $10,000 profit under COD -100% probability of payment, $10,000 expected value. That same order on Net 30 to a creditworthy customer (98% payment probability) looks different: $10,000 profit × 98% probability = $9,800, minus 2% bad debt risk ($1,000 expected loss), minus financing costs (~$40 for 30 days). Expected value: approximately $8,760. The 12% expected value reduction from credit extension must be weighed against incremental sales volume. If offering terms increases your sales by more than 12%, net terms create superior outcomes despite credit risk. If not, you're subsidizing sales with your working capital. ## Three Actions to Implement This Week **Audit your current [AR aging](/ar-dashboard).** Calculate your actual DSO and compare it to your stated terms. If you're offering Net 30 but averaging 52 days to collect, you have a collections problem masquerading as a terms policy. Each additional day of DSO locks up approximately 3.3% of monthly revenue. **Segment your customer base.** Rank every account by payment performance over the past 90 days. Any customer whose on-time percentage dropped more than 15 points or whose average days to pay increased more than 10 days requires immediate credit review. Move deteriorating accounts to shorter terms before they become write-offs. **Document everything for 280E.** Since bad debt isn't deductible as an operating expense, structure write-offs as returns and allowances against gross receipts. This requires contemporaneous documentation - credit memos, customer correspondence, evidence of collection attempts. Build this discipline now, before you need it. The $2.24 billion AR crisis isn't distributed evenly. Operators with systematic credit management, risk-based tiering, and proactive collections will capture market share from competitors bleeding cash into uncollectible receivables. The brands that survive the current pricing environment won't be the ones with the best products - they'll be the ones who get paid. Common questions: Q: When should a cannabis brand require COD instead of net terms? A: Use COD for new customer onboarding, any retailer showing deteriorating payment trends, periods of extreme market volatility, and transactions small enough that credit administration costs exceed the profit margin. Start every new relationship at COD or Net 15 with a deposit and graduate on demonstrated performance. Q: How do you decide whether extending credit is worth it? A: Run expected value analysis. A $50,000 order at 20% margin yields $10,000 under COD. The same order on Net 30 to a creditworthy account yields roughly $8,760 after bad debt risk and financing cost. That 12% reduction pays only if offering terms lifts sales volume by more than 12%. Q: Can cannabis operators deduct bad debt? A: No. Section 280E prevents deducting bad debt as an operating expense. The only workaround runs through returns and allowances, which requires meticulous contemporaneous documentation that most brands do not maintain. That makes prevention through credit policy materially more valuable than recovery after the fact. --- # New York's 90-Day Payment Rule: Adapting Your AR Strategy to OCM Regulations URL: https://www.tryheadquarters.com/blog/new-yorks-90-day-payment-rule-adapting-your-ar-strategy-to-ocm-regulations Published: 2026-02-01 Summary: With industry-wide delinquent receivables now exceeding $4 billion - roughly 20% of revenue tied up in unpaid invoices - the margin for AR inefficiency has collapsed. Nearly two years into New York's formalized credit framework, the operational reality is clear: cannabis operators who treat AR as a back-office function are bleeding cash. With industry-wide delinquent receivables now exceeding $4 billion - roughly 20% of revenue tied up in unpaid invoices - the margin for AR inefficiency has collapsed. New York's 90-day payment structure created a defined ceiling on trade credit. Retailers purchasing on credit face a 30-day payment window before triggering COD restrictions. The framework didn't invent the AR problem, but it formalized the consequences - and two years of operation have surfaced what actually works for protecting cash flow. ## The Working Capital Squeeze The math is punishing. Each additional day of DSO locks up approximately 3.3% of monthly revenue in receivables. A brand running $500K in monthly credit sales that lets DSO drift from 30 to 60 days has an extra $500K trapped in unpaid invoices - capital that could fund inventory, payroll, or expansion. Industry benchmarks suggest 30-45 day DSO as the target range for cannabis operations. The sector's restricted banking access and thin margins leave no room for the 56-day median DSO common in traditional B2B. Yet many cannabis brands report effective collection cycles stretching well beyond 60 days, creating structural cash deficits that compound monthly. The timing pressure intensifies as the industry approaches a debt reckoning. Approximately $3 billion in loans come due for major MSOs by the end of 2026 - Curaleaf, Cresco, Trulieve, Ayr, and Verano collectively face over $1.8 billion in maturities this year alone. Operators carrying bloated receivables into this environment face a double squeeze: capital locked in AR precisely when debt obligations demand liquidity. ## What Two Years Have Taught Operators The New York market has functioned as a live laboratory for credit discipline. Operators who adapted early share common patterns. **Credit terms tightened faster than required.** The 90-day maximum functions as a ceiling, not a target. Brands maintaining cash flow discipline default to net-30 or net-45 terms, reserving longer windows only for accounts with established payment histories. New accounts start at COD or net-15 until they demonstrate reliability. **Collection cadence accelerated.** Waiting until day 60 to escalate a delinquent account wastes the window when intervention is most effective. Structured outreach starting at day 7 - friendly reminder, then firm follow-up at day 15, then escalation at day 30 - catches problems before they compound. The operators recovering cash fastest treat day 30 as the action threshold, not day 60 or 90. **Sales compensation realigned.** Commission structures that pay on shipment rather than collection create misaligned incentives that inflate DSO. The workaround: holdback models paying 80% on shipment and 20% upon cash receipt, or tying quarterly bonuses to portfolio collection rates. Sales teams vet retailer creditworthiness more carefully when their comp depends on actual payment. **Dispute resolution compressed.** Invoice disputes that drag for weeks destroy collection timelines. Contracts now commonly require written dispute notification within 3-5 business days; undisputed portions must be paid on schedule regardless. Finance teams building 48-hour dispute resolution capacity - investigating, issuing credits, or holding firm - prevent contested invoices from becoming aged receivables. ## The DSO Improvement Framework Operators targeting DSO reduction focus on four levers. **Invoice velocity.** The clock starts at delivery. Same-day invoicing with electronic delivery (not mailed paper) eliminates the 3-7 day lag that silently extends every collection cycle. Proof-of-delivery documentation ties the invoice date to an undisputable event. **Payment friction reduction.** ACH and wire transfers clear faster than checks and create cleaner audit trails. Offering multiple electronic payment options and embedding payment links directly in invoice emails removes excuses. The brands with lowest DSO make paying easy. **Credit segmentation.** Not every retailer warrants the same terms. Tiered credit limits based on payment history, order volume, and financial stability allow tighter terms for higher-risk accounts without losing lower-risk business. A simple framework: new retailers start at COD, graduate to net-15 after three on-time payments, then net-30 after six months of clean history. **Visibility systems.** Real-time aging dashboards showing receivables by bucket (current, 1-30, 31-60, 61-90, 90+) and by account enable prioritized collection activity. Weekly AR reviews with defined escalation triggers - which accounts get calls this week, which get credit holds - turn collection from reactive firefighting into systematic cash recovery. ## Multi-State Implications New York's framework remains the most formalized, but operators in other markets face similar pressures without the regulatory scaffolding. New Jersey's Cannabis Regulatory Commission hasn't codified maximum credit terms - payment arrangements remain contract-driven. The absence of a state-mandated COD list means collections are entirely self-policed, which can mean either more flexibility or more exposure depending on internal discipline. California's market continues grappling with AR dysfunction, though legislative proposals to mandate shorter payment windows (some as tight as 15 days on large invoices) signal regulatory appetite for tighter frameworks. Multi-state operators standardizing AR policies at conservative baselines - net-30 terms, structured collection cadences, credit tiering - find themselves better positioned regardless of which state frameworks tighten next. ## The Capital Efficiency Imperative The strategic frame has shifted. Two years ago, tightening AR operations was about adapting to new rules. In 2026, it's about survival math. Operators entering debt refinancing conversations with 60+ day DSO face harder terms and fewer options. Brands trying to fund expansion while 20% of revenue sits in aged receivables compete at a structural disadvantage against leaner competitors. And in a market where illicit competition continues pressuring margins, every dollar trapped in unpaid invoices is a dollar unavailable for the pricing, marketing, or operational investments that drive market share. The operators treating AR as a strategic function - not a back-office afterthought - are converting receivables to cash faster, funding growth internally, and building the financial credibility that opens better capital options. The ones who haven't adapted are learning that you can't outgrow a cash flow problem. --- # 5 Accounts Receivable Metrics Every Cannabis CFO Should Track URL: https://www.tryheadquarters.com/blog/5-accounts-receivable-metrics-every-cannabis-cfo-should-track Published: 2026-01-29 Summary: These five metrics give CFOs the visibility needed to protect cash flow and identify collection bottlenecks before they become liquidity crises. Cash conversion velocity separates cannabis operators who scale from those who stall. In an industry where traditional financing remains scarce and 280E compresses margins, AR efficiency isn't a back-office function - it's a strategic lever. These five metrics give CFOs the visibility needed to protect cash flow and identify collection bottlenecks before they become liquidity crises. ## 1. Days Sales Outstanding (DSO) DSO measures the average number of days between invoicing and payment collection. For cannabis operators dealing with extended retailer payment terms and inconsistent enforcement, DSO reveals whether your credit policies match market reality. **Calculation:** (Accounts Receivable ÷ Total Credit Sales) × Number of Days **What it tells you:** Rising DSO signals deteriorating payment behavior across your customer base. In cannabis wholesale, where retailers frequently stretch terms during slow seasons, DSO spikes often precede cash crunches by 30-60 days. Track DSO by customer segment - dispensary chains behave differently than independent retailers. ## 2. Collection Effectiveness Index (CEI) CEI measures how effectively your team collects receivables that were available for collection during a given period. Unlike DSO, CEI accounts for timing and isolates collection performance from sales volume fluctuations. **Calculation:** (Beginning Receivables + Monthly Credit Sales − Ending Total Receivables) ÷ (Beginning Receivables + Monthly Credit Sales − Ending Current Receivables) × 100 **What it tells you:** CEI above 80% indicates functional collection processes. Below that threshold, examine whether the problem is process (inconsistent follow-up), people (under-resourced AR team), or policy (terms that don't match customer payment behavior). Cannabis operators often discover CEI drops correlate with sales team turnover - new reps may not enforce payment terms as aggressively. ## 3. Accounts Receivable Turnover Ratio AR turnover measures how many times per year you collect your average receivables balance. Higher turnover means faster cash conversion. **Calculation:** Net Credit Sales ÷ Average Accounts Receivable **What it tells you:** This ratio contextualizes DSO within your sales volume. A company with $10M in annual sales and $2M in average AR has turnover of 5x - collecting the full receivables balance roughly every 73 days. Compare turnover across quarters to identify seasonal patterns. Many cannabis wholesalers see turnover drop Q1 as retailers conserve cash post-holiday, then recover Q3-Q4. ## 4. Average Days Past Due While DSO measures the full invoice-to-payment cycle, average days past due isolates delinquency - how far beyond terms your customers actually pay. **Calculation:** Weighted average of days past due across all overdue invoices **What it tells you:** This metric separates structural payment delays from policy issues. If your terms are Net 30 and average days past due is 15, customers are paying at Net 45 regardless of what the invoice says. That's a pricing problem, not a collections problem. Use this metric to inform credit policy adjustments and identify customers who chronically pay late but remain profitable enough to retain. ## 5. Bad Debt to Sales Ratio Bad debt ratio measures uncollectible receivables as a percentage of total credit sales. In cannabis, where customer financial instability is common and legal remedies are limited, this metric directly impacts margin. **Calculation:** Bad Debt Write-offs ÷ Total Credit Sales × 100 **What it tells you:** Track this metric monthly, not just at year-end write-off. Rising bad debt ratios often lag economic stress by 90-120 days - by the time write-offs hit, the underlying problem has metastasized. Segment analysis matters: if bad debt concentrates in a specific region or customer type, adjust credit limits proactively rather than absorbing losses reactively. ## Connecting Metrics to Action These five metrics form an interconnected system. DSO provides the headline number; CEI diagnoses collection execution; turnover contextualizes performance against sales volume; days past due isolates delinquency from structural delays; bad debt ratio quantifies the cost of failures across the system. Review them together monthly. When multiple metrics move adversely simultaneously, prioritize investigation over incremental process changes - the root cause is likely systemic. Common questions: Q: What is a healthy Collection Effectiveness Index? A: Above 80% indicates functional collection processes. Below 75% signals a failure in process, people, or policy. CEI isolates collections performance from sales volume in a way DSO cannot, which makes it the better diagnostic when sales teams turn over and new reps stop enforcing terms. Q: How do you calculate DSO? A: Divide accounts receivable by total credit sales, then multiply by the number of days in the period. Track it by customer segment rather than in aggregate, because dispensary chains and independent retailers behave differently and a blended number hides the single-account concentration that actually kills brands. Q: What does average days past due tell you that DSO does not? A: It isolates delinquency from the full invoice-to-payment cycle. If your terms are Net 30 and average days past due is 15, customers are consistently paying at Net 45 regardless of what the invoice says. That is a pricing problem to solve, not a collections problem. --- # Turn Your SOP into a Chatbot for New Budtenders in Under an Hour URL: https://www.tryheadquarters.com/blog/legacy-turn-your-sop-into-chatbot-for-new-budtenders Published: 2025-06-28 Summary: The traditional training approach of lengthy manuals and overwhelming information dumps is failing both dispensaries and budtenders. **The cannabis retail landscape has never been more demanding.** New budtenders need to master complex product knowledge, navigate evolving compliance requirements, and deliver exceptional customer service - all while working in a fast-paced environment where mistakes can cost licenses. The traditional training approach of lengthy manuals and overwhelming information dumps is failing both dispensaries and budtenders. **Here's the breakthrough:** AI chatbot technology can transform your Standard Operating Procedures into an interactive, always-available training assistant that gets new budtenders productive in days, not weeks. This isn't just about automation - it's about creating personalized, engaging training experiences that actually stick. The best part? **You can have a fully functional training chatbot operational in under an hour** using the right tools and approach. This comprehensive guide walks you through exactly how to do it, with step-by-step instructions, cannabis-specific examples, and real-world implementation strategies that have already proven successful in dispensaries across multiple states. ### The cannabis training challenge demands a modern solution Cannabis dispensaries face unique training challenges that traditional retail doesn't encounter. **Budtenders must simultaneously master product expertise, regulatory compliance, and customer consultation skills** - all while the legal landscape continues evolving. State regulations vary dramatically, with Colorado requiring mandatory Responsible Vendor Training every two years, Oregon demanding 70% test scores on OLCC courses, and California implementing increasingly strict DCC compliance standards. The cost of inadequate training extends far beyond employee turnover. **Compliance violations can result in license suspension or revocation**, while poorly trained staff create negative customer experiences that directly impact revenue. Meanwhile, the labor shortage means dispensaries are hiring more frequently, creating a continuous cycle of training demands that strain management resources. Traditional training methods are particularly inadequate for cannabis retail. Static manuals become outdated quickly as regulations change and new products enter the market. **Classroom-style training sessions are expensive, time-consuming, and don't accommodate different learning styles** or work schedules. Most critically, they don't provide the interactive, scenario-based practice that budtenders need to handle real customer situations confidently. ## Three flagship AI chatbot platforms that transform training After extensive research and testing, these 3 platforms offer the best combination of features, affordability, and ease of implementation for cannabis dispensary training: ### 1. Botpress - Best free option for small dispensaries **Why it works:** Botpress offers a generous free tier with 100MB of vector database storage - enough for approximately 20,000 PDF pages. **The visual flow builder makes it easy to create branching conversation paths** for different training scenarios. **Setup process:** - Sign up at botpress.com (no credit card required for free tier) - Use the Knowledge Base feature to upload SOPs and training materials - Create conversation flows using the visual builder - Set up different training paths for various experience levels - Deploy via website widget or integrate with existing systems **Cannabis-specific features:** - Multi-channel deployment (website, WhatsApp, Teams) - Advanced conversation analytics to track training progress - Integration capabilities with POS systems and inventory management - Custom branding to match dispensary aesthetic **Pricing:** Free for 100MB storage, then $15/month per user ### 2. Microsoft Copilot Studio - Best for enterprise compliance **Why enterprises choose it:** **Built-in enterprise-grade security and compliance features** make this ideal for multi-location dispensaries or those prioritizing regulatory audit readiness. Deep integration with Microsoft 365 provides seamless document management. **Setup process:** - Access through Microsoft 365 admin center - Upload documents via SharePoint integration - Use the "Conversational boosting" feature for natural responses - Configure security settings for sensitive compliance data - Deploy through Teams or embed on website **Cannabis-specific advantages:** - Enterprise-level audit trails for compliance documentation - Role-based access control for different training levels - Integration with Power BI for advanced training analytics - Automatic compliance with data protection regulations **Pricing:** $200/month per tenant (includes 2,000 messages) ### 3. DocsBot AI - Most user-friendly for non-technical teams **Why it's simple:** **DocsBot AI specifically designed for document-to-chatbot conversion** with minimal technical knowledge required. The platform supports 37+ document formats and provides cannabis-friendly templates. **Setup process:** - Register at docsbot.ai and choose your plan - Upload documents using drag-and-drop interface - Customize bot personality and add dispensary-specific language - Configure compliance disclaimers and response boundaries - Embed on website using provided code snippet **Cannabis-specific benefits:** - Pre-built retail training templates - Automatic compliance disclaimer insertion - Real-time inventory integration capabilities - Multi-language support for diverse customer bases **Pricing:** Free tier available, paid plans from $19/month ## Step-by-step implementation guide for any platform ### Phase 1: Document preparation and content audit (15 minutes) **Gather your existing materials systematically.** Start with core documents: employee handbook, product catalogs, compliance procedures, customer service protocols, and POS system guides. **Convert everything to supported formats** (PDF, Word, or plain text) and ensure consistent formatting with clear headings and bullet points. **Optimize content for AI processing.** Remove references like "as mentioned above" since users won't have full document context. **Add specific examples and scenarios throughout** rather than abstract policies. For instance, instead of "Check ID thoroughly," write "Check ID thoroughly - verify photo matches customer, check expiration date, and scan barcode if available." **Structure your knowledge base logically:** - **Product Information:** Strain categories, effects, dosing guidelines, pricing - **Compliance & Legal:** Age verification, purchase limits, ID requirements, reporting procedures - **Customer Service:** Greeting protocols, recommendation frameworks, complaint handling - **Operations:** Opening/closing procedures, inventory management, POS operations ### Phase 2: Platform setup and initial training (20 minutes) **Choose your platform based on specific needs.** For quick deployment with excellent document handling, start with ChatGPT Projects. For budget-conscious dispensaries, Botpress offers the most features in its free tier. **Enterprise dispensaries requiring audit trails should select Microsoft Copilot Studio.** **Configure your chatbot personality carefully.** Set clear boundaries: "I provide information about cannabis products and policies but cannot give medical advice. Always consult healthcare professionals for medical questions." **Include compliance reminders in every product recommendation** and ensure responses include age verification language. **Upload documents strategically.** Start with 5-10 core documents rather than everything at once. **Test the chatbot's responses after each upload** to ensure it's processing information correctly. Add more documents gradually as you refine the training. ### Phase 3: Training scenario development (15 minutes) **Create realistic customer scenarios your budtenders encounter daily.** Focus on situations that require both product knowledge and compliance awareness: **Customer Service Scenario:**"A nervous first-time customer asks for something to help them relax but doesn't want to feel 'high.' They mention they have anxiety and want to avoid making it worse. How would you help them?" **Compliance Scenario:**"A customer presents an ID that expires tomorrow. The photo looks like them but appears to be from several years ago. Their appearance has changed significantly. Can you complete the sale?" **Product Knowledge Scenario:**"A customer wants to know the difference between smoking, vaping, and edibles for pain relief. They're a medical patient who currently uses prescription opioids and wants to reduce their dependence." **Build progressive learning paths.** Start new hires with basic cannabis education and legal compliance, then advance to customer consultation and specialized products. **Each scenario should include clear learning objectives and success criteria.** ### Phase 4: Testing and optimization (10 minutes) **Test your chatbot thoroughly before staff deployment.** Have team members ask difficult questions and unusual scenarios. **Verify that compliance responses are accurate and current** for your specific state regulations. Check that the chatbot appropriately handles questions outside its scope by directing users to human supervisors. **Monitor key performance indicators from day one:** - **Training completion rates** (target: 95%+) - **Knowledge retention scores** on follow-up quizzes (target: 85%+) - **Time to productivity** for new hires (target: reduce by 40%) - **Compliance confidence** measured through manager assessments **Implement continuous improvement processes.** Review conversation logs weekly to identify knowledge gaps. **Update product information monthly** or whenever new inventory arrives. Adjust training modules based on customer feedback and compliance changes. ### ROI calculation for cannabis dispensaries **Typical Dispensary Training Costs (Traditional Method):** - **Manager Time:** 20 hours per new hire at $25/hour = $500 - **Training Materials:** $100-200 per employee - **Lost Productivity:** 2-3 weeks at reduced efficiency = $1,500-2,000 - **Total per Employee:** $2,100-2,700 **Chatbot Training Implementation:** - **Reduced Manager Time:** 5 hours per new hire = $125 - **Accelerated Productivity:** 1 week to full efficiency = $750 savings - **Consistent Training Quality:** Reduces errors and customer complaints - **Total Savings per Employee:** $1,200-1,800 **Break-even Analysis:** - **Monthly Platform Cost:** $50 average - **Employees Trained per Month:** 2-3 average - **Monthly Savings:** $2,400-5,400 - **ROI:** 4,700-10,700% annually! ### Platform feature summary ## Advanced implementation strategies ### Multi-location dispensary deployment **Standardize core training while allowing local customization.** Create a master knowledge base with universal compliance requirements and product education, then add location-specific modules for local regulations, inventory, and policies. **Implement role-based access controls.** New budtenders access basic modules, while experienced staff get advanced consultation training. **Managers receive specialized modules on compliance auditing and staff development.** **Use analytics to optimize across locations.** Compare training completion rates, knowledge retention scores, and customer satisfaction metrics between locations. **Identify best practices and scale successful approaches** across your entire operation. ### Integration with existing systems **Connect your chatbot with [point-of-sale systems](/cannastack/category/pos)** for real-time inventory updates in training scenarios. When teaching product knowledge, the chatbot can reference current stock levels and pricing. **Link to scheduling systems** to provide just-in-time training reminders. **Send compliance refreshers before regulatory inspections** or product knowledge updates when new inventory arrives. **Integrate with performance management systems** to track individual employee progress. **Create personalized learning paths** based on performance reviews and customer feedback. ### Measuring training effectiveness **Track leading indicators of training success:** - **Knowledge retention rates** through regular assessments - **Training completion speeds** compared to traditional methods - **Customer satisfaction scores** for chatbot-trained staff - **Compliance audit results** and violation rates **Monitor business impact metrics:** - **Average transaction values** for trained staff - **Customer return rates** and loyalty metrics - **Employee retention** and job satisfaction - **Time to productivity** for new hires **Implement continuous feedback loops.** Survey customers about their budtender interactions. **Ask staff for training gap identification** and scenario requests. Use this feedback to continuously improve your chatbot training content. ## Future-proofing your cannabis training program ### Adapting to regulatory changes **Cannabis regulations evolve constantly,** making your training program's adaptability crucial. **Build update workflows that push regulatory changes** to your chatbot immediately. Create alerts for staff when new compliance requirements take effect. **Establish relationships with industry attorneys and compliance consultants** who can review your training materials. **Schedule quarterly compliance audits** of your chatbot content to ensure accuracy. ### Scaling with business growth **Design your training system to grow with your dispensary.** Start with basic modules and expand as you add locations, products, or services. **Create modular content that can be combined** for different roles and experience levels. **Plan for advanced features like multilingual support** as your customer base diversifies. Consider voice capabilities for hands-free training during busy periods. ### Staying competitive through innovation **The cannabis industry rewards early adopters of training innovation.** Your investment in AI-powered training creates competitive advantages through: - **Faster new hire onboarding** allowing rapid expansion - **Consistent customer experiences** across all locations - **Reduced compliance risks** through systematic training - **Higher customer satisfaction** from better-educated staff **Monitor emerging technologies** like virtual reality training modules and AI-powered customer simulation. **Build relationships with technology vendors** who understand cannabis industry requirements. ## Getting started today Choose one of the recommended platforms based on your specific needs: We recommend **ChatGPT Projects for immediate deployment, Botpress for budget-conscious, or Microsoft Copilot Studio for enterprise requirements.** **Start small but think big.** Upload your most critical training documents first: compliance procedures and basic product knowledge. **Test with a one staff member** and refine before full deployment. **Remember that perfect is the enemy of good.** Your chatbot training system will improve over time through use and feedback. Cannabis dispensaries that implement AI-powered training today will dominate tomorrow's competitive landscape. **Your budtenders will be better trained, your customers will be happier, and your business will be more compliant and profitable.** The technology exists, the implementation is straightforward, and the ROI is proven. **Your competitive advantage is just one hour away.** --- # What is RAG and Why Should Your MSO's Legal Team Care? URL: https://www.tryheadquarters.com/blog/legacy-what-is-rag-20250625 Published: 2025-06-25 Summary: Discover the latest automation tools and technologies that can transform your cannabis business operations and increase efficiency. [**Retrieval-Augmented Generation (RAG)**](https://en.wikipedia.org/wiki/Retrieval-augmented_generation) **technology has emerged as the most significant advancement in legal AI**, offering cannabis legal teams unprecedented capabilities to manage multi-jurisdictional compliance, regulatory monitoring, and contract analysis at scale. With legal AI adoption skyrocketing from 19% in 2023 to 79% in 2025, cannabis MSOs can no longer afford to ignore this transformative technology. For cannabis MSOs managing operations across dozens of states with ever-changing regulations, RAG represents more than just another technology upgrade - it's a strategic necessity. The combination of federal prohibition creating unique compliance burdens, state-by-state regulatory variations, and the constant evolution of cannabis law creates an information management challenge that exceeds human capacity to track and analyze effectively. RAG technology finally provides a practical solution for managing this complexity while delivering measurable ROI through reduced legal costs, improved compliance accuracy, and enhanced decision-making speed. ## Understanding RAG Retrieval-Augmented Generation fundamentally differs from traditional AI by combining the reasoning capabilities of large language models with real-time access to external knowledge bases. While conventional AI systems rely solely on their training data - which becomes outdated and may hallucinate false information - RAG systems actively retrieve current, relevant information from authoritative sources before generating responses. **The RAG process operates through two critical phases**: First, when presented with a query, the system searches through vast databases of legal documents, regulations, and case law using advanced vector similarity matching that understands conceptual relationships, not just keyword matches. Second, the system augments the original query with this retrieved information, providing the language model with current, relevant context to generate accurate, source-grounded responses. This architecture proves particularly powerful for legal applications because it addresses the **"hallucination crisis" that has plagued legal AI**. Even leading legal AI platforms still generate false information 17-33% of the time, but RAG systems show dramatic improvements in accuracy - up to 71% reduction in hallucination rates - by grounding responses in authoritative legal sources rather than potentially outdated training data. Recent advances in RAG technology have made it especially suitable for cannabis legal operations. [**Long RAG systems**](https://arxiv.org/abs/2410.23000) now process entire document sections rather than fragmenting them into small chunks, preserving the contextual integrity essential for complex legal analysis. **Self-Reflective RAG (SELF-RAG)** incorporates evaluation mechanisms that assess when retrieval is necessary and critique generated outputs for accuracy, while **Adaptive RAG** tailors retrieval strategies based on query complexity - simple questions bypass unnecessary searches while complex multi-jurisdictional issues trigger comprehensive analysis. The technical infrastructure supporting modern RAG systems includes sophisticated vector databases that store legal document representations as dense embeddings, capturing semantic meaning through transformer-based models. This enables similarity searches that understand legal concepts and relationships within cannabis regulations, going far beyond simple keyword matching to grasp the nuanced connections between state laws, federal guidance, and regulatory precedents. ## Current leading apps for legal practice The legal tech landscape is seeing the most RAG implementations. [**Harvey AI**](https://www.harvey.ai/)**, valued at $5 billion with $75 million ARR in June 2025**, has expanded from 40 to 25 enterprise clients across 42 countries, providing sophisticated legal research and contract analysis capabilities built on OpenAI's foundation with legal-specific training. The platform's custom case law models, trained on the complete U.S. legal corpus, deliver multi-stage reasoning with fine-tuned embeddings specifically designed for legal applications. [**LexisNexis**](https://www.lexisnexis.com/) has implemented proprietary GraphRAG technology using Shepard's Knowledge Graph, providing advanced citation verification with hyperlinked sources and comprehensive headnote coverage across their entire case collection. This integration of relationship data ensures authoritative responses grounded in established legal precedents, while [**Westlaw Precision AI**](https://training.thomsonreuters.com/media/Welcome+to+Westlaw+Precision/1_p5hf2w61) combines vector-based document retrieval with the West Key Number System for enhanced accuracy in legal research. These platforms demonstrate measurable performance improvements: **70% average reduction in research time, 50% productivity increase in document review, and up to 3x ROI through decreased manual processing costs**. Legal departments implementing RAG systems report 90% reduction in document review errors and significant improvements in contract analysis accuracy, with 31% of legal departments currently using AI for contract analysis according to Thomson Reuters studies. For document review and e-discovery, RAG systems provide intelligent categorization, automated privilege review, relevance scoring, and pattern recognition that identifies key evidence and document relationships. This capability proves particularly valuable for cannabis MSOs facing complex litigation across multiple jurisdictions, where the ability to quickly identify relevant documents and legal precedents can determine case outcomes. ## The unique MSO challenge Cannabis Multi State Operators are in arguably the most complex regulatory environment in modern business. With cannabis legal in 40 states for medical use and 24 states for recreational use while remaining federally illegal, MSOs must navigate what industry experts describe as a "regulatory archipelago" - each state functioning as an independent island with unique compliance requirements, licensing procedures, and operational mandates. **The compliance burden is staggering**: Cannabis MSOs must track an average of 16.7 required label attributes per state, ranging from 4 to 26 mandatory elements, with requirements varying dramatically between jurisdictions. California requires comprehensive testing protocols, universal symbols, Prop 65 warnings, and detailed nutritional panels, while Colorado mandates specific potency labeling formats, contaminant testing statements, and residency requirements. New York prioritizes social equity applicants with different licensing structures, and Florida operates a vertically integrated model limited to 25 licensed MMTCs. **This regulatory fragmentation creates operational nightmares**. Former NBA player Al Harrington, founder of Viola Brands, explains: "The same strain in Colorado will be different in Michigan due to the environment. Regulations are state-specific, so we have to adjust to different growing techniques, production methods, regulations, packaging, and sometimes THC limits." MSOs must maintain separate compliance officers in each state, with failure to comply resulting in fines, license suspension, or forced business closure. The financial stakes compound this complexity. **Section 280E tax provisions** create effective tax rates of 40-80% versus 21% for traditional corporations, with leading MSOs like [Trulieve filing for $143 million in 280E tax refunds](https://www.prnewswire.com/news-releases/trulieve-announces-filing-of-amended-federal-tax-returns-claiming-143-million-refund-301955634.html) and [Verano expecting $80-100 million in annual 280E costs](https://investors.verano.com/news-releases/news-release-details/verano-announces-first-quarter-2025-financial-results). These financial burdens make compliance efficiency not just operationally important but financially critical for survival and growth. **Banking restrictions add another layer of complexity**. Most MSOs operate as cash-intensive businesses due to federal banking limitations, creating intricate reporting requirements for cash transactions over $10,000 and complex compliance with FinCEN guidance for any financial institutions willing to work with cannabis businesses. Contract management across jurisdictions presents unique challenges where different state laws apply, cannabis contracts face enforceability questions due to federal illegality, and courts may refuse to enforce agreements related to federally illegal activities. Leading cannabis legal experts recommend including state court jurisdiction clauses, choosing governing law from cannabis-friendly states, and maintaining arbitration provisions with state-specific requirements - all requiring deep knowledge of varying jurisdictional frameworks. ## Choosing RAG apps for cannabis legal operations RAG technology addresses these cannabis-specific challenges through targeted applications that deliver immediate operational value. **Regulatory compliance monitoring** represents the highest-impact use case, where RAG systems continuously track regulatory changes across multiple state jurisdictions, automatically flagging relevant updates and providing contextualized analysis of operational impacts. Consider the complexity: cannabis regulations change weekly across different states, with new legislation, regulatory guidance, and administrative rulings constantly shifting compliance requirements. RAG systems can monitor state regulatory databases, legislative sessions, and administrative announcements across all operational jurisdictions simultaneously, identifying changes relevant to specific MSO operations and providing immediate analysis of compliance implications. **Multi-jurisdictional contract analysis** showcases RAG's sophisticated capabilities. When analyzing master service agreements, RAG systems can automatically verify compliance with state-specific cannabis advertising restrictions, taxation requirements, and operational mandates. The system retrieves relevant state laws, regulatory guidance, and precedent cases, then analyzes contract language against these requirements to identify compliance gaps, jurisdictional conflicts, and risk factors. **Legal research spanning different state frameworks** becomes dramatically more efficient through RAG implementation. Instead of manually researching cannabis law across multiple states, legal teams can query RAG systems for comprehensive analysis of how specific issues - such as social consumption, home cultivation, or interstate transport - are addressed across all operational jurisdictions. The system provides synthesis of complex regulatory landscapes, identification of conflicting state requirements, and analysis of relevant precedents. **Automated regulatory filing and reporting** delivers significant operational efficiency. RAG systems can extract relevant information from operational data and format filings according to state-specific requirements, reducing manual filing errors, ensuring consistent reporting across jurisdictions, and providing automated deadline tracking with template-based filing generation. **Risk assessment and due diligence processes** benefit from RAG's comprehensive analysis capabilities. When evaluating new market entry, acquisition opportunities, or operational changes, RAG systems can automatically analyze potential legal risks across jurisdictions, provide due diligence document analysis, track compliance history, and develop predictive risk models based on regulatory patterns and enforcement activities. ## Implementation considerations for cannabis legal teams Successful RAG implementation requires careful attention to security, integration, and change management considerations unique to cannabis legal operations. **Data security and attorney-client privilege protection** represent paramount concerns, requiring end-to-end encryption for all communications, role-based access controls with matter-specific permissions, SOC 2 Type II certification from vendors, and on-premise deployment options for highly sensitive matters. Cannabis legal teams must implement hybrid cloud/on-premise solutions balancing security with accessibility, establish clear data governance policies for AI tool usage, and conduct regular security audits with employee training on AI security protocols. The vendor due diligence process should verify data encryption standards, retention and deletion policies, third-party audit certifications, breach notification procedures, and geographic data storage requirements. **Integration with existing legal technology stacks** requires careful planning around common integration points including document management systems (NetDocuments, iManage, LexWorkplace), case management systems (Legal Files, SmartAdvocate, MyCase, Clio), contract management platforms, and time tracking and billing systems. Technical considerations include API availability, single sign-on capabilities, data migration requirements, workflow automation possibilities, and mobile accessibility. **Cost-benefit analysis reveals compelling economics**: Professional-grade RAG solutions cost $400-500 monthly per user, with implementation services ranging $10,000-50,000 depending on complexity, training investments of $5,000-15,000, and integration development costs of $15,000-40,000 for complex implementations. However, expected benefits include 50-70% reduction in legal research time, 43% increase in response accuracy, up to 3x decrease in overall research and compliance costs, and reduced compliance violations with associated penalties. The typical ROI timeline spans 6-12 months for full realization, with the calculation framework considering annual savings from hours saved multiplied by hourly rates, plus avoided penalties and efficiency gains. For a mid-sized MSO legal team, this often translates to hundreds of thousands in annual savings through improved efficiency and reduced compliance risks. ## Current limitations and risk management Despite significant advances, RAG technology faces important limitations that cannabis legal teams must understand and mitigate. **The hallucination problem persists**: even with RAG implementation, leading legal AI tools still generate false information 17-33% of the time, with Stanford studies finding LLMs hallucinated 69-88% of the time on specific legal queries and GPT-4 hallucinating at least 49% of the time on basic case summary tasks. **Real-world consequences have emerged**: at least 158 documented cases of AI hallucination in court filings globally, with multiple sanctions imposed on attorneys including $2,000+ penalties and mandatory CLE requirements. High-profile cases like Mata v. Avianca, which involved fabricated case citations, highlight the critical importance of human verification for all AI-generated legal content. **Professional responsibility implications** extend Model Rule 1.1 (competence) and Rule 1.3 (diligence) obligations to AI use, requiring human verification of all AI outputs, raising ethical concerns about billing for AI-assisted work, and creating client confidentiality risks with cloud-based AI systems. The ABA's Formal Opinion 512 provides foundational framework for ethical AI use, while state bar associations are issuing specific guidance emphasizing lawyer competence, client confidentiality, and billing transparency. Cannabis legal teams must implement robust risk mitigation strategies including comprehensive backup and disaster recovery for data loss prevention, high availability and redundancy for system downtime protection, rollback procedures for integration failures, strict access controls for privilege protection, human oversight for regulatory compliance, and defense-in-depth security architecture for data breach prevention. **Technical limitations include** "sycophancy" issues where AI agrees with incorrect user assumptions, failure to identify when legal precedents have been overturned, context limitations in understanding complex multi-jurisdictional matters, and inconsistent performance across different legal domains. These limitations necessitate careful implementation with appropriate verification protocols and human oversight. ## Future outlook and emerging opportunities The cannabis legal technology landscape is positioned for dramatic transformation through emerging AI developments. **Agentic AI represents the next frontier**, with 25% of enterprises expected to deploy AI agents in 2025, growing to 50% by 2027. This shift from supervised AI tools to autonomous "AI colleagues" handling complex workflows promises to revolutionize how cannabis legal teams manage multi-jurisdictional compliance. **Cannabis-specific AI platforms are emerging** to address industry unique requirements. [CannabisRegulations.ai](https://www.cannabisregulations.ai/) provides state-trained AI compliance chatbots with real-time regulatory updates and marketing compliance review tools. [ChatCSG + Compliance](https://cannaspyglass.com/solutions/consultants) from CannaSpyglass offers the first cannabis data analytics platform with integrated AI, providing comprehensive cannabis regulations across all U.S. markets with regulatory citation capabilities. **Federal legalization dynamics** will significantly impact cannabis legal AI requirements. Cannabis rescheduling to Schedule III appears inevitable, potentially eliminating 280E tax restrictions and increasing company valuations eight-fold. This transition will require FDA/OSHA compliance preparation as federal oversight increases, creating opportunities for sophisticated compliance frameworks managing both state and federal requirements simultaneously. **Technological advances** promise enhanced capabilities: breakthrough AI reasoning capabilities with models achieving 157 IQ equivalent scores, mainstream deployment of AI agents for complex legal tasks, quantum computing integration accelerating AI processing speeds, and integration with state tracking systems like [METRC](https://www.metrc.com/) for automated compliance monitoring. The productivity impact appears transformative. **AI could save cannabis lawyers 4 hours per week**, translating to massive efficiency gains for legal operations. Industry experts predict AI may replace entry-level lawyers within 5 years, while creating opportunities for higher-value strategic legal work. This shift is driving evolution in business models, with 43% of legal professionals predicting decline in hourly billing models by 2030 and growth in alternative fee arrangements. ## Practical next steps for MSO legal teams Cannabis MSO legal teams should begin RAG implementation with systematic evaluation and planning. **Immediate actions** include conducting comprehensive technology audits to assess current legal technology stacks and integration points, defining use case priorities by identifying highest-impact RAG applications for specific operations, completing security requirements assessments, and developing comprehensive cost estimates for implementation planning. **Short-term actions** involve thorough vendor evaluation using established criteria weighing functional capabilities (40%), security and compliance (30%), vendor stability and support (20%), and cost and value (10%). Design pilot programs with clearly defined scope and success metrics for initial implementation, secure executive support and legal team buy-in, and complete security and compliance approval processes. **Vendor selection** should consider Harvey AI for large MSOs with significant legal budgets, Thomson Reuters CoCounsel for organizations already using Thomson Reuters products, and Callidus Legal AI as a cost-effective alternative for mid-sized MSOs. Evaluate emerging players like Spellbook for contract drafting, Paxton AI for broad legal capabilities, and cannabis-specific platforms for specialized compliance applications. **Implementation strategy** should follow a four-phase approach: Foundation (months 1-2) focusing on vendor selection and core team training, Pilot Implementation (months 3-4) deploying single use cases starting with regulatory monitoring, Expansion (months 5-8) adding use cases and full team training, and Optimization (months 9-12) achieving full feature utilization with continuous improvement processes. **Success metrics** should track efficiency improvements including 50-70% target research time reduction, quality metrics measuring accuracy against manual review baselines, cost metrics evaluating legal operations cost per transaction, and ROI achievement timelines. Establish comprehensive monitoring systems for technical risks, legal compliance risks, and operational risks including user adoption and over-reliance concerns. ## Competitive advantage through strategic AI adoption The cannabis industry stands at a technological inflection point where early adopters of RAG technology will gain significant competitive advantages in managing complex regulatory environments. **The regulatory complexity that defines cannabis operations makes it an ideal application** for advanced legal AI, where the ability to instantly access, analyze, and synthesize information across multiple jurisdictions becomes a strategic differentiator. MSOs that strategically implement RAG technology while maintaining appropriate human oversight will achieve operational excellence through improved efficiency, enhanced accuracy, and reduced compliance costs. The financial stakes - with compliance failures resulting in license suspension, business closure, or millions in tax penalties - make advanced AI tools essential infrastructure rather than optional enhancements. **Success depends on thoughtful implementation** balancing early adoption benefits against inherent risks through careful vendor selection, comprehensive security planning, and systematic deployment with robust verification processes. Cannabis legal teams that understand both the transformative potential and current limitations of RAG technology will be best positioned to leverage these tools effectively while maintaining the professional standards and ethical obligations that define legal practice. The future of cannabis legal operations will be defined by organizations that recognize RAG technology as strategic infrastructure for managing regulatory complexity, enable their legal teams with cutting-edge tools while preserving human judgment and expertise, and continuously adapt to both technological developments and evolving regulatory landscapes. The question is not whether cannabis MSOs will adopt RAG technology, but how quickly and effectively they can implement it to gain competitive advantage in an increasingly complex and competitive industry. --- # Is Quickbooks Cannabis Friendly? URL: https://www.tryheadquarters.com/blog/legacy-is-quickbooks-cannabis-friendly-20230321 Published: 2023-03-21 Summary: Complex regulatory environment, evolving legal landscape, and unique tax considerations make it crucial for cannabis businesses to use specialized accounting tools that can meet their specific needs. Complex regulatory environment, evolving legal landscape, and unique tax considerations make it crucial for cannabis businesses to use specialized accounting tools that can meet their specific needs. One such tool that has gained popularity among cannabis businesses is QuickBooks, a widely-used accounting software that can be customized to cater to the cannabis industry. For example, QuickBooks allows you to set up a customized chart of accounts that is tailored to the unique financial reporting requirements of the cannabis industry. You can create accounts for specific cannabis-related expenses such as cultivation costs, lab testing fees, and excise taxes. Majority of cannabis companies we work with do these 4 things: **1. Cannabis Product Type Specific Reporting:** You can generate reports that are specific to the cannabis industry, such as sales by product type, strain, or customer segment. These reports can help you identify trends, analyze costs, and make informed business decisions. QuickBooks also provides state-specific tax reports, which can simplify the complex process of calculating and filing cannabis taxes in compliance with local regulations. **2. Integrate with cannabis-specific POS systems** and seed-to-sale tracking software, allowing businesses to automate many of their financial processes. One of the key features of Quickbooks is its ability to integrate with other software tools with it's flexible API. **3. Inventory Management:** The cannabis industry has strict regulations around inventory tracking and reporting. QuickBooks allows you to manage your cannabis inventory with precision. You can track cannabis products from seed to sale, record all inventory transactions including purchases, sales, and transfers, and generate detailed reports on inventory levels, cost of goods sold, and product margins. This helps you stay compliant with local regulations and make informed inventory management decisions. **4. Compliance Features:** QuickBooks has built-in compliance features that can help cannabis businesses stay compliant with industry-specific regulations. For example, QuickBooks allows you to track and report on [cannabis-related taxes](https://www.cdtfa.ca.gov/industry/cannabis.htm), such as excise taxes and sales taxes, ensuring that you are accurately calculating and reporting your tax liabilities. QuickBooks also provides audit trail functionality, which allows you to track changes to your financial data and maintain a clear record of all financial transactions, supporting your compliance efforts. ## Who Should Use QuickBooks? ## Who Shouldn't Use QuickBooks? ## Conclusion While QuickBooks can be a suitable accounting solution for small to mid-sized cannabis businesses and service-oriented companies, it may not be the best fit for large-scale cannabis operations, manufacturers, distributors, cultivators, or retailers with multiple locations. It's important to carefully assess your cannabis business's unique accounting needs, including inventory management, compliance requirements, and reporting complexity, and consider whether QuickBooks or other specialized accounting software would be more appropriate. Consulting with a cannabis accounting expert can also help you make an informed decision on the best accounting software for your cannabis business, ensuring efficient financial management and compliance with industry-specific regulations. --- # Most Innovative Cannabis Products (2022) URL: https://www.tryheadquarters.com/blog/legacy-most-innovative-cannabis-products-20220116 Published: 2022-01-16 Summary: Cannabis companies are hiring experienced consumer packaged goods (CPG) executives away from Fortune 100 companies to lead product innovation. Cannabis product innovation is more important than ever. As the industry gets more competitive, new consumers enter the market and they develop both product and brand preferences. Cannabis companies are hiring experienced consumer packaged goods (CPG) executives away from Fortune 100 companies. With this leadership in place, you can bet cannabis product innovation will be a top priority for many companies. With that, here are our top picks for cannabis product innovation in 2022: ### Cann Social Tonics Founded in Los Angeles by Harvard and Stanford graduates Luke Anderson and Jake Bullock, Cann is the #1 selling THC-infused drinks globally. They offer a range of microdosed, lightly carbonated beverages. You can(n) enjoy more than one, and experience a light, refreshing social buzz within 10-15 minutes. With five simple all-natural ingredients, and 30-35 calories per Cann, they make the perfect substitute for that glass of wine, but without the hangover the next morning. The brand is backed by celebrity investors, including Gwyneth Paltrow, Baron Davis, Rebel Wilson, Ruby Rose, Darren Criss, Casey Niestat, Tove Lo and Bre-Z. ### Click Spray Backed by industry insiders, Click Spray simplifies the cannabis experience. Simply spray under the tongue and feel effects in as little as six to eight minutes. Click’s unique formulation offers control for how much cannabis their customers consume, and the discreet bottle design allows Click to go wherever they go. Their line of four sprays: "Go", "Restore", "Chill" and "Dream", all serve as a healthier alternative to smoking. ### Pop-Up Potcorn Pop-Up Potcorn is a trendy cannabis brand that creates three unique mixtures of cannabis-infused popcorn, or "potcorn," as they prefer to call it. Many cannabis consumers have made their own cannabis-infused popcorn at home, but Pop-Up makes it a bit more convenient, and eliminates the need for making your own cannabutter or oil. The THC combination from Pop-Up Potcorn is designed to make you feel "buzzed." This product is ideal for a movie night in with friends and truly works to spice up snack time. ### Pilgrim Soul Pilgrim Soul is the first cannabis company created to enhance creative performance. It is a mission-driven brand that aims to provide people a competitive edge in both life and business by enhancing their creative thinking. Their Live Resin Vape Pens feature unique combinations of the most creative, dynamic strains available at top cannabis retailers in California. Pilgrim Soul analyzed hundreds of cannabis strains that index high for creativity, along with secondary and tertiary states of mind, with blends for Creative Awareness, Creative Imagination, Creative Focus and Creative Reflection. Each vape pen is paired with a section of The Creative Thinking Journal to further enhance your creativity. ### House of Saka If the cannabis-infused beverage manufacturer House of Saka from California has shown anything, it's that it's not afraid to go against the grain. This female-led business carved out a large niche in the fastest-growing segment of the cannabis market. House of Saka Spark "Mimosa" is the first cannabis-infused sparkling wine without alcohol. Saka's distinctive product and packaging were made to stand out in the sea of infused seltzers saturating the legal cannabis market. Available in single-serve, 187ml champagne bottles with 5mg THC per bottle, all the flavor and celebration of a typical mimosa are present in Saka Spark's "Mimosa," but without extra calories coming from alcohol. ### TSUMo Snacks TSUMo Snacks brand offers consumers a distinctive and nostalgic snacking experience by fusing well-known salty and savory ingredients. Rap legend and culinary icon Snoop Dogg collaborated with TSUMo Snacks on creating Uncle Snoop’s Snazzle Os. They arrive in two flavors, Onion and Spicy Onion, both of which have abundant taste and 100mg of THC per bag-a respectable dosage deserving of the hip-hop icon's endorsement. ### Purejuana One of the newest alternatives in the quickly expanding market for cannabis-infused drink additives is Purejuana, a soluble powder that can be added to any beverage to amplify its THC content. It is vegan, gluten-free, and low in calories. There is a manageable 2.5-milligram dose available for individuals taking baby steps into the baked-by-a-beverage arena, in addition to the 5-milligram and 10-milligram levels intended for more experienced users. It also serves up a weedy, terpene-packed punch, especially when mixed with a neutral-flavored beverage like water or club soda, thanks to a production procedure that maintains the inherent flavor profile of the marijuana plants. ### Cheeba Chews Edibles Born in Colorado in 2009, Cheeba Chews is known for its consistently delicious award-winning confections. From original chocolate and caramel chews to newer offerings—such as the Sleepy Chews and Trifecta lines of low-calorie, fat-free taffies featuring an entourage of emerging cannabinoids like CBG and CBN—Cheeba Chews’ unique products tap into the increasingly in-demand cannabis derived wellness market. With a focus on quality and consistency, consumers trust Cheeba Chews to deliver in taste and reliability. In essence, Cheeba Chews are basically cannabis-infused Tootsie Rolls with different strengths and, as of late, additional flavors. ### Sonder Space Crystals Sonder's cannabis is solely sun-grown, using only responsibly grown flower from farmers Leif and Jessica Bolin in Mendocino County. Sonder Space Crystals come in Peachy Passion, Pineapple Party, Stoned Fruit, and the Cheers Queers! Since the majority of the THC in Space Crystals remains in its original form as it is absorbed into your mouth's tissues, the high is more similar to a combination of smoking and eating cannabis than it is to that of a conventional edible. This is because Space Crystals function as a sublingual-edible hybrid. ### Kiva’s Everything Bagel Seasoning Munchies Bar Kiva is a signature brand of decadent cannabis chocolate bar edibles. They carefully craft each bar using sustainably-sourced cacao, all-natural flavors, and clean, pure cold water hash for a richer, fuller cannabis experience that captures the essence of the whole plant. Kiva made an Everything Bagel Seasoning Munchies Bar, which is a weed-infused chocolate bar with everything bagel seasoning as a collaboration with LA bagel food truck pioneers The Yeastie Boys. The Munchies Bar is made with sweet, hash-infused dark chocolate and the traditional salty seasoning from Yeastie's. This limited-edition treat's sweet, salty, chocolaty, and hashy flavors will transform the way you wake and bake. --- # The Shift, Ep 1: Mother of Cannabis URL: https://www.tryheadquarters.com/podcast/ep1 Guest: Jennifer Muñoz Summary: Industry veteran on building cannabis distribution, working the events circuit, and why people - not software - still drive this business. Transcript (auto-generated, lightly edited): Welcome to The Shift, a little series we put together to give you a real look inside HQ. It's not the polished version, the real one. Because at the end of the day, it's not the tools, it's not the systems, it's the people. The ones behind the screens, behind the calls, behind the deals. They're the reason everything actually works. So, this is where you get to meet them, hear how they think, how they move, and what really goes on behind the scenes. Let's get into it. So, today I'm joined by someone who, if you spent any real time in cannabis, you've probably heard about one way or another, Jennifer Muñoz. Also known to many as Mama Jen, and to some, the mother of cannabis herself. She's been in the industry for years, she knows the people, she knows the game. She's lived the sales side, the relationship side, and she's one of those names that carries real weight when she walks in a room. My very good Judy, my very good friend, Jen, welcome. Thank you, Filip. That was a wild introduction. I appreciate it. it? Do you want to share the story of how you and I met, or or when we started working together? The first time that you and I met was over a Slack channel, and me begging for information on whether my invoices were paid or not. That's how I can definitely remember I definitely remember sending you messages all the time, and I just know there was a Filip. That's how we met. Okay. And feel free to say. So, it was pretty much I was working at Nabis doing AR for Nabis, and you were working at Lime. And our stories kind of crossed through Slack because we were working together in some of the outstanding balances for the retailers that you were doing business with, right? Exactly. Exactly. And then what actually happened is how we met on a video call was when when you joined HQ. This is true. And my first thing was apologizing to you for my behavior. I was just meant to collect invoices at that time. That was my very first thing. But it was funny to me because I So So you have a very And then this is like you have a very specific easily easy to remember name, right? But also I've been working with you for It was probably like I'd say it like roughly a year. So I got your name stuck into my memory. And then when I heard you're joining HQ, I was like, "Okay, this is a person that I'm really familiar I really don't know." When when I saw you on the on the um meeting, the face and the actual name sort of made sense and the the tone of communication that we had and all that stuff. So it was it really really made complete sense. And then I was like, "Oh my god, I'm so happy that this person is joining the company. This is going to be awesome." And the reason why I said that was I remember from back in the Nabis days, I remember you were really you were a really hard-working individual. Extremely hard I was intense. It was an intense time, you know, I I think that's hence AR is intense, right? So um it was a very intense time. We had a lot of open invoices. Um and we needed a lot of help, so. Yeah. And as soon as you came in, I was like okay, now we're in good hands good hands when it comes to sales. I was really happy. Um so, I was like, oh, she's going to do a good good deal for us. Oh, everywhere she goes. Um and yeah, that was that was really cool. Anyhow, let me let me switch to something that I was interested and I'm pretty sure everyone would would want to know as well. Cuz cuz you didn't actually start in cannabis, right? You started somewhere else. You had a pretty big experience before cannabis and you know, you you've been in cannabis forever a long time now as well, but who was Jen before cannabis? I worked at Wells Fargo for 10 years. Uh-huh. You just wanted me to bring up my event work, my my modeling want you to Look, I want you to bring up everything that made you successful in sales in cannabis, which is ultimately your previous experience. So, how how did Jen become this master of sales? I mean, I've I've always been in sales, but I mastered sales during my time at Wells Fargo. I was in the top five of the state, you know, and I worked in six different divisions within 10 years, so I was constantly creating and going to each different division, doing something and then moving on. It's always been my MO. But that's where I was really successful. I believe it or not, selling checking accounts is hard and investments through Wells Fargo is is definitely hard. It's definitely not an easy task. And how were you successful? What was the reason that you were successful at doing what you're doing? I mean, that's just my character. I'm just tenacious. I was always go go go. At one point, I worked in our in-store banking division and I was training people to close equity lines and loans down a grocery store aisle. So, they launched a huge uh it was called the in-store banking division and basically we were opening up checking accounts, boarding loans all over the place. So, that's really started it where I started the rogue sales if you will and that's where I became successful just trial and error. Lot of lot of no's. Lot of no's. Going to take the rejection. And so, when did the transition to cannabis started? How did it start? You know, I like groundbreaking things. I'm very entrepreneurial and I saw an opportunity. Um I had a friend in packaging and he started to make these really big boxes which carried all the eights that were branded. So, I started in packaging and then quickly switched to a brand. Um packaging's boring. Selling means fun. So, that's how I transitioned. And I can imagine the shock that when you came into this industry you were like, "Oh Jesus Christ, where did I end up being?" Like this is a complete chaotic mess. What's going on here? Where's everyone going? Where where where all of this is going? Was that your first reaction or how did it look for you? No, I thrived because it's it there was no METRC at the time. So, we were just out for rogue selling. Um I was selling for Lowell Herb, which was a very popular brand back then. Really bougie, you know, start of the cannabis cafe. So, um I enjoyed it. You know, it you were just out selling. So, I it wasn't that crazy. It was uh it was actually fun. You know, it's when we were out and about. Um as it's grown it's gotten chaotic. But in the beginning it's a lot of fun. It's a lot of fun. Okay. And and so as you were there from the very start and like looking through that entire journey. So so let's let's let's see the analytical Jen. What when when you look at the industry from like from the very beginning up until now first question what changed? And then second second question would be what do you notice a lot of these brands are doing or making mistakes that cause future problems for them? Well, what's changed is we used to do the euphoria sell. So we just used to sell sell sell without any data because at the time we didn't have data. I mean we were just starting out right in California it was one of the largest and still is one of the largest um areas, you know, with about 900 plus uh retailers out there. Um at that time we were just selling, you know, I remember selling my first 40 lb like that was exciting. Whether they needed it or not was a whole another story. That was the euphoria sell. You could sell 5 million in a in one month and it was great. But the reality is was it moving from that store? We didn't have any of that data. We didn't have anything but a field manager to go out and check on it and try to count the inventory, right? So what has changed now is we have data. We have data from Hoodie, from Headset, POS data from the actual uh shops to build orders. That's what's changed. But what's happened at least in California is accounts and shops have merged and people have been bought out. So all of a sudden the sales rep can spend three days behind a computer building out these orders which you know, we all want our sales reps out selling not building orders. Hence that's why we started the inside sales team here to help with that. Um that is a complete change from when it started or when when I first started almost 10 years ago. That's that's actually a perfect intro because the next segment I was like so you came to HQ and were like, "Look guys, I see what you're doing. There is this amazing opportunity in the industry for this." And then you presented to us inside sales and you literally created this entire project. So, how did you notice that HQ had the possibility of executing inside sales to the level that we're doing right now? And and how how is it working so far? Like, are you happy with it? I'm 100% happy and what I noticed when I came to HQ is there's incredibly talented smart people here. And as a sales leader running a brand, you're not you're not really working on the operational side. So, I saw you guys collecting data, having all this information, and being able to build out a process in record time, right? With the knowledge. I mean, let's face it, brands are hiring sales analysts and if they are, they're rather large uh, companies and they're not focusing on building out an order for a sales rep. So, that's where I saw the need. Um, and we tested it and it worked and it's working well. And there's a couple different ways that we go about this. So, when we initially started, there was a customer that came to us that's been around since 2015 that wanted to uh, cut costs. They wanted to eliminate some staff and they wanted to bring accounts in-house. Well, the accounts that they want to bring in-house are these large accounts um, that have 19 shops, 60 shops, 20 shops, you know, nine shops. So, my idea was let me build these orders for you, send it back to you, you go for approval with the buyer. So, really the shops don't know we're doing this busy work behind the scenes. Um I can't even put a dollar figure on the amount of money that we're saving them. It's got to be close to 200,000, you know, a year if you think about it cuz they're cutting, you know, overhead and they're also cutting commission. Another customer that we have wanted to rebuild the brand, you know, re um just grow it by a million dollars. Well, the best way to do that is to have a back office, right? So, we're their back office. So, we again are building out orders for the sales rep so the sales rep can be out getting new business. So, we're doing all that busy work in the background, which is working really successfully, too. We were able, you know, to um increase their order size by about 50%. And that's just by using data, using it accurately, using par levels, using delivery dates, using actual presence on the shelf. Um and then pivoting and changing those as, you know, the weeks change or as the month changes. Um we're able to identify um out of stocks. We're able to identify um what's moving and what's not and put these reports together for the brands um that a lot of brands don't have access to. So, all of those um situations are really are working really well and we're now going to be moving um out of California and to New York and doing the same thing. Um New York doesn't have multiple shop owners. They might, but they still have separate buyers. So, again, you utilizing the same skill set um but, you know, in a smaller sequence, but more shops. So, it's very successful. It's working. It's saving companies money. It's saving sales reps time. It's just an overall win-win. Pretty much. So so it's it's the entire process is based on like we look at historics. We know the markets. We're going to do this for you. The shops are not going to know the sales because they're going to have more time to do whatever they want to do on the field. And we're going to increase the actual order sizes based on that historics, right? Right. And we're using data. Like data What happens is data is dirty. A lot of people don't understand this and I didn't understand this until I came to HQ that a lot of the information that we have from POS systems is dirty. And what that means is the way that it was input or the way that I mean if there's just a slash off a dot off it doesn't come up right. So a lot of times you'll hear the sales rep say, "Oh, that you know, headset isn't accurate or so-and-so isn't accurate." But that's not a true statement. It's just the data is dirty. So when you get it, you might think, "Oh, I'm out of stock on that." So not only that, we take that data and clean it up so that we can make sure that we're making accurate decisions. So there's so much that goes into this that you really can't ask a sales rep to know or to do. I mean you know, it's they don't know how to clean data or nor do they know how to identify that. You know, so there there's so much more that we actually offer um as a service, you know, not just creating a pivot table on steroids, so. Yeah. No, that makes complete sense. Now the other thing which is again very important and it sort of relates to this is so we even before you came in we had this other service which is um sales ops. Um and I'm not going to about it because you're you're better at describing the services well, but this is a place where you also figured out how you can how you can go and sell these services to or actually even better, you knew which brands are in need of this service. Can you tell us a little bit why this is a good service, why it's so popular in HQ? Again, we want the sales reps out. If you're sitting behind your computer processing orders all day you can't do anything else. And a lot of times these bigger brands already knowing, okay, I'm mandatory going to get an order from XYZ and it's going to be a large order and those take time. That's why our order entry piece is is it's phenomenal for those types of brands. You know, when you're moving you know, 5 million a month, 10 million a month, even 1 million a month. You know, it it's still time-consuming and it takes forever and especially if you have a lot of units to put on to an order. All of that takes time and we have figured out a solution to eliminate that. You know, we bring in a team to do so for each individual brand that we bring on. Um, and they're professionals at what they do. I um have never seen anything much like it to be quite honest and I'm not just saying that cuz I work here. I mean it's phenomenal like the way that they execute. Um, I see turnaround times anywhere from 15 minutes, sometimes faster. Uh, they know what to ask. They know, um, you know, out of stocks. They know first in, first out. Uh, that's the one thing HQ specializes in is we know cannabis and that's all we've been doing is cannabis for the last 6 years. There's no ramp-up period. There's no training. I mean, there might be, okay, what's your policy? What we build out a SOP and then the team follows it. Um it's a no-brainer when I know that there are some of these companies out there that need this help. You know, so it's just from me being in the industry for a long time, understanding who um can benefit from the service. Yeah. And ultimately, again, it puts the sales guys actually on the field where they are supposed to be, and then we're going to do all of that boring, time-consuming work for you. Um cool. And so let me um go back to to something that's more of like uh Jim personal, right? Cuz we we had a bunch of conversations about a bunch of stuff. Uh you do often uh attend events, obviously, as the majority of people in the industry do. I want to know cuz this is very it's a it's a very different Well, not a different, but like it's a very specific type of an approach that you have when you go to different events. Can you explain the strategy of when you go to cannabis events? How do you approach the event itself? And what is your main goal when you're going to cannabis events? It depends on where I'm going. In California, I know most of you know the brands, the retailers, so it's a little bit different. But moving out of state, you I want to research, you know, the top 10, the top 50 players, be able to engage via LinkedIn, um be able to go to the events where I'm going to meet the key players, where I can present how I can save them money, and make them money, right? And we do all of that, cuz it's not just inside sales piece and and order ops. You know, it's all of our collections and the amount that we collect across the United States and and how we do the process. That's the key thing is sure you can hire someone to collect AR, but we've figured out the secret sauce. Like we figured out how much time it takes. We track internally um from operational standpoint something that I've never seen before. Um and we figured that part out and we've been doing it. So there's always that and we are doing it for an affordable price. That's the other thing majority of our services are affordable. They're not, you know, outlandish. A lot of times we can even enhance an AR service or we can take over everything. So there's so many different things. Even Filip just in the retail environment going in and taking over like their master data management services like we've been able to do that for several of our large retailers. And what that means is we're taking over their METRC. We're processing um orders that are coming in with our night team. And we're also um creating shells for new products and we're doing that all while everyone's sleeping so that the next day when they get receive the inventory, all of that paperwork is already processed. We're able to create a system behind that that makes that faster, more seamless. Um that's what we're good at. And that's what I see as a positive uh moving forward in our industry especially in our dispensaries where money is really tight. Taxes are tough. Uh they're looking for other ways to save money and that's what we do. We save people money and they can also make money at the same time. It's two-fold. And 2026 is especially crazy given that everything's, you know, happening in the world right now. So, it does make sense. But, let me So, if if I was a brand, right? And I came to you today and I I was like, "Jen, give me one piece of advice so that I can grow faster in 2026, what would you tell me?" You need to have your sales reps out. Like, they need to be knocking on doors. They need to be upselling. They can't be behind the computer. We're giving them two days to be behind the computer and only three days to be out. Time is of essence. Right? Time is precious right now. Have your sales rep out. Have them have a plan. So many times it's like, "Oh, I'm going to see Filip today." You know, do you have a plan on what you're going to sell to Filip? Right? If you don't have a plan, if you haven't looked at his menu, if you haven't seen what your competition's doing, that's a problem. And if you haven't said, "Okay, what is Filip going to say? And do I have that idea like I think Filip's going to say this, so my response is going to be this." I think Filip's going to say something about margin, here's my response to this, right? Like, having all of your ducks in a row and being out there. So, have a plan, one, and two, be out there. I can't say that enough, and that's where HQ comes in to help with that. With the collections piece, with the inside sales piece, with the order entry piece, etc. from a brand standpoint. Yeah, that that really now that I think about it, it really makes sense because ultimately what's happening is we are doing this stuff for you so that your sales rep can get more exposure, your brand can get more exposure cuz your sales reps are going to be on the field, but also you're thinking we're saving you a lot of time, ultimately saving you a lot of money as well. Um but then when you think about that sort of preparation or planning as you said, think of the scenarios of what you what can happen on the field on those conversations cuz ultimately everything's about relationship in this industry. So when you prep when you plan when you prepare as you said, it makes a lot of sense. So You have You can't just go in blind, right? You have to have type of a process in place or something that you know, how am I going to get Filip to add three more of my SKUs? I have 20 gummies. I only have 10, you know, what's the strategy behind that and how um we have an oversaturated market in California, right? And in a lot of states, um you know, the markets are getting oversaturated, it goes down. Um there's price compression. There's a lot of these situations. In California, there's not a lot of people growing their own product. They're usually sourcing. So it can definitely cut into your margin if you make an error uh with pricing. So I mean, my strong suggestion to a brand is to have your sales rep out and have them have a plan. Right? I mean, there's so much like I'm watching again going back to the inside sales piece, how we sit with a sales rep and actually strategize and create a SOP behind it. So for example, if you wanted to not just use the data, but you wanted to add new SKUs. I mean, we follow an SOP behind that. So there's everybody has a different story, a different tactic of how they want to do things and how they're going to get the buyer to, you know, approve these orders. We're just doing all the busy work, so we're basically a sales assistant for the sales rep. Yeah. I mean, what more could you ask for, right? And And for the people that are cutting costs altogether, um or even moving, you know, a lot of people are doing third party and they're thinking, "Okay, uh maybe that's not working. We're also an excellent source right then. So, maybe you only want to have one sales rep in the north, one sales rep in the south. We're an excellent, extremely affordable option to handle all the big accounts. That's another uh situation that I've talked to a couple clients about um that we're currently getting ready to work with. So, it's I only have one sales rep in northern California, I only have one sales rep in southern California, I need help. Let me take the big accounts. Let me build out the orders for you, submit it back to you, sales director, or back to you, you know, leadership. You can shove that back over, get it approved, then we process it for you. Yeah. And um that's that's very interesting because, you know, what you said is sort of like, "Oh, here's a solution uh to a lot of your issues. If you follow them, probably you're going to have them fixed. Obviously, mistakes can happen here and there, but given that and given what you just said, which is like, "Get your sales guys on the field, get them out." What do you How do you see the cannabis industry um in the next, let's say, 3 to 5 years from now? I mean, I hope it's federally legal by then. That will uh solve a lot of issues brands are currently having retailers are having, right? Um until that time I think more shops will go into receivership. There will be a lot of of uh brands and retailers merging together. I think you'll see more wholesale selling. Um I definitely we see that now. We see some of the larger MSOs beyond the California. Right? Um which I think is beneficial. Uh There's still you know listen, boutique cannabis is still going to be around and that's great. We we need that. I just think that more brands will consolidate, fall under one realm, you know, have better marketing, have better margins, have a better process in place. That's what I see happening. And I think you'll you'll see a lot of outsourcing and that's where we come in, you know, we're able to save money. It's the name of the game and process it faster. Yeah. And what's what's the Okay, so so this is a very good sort of ending to the I want to wrap it up now. And uh we kind of touched touched about the future of cannabis. But what I want you to tell me right now is like what was the thing that Jen learned in HQ that she didn't know before such as what you you actually gave us an example of I did not know that the data is so dirty at at that it needs to be cleaned. Is there anything else that you've learned in it while while in HQ? I I've learned so much. A lot of brands can't afford to have a sales analyst or an engineer or you know, someone that is a master at creating spreadsheets that are beyond what my scope, you know, or the majority of people's scope is. Um there's so much talent here and they're like, "Jen, I could do that and I can do that faster. I can do that better." So, there's so much knowledge here with cannabis. So, that's the first step is like everyone knows cannabis here. Which is amazing because a lot of times you can hire a company and they they don't know, right? So, there's training, there's ramp up and usually usually doesn't work out. Here we already know that. And so, when I can identify a problem or a situation that I see in the industry I could run that by one of our team leads or our CEO and they're like, "Oh, we can solve that problem." I think that's the biggest thing I've learned here. I feel like it's Christmas every day, right? Because on my brand, we couldn't afford to have these types of people on the payroll and right now, you know, it's like, "Hi, can I get a sales analyst?" Hi, how about no, right? So, right right every every moment every penny counts. So, having this team that can create things and me having this idea from my experience is something definitely that I've learned. Like um like I said, I was super excited cuz I was like a little kid in a candy store. I was like, "I can create that, Jen, or I can do that." And to see them do it and do it right and do it well is super exciting. It's super exciting cuz I as a brand, you know, I still think as a brand and always probably will. Um it's exciting to see that I can offer uh affordable services to people um and my fellow brands out there, right? And I get it. I get their pain point. I think I've been through every struggle. I've tried and pivoted every idea. Um, so to be able to translate that to the headquarters team and for it to actually execute and work, um, for example, like I just mentioned the inside sales team, um, is something to be excited about. Yeah, that's great. Cuz I mean, look, this majority of this video or this podcast series or whatever you want to call it, it's going to be like it's going to sound a little bit like a self-promotion thingy, but I don't care because it is. It is a shift. It is The Shift and it is about the people from HQ. So, what you're saying is, and and I could not agree more with you, is look, if you want to grow, HQ is going to help you with that because we're going to cut you cut costs for you pretty much with these professionals that we have in our company. Cuz you know Jen as well as I do, like every single person that HQ hires is a person that has to have cannabis experience in some some matter. And then also, they have to be a pro in the field of whatever they're going to be doing. So, if it's an AR person that had they had to work in AR previously, if it's uh, if it's an accounting person, they have to work in accounting previously. If it's uh, um, a sales office person, again, they have to have that experience. So, love how we've sort of circled round this entire video and I'm really happy about that. And um, I just want to ask you one last question before we finish. Uh, do you want to share with the folks what is your favorite food? You're already going to say it for me, Filip. Seabass. And also, you're not a white wine drinker, right? No, I am not. Love that. Well, thanks, Jen. It's always a pleasure talking to you, especially in this setting, cuz this is a little bit of a different setting for us. Um but yeah. Really really big pleasure talking to you again uh uh about everything HQ, about everything Jen, and about everything Cannabis. So, thank you very much. And uh see you on the next meeting. Okay. Bye. All right. Bye. --- # The Shift, Ep 2: Systems First, Chaos Never URL: https://www.tryheadquarters.com/podcast/ep2 Guest: Marco Pizano Summary: Why durable cannabis operations come from disciplined systems, not heroics. Filip and Marco get in on what separates teams that scale from teams that stall. Transcript (auto-generated, lightly edited): Welcome to The Shift, a place where cannabis secrets stop being secrets. A place where we talk real and no BS. Today's guest is one of those people you don't fully understand until you see what he's actually running behind the scenes. The man um behind the largest team at HQ, 30 people to be exact, one structure, one brain, and somehow it works clean. currently leading the staffing department. But before that, he was running service delivery at Proper AI, which tells you everything you need to know about how he thinks systems first, chaos never. If you ever wondered what it takes to actually manage scale, not to talk about it, not pretend it, but run it, track it, and optimize it, this is the guy. Also, quick disclaimer, last name sounds Italian, but don't get confused. It is a trap. Welcome to The Shift, Marco Pizano. What's up, bro? Thanks for the introduction. Love it. Quite a little love, Nate. I I wanted it to be uh you know to be a little bit fun um but also to sort of bring up all of the things that you do and sort of give you a boost as much as I can because obviously you're you're running an excellent job and yeah everyone knows that. So um perfect. All right. I'm glad to hear. So okay before we go into anything and uh I sent you a message about this as well. I sent everyone a message about this. was a crazy thing, but we got the reclassification of cannabis to schedule three, which is amazing. So, congratulations to you. Congratulations to me and everyone else in this industry. Oh, yeah. That is a huge step. I mean, uh great opportunity for um increased margins. I mean it's not again like we all know we're not where we want to go but uh in terms there's a lot of benefits for uh for investing and increasing like deducting some stuff for tax payroll rent etc. So there's some things that they need to apply here and there and but uh a great benefit, a great step. I would say that pretty much for me is that's the big thing. It's a step forward. I want to I want to hear a little bit about you and I want to know who is Marco Pizano? What what what is Marco Pizano? Okay. What is Marco Pizano? Who is Marco Pizano? a freaking crazy dude that once upon a time thought about being an accountant. I don't know why. I mean, you can see it like out of hair already. Uh once upon a time I thought about being an accountant and um and pretty much what I found it was uh there there is so much more of the normal being accountant. So, Marco Pizano became a sigb of trying to learn different things. um where uh I spent some time in at Deloitte. So I got to see different industries and uh and I got like that taste of h this is nice. This is not just uh account debits and credits and numbers and it's it's more it's about decision. It's about strategy. It's about business. It's about advice to the right people. It's about it's about getting to know the whole operation of uh and the whole cycle of company. So, who is Marco Pizano? Sorry to pick you up. What What did What did pull you into wanting to know more? What do you remember? What was that first thing that from accounting you? So, you you said you were in accounting. You're like all of a sudden your interest started growing and going outside of that like what was do you remember what was that thing that sort of attracted you to go further? Yeah, 100%. Uh I was auditing Nissan. Okay. Right. I was audited. I I was like I don't know like 23 24 years old and then just to go through that massive production lines and like different stuff and then we got to the inventory at the end of the year and so I but going through production lines I was like hm this is interesting. I would like uh to be an engineer and know how this freaking machine works. And then when I was audited, I found out that I actually had to go and understand the process, not just the number. So then I walk through production lines and stuff. So I I tried to ask questions as one of our core values, curiosity. I was asking everyone I got like so many people like, "Shut the I mean dude, do your job." I'm like, "No, I want to know." So that's the thing. I've I got to see like pretty young huge massive stuff for production that I'm like and how does it work like how this p how do we get this piece the raw material and then how does it converts to something else and where where do you get it and like what are the incoterms on on like how do you manage to like uh the cost the sales the distribution the the everything and because at the end of the my if my brain and I had good uh mates and managers and partners and Deloitte that at the end of the day I always wanted to think about a whole business and not just a piece of it. So once you think about a whole thing if you see accountant is accounting is boring for like 99.99% of the people but when you look at a financial statement and you say like this is these numbers when you start reading it as transactions numbers but then uh do we get profit loss whatever expenses what are we spending on but then you think and you connect the whole transactions and then you start like the business the cycle why are we here what every company what is the final goal for each company money so what's the in what's the out why the the the question of why these numbers are moving like this how can we improve these numbers so we can grow we can sell more we can move more etc etc so that's the thing that's I answer your Yeah. Yeah. Yeah. Yeah. You definitely did. But um that is also interesting because what you just said right there was sort of a culmination of all the things that HQ sort of looks at as its pillars such as as you said like curiosity, interest, wanting to learn more, wanting to understand more, um development and so on and so on. So it you know Yeah. Yeah. Definitely because I mean at the end of the day like if efficiency is a money saver which is what the reason literally why we're here that's that totally makes sense but so so and and this is now interesting so if uh do I understand correctly was your last uh work experience prior at HQ you were working at or uh was it at Deloitte or were you working at Proper AI which one Proper AI yeah Proper AI it's a company from San Francisco that manages like share services and automations for uh property managers, construction companies across the US and I think Canada uh nowadays. That's awesome. So, how long were you there though? I was there for over three years. Uh started as a manager, then senior manager, then VP of delivery. Awesome. And and so uh how did you get into all of this, Raid? How did that happen into into share services or into cannabis specifically? Cannabis and cannabis. Oh, that's a funny story. I don't know. I don't know if you know this uh many people will know now. So David reached out to me a few years ago through LinkedIn and like yeah, hey what's up? Hey, we're building a team etc. I'm like thank you sir. Uh I mean I was like thank you thank you. Right now I was in the road of building a lot of uh structure leadership at um when I was senior manager and VP at Proper. So that was a time that I had a big challenge there. A mission I do believe I do believe a lot in missions uh uh in terms of what what you do in a company. So I'm like, "Thank you, sir. I appreciate, but for now, I'm doing something important here." So I I'm not going to move. Then uh I decided to part ways from um from Proper many reasons. It's a great company. I still uh message with the CEO. It's like awesome, dude. Great company. But it um for a certain per period of time we uh I I decided like uh I need to move from there. Uh I did some freelance after and then boom I saw an opportunity in HQ through LinkedIn and I applied and my dear David is like hm interesting now you are interested. Okay shoot that gives him more leverage now. I mean, back then when when you said no and then now you're looking for a job, if I was David, I'd be like, "Okay, this gives me leverage because I wanted this guy, he didn't want it." And now that he needs it, I'm going to be like, "hm, what can I do?" Well, think think about David at that moment. I'm like, hm. But but I I mean I'm grateful he he gave me the opportunity and I and I say I I have given uh I have proved myself here and I I given uh to the company growth and stability and so so a few things but I I'm really grateful with David for the opportunity and he made the right call. Um, absolutely, absolutely. I remember. Yeah. I remember when you joined the call, I was uh honestly quite impressed with you. And when he told me um myself, thank you. Appreciate it. So, when he told me uh what he wanted you uh for in HQ, I was like, "Okay, that makes complete sense." um which which is now a great segue for me to ask you the next round which is what is Marco doing at HQ and this is very important for you uh to answer is because um both internally and generally with the clients that we're working with there there can occasionally be a lot of confusion about what is the difference between the services that we're providing and with staffing was all like a lot of times there's like this very big mysterious question like what is one versus the other is it the same is it different what's going on. So, who better to ask than you, the guy who's literally running the entire thing? So, can you tell us a little bit more about staffing in general and how it differs from services? Oh, yeah, for sure. So, um what am I doing here? I'm doing a combination of uh managing people and client services. Uh there's a few combination recruiting as well supporting and uh and what am I doing with staffing and what is a staffing? So staffing is the support for any type of role or like any oper operational role most of it uh you can you can support in many in everything uh doing staffing what's the difference with services I will give you the example of clients what the clients prefer one client will say like you know what I just need someone whoever to process thousand invoices per That's it for accounts payable for example I need just one person to like whatever or if you do it automatically whatever I need this invoices process so this person this client just cares about the process and the volume doesn't care about whoever does it so that services because we have a backend team uh with Alex that provides that service and I mean this is just one example but services is like huge the staffing It's the client wanted wanting a person uh that to be part of their team. Uh one person a specific person to reach out to for an specific invoice. I want you John Smith to process those thousand of invoices. But if I have any question with any of those thousand invoices, I want to reach out to you, not reach out a point of contact for services, etc., etc. So many clients prefer to have that person kind of like in-house but it's not in-house. It's a staff uh from contractor from our side but it's kind of like part of their team. Uh so this person also is trained and developed by the client and the client feels that confidence that is part of the team. So actually what success looks like for staffing is the client loving as part of their family our staff which has happened actually even in your case dude. So I remember some clients that no I don't want him to leave etc etc and they wanted you so bad. So that's the thing that's a staff. A staff is having that person kind of like in-house but uh you don't the client doesn't have to absorb any social security or hiring etc. We do all the things we do all the fit the right fit and that's the magic also. It's not just filling roles or a process. It's to uh to find the right fit according to the process, according to the culture uh HQ culture and according to client culture and client needs. That's like a different combination of elements which make us different. Yeah. and and and so that is perfect what you said there because uh pretty much like let's say staffing the way staffing functions is like you would want to have a workforce that we're going to find for you. We would find a perfect match but we would also run all of the sort of um boring slash could be expensive stuff on the background so you don't have to worry about that stuff. We're literally going to get you a perfect person that's going to match whatever you need. They're going to be following your processes. They're going to be doing whatever you might uh require from them for that particular position, but without the the, you know, the HR stuff, the um uh compensation stuff. All of that stuff is going to be handled by us. You're literally going to get a person and you're going to be having that person do whatever uh needs to be done in that position, right? Yeah. But like I'm all like data driven, so let me give you a few numbers. many of the uh many of the businesses uh and even more startups or businesses the the percentage of administrative cost sometimes is up to 26%. So dude, how are you going to grow and operate something business if your oper uh operation like operation and expense is that huge 26% for like accounting administrative stuff? It's like it's not it's not a scalable model. So that's a solution. Hey, don't worry. You you don't have to pay that much. you can pay uh up to 30 50 70% less depending on the the seniority of the role but even you can get even one or one person that it's more experience because at the end of the day it's like lower cost but more experience you know. Yeah. So that's that's and and also so think that's thinking about money and uh to be more scalable for the business but also you think okay how do I scale my business if I don't have time so that's the most important part at the end of the day you need strategy you need to think you don't like if you're running a business and you're every day or you are it's not your business but you're management of that business and you are like in a daily I need to finish this and I need to finish that. where when are you going to think about strategy grow uh efficiencies etc to be scalable so you need that time that's also a relief from our side that's where we come in and reduce your cost automate your some process improve your process build so that it like doesn't exist in many places and also guess what I give you your time back think about how we improve how to improve, how to grow, how to make more money. That's the thing. Time is money. That Yeah, that that really does make sense. I mean, it is a cost-saving thing. Um, you get what you want and uh you also get on top of it your your support, Marco Pizano's support as well of like, oh, we're having issues with this. How can we resolve that? which now gets me to ask my other question regarding staffing and the differences between staffing and services. So, typically like if we're if we're talking services, you know, generally speaking, let's say we have a client, they're going to come in, they're going to be like, you know what, we need someone to do AR. We have zero processes. We have nothing. We don't have any tools. You build everything out. You create everything and and we're going to just, you know, have you do all of it, right? So, with staffing, it's a little bit different, right? you would go in and you would provide to people most of the time they would have their already defined processes right or how does that work? Uh no no but or or the process is in place but really broken or wrong. And and let me say you this this is super important and this is part of every time I interview someone I tell them this the most dangerous phrase in any language is we always done it this way. That's the most dangerous phrase everywhere. Why? Because okay you could have a process you can have a broken process you can have no process at all. where we come up is we need to either create a process or improve the process or even question the process that is in place. And I gladly say that and and this is like really awesome. uh we have people that have improved in so many ways and so many processes uh across like many clients and could be something like really really small and really I I I must say like sounds stupid but it's like so like so much impact and I give you one example quick example think about a process that uh step of accounts payable that used to take 70 hours per month because you need to confirm. Okay. Uh I have to pay this invoice. But do we receive the goods or not? Uh we need to confirm. So that's with another team. So let's go and let's that but the other team there was a third party that in enters the invoice. So clock is running and but you need to verify. Do you follow me? Yeah. Simple simple process. Okay. So the back and forth of verifying that it it used to take 70 hours per month. So one of our uh awesome girls just said like hey why don't we tell the third party that is like inputting the invoices wait for one week and we will reduce over 50% 60% of the uh of the reconciliation back and forth. It sounds it sounds like pretty simple and like so the manager of the client was like okay let's try boom 70 hours saved in one month. Wow that's that's a lot and that's a small thing. Another example uh and you know this girl Laa Control uh she became a team lead but becoming a team lead comes with challenges because you have a lot of responsibility but also you have also hands on deck you know so she was like like not enough time I'm doing a lot of overtime like this is so this girl that is it's not like engineer finance it just like hey let's let's ask ChatGPT, let's use Replit boom she just made an automation for cash application that is awesome and you will see it pretty soon because this this is going to be uh applying for another clients as well why because she's like I cannot hold this anymore like there's too much volume too much I need to automate something and and you know we have team that develops engineers and so HQ and [ __ ] Ah, let me try it. Let me do boom, boom, boom. There you go. She just herself. I love that. Yeah. So, so anyway, the answer is uh staff or the comment is staff is not just about filling a role. Staff is finding the right person that could give you a big impact, not just doing one task, improving the process, automating. Uh there's a lot of automation, small automations, huge automation that could be done. You can do an automation with Excel. Uh you can you can build something with an appcript in a Google sheet and and save you 10 hours per week. So it's and you you just need to ask ChatGPT and then like perhaps use Replit or some thous tons of other tools. So we need those type of person there that can take a look at your process and say hey we can do it better or um this is wrong we need to it's not like we can do it it's like we cannot continue doing this because it's wrong because of our financial standard because of the time that is spent because of whatever again not it's the the dangerous phrase. Uh, we always done it that way. This way is the most dangerous phrase in any dimension. Yeah, that's that's exactly what I wanted to ask you because, you know, going back to that phrase, when you say something like that, you're literally limiting innovation at any point in in future, right? Because you're you're putting a a you know, full stop to to whatever conversation. And now my my question to that would be and I'm assuming you probably came across some of these uh while working here but have you had situations where you're like you know what guys this is something that is a bad process it has to improve it has to be changed. It has to be altered. We need to create a fully new one. And you hear on the other side you hear no we're not doing it. How do you cope with that? How do you handle that? And how do you manage to pull it off on your um on your goal which is ultimately to improve everything? Patience and I would say patience is not my last name but you need to develop patience is patience in cannabis. Are you sure? I mean honestly dude again look at my head but no it has happened. Um so what how to do it and accomplish is patience step by step. There will be um resistance. Uh there will be people that actually get mad. There will people that also could be afraid of losing their job. Uh and there could be nasty nasty comments as well. So you need to be patient and you need to be consistent and you need to be resilient on the idea. There is this a little bit of a paranoia when it comes to the industry about change generally speaking especially if we're talking tech. Why is that? Well, I can tell you like a list of different stuff and and at the end it's a combination. So one of them is some management is not actually uh in the cannabis culture. It's just manager uh it's just an engineer. It's just a most of them are but I have found in many clients that they're not into the cannabis culture. So that's one. The other part could be uh the the uh the actually the part of no this is the system that I has always worked for me and I don't want anything different. So that's like this has worked for me and I don't want nothing different. That that is the other part but I would say gladly uh not that many cases like that. uh many of the cases and and I appreciate I am really grateful for that many of the clients that I support are people super open for automations for improvements but most of them that's that's the beauty so far of my job I love my clients but uh no no seriously because they they are open for suggestions and they are like some of them are really challenging like hey but it's like super micro detail and I love it. But let's go. Let's do it. That's awesome. And one of the other things which is again very important and and this is a little bit of internal information but every single person that is your report like they really like work. They love you. They they really trust you and they feel safe with you which is not something you can say for a lot of managers because a lot of managers are just managing. they're not leading, they're not being supportive. And I think that this is one of the strengths that you have which sort of defers you from the rest of the bunch. Um, which I'm really happy to hear. Why why that? No, no, no, no, no, no. Because I I one thing and and this is something that I always tell everybody. Uh, I'm not the boss, you know. I'm a I'm a teammate. That's that's the first rule. And you know it like we have worked a lot together. We are teammates. I'm not this superior. I have different responsibility and I need to and I to be and I am I'm hold accountable for many things. But the first rule is like the wins are yours. The trouble are mine. So like I need I need you. I'm I have your back. Please dude have mine. And the way that you have my back is doing a great job. That's one thing. The other part is I'm old, dude. I mean, well, not that old, but I can say No, I'm not that old, but um but but I had I have had so many hard situations in my uh professional life that my like the lessons that I learned it was what are you doing, dude? Uh you're spending 8 hours, 10 hours per day working. That's your life, you know, and I need to enjoy my time. And how am I freaking going to enjoy my time if I don't get along with people? So, I don't I'm not a believer of the uh we are here just for work and like I don't make friends at work and I'm like I I mean I don't know. I I cannot say that it's right or wrong. I can say that it doesn't fit with me. Why? Because I still have a lot of friends from previous companies. A lot. I mean, I still call them. I still hang out with them. I still travel with them. Why? Because you spend your life at work. That's the real thing. So, why the heck do I have to be a robot? No. And the other part is um whoever I'm I'm the is part of the team. I am usually and you know me that like I'm I don't go around and I'm I'm pretty straightforward dude. So, but now I I I care about building community. I care about like the people I'm and and I guess also it's part of my education, you know, like I was educated that way. How hard it is to build a community and to lead a team that is fully remote. Because what people might not know about HQ is that we're a fully remote company. Like we don't have, you know, obligatory office hours or something like that. Like we literally everyone works remotely. Occasionally we meet each other if you know we're traveling and stuff like that, if we're having events in the industry, whatever. But we're a fully remote company. And like for someone that like is looking from from the side, especially like after COVID where everyone tried to see if remote work is going to work, all of a sudden everyone's returning back to this like sort of either hybrid model or like office model and we're like we're just fully remote and it's I'm going to say it's working for us, but how hard it is for us to get to the part where we say it is working for us. where um I can tell you what works for me. Um I don't know like it if it is the right way of doing it or not but what it works for me starts and we has I I think we have spoken about this before starts with uh the face of recruiting. Why do you care when you are uh hiring somebody? because I can find a candidate that is like a super genius but doesn't have that cultural fit, doesn't have that attitude. We have that vibe, you know, we we have that vibe. So, we need it's not like I want someone exactly like me. No, never. I mean, I don't want copies, but I do want a cultural fit. I I rather to have someone hungry with good attitude that have a super genius. Why? Because I can work with the the person I can train. I can support and I can learn from that person. Uh with a super genius that it's like uh the the the last coke in the stadium. It's thank you sir but we are a team here you know. So, so the first thing how do we manage and how we build community from the beginning from uh from the day that I called you and hey nice to meet you we're HQ who are you that's the first thing second thing when when you enter you need uh I I like to like uh set up the tone in terms of the community in terms of we are team support how are you etc. It's like a constant communication that last year I did a bit uh it was challenging for me but um it's constant communication a lot of communication uh setting the metrics clear the the more like the more clearly you are you will not give give everybody step one two three of the whole process or everything that they're going to do because we need to be flexible and everything changes from one day to another. That's the real stuff. But we need to be real about it, you know. We need to set up the tone of we this might this is this is what you're gonna do today. Something might change tomorrow. But we need to be like we need to say it straight and but we always need to care about uh timeliness uh responsiveness and accuracy metrics data etc. So it's from day one and constantly. I'm one person that uh has a lot of communication. I don't micromanage. I'm not a believer of micromanagement at all. I think that actually uh makes things going slower and perhaps like no I'm not a micromanager but I do care about knowing almost everything in terms of operation visual what is happening what what is everybody doing how everybody's doing um I have a contact with the clients what are you doing I want to know about how the client is I'm not going to know everything But I need to know uh some of and like communication, communication, communication. One quick thing when I was in automotive industry, I spoke with a worldwide CEO of one of them. And it was funny because I was just having a smoke and then this guy CEO comes alone to this area where we were smoking when I was smoking. I'm like the CEO why can I why do I ask him you know because it was the this big thing in Japan I'm like what has been like so many years as CEO what has been your biggest challenge and it goes pretty straight like communication that's the biggest challenge everywhere communication so that took into my head and it's like okay it's not about just improving and it's not about just efficiency it's It's communication how you build communication, how you communicate effectively, how etc. So, and sometimes you need to be repetitive in terms together. Yeah, I send a message a message and that's it. Dude, give a call, dude. Slack, dude. No, I sent the email like two days ago. So, what your goal is to like have an interaction, a communication, so look for it. You know, stupid thing, but for me, communication is one big deal. But that's very well said. You want interaction. You don't want a one-way street. It doesn't make any sense. Pick up the phone. Pick up the phone. Yeah. Now, Marco, you've worked, and as far as I know, you've worked with manufacturers, you worked with brands, you're working with distributors, retailers. You're the person that's sort of everywhere a little bit, right? You might be the right person to ask about what what can we expect next in the industry. Do you catch a vibe when communicating with all of these guys? You know what has been confusing? But yeah, I can I can answer my perspective uh from what I've seen in the clients and what I have uh seen. So you see a lot of things in the news, the changes, schedule 3. Um, so there's there's a lot of investments coming up. There's a lot of big names coming up. Uh, companies from Canada that are growing in the US as well. Um, but it's there's a lot of challenge uh in terms of cash. So what do I see? I see an industry growing this year. uh better than last year. Last year was kind of like an inflection point or like tough uh I don't know uh it was weird but this year I see a bit of growth but also a challenge of uh how are you going to manage your cash? Cash it's always been the king. So so times up. So whoever manage better the cash and it's not about to hold the cash it's about interact with the cash you need to move the cash you need to pay but you need to receive you need to do the whole transaction to make this uh whole cycle alive so whoever manages better their cash um I think is is going to be tough and and whoever doesn't uh will most likely disappear. That's that's that's a very good point. Do you think now based on what you said, do you think that maybe a lot of businesses might now given that there is this very big opportunity? Do you feel like some businesses might be having issues ex or sca scaling let's say because they were not prepared or do you think that the better sort of or more often more frequent situation might be that these businesses have been waiting for this for so long that they've been preparing for it and that now they're going to be scaling fullon without any errors. What do you think is the more likely one? Uh let me put it this way. What I have seen is that many people is like um or many businessmen try to hold into I I've done it this way some cases. Okay. Okay. Okay. I see where you go. Yeah. So at the end of the day uh like yeah I don't care about this and I don't care. Let me let me put it this way as well. Finance is boring. accounting is boring when you start reading the financial statement and see like hey these transactions did and there and there. So you need you need people to read and not just thinking about uh a like a margin of profit. You think you need to think about how can I reduce my cost? How can I improve efficiency in opics? How can I sell more? How can I make a distribution more efficient? Uh how like you need those type of questions and you need to know where uh your transactions move and where uh according to the market according to the numbers of the market as well. So you need a combination of things. So short answer is you need you need to educate yourself in terms of uh the information and the transaction you do in order to make better decisions moving forward and how are you going to do it? Um let loose man people just need to let loose and they have to be less paranoid and I think less stubborn and less ego driven. It's a lot now less It is. That's pretty much it. Like just let go of the ego, let go of stubbornness, and feel free to listen a little bit more. And when you start listening, you're going to you're going to sort of differentiate the actual noise from a melody and you'll be able to understand which one is what and where you focus your attention to. Yeah. Awesome. Look, I this was a very interesting conversation and I loved it. Uh and uh I feel like we we're just at the the beginning of a bunch of other things that we can go through because um you're an extremely interesting person, but I obviously this not the last time. We're going to be talking a lot more in the future. Funny because I Funny I had a podcast for several years. Oh, really? About what? Oh, about everything. But most of it about uh music, cinema, and some politics like but fun stuff, you know. Love that. That's Oh, perfect. So, you're you're kind of this is your ter territory. You're not as I I I did some actually commercials for I work for a radio station as well. So, awesome. That's great. Did not know that. So, see how interesting you are, man. We're definitely going to have more of these conversations in the future, but I appreciate your time today. really. I do think that um whoever jumps in to watch this one, they're definitely going to learn a lot more about uh a bunch of things uh that you do right now and that um HQ is doing with you as well, but they might also learn a couple of things about industry and about um these different types of individuals and companies that um there are in the states and you know some some other countries as well. So, thank you so very much. Appreciate you once again. Have a great rest of the day and we will chat soon. Marco --- # The Shift, Ep 3: Inside Cannabis Sales Ops URL: https://www.tryheadquarters.com/podcast/ep3 Guest: Dusan Markovic Summary: How modern cannabis sales teams really operate — order entry, inside sales, account coverage, and the data behind every closed deal. Transcript (auto-generated, lightly edited): Welcome to The Shift, a show where we talk all about cannabis and business. Now, today's guest is a very peculiar individual, a person that runs a legion of people in his apartment, a person that knows sales, but interestingly enough does not sell, a person that operates within sales, an ex basketball player, frequent traveler, and a guy you go to in order to save your sales guys money. But we will talk about all that in a second. Please welcome Dusan Markovic. What an intro. Wow. Right. Yeah. I actually got a fact check you. I didn't play basketball. You did not? No, I played tennis. Why was I under the impression you play basketball? Yeah, I love basketball. I mean, I played basketball as a junior, but not really professionally or semi-professionally. Do you remember when you and I actually first met uh in person? I said to you, you're extremely tall. Did you ever play volleyball or basketball? You said you played basketball. Yeah, I played basketball, but didn't you know, I didn't play played professionally, but you know, you ruined my intro. Doesn't matter. Um, it's all good. It's all good. But that's that's great. That's a great intro. Let's start off with um you and sales. So where did that start? Where did you obtain your understanding of sales and how sales work? So before I came to headquarters, I was actually working in sales for about five five and a half years. Interestingly enough, it was a Canadian internet service provider and it was a small team but I came as a junior back then just learned the ropes started doing sales grew kept going to like a meteor senior and then eventually a team lead and uh ended my career there after 5 years came to headquarters and funnily enough that's a great story uh how how I met our CEO David and uh the whole headquarters opportunity. I drove for 4 hours from my city to Belgrade to meet David and surprisingly I was met by 10 different department heads that interviewed me at the same time and it was a it was a funny and eye opening experience actually and uh got a call a few days later and we're here since and this Wait, so so you you drove from Niš to Belgrade to for the interview with him. Yeah. Yeah. I I passed everything like I I So I I spoke to him online and I was like, oh, nailed this interview. About to get a job. 3 days later. Oh, can you come meet me in person? I'm like, wait, I didn't get a job yet. Sure, let's let's go. I'll I'll do it. And yeah, met met him and uh well, everyone from headquarters at this point there. Uh, and that went great. Uh, got a call back a few days later, got the job, and my journey here started, and it's it's been an eventful one to say the least. But that's that that sounds so much like David. I'm not surprised. Yo, but honestly, life-changing. that that whole experience just puts things into perspective for me like where I was and where I am today and how higher level things were. I to I thought I knew sales and I thought I knew the business and then saw these people in person like challenged me on a completely different level than I was challenged before and I felt so small at that point. I was like, "Yeah, we don't belong here." And then, you know, now as things stands, things are great. As you know, obviously, obviously, yeah, we're we're running it. But it's it's actually very interesting what you said there cuz like I was sort of under the same impression as well when I met David and when I when I actually started working with HQ because it's not cuz I I've had some uh previous experiences with startups. I had some previous experiences with corporations and this one was like sort of a mix of both and you're you know it's it's very interesting how you have to juggle between the two to to actually reach the goals that you want to reach. So really does make a lot of sense. Um but so let me revert back to the sales uh experience previously. So five years you were selling internet provider contracts or how how did that work? Yeah. So I sold everything from like internet service to like internet equipment and it was mostly residential. There was also some commercial sales but I was mostly in the residential area and like it was rural Ontario. So you got to understand there wasn't like highspeed internet back then. That was like 8 years ago at this point. Wasn't highspeed internet everywhere. Starlink still wasn't established. So uh it was just a struggle for you know hardworking people that had money to find reliable internet. So I figured out you know how to sell it, how to approach the clients and how to hit my targets essentially. But what was interesting to me at that point that I didn't know was how connected the problems that I had back then were the problems that sales teams are facing in cannabis. And it's surprising that like when you walk into like a sales industry for a bigger company, you will have a defined role which is, you know, just going to hit the road or hit the phones, call and close, and that's it. you're hitting your targets, you're getting paid. But with me back then, I was doing sales and post sales. So once I make a sale, I'm like drafting up a contract, organizing the installers or like the people who are going to install the equipment. So like I'm the one navigating the logistics behind it. And I noticed the same thing in cannabis, too. It's like people would like make a sale, be on the road for 8 hours a day, then come back home, submit orders online for like 3 hours. And I'm like, what are you guys doing? So that's that was an interesting parallel that that we are now solving basically. That's that's actually a great segue to what I wanted to talk to you about next, which is what are the differences and similarities between what you were selling before and now as someone who's really attached to this like selling process with other uh brands is like what is what are the major let's start with the major difference and then we can we can look at the similarities uh when it comes to selling in cannabis versus uh your previous experience. Yeah, obviously. Well, cannabis is just the major difference because things are just not consistent. And I noticed like the brands that are on top are consistent and they have consistent products, consistent strains, consistent percentages. And like coming from other industries, you know, you're selling the same thing. So, the pitch is the same, the motions are the same. And here like one month you might have like a blue dream, you know, flower that's like 32% THC and then the next batch is like 24. So it's a completely, you know, there's a lot of inconsistencies that you do not anticipate. And also what I noticed is people in cannabis are way leaner. The companies are just trying to save as much as possible and everyone is wearing multiple hats. So that can be a blessing in a startup. But if if you're scaling, that's a problem. And as you know, like in our business, all of our clients want to grow and want to scale, but they're facing this fundamental problems where, you know, you have a salesperson who's also an analyst who's also an admin. Uh so that can't be good. I mean, sure, there's, you know, exceptions to the rule. there's probably some superstar people that don't even know how how good they are, but most of the time it just creates chaos and inconsistencies. So, that's like the biggest uh thing that I noticed. Yeah, it it's it sort of sounds like there's there's um there's a lack of definition between the roles, which is understandable given that, you know, the market is also sort of kind of young if you compare it to other markets and under other industries as well. But like on top of that, like we're not talking about a fed a federally regulated market. So it's very different from state to state and there's like all a lot of a lot of these differences that you have to get adjusted to. But uh um but it does make sense. Now, so and this is interesting because I'm just going to say it and I'm pretty sure a lot of people will agree with me, but you are killing what you're doing. like you're really good at your job and that's like sort of a well-known fact between everyone you and I know but also between some of the clients that you're working with as well. And um when you were talking a little bit earlier about that whole process when you were selling before at that internet company and you say like oh when I finish the sale or the sale I have to go and do do a bunch of back office work and and logistics make sure everything is executed yada yada yada. So what I'm what I want to hear from you is was that a contribution to how successful you are at the moment right now with what you do and smitch a little bit of um of a teaser of what you do specifically. Yeah, a thousand% actually. Now when I turn back the clock when I used to be doing that I was so annoyed because all I wanted to do is sell. Like I I used to tell my previous mentor is like listen just give me the leads put me in the position where I can succeed the most. I know I can outsell almost everyone here but I was just so annoyed with all the back office work I had to do. But that then right now that like enabled everything that I'm doing today because it taught me like how to be accountable, how to like be consistent and also multitask at the same time because you know cannabis is very chaotic and like things happen in a snap. Like you would be doing you know a a job today and then tomorrow that job might completely change. you would be using a process for 2 weeks or 3 months and then all of the sudden, hey, here's this new AI tool that can completely revamp this process and it can automate it completely and then you're like, aha, let me get on that. So doing all of the admin work and like doing the repetitive stuff over and over again helped me tremendously like adapt to cannabis and sales operations in general because when I came here I didn't know what exactly we did as a team but then as I dived into the weeds I was like wait a minute I was kind of doing this back in my job except you know it wasn't in focus it was just in the back end so it was way easier for me and And as we started growing and growing, I was able to like put all of those lessons in motion and kind of make sure I'm organized and I'm staying on top of everything. Great. And that makes a lot of sense. So So if give me your elevator pitch. So what what is what is your job? What do you do? Tell me in a in a quick one. Well, I like I like telling people to sum everything up because I can go in elaborate detail, but basically what I do and what my team does is we just help sales people do what they do best, which is sell. And the way we do this is exactly what I hated doing before. Like I just take a give them back their time. That's like the number one thing. So focus on your work. focus on doing what you're getting paid to do and what you want to do. And we'll do everything else in the back end. Whether that's order management, menu creation, uh CRM, uh management and updates, all of the tedious things that they hate doing, we love doing and we are very good at that. Uh so that's the elevator pitch. I can go deeper. Uh but basically just enabling them and buying them time. But but that's that's that's crazy because like you just and that's interesting because again it sort of intertwines and it connects but you said before like when you were working in that internet company said like you know I wanted to sell I don't want to do all this back office stuff and now knowing what that struggle is as someone that knows how to sell. You're like I just just give me the leads. let me handle everything there and then you do all the other stuff that I don't want to be bothered with which is which is awesome. Um uh but yeah I look feel free if you want to go in in more detail if if there's something that you like to say specifically about what you're doing go for it and then um I'll probably follow up with some extra questions um if you want to. Sure. I mean, the the premise of our job is simple at first, but then as you get deeper, it's way more layered and way more complicated. That's why we're sometimes used to have issues recruiting and finding the right talent. But I'll talk on that a little bit later. But basically, a sales hypothetically, so a sales rep would close down an order. They would call or email our team, hey, here's the order. Can you please get it into the systems? And then invoices in invoice it back to us, right? But the complications and the problems often come from like inventory. Like they would sell something that's out of stock, low stock. And then we got to figure out the logistics behind that because obviously everyone wants to save revenue, right? Like if you make an order for 10K and you can only fulfill 8,000, where is the 2K coming from? You know, so that's where we come in. We're able to make smart substitutions like note out of stocks like figure out figure out what the brand wants and then what the retailer wants. We give them those notes you know on our hand and in our own SOPs. So we are able to like on the fly make those decisions and uh save the revenue and also as I said like save time for the people doing that work. Yeah, that's that's actually a fantastic thing that you've mentioned there is and it's because and I'm looking at from from the perspective of other departments that HQ is doing as well is like we communicate with all sides and um you know whatever services that we do have they're communicating and working with both brands, distributors, uh manufacturers, resellers, retailers, literally everyone. And we sort of get the pictures from all them. know what their goals are and we can use that to our advantage to make sure that whatever service we're delivering, we're delivering at a good quality, but also making sure that all the parties are equally satisfied and and that sort of translates uh to to you as well and what you do because obviously as you've been growing, it sort of goes to show that you as someone who does communicate with all these guys, you really know what they want and what they need and like give them um and and make sure that satisfied. That's that's super important and actually an unsung hero of all of this that I've done is like proper communication with sales reps directly. Of course, everyone wants to talk on a high level, you know, with decision makers and CEOs, but having great, you know, understanding and trust between sales rep is super crucial because you're dealing with their revenue and they need to know that you're on the same page as them and you will do no harm to them. And coming from sales, sales people are superstitious. salespeople do not trust anyone, do not want change and do not want to evolve. So, uh us having to like thread that path correctly and communicate effectively helps everyone win-win because if like they want to trust us, they just, you know, don't know it yet and we obviously want to help them with their work. So, building that relationship is super crucial. Yeah, that that definitely does make sense. So, and you know, taking all this into consideration, when you look at all of the HQ services, sales ops is one of the most popular ones. I think it's not the most popular one. So, what does it make so popular? What is actually So, when you're talking to the stakeholders on a brand side, right, what is the thing that you see like, oh, this is what sort of ticks in their head and and that's why they get interested. this is why they want to come here. Why what does it make so what does it make sales ops so popular in HQ? That's a good question and I think it just easy to connect the dots for higherups in a sense of hey let's give your sales people more time because they can make more money because that's how they talk like everyone wants to generate more revenue and I've heard this before uh from one of our partners was like hey before you guys came in they were super unhappy like they did their job but they were like one guy almost quit on me uh we had to fire another person to bring a fresher person on board because they were just working 10 hours a day and half of those hours were like doing admin tasks. So I think it's easy to make the connection between uh us you know stepping in on a support side of things and then them going out more and generating more revenue and also saving time and making them happier because unfortunately for you know 70% of the people not in sales sales people bring the money I wish it was like more equal uh but people will listen to sales teams so us coming in and building those relationships is super impactful and also very easy to integrate. We don't require a lot of training. We don't require any SOPs. Uh we're we on board within a week even less within days. So it's super seamless uh for us to come in and start doing that work. So that's I think what's a big benefit for us. Yeah. And and also like you yourself know if you're a dissatisfied salesperson, you obviously know what's the difference of how you're going to be selling and how successful you're selling if you're dissatisfied versus if you're satisfied. Uh and and what let's not even go there if you have all of your time reserved exclusively for you literally going out and pitching to people and selling product or whatever it is. So that does make uh a whole lot of sense. Now, um I so before this podcast obviously I reached out to you. I was like look I and and I was really passionate about this because it's a very good sort of case study/example of why sales ops is an extremely important service and and a you know a a good solution for different types of brands. Um, so I've asked you like what can we do? What can we share about this one specific brand which we're not going to name at the moment right now, but give us a little bit of a clue of, you know, how big they are, who they are, and and tell me about this success story um with this client. The brand that we're talking about is top two MSOs in the business. They're one of the biggest players in cannabis and we've been working with them for I would say about two years now but for a year we work with them in a much smaller capacity. So we supported them in three different states and those were the smallest states in terms of like output and volume. And then I mean we were obviously doing a good job. Uh and this was before I became a manager of this team. And then once he became manager we started talking about potentially expanding with them and no one understood the scope because my team was not running on high volume to that extent. like we were just doing a good job with a lot of clients, very efficient uh but smaller uh and then this opportunity presented uh itself to us. They wanted to expand from three states to eight states and that those includes like their biggest hitting states and our volume and output quadrupled in 3 months. So, we went from like I don't know like 500 orders a month back then to today three three and a half uh thousand orders a month. Our team tripled uh in the last year. So, we went from like five uh sales ops people to now 17. But what's interesting there is like our efficiency increased because our output went from 500 to 3,000 and our team just tripled. So, that's what I say. It seems like it was it's actually a a money saver on top of a money saver pretty much because you save money by having the service and now all of a sudden you're expanding with other states. You're saving the money on saving the money with having less of required individuals to do this job but having as you said quadruple the number of orders um that they're um asking you to do for them. So that's that's that's amazing. Yeah, it's really really a testament to like how hard the team works and just headquarters in general. Like every again I will always be a preacher for the people. Uh I love working with people like putting people in the right positions to succeed and this whole experience in the last year has been you know life-changing in that regard. just hiring the right talent and then training and onboarding correctly. Uh just setting processes in place. I mean obviously if things stay the same from before that deal to today it wouldn't be possible but we had to like strip the whole process naked basically and just build it from the beginning like make sure all of the SOPs are in place and followed build checklist. uh build accountability within each person on my team and then you know lead by example also I mean when those things are happening I was working actively with all of our clients back then so I was able to like coach people and mentor and take them with me show them how I think how you know anyone with more experience should think and now today I mean we have two team leads within my team when I joined uh and I became a manager I was doing the work alone now we are lucky enough to have promoted from within that people stepped up and now are leading these teams but it's been a great collaborative effort. Of course, you know, I I don't want to sound cliche that, you know, I'm no one without my team. I mean, it's kind of true, but also it just everyone worked hard and I helped build this processes that today we're scaling with other clients as well and we built a blueprint that now is so easily replicable. Uh it's insane. Uh and yeah, sorry I went on a tangent. I'm just very passionate about these topics and you should be because again it is a very huge success story. But also what I really love at what you said there and I think we're I both of us are coming from the same place is that the the way that HQ differs from maybe some other companies in terms of hiring is that and as you said like I don't want to sound cliche but what we do is we really try and focus on finding the right people for the job. And when I say the right people for the job and I'm not not thinking about like you have this degree or you have just this experience or blah blah blah. I'm saying of like literally trying to understand what that person wants to do, where do you fit perfectly so that they're going to be satisfied with what they're doing, but also that the delivery um is going to be at a level that no one can beat, right? And I think that the reason why they're doing their job so well cuz like what we don't even have like a turnover of people. It's like whoever it's like people are extremely valuable and the backgrounds that we have at our company are like are do you want to do um I don't know whatever accounting you have to know accounting but you also have to have cannabis experience cuz without like that's sort of the way that we go about hiring people is like you have to be within both of these scopes otherwise it's very hard for for it to work cuz if you're not in the cannabis industry, you're not going to be used to this dynamic surrounding that's like constantly changing as you said yourself but also we need the expertise of I agree and also like I don't know how how what your experience is with other teams but I I always set myself up up for failure uh on purpose with like recruitment for example I always tell them hey guys like this is not for everyone like you need to be able to multitask and like pivot Because like being able to pivot in this industry is like the number one skill and I will never not say that just because you never know what you have and then it's gone tomorrow. Like you need to be able to have a plan B and a plan C and a plan D and like just being able to constantly be able to like, you know, task switch and go from one place to the other. That's like super crucial. And some people are not cut out for that. And you have a Frenchie there. This is my sister's dog. This is not my dog and she's uber uh attention seeking so I I do apologize. She's just I think that's cool. I think mine's sleeping next to me. So that's that's great. Come on. Come on. But it's my sister's dog. I I this is not Sorry for getting dog. Go. You're good. Don't worry. Um yeah, that's Yeah. Uh we're on the same page there. And I think this is extremely important. Not, and I'm not talking just about cannabis industry. I'm talking general. If you want your business to run good, your people need to be happy with what they're doing. Um, and that does not include, you know, just like having quality compensation. They have to be valued and cherished and appreciated, but at the very top understood as individuals and where they fit. Um, which is which is again the reason why we're so successful as well. Um, now We talked a little bit about like sort of hiring people and sort of like going into the past, but what I'm interested right now is what what it when you look at the industry right now, when you look at what you're doing, what are the problems that you're facing in sales operations or what you anticipate might be a problem in the future that you're looking for a solution right now? That's that's a good question and also a broad question. and I'll try to answer it from from my perspective. It's like I mean you know this uh but everyone's facing cash problems right now like it's tight. People are trying to get creative and smart in terms of savings and obviously that's not great for business but we also have to be creative and figure out solution to solutions to problems that our clients may have and also anticipate solutions to the problems you're going to have tomorrow. So uh right now in terms of like sales ops what we've done historically our work is very reactive. So we would be hey here's the deal I closed here's the order get it into the system and we execute so fast but like that's the root problem is it's very reactive. So my goal over the last like year and I've talked about this with you you know Jen you know Adam we've been talking about this for a while is like how can we do the job that we're so good at but be more proactive about it and right now what we launched recently is inside sales which is the more creative approach of order management or order entry however you want to call it is like utilizing the POS data and the data that's out there in the ether whether you know our clients are sending to us or we're scraping through Hoodie or Headset uh realizing like what's in stock generating those reports and then us doing that work proactively hey here's here's an order a sales rep didn't have to call us to trigger it would think that this is what you should order based on the sell through data and based on all the reports so everyone can get a win-win because how sales works in the old world is you know sales people would be so hungry and greedy for their cut, they would oversell very aggressively. And that's fine for the sales rep. He's going to get commission. But then brands and stores can get into potential problem with, hey, your product is sitting on the shelf for 7 months. You need to credit us. We can sell this. So they're going to be like AR, we're going to be paying you like Yeah. Right. Exactly. Pulls and pushes and creates this ginormous issue for a lot of different um departments, teams, individuals and so on and so on. So I completely get what you're saying. Yeah, I I agree a thousand% and you guys are doing a lot of like your team is doing a lot of the work. Exactly. Because of those issues. So now we are being more strategic with with that work and just always ensuring that the product is shelf the appropriate amount of time. I mean that's like in discussion with the client of course maybe they want to be on the shelves for a week for two weeks maybe the order should be once every month once bi-weekly. So based on those conversations we do the work in the back end generate those reports make an order and everyone's winning because the shops will order more frequently. maybe not as high amounts as they were before, but you're going to get frequent income and they're going to pay it on time more often than not because they're not going to have uh overstock product. The product is going to keep flowing and moving and then you can work on that relationship in terms of AR. It's going to be, hey, you guys owe us XYZ, but look, we're constantly, you know, supporting you with the right amount of product so that relationship can be mended. So, this is something that we are currently working on and developing. We currently have a couple of clients that we're doing this work with. And then maybe tomorrow, well, I might save this in in my pocket, but right now problems, cash problem, and us being more proactive about our work. Okay, got it. Makes sense. So, and and now let me just retract a little bit with with the inside sales things. Uh would can you would you say that inside sales is like this new improved modernized version of order entry? Would you say that? Maybe I would well I would not frame it like that but I would just say it's the big cousin of order entry just because they are adjacent like you you can't do one without the other because the good thing about headquarters and our services right now is if you're getting inside sales from us you're also getting order entry in the package so we do both. You don't need to like worry about having to do admin work yourself. It's just like basically a Pokemon evolution of order entry is today. Yeah. Comparison though. Love it. Love it. That's great. Okay. Awesome. So let me and this was this was extremely helpful for for me to understand what you do even more than um how I do understand it right now but also for whoever going to be watching this they're going to have a better understanding of what sales ops is and order entry is and what you do but let me generalize it a little bit and ask you and this is something I'm asking everyone because I I want to genuinely understand and hear what people see in the air and what they feel in the air and that is Where is the cannabis industry going? What do you see for the cannabis industry in the next period? Let's say a year or two years from now. I'm hoping it goes federal because it's been a blood I mean you know this. It's been a blood bath lately. Uh markets are way oversaturated at least like the top markets. Like we we had an exodus from California for a while uh with my department. uh we weren't in California for like a year even though like in the past we were and now we're back and what we are seeing right now is a complete parallel of what was happening like even 2 years ago but 3 four years ago it was way different but it just margins are super thin it's oversaturated like the competition is huge and everyone is just bleeding money and I mean for the sake of the industry I think I mean I think we're headed there I don't know how soon it's going going to be, but it needs to go federal. Uh because there's so many smart and creative people in this industry and like the brands that we all root for and support, but a lot of brands are going out of business as you know, and uh they need help. So hopefully, you know, the market needs to expand uh and I'm I'm hopeful not just in the states but also in Europe um and uh further um as it is right now. So we're all having our fingers crossed for that one. Um, I was I was in Germany two weeks ago uh and I was so shocked how much weed presence there is in Cologne Germany. uh it's on level of Chicago and I was shocked because I I know that Germany has uh like it it's gone medical last year but I was not ready for the whole city to stink like cannabis and I mean I enjoy it recreational as well. You have the lounges now in uh where you can you can literally just like smoke recreationally. But also, let's just I mean, let's just be real. You can literally smoke cannabis wherever you want. And for sure, no one's going to be like, "Oh, shame on your ear. You're going to be arrested or whatever." I don't know, dude. I I know people that got in a lot of trouble uh just like having a joint on Oh, yeah. I I know a guy who got a year and a half in prison, but he cut a deal, but had to pay a crazy fee for just having a joint on him. So, I I I don't know. I don't mess with cannabis here unfortunately. It just Wow. That's that's a completely different experience from what I I Yeah, at least South I mean where I am it's just very So let me just share a little story that I had and it's not me it's Spain. Um and I think it was like maybe a year ago or something. I was there uh for a sports event, right? And um what happened was obviously you know there's a lot of sports but when uh the sports stuff ends everybody goes to the club goes on drinking mode um and um as you know people that are coming from like um Southeast Europe there's a lot of people that don't have accessibility to cannabis product. So, um, everyone was like, "We want to smoke. We want to smoke. We want a joint. We want cannabis all around." And, um, trust me when I tell you, literally in front of the club of like where we're hanging out, there was a bunch of police officers. Everyone was smoking a joint. Everyone was like having a or whatever it was. The police guys were just being there with them. No one said a thing. Bear in mind in Spain recreational I don't think it's legal still fullon as it is like in Germany. I think you can like consume a certain amount but like again it it's a very very small amount. It's not like right United States right? Uh but and then I asked this girl and was like she's by the way she's from France. I asked her so like how freely can you smoke here? And she was like you know what no one cares. The only the only situation where you like might be in in a problem is like if you um get pulled over uh if you're driving bad and a cop pulls you over and they see that you're obviously right like that that but otherwise just like no one cares anymore. I mean that's a good thing and that's something I wanted to ask you like I what do you think where is the industry heading? I I'm well hopefully what you said it goes uh federally and that's I think whoever I asked this question the answer is always the same like everyone wants uh cannabis to go fully legal which obviously I'd like as well but what I think is we're going to um I feel like it's going to be even more commercialized it is right now If that happens, and I think that if that really happens, cannabis is going to be like the new energy drink uh industry. It's going to be everywhere. Everyone's going to want it. Everyone's going to be using it. I mean, that's fair. Sorry, can you please? No, no. I That's sort of what And I think it's going to be this next main thing, but I also would like for these social media platforms to remove the bans from cannabis because I'm not really sure why they exist anymore. That's like sort sort of crazy. Let us talk about it. Why do you I know content that's like so crazy. I really Well, is getting lobbyed everywhere. So that's that's my only pet peeve is I I agree that if it goes federal and like moves in Europe and everywhere in the world, it's just going to be way way way more commercial. But I'm like the counterargument to that like is that a bad thing? Like I would rather sip a THC seltzer than a beer. Like it's more healthy for you, you know? Yeah. Yeah. 100. And and again that would be perfect because then in a world where we would thrive. I I would like that for sure. I agree. I mean we have people in especially our country like every second person is an alcoholic or like uses something else like give them cannabis they'll be happy you know. Leave it. Leave it. Yeah. Um but yeah, that was uh this was an amazing time that I spent today with you and I really appreciate you coming over and just spilling out um everything salesy, sales opsy, order entry and so on and so on. So really do appreciate that and I really do hope that um people that might be interested in understanding better what you do will get uh a clearer image as well. So, thank you so much, Dusan Markovic. Uh, a proud tennis player, ex-tennis player, and, uh, an ex basketball player. Uh, appreciate it. Uh, have a great rest of the day, and, uh, we'll see each other in some other meetings. Thank you for inviting me, Filip. This was this was a great experience. Uh, did this satisfy your your, uh, your sort of interest to being on a podcast? Oh, I mean we weren't supposed to break the the fourth wall with this. Like never heard of this podcast. I just came to the meeting. You were here. I was surprised. But yeah, I'm I'm happy to see you thriving. And what what podcast is this? Am I number one? Number two? What is this? Oh, number two. Okay. Well, many more fruitful podcasts for you in the future. Uh I really enjoy this. And is there something you want to say to the audience? just keep on watching. I I think that uh the the ne I mean including yourself and the previous guests and so on and so on. We we have a lot of awesome individuals in different aspects of the industry that people really really enjoy uh listening to and can learn more about the industry and business and cannabis. So just stay tuned. That's it. --- # The Shift, Ep 4: Teachable Operators Win URL: https://www.tryheadquarters.com/podcast/ep4 Guest: Jessica VanDeWalle Summary: In Episode 4 of The Shift Podcast, Jessica VanDeWalle of Ethos Cannabis breaks down what it really takes to last in our industry. Transcript (auto-generated, lightly edited): Ethos is vertically integrated. So, that means you see the cannabis business from cultivation all the way to retail. From your perspective, what's the biggest mistake brands make when trying to scale wholesale relationships? Yeah, but I think this was one of my favorite questions that you had. Um, you know, from my side, I think the biggest mistake is brands confusing the access with success, if this makes sense. So, they'll scale the distribution faster than they scale the relationships, right? And instead of being organic and and, you know, they're chasing doors instead of being realistic. So, is our product actually moving here once it's there? That's the question. And I think a lot of people forget to ask that because it's more about the sell-in than the sell-through. Um, it's kind of become that environment organically, which is not what we want to see as a wholesaler. So, for us at Ethos, wholesale isn't about being everywhere, right? Like, for us, it's about being effective. I always tell my team that we want to be in the right place at the right time. Um, you know, and in our mind, the brands that win are the ones that are listening to the retailers, supporting the staff in store, and just, you know, adjusting based on what the group performance metrics are um that our partners see. Makes sense. When you say uh at the right place uh the right time, what does that mean for you? Uh so, let's use our Massachusetts market as an example. There's a lot of tourism traffic at certain areas of the state. Um, the South Shore, areas that people escape to during the summer season. Uh so, that seasonality approach, whether it's summer or it's winter out in the Berkshires, making sure that you're in the right spot at the right time. So, you're not just selling into a store to sell into the store, but knowing that this is an area that's going to see increased foot traffic. You might get larger orders. You might have different needs from these partner accounts uh during these seasonal approaches versus what they have on the the other times of the year that aren't these like high-traffic seasonal areas. So, how can you, you know, still be in the right place at the right time, but still give your partners the things that they need to be successful? Got it. So, so pretty much that means assisting your relationships with understanding the market from your perspective, understanding the customer, and then strategizing based on that. Yeah, absolutely. When talking about that, a lot of people talk about cannabis becoming um um more corporate. Um do you think that's helping the industry mature, or is it slowly killing the culture that made cannabis special in the first place? Yeah, I'm I'm not convinced that corporate, you know, corporate as we all kind of know it is the problem. I think that losing the soul is the problem. Um the industry needs that structure to mature. We all know that it it's still a maturing industry, right? But it can't lose its curiosity and authenticity behind who we are. So, you know, when professionalism is used to elevate education, um I think it outcomes of of that piece of education are like bringing the real-world research into the conversation. So, it strengthens that corporate environment of cannabis culture instead of just erasing it. Um and it still maintains that authenticity of who we are, what we like, and how we're community first and foremost. Very well said. Uh do you have like a tip of how you maintain the the OG cannabis spirit uh while sort of trying to, you know, uh manage these uh new corporate entrances and uh um the whole professionalism, let's call it that way. Yeah, I I I think there's that line between, you know, keeping your community close, knowing who your friends are in the environment, but then still remaining true to yourself. So, you know, I myself included, I'm I'm actually the child of an incarcerated parent from the the war on drugs. So, my dad was um in jail for drugs uh for cannabis. And so, for me uh staying true to myself, where I come from, who I am is part of my culture and my background of my soul in this industry. So, you know, the corporate environment is encompassed from a lot of people that have shifted from other industries that have found cannabis really intriguing. Um and then you still have those who are the OGs in this space that might have come from the legacy background, whether that's themselves or a family member. Um and just kind of remembering where you came from, what you built, why you do what you do. I mean, for me, I do what I do because of him. Wow, that that's uh not to be cheap, but I I literally just got chills. That is That is uh That is great. So, so a very big part of you is cannabis itself. Yeah, completely. Love that. That's amazing. Um all right. So, on the topic of obviously business and and experience. So, you worked your way into a leadership role in a pretty uh some people might not say aggressive, but uh a pretty fast-moving industry. What separates the operators um that actually survived cannabis from the ones that disappear after a year or two, let's say? Yeah, and and it's a challenging industry, right? We're we're all well aware of that. So, you know, I think the operators who last are the ones who stay teachable. Um you know, we can all learn something, no matter what the topic is. So, staying teachable, staying open-minded. I mean, cannabis truly moves really fast, especially too fast for ego, if you have one. Uh regulations change, pricing compresses, consumer preferences evolve. Um high THC chasers versus terp chasers. So, the teams that survive are adaptable. They're data-driven. Um I think they're willing to change course quickly. They can pivot fast, right? So, if you think you've figured it all out, you're probably already too far behind. Thankfully, we do have a partnership with Thomas Jefferson University where a lot of what we do as an organization is backed from research and education amongst consumers. So, not just internal, but actually taking our products and putting them out into the marketplace, doing studies on anxiety, insomnia, pain management. So, remaining teachable ourselves based on what we learn from the environment that we're already living in and the people that support us on the daily. And then obviously as it relates to research and development of new products that we may launch into a market and taking the data that we're learning across the organizations that we're operating in and then everything that we learn through our research partnership with TJU is kind of informing how we stay teachable. So, I think we do have a little bit of a unique identifier as an organization because of our partnership and how lucky we are to to have that deep bench. That is that is quite fascinating. How did that relationship with TJU start initially? Yeah, it's something that's been going on for years and it started a lot smaller than what it's become now. Initially, it was just kind of like dabbling in the exploratory phases of how can we turn this into research projects and now it's really evolved into what do the people want in here? What are the elements that individuals really want support with? One of the biggest things I think in the industry that we hear or see even from, you know, our own friends and family or or whom have you, are sleep problems. People want to use cannabis to sleep. So, we thought, okay, well, this is the perfect time for us to launch a study to see if there are any legs here surrounding sleep, insomnia. What works, what doesn't and we're kind of learning as we go, right? Our information that we receive from the partnership has been wonderful when it comes to relaying back to patients particularly in Pennsylvania, but just across our whole portfolio in in how we can support true consumers of the plant and of the product. Amazing. That is truly amazing. The knowledge, the research, the education backed up by data plus the expertise that you guys have all together is is a great win. Wholesale is one of those areas people outside the industry don't fully understand. What's something happening behind the scenes right now that most people, even inside cannabis, are completely underestimating? Sure. Yeah, wholesale feels like a different world sometimes, right? We all laugh about that, but so I think for this education is really, you know, that piece that's becoming the most powerful differentiator in wholesale. So, you know, there has been an evolved capacity of the quantity and the quality of education that's being released into the marketplace on any avenue. So, I feel strongly that buyers and budtenders, we all know they're overwhelmed. Uh there's so many options. There's so many brands. It's hard to distinguish the what, the why, except for I'll give you a good price on it, right? So, brands that can clearly explain, you know, why their product works and to back it up with the data and training, I think are really earning trust and reliability at this point. So, you know, back to our partnership with TJU, that's kind of why we invest all of this time and care in education and research. So, it really shifts the conversation in my mind from that hype to being credible, which is really the lane that we want to be in. If I understand correctly, it's like you literally help out budtenders do their job by taking off a bunch of work off their hands by you doing the majority of the education, writing of information, and so on and so on. And therefore, it sort of leaves the budtenders more room to promote you as a brand itself, right? Yeah, and whether we're selling our products our Ethos family of brand products, right? In any one of our own Ethos dispensaries or we're working with one of our retail partners that support us across our portfolio, we want them all to be able to speak as intelligently on the products. So, we want them to have a united front and alignment on educating the consumer or the patient, depending on the market, on that particular product, that SKU, you know, the the benefits of it. Um you know, pointing them into the direction of the right product. So, it's not just about our own team. It's about education in totality from budtenders, whether they're our own partners at our own stores or people that we wholesale to, and then ultimately making sure that that information from the education and the research that we do is trickling down to the people that are consuming the product. Sure. If you had to predict the next 2 3 years of cannabis, what changes do you think are coming that will completely reshape the how brands, retailers, and distributors work together? Wow. Okay, so you know, the next phase of cannabis I think is going to be relationship driven, right? Not reach driven. So, brands will need to act like true partners, uh not being just suppliers of the industry. They'll need to be bringing insight, consistency, continued education. I think that, you know, retailers or retail partners in any capacity will expect smarter support, if that makes sense. Wholesalers have to become more of that strategic connector for the needs of their partners. I kind of spoke about that in the beginning where we're identifying the things that fulfill the needs to our partners to become successful. So, companies that combine operational excellence with just real-world knowledge, right? Data capturing. Those are the ones that are going to win. Um cannabis has always been about people. So, patients, consumers, operators, and the communities that we're all operating in. Um I think the industry doesn't need less structure. It needs better leadership. Uh so, better leadership comes from listening, learning, respecting each other. I think it's both the plant and the culture while we all sit here and play the long game, even though cannabis operates so quickly. Um it is a long game. Yeah. And what you said at the very beginning was uh maintaining that spirit. I think that the spirit of cannabis itself, if it's held to where it was originally, is going to go really long way. And as you said, it probably will impact the future of cannabis and where it's headed and the overall success in the cannabis industry, if you manage to to keep the spirit up. Um so, yeah. Love that. That's That's amazing. --- # The Shift, Ep 5: From Compliance Startup to Acquisition URL: https://www.tryheadquarters.com/podcast/ep5 Guest: Michael Elkin Summary: Michael Elkin on founding Cannabis Compliance, global licensing, and what separates operators who last from those who burn out. Transcript (auto-generated, lightly edited): You entered cannabis before most people even believed it would become a real global industry. Looking back, what was the moment where you realized this wasn't a trend, but a massive long-term business opportunity? And given your story, I mean, this is a I I think this is a perfect question for you. Honestly, like I when I f I got into this uh I was driving to work one day and I was uh living in a small city in Canada um installing cameras in prisons and hospitals. I was a security integrator and I literally heard on the radio that there was a company that was going to be buying a rundown chocolate factory and turning it into medical marijuana. And that was back in 2013. And and at that time I was like a what's medical marijuana? And there's a Hershey factory like literally right beside where I live. So, I think it was like the that that moment when Canada legalized on a medical uh platform back in um in in 2013, I think gave me a little bit of insight. I was like, "Wow, this is this is something, you know, that I grew up consuming. This was something that, you know, my parents uh you know, did smoke back in Woodstock, but then where there, you know, they were like, you know, anyone that's smoking weed is not going to get anywhere." And now here we were as a country getting ready to legalize medically. Um, and that was like my first like aha moment which led me to follow up with the next three years of installing security systems uh into the first legal medical grows in Canada. And then I would say the the second aha moment was you know after Canada got ready to go adult use. So we ran medical for four years. Um, and it was it was when I got a a random DM on LinkedIn from this other gentleman that said, "Hey, you know, I've been following your career over the last 3 years. Uh, and I know you're this security cannabis uh, guru, and I'd love to put a couple of people together and start a firm that would, you know, be this inflection, you know, driver of of actually writing applications." And back at the end of 2016, there was only 50 uh cultivators, licensed growers in Canada on the medical side. And if you fast forward to today, there's over a thousand. So again, I was at the right place at the right time. And then that DM turned into the forming of the compliance company that we started in 2016, which then um went, you know, like a rocket ship. and you know grew from me and three guys to uh 115 employees in three years and writing uh you know regulations and licenses in seven different countries. So I think I've had two aha moments sort of like this was going to be something. Um yeah so those are sort of two big moments in my career. What when you got that DM? What was your like initial reaction? Were like oh this is interesting. Were you confused? Were like amazing. What was do you remember what was that initial? I remember like it's there's a very very first of all I still have the DM so offline I'll send you the the DM. Um and it was like I was very at the time I had spent three years um installing security systems in some of the coldest places in Canada. So some of these early grows were being built in like remote locations. So at when I first saw that DM, I was like I was like, "Oh man, can I really stop like running off to bum nowhere Canada for like three weeks at a time in minus 40° to stand on a ladder and install cameras." So that was my first thing like oh wow I can stop like running around and because at the time he really the the gentleman approached me he's like I just want you to like design the systems you don't got he knew I was in like northern Ontario and like uh southernmost part of like Alberta and really really cool places. So um so yeah so he uh he had he had he had offered me that uh that position and yeah um and then we were off we were we were off to the races and it was actually my um I remember I'd given this giant list of demands that I had wanted. I I really would have left for anything because I was so tired of doing all these installs. And then like in I think in the same DM he was like, "Yeah, for sure. Whatever you want. Like let's let's start this." And then I quit the security company in December of 2016. And we had like uh officially launched what was then known as Cannabis Compliance Inc. or abbreviated CCI uh in April of 2017 in Berlin at the first ever ICBC um conference. That was the first time that we had made like a public appearance. We had traveled and we were like and we first started talking about like a full compliance firm that was able to like specialize in writing regulations in any country that it really just boiled down to rules and regulations. And if you had enough smart people in a room, you could figure out how to write an SOP for whatever. So that was the that was the birth of the compliance company. Wow. And so so you know when when talk about the obviously you mentioned compliance. So you you've worked across compliance licensing uh security systems, business development now even and the brokering deals. So when you look at all of the experience from your perspective, what separates the companies that actually succeed in cannabis from the ones that burn cash and disappear? Yeah. Like it sounds so cheesy, but it's it's like it's life. It's it's like what makes a successful company that I work with is what me what makes me successful. It's relationships, reputation, and execution. It's like who do you know? what have you done with those people? And then what do other people say about what you've done? It's like it's like that's why people answer my emails. That's why people answer like my phone. It's so like that's what differentiates. It's like what cannabis companies are aligned properly who have the people right working in the companies. What are the reputations in the either state or in the country? I find cannabis you have like one strike. This industry is so tightly knit. It's a small industry in a giant world. Um, and like everybody knows what everybody else is doing and it's like when you over word travels quickly. Yeah. So like like that it's something that I learned when we were running the compliance company like we were the most expensive firm and like I would say I would stand there at a table across from someone else and I was like this is what we charge to file the application and we're going to get your application. I'm like and they were like well how do you know that? I said cuz back at headquarters I have 75 of the smartest like regulatory people that are trapped in a room happily uh and they're not here. It's like my job is to to meet you, to give you the comfort that what is behind me uh is supporting you. So, it's really about like what makes those successful cannabis companies are the ones that have great reputations, great relationships, internal and like that the janitor and the CEO mop the floor the same way. Like super important. Like there had like that message and culture has to bleed from top down. And it's like you can tell when you can tell when uh when that's not like that. Yeah. Yeah. And also I I I assume that you know because of uh everything that you've done and and given that the focus that you've had on relationship I figure that's where your international experience came from as well. like working with all of these different countries, different states, and uh being all around the world and a lot of people outside industry don't realize how complicated cannabis regulation really is. Yeah. Especially now that we're expanding so much. But you've helped companies across more than 10 countries. So, what's one behind the scenes reality about global cannabis that would shock most people? I don't know if it would shock most people, but really like cannabis has always fit into another box that had existed before cannabis. And what I mean by that is like a great example is what's going on in the United States right now. They originally classified cannabis with heroin, cocaine, and opiates. and now they're moving it down to a schedule three in the to the same category as like Tylenol. So like these schedules existed right before cannabis was even brought into the equation. So like really if you're in an emerging market that is being regulated, first of all, it's a good thing. Second of all, like there's a script. And what I'm trying to say by that is like there's no secret to figure out cannabis regulations. You literally need to like just follow the guideline of the box that it's in. And a great example of that is what's going on in the states right now because we're I'm helping tons of companies go from schedule one to schedule three. Right? M so like in their schedule one when they were with heroin and cocaine and all this stuff like they knew like they have 80% taxes cuz if you have an opioid factory you pay 80% in taxes but you're backed by big pharma so who gives it so like trying to educate the the new cannabis license holders in the states about this and saying like this is exactly what's going on in the states is exactly what's happened in Canada. So I think something that's going to shock that should shock the Americans right now is like this is a direct copy and paste. So the government and the United States government is literally looking for you to take this substance and like place it and hold it and interact with it the same way you would as a schedule one drug. So when you have a schedule even in a schedule one drug like you need to have like a safe facility to store inventory. So, a lot of these I'll give you a great example. There's 4,000 license holders in California. There's only 500 of them that are medical, which means there's another there's 3,500 that are not medical that don't hold that will not be able to apply for this DEA unless they uh amend their license. So, like all those 550 something medical holders are already ahead of the game. So, they already have like secure storage. They already they already have those things. So what I would say is like in any existing market that is getting cannabis regulated, look at the playbook that already exists and you're all your cheat codes are in there because there's standards, there's SOPs that that exist and you're just essentially taking the API and putting it into that like box. Doesn't matter if it's Tylenol or like cannabis. If you're making Tylenol, you're done your finished product. they want it in like a secure vault or whatever till it's picked up to be shipped to a pharmacy or whatever it is. It's the same thing with with cannabis and and all this re all this regulations that's coming in the states. Um yeah, and I would say and the other thing I would say is it's very hard for lawyers and accountants to write SOPs, standard operating procedures for like deviation. It's it's a game that we played in Canada for a very long time where there was like a few different people, a few different firms that could write an application that Health Canada would deem worthy of a license. And like less than 50% of the time, the ones that got stuck in the cues were all these lawyers, all these accountants, you know, like a lawyer is good in court. He doesn't not a lot of lawyers know like an SOP for destruction of plant matter or understand like transport of tissue culture but like you know you have to go to like a subject matter expert and that's really what we developed CCI into you know we hand we hired the most cannabis knowledge people and then when there were none of those left I was like go let's go let's go pull from pharma you know like some of our best sales guys we have from Red Bull from Heineken, from big tobacco and like these regulated industries. So any like emerging cannabis market, I would say like anyone that's looking for licenses, make sure you're aligning yourselves with like regulatory people. Yeah, makes sense. Also, that that is actually one of the things that we as a company also are really really focused on like especially when we're hiring people for uh for the job. The main thing is like you can be a professional as much as you want. you can have a bunch of experience all around the world with everything. We need someone that has cannabis experience, specific cannabis experience, because outside of that, it's going to be very hard for you to get into understanding what the cannabis market is right now. And um that is something that I really uh feel like is one of the things that also sort of kind of makes us stand out from other um standard outsourcing companies or whatever it is cuz it's like we need specific guys that had cannabis experience period and that's it. I think that's extremely important. Um so help me out with this next question because I I wanted to make sure that I have my facts straight. So, um, you were part of CCI before it was acquired by Deloitte, right? Yeah. So, I was part of the founding team. So, it was me and three guys and Yeah. Sorry. Sorry. Go ahead. No, no, go ahead. Yeah. So, I wanted to because this is obviously huge milestone, right? This is extremely big. What did the experience teach you about where cannabis is heading from a corporate and institutional standpoint? Because a lot of conversations that I had with a bunch of people from the industry is like how the corporate is affecting cannabis vice versa and you know what's going on with the whole cannabis culture/cannabis spirit and stuff like that and that's what I wanted to to hear from you as well. I mean like again you have no choice with when all these countries are regulating or are legalizing um like you have to adult up and again it goes back to this whole thing that's going on in the states right now like if you want to take advantage of this adult use market and and you know expenses and taxes and safe banking then you need to like follow rules and regulations. So like like this is it's you're on the bus or you're under the wheels with this. This train is going and you like it's like it's I don't want to say the black market and legacy is going to ever like not exist. I just think that there's room for like like there's nothing there's there's culture and there's everything that exists in California in a regulated market never went away because it was regulated. So what I would say is like there's further regulation coming, right? I mean the states are going to legalize eventually. They'll do interstate commerce. Eventually they if they get their standards in order will be able to be like Canada, you know, I think it I forget what the number was 4,000 40,000 metric tons shipped into uh international markets from Canada. Um but again like those those license holders in Canada pay their taxes. uh you know they're they're they're they're on the they're they're like grownup businesses. So what I would say is you know the corporate world is coming um and you either are going to be a part of it or you're going to be left out of it. So and I think this first thing in the states is a first indication of who's going to be like I don't want to register for this because I'm seeing it now. I have a lot of California companies that I'm dealing with. They're like, "No, we don't want to. We don't want to give our information to the DEA and they're going to do this and they're going to that." I'm like, "No, you don't understand. Like, this is what it takes to get banking." You know what I mean? Like, do you want to still have the duffel bags under your bed and garbage bags on your windows and worry about who's coming to your door or do you want to have Canada and like have the government write your purchase orders for your wholesale business? Like, that's that's the that's the way it's going to roll out here, right? like so you you either adult up and get you know and and again like there's there's a lot of benefits with this with this changeover. So I wouldn't say as much as it's going to be like corporate cannabis as as it is regulated cannabis. So you know I think you have to pick your battles with what you what you want to like die on the sword for if that makes any sense. And also I mean it's a very speedy market and if you you also have to be fast in every aspect of it whether that's you know like new things coming into it whether that's the current things that are sort of expanding changing moving you have to just make sure you're following. If you're not then you're out and uh and I think that you really made a very good point there. It's like at the end of the day you're not you might not even have a choice. So you win it out. That's why it goes back to my whole like relationships thing is like you're it's so important about like who you're talking to, right? Like who's advising you, who you're talking to, whom you're selling to. It's it's everything. That's why like I have this other saying, you know, you're the average of the five people you surround yourself with. So like choose wisely, you know, like you got to who am I spending my time with? Who am I like tying my, you know, ty what I tie my horse to? That's the saying. Anyways, yeah, it's just it's super important because again, you have like one shot in in this industry and yeah, you want to be around doing this for a while. No, I I completely agree. And uh also, you know, speaking of uh the relationships and and ultimately again the the way that you're sort of everywhere in the industry. So as someone who talks to operators, brands, investors, executives, uh, and so on constantly through Canna Broker, when you look at everything and when you, you know, go off fish a little bit in the future, where do you honestly think the cannabis industry is headed in the next 3 to 5 years, who's going to win and who's in trouble? Um, if if we take away this aspect of what you talked about just now, which is, you know, follow don't follow and stuff like that. Yeah. wellestablished brands, multi-state brands, multi multi-country brands, brands that have established uh retail footprint that understands supply chain that understand what it takes to pack like 50 cases of like three and a half mylar bags, you know what I mean? Someone that understands how to ship 100,000 vape carts wholesale on a pallet to here to there. I think once the states gets their stuff in line, I think once Germany gets their stuff in line, like you're going to see like a full like supply chain of CPG like goods and and and and trade and commerce. And I think, you know, you'll you'll have like supply chains that'll be international. I think Canada's going to play a huge role while the United States gets all their stuff together. That's why I have a huge interest right now to bring a lot of American brands into Canada. and then start immediately exporting those brands on the German and the medical platforms. But the German and the medical platforms are looking for established brands that have stories to tell that they can then start telling these stories to to markets that don't exist, right? So I think that's hugely important is like get your like company story together, be existing in legal markets and as many as you can um and have like good relationships in those markets because like those international markets will come looking for the stories to tell and and Mike, so when you talk to brands that you see have potential to to become one of these and How accepting are they of what you're suggesting, of what your idea is and what you feel like is is what's going to be good for them. How hard it is for you to negotiate them or or or make them follow what you're saying? Like right now, not at all. Look at the brand lineup for Mary Janes in Berlin in June. Every freaking sticker that's on this wall is is at Mary Jane's and there's no adult use market in Germany. It's it's medical. So, like every single one, every single brand that I'm talking to and I'm I'm speaking to the Wizard Trees and the Preferred Gardens and the Alien Labs, like that from my experience is like that's the pathway now is get into Canada, get into a few hundred stores, build that brand because in like three years like we there's going to be some type of hybrid in Germany, whether it's through consumption lounges and pharmacies and this and that where like they will they'll we'll be exporting pallets of of like finished goods. into Germany for distribution. So that's that's my like that's what I'm that's why I go to California lately. Uh in at the ICBC show in April, there was a ton of brands that we're speaking to now. Um so they also see the writing on the wall and and even as the states does this whole rescheduling, they're still like 3 to 5 years away from being able to move anything out of their country. I think at best interstate to ship stuff from California to Michigan. Yes, that that's going to happen and the DEA is going to regulate it. But again, Canada was medical for almost 5 years, then it was adult use. States is doing the same thing. It's the same playbook. Yeah. Yeah. Yeah. As you said, copy paste all over. Copy paste. There's a DEA portal application the same way Health Canada had a DEA portal application. It's hysterical. I'm literally living through that saying if I was able to go back in time knowing what I know now. This is literally me going back to like 10 years ago or whatever it is, knowing what I know now. That's why it's really funny for me that that's why I'm going to California next week. I'm sitting down with I think 10 of the biggest brands, excuse me, to like really explain to them. I'm like and we and we've been talking to a bunch of them over the last like three, four weeks and they're like, "Yeah, this is what it says." I'm like, "I know. This is what they said." They're like, "We have to do all this." I'm like, I know. This is exactly what we did. So, yeah, it's it's it's it's a it's a fun place to be right now. Yeah. But it's also good for you because you've been there. Amazing. It's amazing. Yeah. I love that. It's amazing. I was on a phone with an MSO this morning who was like, "Our lawyer said this." I was like I was like, "Can you can you get your lawyer on your phone with me? Our he doesn't want to talk to you." I'm like, "No, no, no." Like I was like, "What is it?" Because they don't want to charge me or like he doesn't want to talk to you. I'm like, he's scared of me. The I'm like, yeah, because any again, it's it's lawyers are are very well in a in a court of law. They're very bad in a pharmaceutical grade facility. Same thing with an accountant. Take me an accountant when I get an audit, not when I got a a regulator knock on a door and ask me to see SOP for this and can you pull up camera 4 for growroom 3 uh two weeks ago. Like that's where you have to have like proper compliance knowledge. Yeah, makes complete sense. Uh Mike, as always, it was extremely extremely useful talking to you because yes, a bunch of knowledge just came out and like, okay, I love every single thing uh about this one. Can you tell whoever's viewing where they can find you on social media? Yes, for sure. First of all, thank you so much. And I think I have to make my way out to Serbia. Wink wink. Right. That's that's Yes. You probably very soon. So yeah. Okay. Good. Uh you can find me on Instagram, the Canna Broker. So that's no E. It's the Broker. I'm on LinkedIn, Michael Elkin. Um and yeah, you can catch me any like major trade show that's happening over the next like six months in North America. Um and yeah, really thank you so much for the opportunity speaking to you and um love the connection. the extreme pleasure of my guy and uh really looking forward to meeting you again in person. Enjoy the rest of the day and we'll chat soon. --- # The Shift, Ep 6: Inside Cannabis Finance URL: https://www.tryheadquarters.com/podcast/ep6 Guest: Alex Ceja Summary: An inside look at how F&A Services Lead Alex Ceja helps Headquarters’ clients navigate finance and accounting while growing their businesses. Transcript (auto-generated, lightly edited): What categories are there in accounting and finance and what are the divisions uh of services teams in your department? Okay, so this is a big one. Uh I will mainly group I think that we are doing a bunch of stuff in the team but I can group them into different categories. So the one is going to be more focused on specifically finance and accounting. So we call it controllership. So let's think about this. I've seen in the in the market like a lot of options as a part-time CFO, but no one is offering you like a part-time controllership. So, this specific service is including everything from finance that will allow you to operate. So, AR and AP money coming in, money going out, so you can know and you can still like collect those phones uh but also making sure that you're sending those payments so you can still run. And at the same time, uh well, you need to categorize all of these transactions. you need to book them also reconciling everything. So this is going to be what a a bookkeeper or an accountant will do and the controllership is like the glue. So he will be in charge of this team ensuring that everything is working smoothly. So you can go from let's say uh I would say that we start with a bank transaction. So your bank is linked to your QuickBooks. So this whole team is going to be in charge of categorizing and linking and just putting the the right uh GL to every single transaction up to getting to the month-end close where they will continue doing the journal entries adjusting. So think about allocations or maybe uh acruals. So at the end you ensure that you have your financial statements call it uh balance sheet P&L and well if you have inter companies making sure that these allocations that you are transferring a specific uh charges to every single one of your entities so you are reflecting the right revenue uh the right profit or the right cost in the right entity that's the first one so controllership then if we move the other one is called at this moment it's a mix between FP&A or well the name uh financial analysis and insights and we rename it from FP&A to that one and the reason is because what we are mostly doing for our customers is to help them understand their numbers. So yeah you have a bunch of numbers uh in your POS in any kind of your software platforms that you're using uh sales platforms inventory platforms MRPs etc. And what we're doing is it is hard to read that information or sometimes it's it's too much. You have a bunch of uh details and maybe you don't want to to waste your time anal analyzing every single KPI or every single thing that is happening. So what we do is okay give us your focus. So you want to focus on sales. Okay, let's do something about it. So we can work with a let's say platform. So we can tell you okay these are your top selling SQS these are your top markets these are your top customers these are your KPIs also we can tell you okay the performance so how well is performing Nabis like how much is it costing you to work with Nabis u just maybe doing a an analysis on how much you're paying for fees uh considering let's say the distro fee but also any other kind of extra fees that normally Nabis will charge you and how much you're getting like how many customers you're getting because at the end Nabis is a marketplace. So if you're working with Nabis, it's because of two reasons. The first one is because they will help you with the distribution. So you need to hire drivers, trucks, etc. But at the same time, it's a marketplace. So you're going there because in theory, it's supposed uh it's supposed to uh open you to new customers, new markets, new regions, etc. So we can give you this analysis so you can determine if it's a good business or not. But at the same time we can help you with the the KPIs of your sales team. So because well you know and while working in Nabis you can say okay this is my wholesale price. This is my at the end how much I'm I'm selling this price um sorry this product. So you can you might give a discount but it can be uh a discount based on the top price or the lower price. So we'll we'll help you to calculate the real discount that each of the sales rep is really giving because it's maybe on paper it will look like okay from this price I give a 5% discount but if you analyze how much it is really costing you versus the price that you were trying to uh sell this specific product there might be a a difference so yeah I will say that or financials analytics and insights it's it's helping you to understand your numbers and just gathering the data from any kind of platform. Uh also we've identified that there's a bunch of let's say no uh that is not clean. So we need to focus on a little bit of data analysis where we need to clean the information. we need to parse it uh a bunch of times. It's names and conventions to just to making sure that we're analyzing the same uh names, the same let's say maybe brands, SKUs, strengths or whatever in order to give you a report. And just as a a brief description, if you hire one of these services, what you will get every single week is first of all, you will receive an email at some moment of time during the week. I'm saying this like randomly because it depends on when you want to receive this information. Normally it's between Monday, Tuesday or Wednesday and this will give you a quick analysis. So a quick snapshot. What we're trying to do here is focusing on two different targets. So one of them is let's say C-suite uh investments owners. So these people they just want to read something really fast. So what happened with my company in this specific area in less than five or 7 minutes. So I just want to read understand and that's okay. So something you can read even your phone. So they will this will be an email that will adjust your phone so you can read it carefully. But then uh let's think about maybe a CFO or a controller that they want to dig into the numbers and just making sure that everything looks right or the calculations everything. So you will have access uh to the actual report through the link. So in the link you can see the spreadsheet you can see the calculations you can see where the information is coming from and if something looks off it will be issued to detect there and at the end you will have we are working uh as our BI tool we are using Data Studio which is a tool uh that is coming from Google. So uh with this you can play with information. So these are we designed them in a way that you can play with information. You can uh filter information, you can present information in different ways. So you can do your own analysis without needing to work through a spreadsheet. So every single time that you click on a slicer and you will select that a specific option, all the information is going to be updated based on that specific filter you would like to apply. So um you can play with it. It's it's fun. Alex, you So I have two follow-up questions. you did mention uh QuickBooks and Google uh in in your speech about the services that you offer. Where's the familiarity of tools when it comes to the cannabis industry lie with you? Like how familiar you are with other tools and not just like the main popular ones? I would say we're experts on QuickBooks because this is the main let's say ERP or accounting tool in the industry. So I would say from every I don't know 10 or 20 customers only one of them is not using QuickBooks but we can also use Sage, Acumatica uh the team has experience with SAP so a bunch of different tools and what I would say like yeah we're able to to work with any one of them I would say QuickBooks is even though a lot of people complain about this tool I would say since it's the main one or the most common one, it is the one that it's easier to handle. So something that I would say it's pretty attractive from working with us is that we develop a tool called the QuickBooks gateway and it's just in summary or in a nutshell or the simplest way that I can describe it. We just have a connection uh something that will take us 5 minutes. So let's say if we want to connect your uh company or your QuickBooks entity with us, we can just schedule a quick sync maybe 5 minutes and even though you can do it on your own but well the link will expire based on uh the QuickBooks requirements. But what I'm trying to say is that with this connection we're able to extract information from QuickBooks. So sometimes working or analyzing the information in QuickBooks is kind of hard or maybe sometime it's even slow. Why? Because you need to click a button to get to an specific report. So uh we are just avoiding to do all these five, seven, 10 different clicks and we're just extracting information directly from the API and put it in a Google spreadsheet. And with this spreadsheet we can get creative. So you can do a bunch of different things. So uh maybe a quick example. So uh some of our customers are asking us to hey I'm doing this exercise that it's I would say it's it's pretty common in cannabis on the big MSOs which is called debt swap. So what they're doing is they have customers and vendors that they have balances open with them and what they do is I'm not going to send you money but let's see how much you owe me and how much I owe you and let's just offset these balances. And yeah, before us what they were doing is let's say maybe think about that they have 10 different entities. So they have presence in uh 10 different states. So they needed someone downloading the AR detail report the APD2 report one by one for every single entity. So we're talking about 20 different entities manually and then just copy pasting and then updating all the formulas. Now with the uh API that we have, we just click a button and in less than I I would say five 10 seconds you have the data information and if you would like to refresh you can do it just right away. So we're saving a lot of time and everything is from the gateway where you know like okay this is attractive I have this balance hoping with this specific entity uh I would say I don't want to mention names but we have helped uh one of our customers to offset in the past I would say month around $1 million. So just think about it like all the efforts that you are um reducing of having someone to collect those those funds or maybe something that it's to age. I'm talking about balances that have open more than one year. So in theory well in cannabis what I've seen is that if someone owes you something and it has more than 90 days it is almost uncollectible. There's nothing that you can do about it. But now here you have some leverage. So okay I owe you money. You owe me money. Why? like maybe you don't have funds but we can offset, it's going to be something that we just need to adjust in our balance sheet you will give me a credit memo I will apply it and I'm I'm going to do it the other way so now with this customer uh we realize that this is something that the market is really interested in uh we're trying to offer this exact same service to other customers and what I can say is that yesterday I did analysis and we can still help this customer to offset $2 million so it is something that let's say the work that we're doing it's paying for itself pretty easily and this is just one of the examples that we can do we can get creative and we can do a bunch more stuff uh with information that we can gather from uh the API we can just uh take the P&L the balance sheet or any kind of a specific report and we we can create a bunch of uh things I would say it's just a matter of uh trying to solve different pain points across our customers yeah well you're saying right now is something that I've come across a lot in the industry when talking to a bunch of different people uh both MSOs and uh SSOs and what I've noticed is like there there definitely is this very big um problem in terms of trading partners versus non-trading partners. especially if we're talking trading partners and as you said like you owe us, we owe you and there's this open balance that sits down for like god knows how long. Let's just make sure we clear this out by either um going with uh credits or whatever it is. Uh so I I feel like I understand how that can be beneficial. Um and then I wanted to revert back to the original uh conversation when you were talking about a reporting and this is something that like you know it it is a very crucial thing. A lot of people want to know exactly what type of reporting is available from from your standpoint. If I understood correctly, you go from like the executive level reporting very quick, very simple as you said, like you can look at it on your phone, but you also go in-depth if we're talking about specific departments that want more in detail analysis about specific topics and specific segments of the business. Right. Yes. I would say it's kind of the same. So uh what we do in the team is we are not try to get in a comfortable position like okay this is my reports this is my catalog and this is what I'm going to do and that's it. Now what we like to do is okay tell me what you're trying to uh solve like which is your pain point where you blocked and we are just going to brainstorm and look like okay you have this information that it's coming from QuickBooks or maybe you have this information that it's coming from let's say your uh seed-to-sale or your POS so let's just try to connect this data so something that I've uh realized is that maybe in some other industry there are true ERPs so call it SAP or maybe any kind of Oracle. So you can see everything everything is connected. So you can track uh maybe let's say in this industry from cultivation. So whenever you are growing a plant uh you can know up to the sale like which were my margins where my costs involved into specific batch. Everything is tracked and in theory can be this exist. So if you think about METRC, it is a blockchain. So the information is there. You just need to uh be able to track it down. So uh whenever you have a a plant there's a METRC code and whenever this plant uh gets uh let's say extracted into something different like the all the vapes whatever you're going to have a bunch of different METRC codes and then uh when this is packed uh into different uh specific products like again call it vapes or pens you're going to get uh now different codes and then this will be sent to the retail store and then someone is going to purchase it. But if you track like that specific pen in theory with METRC you can track it down to the to the plant. I would say the the interesting thing here is again in other industries you have an ERP that will help you to do this process. But here in this industry you will have Quickbooks which is managing the accounting information. Then will you need probably an MRP that is help you with inventory and also the bill of materials and just calculate the cost. And then you will have a POS that will tell you how are you selling your product like the finished product that you're selling to the end consumer. But there's no like true connection between these tools. There are different tools, different providers. Uh so it is kind of hard. So what we're doing is okay, let's just look for the connections. There's going to be a a path that we can follow. So every single time that you're creating a batch, you are uh then uh doing a set of different uh products. So helping you to identify every single one of them and creating reports for you so you can know your margins, you can know which product is really performing as you are summing or the ones are maybe you thought like okay this is going to be a a strain that is going to kill it but at the end uh when it is in the shell it is not selling. So you can identify like okay this is something that either the market is not liking it we're not pushing it hard enough and also what we're trying to but some something pretty interesting to that we do is with inventory we help the retails the brands to know uh if their product is moving or not because sometimes it is just there like they have storage they have maybe I don't know 10 boxes 20 boxes 100 boxes of specific product and it is somewhere in the retail store, but they don't know that that product is about to expire. They don't know that maybe they they buy more like they they didn't know how to calculate the demand. So, this is something that we can help them with. It is not that easy. Of course, uh every single strain, every single product uh has a different behavior, but at least we can try to uh give you like something closer to what is going to happen. So, let's say if a retail store hasn't uh sold uh let's say a thousand vapes during a a month, then it makes no sense to send them like 2,000 vapes unless it's going to be for training or an specific uh thing. But we can help you to make better decisions while we do this kind of reporting. Yeah. And when I listen to what you're saying, I sort of feel like, you know, some people might be on the side saying I this literally, you know, one person might be able to do all of this as like a specific position. But one of the things that you showed me where um I was really impressed is the is the money saving scheme. Can you jump into that a little bit more for us? Cuz that was one part that I'm like, "Okay, I'm sold on this one. This this completely makes sense." and it will probably answer a lot of those questions about why not do in-house versus having Alex do all the work. Okay, so let's I'm going to start this with thinking about uh maybe the easiest example that I always uh use is let's think that you hire an accountant. It's going to be a senior accountant, some someone that is going to help you to uh close your books, assist you with a month-end close up to creating financial statements. But let's think that maybe you are paying this accountant, I don't know, maybe $30 per hour, $40 per hour. So you want this accountant to be as efficient as possible. But then when you're talking about accounting, there are a bunch of different tasks that you need to do to complete. So sometimes it's just categorizing transactions, which is something important, but at the same time, it's something that it's not really adding a lot of value. Or maybe let's think about, hey, I need to do the reconciliation. I need to reconcile this uh account statement or this vendor, this uh customer or maybe this specific GL account. So reconciling is something that is pretty time-consuming that you don't want to spend let's say $80 or 30 or $40 per hour uh to someone to do it please. So what we offer is think about u like u you're not hiring one person you're hiring a team to do this work and this team it's a combination of you'll get junior mid-level senior or maybe even a controller to do all this work. So it's going to be more holistic. So we're not going to charge you like hey you you will have you will need to pay me uh let's say $80 per hour because all my services are charged as a controller. But it's more like we're going to make a package for you where we're going to get to a midpoint where instead of charging you like $80 per a controller, we're going to charge you $40, $50 depending on the volume and the complexity of your work. But we're going to be able to do everything. So from reconciliations from categories categories of transactions, AR and AP, call it invoicing cash application payment applications sending payments uh month-end close uh creating financial statements helping you with reporting. So everything is going to be in a package. So let's think maybe maybe your your company is not that big. So yeah you need a a bookkeeper but this bookkeeper will be limited to to the position. So, uh let's let's think about maybe a staff accountant. This uh person um will be able to to close the books, but sometimes like a uh yes, but this person doesn't know how to do reporting, but this person doesn't know how to talk to a customer. So, there are different profiles. So, what we are offering you is more like yeah again a holistic uh proposal for you. So, you can take everything. So let's just think uh as our service as finance and accounting in a package. So you don't need to worry about a specific uh person. You'll get a full department to work uh for you and we're going to do every single task that you need to get from point A to point B. Yeah, I I understand that. So instead of hiring three different positions for the work that you need and then leaving them halfway through with like four hours per day left of not really having anything to do, you go with Alex, you get a package that is literally tailored depending on the time needed to invest in order to achieve these specific tasks and that's how you pretty much save the money. I'm going to go back to the beginning of the conversation as well where you did mention like if we're offering a service to a specific client. So there, you know, in some instances there might be a specific focus depending on what their business needs are at the moment. But from a business perspective, like obviously there is a difference if we're talking about cultivator versus retailer. What does that mean for you? What's the difference in the approach of finance and accounting when comparing license types in different uh businesses? Okay. So, normally with uh cultivation and processing, they're pretty similar. So, the main focus there, of course, I'm going to say that uh for every single uh license uh finance and accounting should be uh almost the same. So, you need to uh to sell to send the invoices to collect these uh funds to send uh payments etc to close books to the month-end close, creating financials specifically on retail. Well, you won't have AR. So your main focus is on AP and accounting and just the financials. But then it is more complex working with a cultivation facility or a processor. Why? Because they would like to see uh they're more related to cost accounting. So being able to track down all every single specific cost uh in the cultivation process or the extraction, the packaging etc. So we need to capture every single one of these costs to be able to create uh reports for them. So I would say this is the main difference. Um but again in theory uh every single company from this industry or any other industry they need to go from uh receiving transactions categorize them or to creating financial statements. Tell me about plugand play. What is plugand play? At this moment uh we have the first version of the plug and play uh which is the Nabis plug and play. In theory the plug and play the concept is we have something that is already uh created and the only thing that we're missing is just the key the API. So whenever you uh get us access to let's say the Nabis API we're just going to connect uh the information is going to be refreshed now with your own data and the report is ready to go. So that's why we call it plug and play. We are uh thinking of uh potential uh different approaches on how to use the same concept or theory of the plug and play. Something that we've been thinking about is METRC. So just METRC has an API connection. So uh we can do a bunch of things with METRC. But going back to the Nabis plugand play. So this is something that we're trying to to promote and this is something that customers uh find attractive. So this is I would say pretty niche. So in order for you to use the Nabis plug and play of course uh you need to work with Nabis but what we're trying to do is to give you three different uh concepts from it. So the first one is sales. So how are your sales uh performing? So where are you selling the most your top customers uh and just helping you to understand which product is working good with Nabis? Nabis works with two different um uh customers. So one is going to be the brands which is uh sending the product another one's going to be the retail source. Uh but at the moment we're focusing specifically on brands. So they would like to know their product which one is the one that is performing good because I' I've seen um there are I would say we can categorize brands into different uh sections. ones one of them is those brands that exclusively work with Nabis and also those brands would work with Nabis but sometimes they do the their own self-distro so what I've noticed is that maybe before working with Nabis some of their products uh they they used to have some top products but then uh while working Nabis it switch so we help them to identify which ones are the ones that they should keep sending to Nabis because they are really performing uh pretty But uh then we have another section that is just trying to help you with uh the performance. So the analytics on the marketplace if it's really working for you, the charges uh if you're getting uh because whenever you work with Nabis, you get your your contract and they tell you like, hey, yeah, you're going to I'm going to charge you a 10% distro fee. But then it comes the question of is this going to be from the wholesale value, the dent value? So all the calculations uh are not straightforward. So it doesn't mean that if you're selling $10, they're going to just take $1. There are a bunch of I wouldn't say hidden fees, but if you don't read the they call it the brand partner handbook, which is a set of rules that are going to describe every single thing that is going to happen with Nabis and it's just like let's say the bible of working with Nabis. So and there's an specific section that will talk about uh fees. So uh maybe a label fee, if you send your product but the labels that they you send were not good enough and they need to do the labeling they will charge you and they will going to charge you for every single unit uh that they are doing for you. So there are a bunch of of different things. Uh but yeah we're trying to to to help you to to determine if all these fees make sense according to how much you're selling there. And lastly it is the AR portion. So we help you to identify uh your top offenders. So the the the customers owe you the most and well just you know like which ones are performing good. So yeah maybe just try to give you some uh hints on these are good customers try to sell uh to them more and also giving you like more granular details like which is the average uh price order uh that every single customer is getting to you how many days it it takes them to to pay you back. So you can make your own decisions. And sometimes the volume doesn't meet profit. So if you're maybe selling to an specific customer, uh let's say one $1,000 one, well, it's just a a random number, but uh if this doesn't translate to collections and also if their margins are not good enough, this might not be your top customer. But even though uh just in a in a pretty quick analysis if you see a big number like we are selling this is our top customer because we're selling them uh million dollars per month normally it doesn't translate. So it is more you need to do a more granular analysis. So with the plugand play what I'm what I'm hearing is that we're with the plug-andplay you're going to know what sells the best where and why. you're going to know um where to improve the cash flow through the AR plug-and-play. And then lastly, you're going to know where to save the money through the specific fee handling. That can sometimes be a little bit tricky to handle, but given you're a professional in that you have a lot of experience, you know how to how to make sure you execute the best on it. Right. Exactly. Uh I forgot to mention, but we also send you there's some specific tab at the beginning, which is called the executive summary. So, we're going to give you specific details on every single one of the categories that I described so you can take actions into it. So, hey, these are your top performers or maybe you need to let's say maybe thinking about collections. These are the the orders that you need to focus this week. Why? Because if you get closer to uh 60 days past due or 90 days past due, probably you're you're aren't going to be able to collect. So maybe put a little bit more pressure into those. Um and also yeah you will receive us uh all our reporting uh a weekly email so you can have it you can read it and is is the same logic. So we're focusing on if you're a CFO like or maybe just uh talk about C-suite so you can have something to read pretty fast understand what's going on with Nabis but also if you want to go deeper into details if you have more time there's full report for you. Very good. Very good. I now know a lot more about accounting and finance than what I originally knew. So really do appreciate that and uh thank you very much, Alex. Thank you. Sounds good. Chat soon. Thank you, Filip. Bye-bye. Thanks, Alex. Bye. --- # The Shift, Ep 7: Cannabis AR: From Spreadsheets to a Video Game URL: https://www.tryheadquarters.com/podcast/ep7 Guest: Milos Stankic Summary: Headquarters' most experienced AR manager breaks down how data, dashboards, and a healthy collections-to-sales ratio are reshaping risk and cash flow in California's cannabis market. Transcript (auto-generated, lightly edited): So, how long have you been doing AR? I've been doing AR um for more than 10 years, but in cannabis I've been working in AR for five and a half years. Five and a half years. I'm trying to think. I I believe that you might be the person that did AR the most that I personally know um from HQ. I could be wrong, but I think that's really it. Yeah, that's actually factually correct because I was the first AR person in headquarters. Nice. And and this is interesting because and and here's the reason why I wanted to talk to you specifically is because you remember what it was AR five and a half years ago in California and cannabis and you know what it is right now. So that that gives us like a lot of um a lot of stuff to talk about. But um you've been collecting money from California cannabis retailers for so and so. What's the biggest difference between California cannabis market when you started versus what it looks like today? I would say the biggest difference is that now we have some kind of um payment history, payment behavior history um across the state. When when I started it was just process of collecting information about payment behavior and now it seems like that industry is shifting towards uh more knowledge about how people pay if that makes sense. Yeah. So ultimately the data that we've accumulated throughout the years and the information sort of got us to this point where we're like, "Oh, we know exactly what this person's going to do, when they're going to do it, why they're going to do it, and so on, right?" Yeah. Yeah. So when you think about that, obviously the data itself is extremely impactful today. How does this make your job easier? How does this data make your job easier in terms of making decisions when communicating with retailers? Well, it makes your job easier in um a way that you can do better job prioritizing who you reach out to, how um how often you reach out to them, um how do you approach them, what are their preferences? we basically know a lot more than we used to know. Um so you can save time by um calling someone instead sending them 300 emails they're not going to open because you know that that person or that particular shop operates the way they operate and it is via phone calls or texts. So having the knowledge about their payment behavior and how they used to behave historically saves a lot of time when you um don't shoot blanks. You just um you're straight to the spot. You know when you call them, they're going to pick up. You're going to have the conversation about payment. it's going to be easier for them, easier for you, and no blanks. Do you feel like there there was an evolution from the point where we're like, okay, my job is just to reach out to people and make, I don't know, 20 calls a day or 30 texts or 50 emails, whatever, to the point where we're right now, which is it's not really based on the number of calls, number of emails, but rather the success of collections per se, per associate or whatever. Yeah, I would say that um keeping your aging report in order does not mean like it does not correlate with higher number of reach outs if you ask me. Um I think the focus is shifting towards um making better decisions creditwise and that's also where data comes in. So you know who to approve terms to or not. Mhm. You're in constant communication with sales. And it's just shifting towards not increasing sales just to increase sales, but have meaningful sales. You put it in a perspective of if we're going to collect what we sold. Mhm. Um, so all the data, all the knowledge that we have, um, have us being instead of just email spammers to decision makers that's going to proactively make the success rate better by making better decisions before the order actually leaves the facility. Would you say again when you compare back in the day AR with the AR today obviously there's a lot of data that's not only useful for you but as you said like it goes to sales so that they know who to sell to or they're going to be more successful but that again the payments are going to be coming in. So when you compare your initial experience to today were you communicating with sales in the same amount as you are today? No. Um it was way less in the beginning. Um the departments then back then were more disconnected because it seemed like cannabis was a new industry and that everything was built ground up. Even if there was a lot of experience from the other industries, um we needed to wait for that learning curve to um just do its thing. Um we needed to wait for the cannabis industry to absorb the the good practices from other industries. And I think that is happening and it's still a process. It's probably going to be a process forever. As much as we take the good things from other industries, there are also some like negative things that we can absorb from other industry like like bureaucracy that we don't need. But it all goes down to the whole system. Like if we're going to have difficult um taxes to look at and we're going to have difficult process to do those taxes, then it's going to cause bureaucracy and and stuff like that. But let's focus on the positives. like I think that um a lot of um positive things came from other industries and we are going towards more strategic type of doing things in cannabis business instead of doing the like extra work with no strategic impact. And this is this is a a conversation that I had with a lot of people and uh um the concerns versus sort of the positive traits about this sort of cannabis transition to like corp more data oriented industry. Um when you compare it to what it was before which is like literally go and that's it. you don't really plan as you said and uh and it's it's something that a lot of people are talking about right now and I feel like as you said like it is a process it's probably going to take a long time but ultimately if you make sure that you pull out everything that's good do that but make sure you keep the as one of the previous guests said you know keep and maintain the spirit of cannabis which is a sense that that I really like um but going back to data very quickly I want to touch on that as well. Um because obviously as we now understand there is very relevance towards data and it's important to store data. How does that look like for you? And again give me like a comparison to what it was before versus what it is right now. You know looking at what a typical aging report used to be before and how you look at an aging report right now from you know techwise and data wise and so on and so on. Well, back in the day, it was an Excel spreadsheet where we um were looking at a lot of data that meant something to us, but a lot of data that was just spam like it was just like unnecessary for us at any point. Um, so how the time passed, we learned what to focus on, what we needed to go over, what we needed to actually do our job. So it was structured in the way where we now are looking at meaningful data and we are having a lot of knowledge to to take that data and make it into information and we know what we want to look at every week, what we want to um look at from the strategic perspective. For example, when we are doing reporting and we are discussing um the collection's success with um C-level um people and what we want to look at granularly when we are doing actually our job. So when we do our job in headquarters, we are building the AR dashboard which helps a lot making our a lot of spam data is structured into a dashboard where you can access the correct data points that you need at the time that you need them such as how much is due, how much is overdue, what's the latest update, What's their contact information? What's their um basically um latest event that happened such as payment pickup? You can see how they pay. Um, we can basically use um we can do collections like it's a video game basically like you can navigate through through the dashboard and just look up whatever you need faster and it looks better. So that's something that is involving how how we are evolving as an industry as well to to put it more in perspective right back in the day you had just like an Excel spreadsheet and that was everything that you were going yeah um and and now it is this ultra fancy dashboard that has all the data classified stored and then you access it depending on your needs and who you're supposed to talk to, who you're go um to collect money from and so on and so on. So, it's like in a in a sense it is sound versus noise where noise was um five and a half years ago and then now it is actual sound made out of that noise. That is something that you can leverage for real to be more successful at what you do. When you look at your dashboard, you said it was like a video game. Does that mean that you know everyone is able to use it or is it a complex tool? How does that work? Everyone that's tech-savvy and know what they want to do, it makes their job more organized and standardized. So I think it's having a learning curve of being faster. If you're on boarding with headquarters doing AR, you're going to get up to speed faster with standardized dashboard instead of just using bunch of different spreadsheets that are different with every company in the industry. Going back a little bit to the retailer side, one of the things that I'm assuming your dashboard is doing is it's kind of classifying retailers based on their information you have uh about them. What are the different types of retailers that you're working with? Like if you can put them in boxes, like how would you classify them right now with with the experience that you have? Well, in the dashboard, you can classify them however you want. um you can customize basically the attributes that you put to the to the retailers. But how would I classify them is um it has to do a lot with their payment behavior. Like do they pay on time? Do they need reminders? Do they like reminders? Um and obviously they are there are the the usual suspects as I call them. Um there are retailers that just pay slower for various reasons which is why we have our jobs as well. But um on the other hand there are um yeah let's focus on the ones that don't pay on time. There is that type that um will just ghost you until they have payment for you. So they will ignore your reachouts. They will they will dodge your calls. They will they will just ghost you basically until they recoup the funds and send you the payment which is when they will reach out to you basically bragging about them paying. Um there are also the the ones that are really struggling. They're ghosting you. They're not paying. um they're just trying to get an update and my message to them is an update is an update even if it's a negative one. Um sorry, let me here for a second. I I have a follow-up question to what you said, which I think is very important to address, especially with brands that are, you know, wanting to make sure that they're making the right decisions in advance and stuff like that. you know, as you said, like projecting a little bit further into the future. Do you recognize now with the level of experiences you have, do you recognize the patterns of like, oh, this seems like a pattern of someone that's struggling or going out of business slowly. Let's just make sure we put a full stop before crazy stuff happens. Um, or is this something that that's still not fully developed? How would you how would you talk about that? I would say it's not fully developed because I feel like it's still based on what I as an individual feel looking at the data. Um it's not structured in a way that everyone can make the decision. But if you ask me about me, I would say that I know how to to predict that something is off and it's just based on the experience like and also I moved a lot between different brands and I've been working with the same retailers from the from the perspective of different brands. and their payment behavior is the same towards different brands. So having that knowledge I can see that brands have different strategies when it comes to um providing terms provide um leveraging their exposure to a retailer how much they sell versus how much they collect from a particular retailer. So you can see when someone is risking too much um and it doesn't seem like every brand is let's say managing that risk well enough and that's where the room for growth is in the industry for sure. So I feel like because you've worked so much with these guys, you know by heart almost sort of fundamentally or sentimentally of when you see these patterns emerge and you're like, "Oh, this is the moment." But you cannot put a number to it. So it's not really technical that much and it's just more based on the feeling that you have in the moment. So what do you think if we were to do an experiment right now and if I asked you put three things that would you know that based on your experience you can you can uh quantify them that would make you a system that can recognize this patterns what those three specifics would be. I will have to think about it for a bit. But the first one that comes to mind would be their payment cadence on average. how overdue their AR gets until they pay on average through time like historically like in the past let's say 6 months um how they their aging buckets move if I should put it that way that we probably the most fundamental one and the most obvious one if we would need to quantify the others it would probably be how responsive they are over time. So we would need to track and kind of grade the responsiveness to the AR outreach if we are just looking at and gathering information from the AR team and not syncing up with other departments uh um in the company. I use a lot of insight that I can get from sales from the sales reps that that actually visit the shops. Um they can tell you a lot but that is that is not easily quantifiable. It's more like subject if you need you need to to to listen to the rumor mill. That would be so amazing. I think that would definitely help a lot. Um, but at the end of the day, that's the reason why this is one of those jobs that you cannot easily replace by AI. It's like you have to take these sort of sentimental/fundamental information in into consideration and not just technical value, right? You have to be like, "Oh, but I got information from the sales guys that they're closing and even though it seems like they're paying everything on time, God knows what's going to happen. So, let's just make sure we put a stop to it before it goes out of hand." Um, and that makes sense. Um, so and and then same goes because you did mention that you also worked between multiple brands and you've worked in uh with distribution as well. Um, so I would like to know like if you if you look at those brands, what's something that cannabis brands consistently misunderstand about getting paid by retailers? Because you said that there's different strategies or or approaches when you know get giving terms to retailers. How how do you go about that? Well, it it all comes down to that um forever battle between sales and AR. And that battle is real. Um every company has um situation where one or the other department has the upper hand and it all comes down to to personnel. like it's like the CFO of the company and the COO need to to be in balance like they need to work together and kind of set the KPIs in a way that makes sense that we need to have more sales but the collections need to follow and The indicator strategically that I like looking at the most is collections versus sales ratio. Like it needs to be around one. And if it's not around one, some some decisions about leveraging risk as we talked about are not made correctly. So that's the main thing that's that's different across the board. Um if and I understand that a lot of companies have um their obligations towards investors. They need to um increase their revenue. Um it all makes sense to me. But if we're looking at the like theoretical perfect situation, you need to um have the sales that are collectible because in the long run that's the only thing that's important. Like if you pump your sales up at the end of each month at for every month, like you need to to have higher and higher sales and then after like 3 months the the invoices that were on net 30 are 60 days overdue, then you're in trouble. Um, and then you need to address those sales as kind of bad. Like if we did not collect on them, then do they actually make sense? So yeah, that that's basically the the main thing that's different across um different brands that I worked for. There are some that Yeah. Sorry. Sorry for cutting you off. Uh but but you know me knowing that you swim very well in this sort of relationship between sales and AR, what is your secret to making both parties satisfied? How do you swim through these waters? because you're very good at it and I'm interested in what are how what do you do so that you're not having issues and that the sales guys are actually satisfied with what you're doing but you're also satisfying the need of getting those payments in. I think it all comes down to trust um for the for the retailers that sales reps does not want me to to touch their relationship. I need to have complete trust that they're going to provide me with updates and that the retailer is not going to go out of control when it comes to to collections. On the other hand, um sales reps need to have complete trust in me that that I'm not pushing credit limits, credit holds on particular retailers damage their sales at the end of the month. kind of over time when you build trust then you work together better towards the the same goal and the my goal is to collect everything that they sell their their goal is to sell as much as they can. There are also practices about bonuses for sales reps where some companies just um hold the bonuses until the we collect money for product sold. So that makes us work for the same interest because as soon as we collect they're going to have their bonuses and apart from that trust that we are trying to mutually build. I think it all comes down to that as well. But yeah, as you said, you need to swim in those waters and just over time it feels naturally to me that it is going towards a good outcome. Um, and yeah, it's like making sure that you're a good mediator by doing or by convincing sales that without them selling, you don't have anything to collect. So ultimately, your goal as well is to make them sell as much as possible so that you can collect. Um, which is probably something that sales guys should take into consideration as well. All right, last one. And this is something that I really like talking to people about. It's just because it's a bunch of information that I mean, you know, it's just forecasting. But tell me, what do you see or how do you see California market in three years from now? No one has issues with having a bank account. They're making a payments and it's clearing automatically via blockchain and I'm out of my job. But realistically, I don't think that's going to happen. Yeah. Um real realistically, I think three years from now, it's we're going to make progress towards um quantifying the indicators that we talked about. It's going to move more towards leveraging the risk and making meaningful sales. But I wish that um cannabis industry as a whole is going to have more access to capital. It's going to have more access to banking um like kind of factoring capital for their cash flow to be faster. I would like to see that moving in a positive direction 3 years from now. Thank you very much. Where can people find you? They can find me in this spreadsheet probably and in the AR dashboard. Thank you very much. Have a great rest of the day, evening. Thank you. Really enjoyed it. --- # The Shift, Ep 8: Marketing Cannabis at Scale URL: https://www.tryheadquarters.com/podcast/ep8 Guest: Josh Karchmer Summary: Former Glass House Brands VP of Marketing Josh Karchmer on treating marketing as the connective tissue of a cannabis company - budgeting from zero, cutting the waste that quietly kills margins, and why storytelling and brand trust win in an AI-flooded market. Transcript (auto-generated, lightly edited): just been knocking around in California cannabis since 2018. Um my first job was um Mo with a company called Moxie who are you know a concentrate and and vape company that were operating in four states. One of the co-founders used to work for me um in in advertising. So I ended up following him into the business in 2018. Um I'd been smoking my whole life, but I never really understood where I would fit in the industry. So it was like we sat down in 2018 was right after it went rec. We talked for like four hours. Billy Maddox who used to be at Moxie and um and at the end of that conversation I saw where it was going. I like this going to be a a CPG business. They're going to meet people who can create brands and connect brands and culture and tell stories. And so that moment like I made that decision. I shut down my agency. I'm like, "Okay, I'm going to go spend the rest of my career, at least next chapter of my career in cannabis." and um and specifically building rec brands and so you know I did it I was in Moxie for a couple years then I went and consulted on a bunch of other bunch of small brands and I went to high season got to create high season and gratitude and that was the first time really controlled supply chain we had had my own cultivation or the company did um and learned so much through that and then you know I wasn't looking for a job but glass house came calling and that was like an opportunity to go to the big leagues really like, you know, it's as close to the NFL as you're going to get to go run uh, you know, House of Brands with a big publicly traded company and be responsible for storytelling, not just for CPG, but like I make the investor videos, too. So, like a lot of, you know, pretty much all the storytelling like that, a lot of that came through came through marketing. So, it's just like the cool thing about cannabis was it was just a place to take everything I've learned from 20 years of marketing and music and and in advertising and then go apply it like within a product company. And um it's just been it's been a blast. Like um I've done a lot of cool things in my life, but like my cannabis experience is, you know, something I treasure the most. So you believe that marketing shouldn't be viewed solely as the creative department. And if marketing is actually the connective tissue of a company, what does that look like in practice in inside a cannabis business? Pretty much. Yeah. My my whole philosophy on marketing is that marketing is really everything you know everything is a marketing uh everything from your product you know all the five Ps of marketing the product the price you know where we sell it distribution strategy um promotion storytelling um and people is a huge part of marketing um or a huge part of business and marketing's job is to create the stories the energy the the tools the events the, you know, everything you need for that business to run well. So, it's what that looks like in practice. We could, you know, look specifically at Glass House. I'm coming off of three years where I ran marketing at Glass House, which is, you know, um, one of the biggest publicly traded companies in, you know, in the business. And our business was a lot bigger than brands. So, you know, if you think about the whole organization, it wasn't just marketing for the the narrow version of um just CPG brands. I'm looking at an organization where the business is dependent on the farm doing well. The farm is the biggest piece of the business. And then we have um the house of brands, you know, Glass House, Allswell, Mamasu, Reform, and we had retail. So, we're completely vertically integrated and we supported um the retail marketing as well. So, you know, uh what that looks like is a small team that partners throughout the entire organization to move the business forward. Um so you know as the vice president of marketing I I sit in the leadership or I sat in the leadership team with head of sales revenue um retail data you know all of the the VPs and SVPs um who really run the business and you know everything from marketing strategy to product and portfolio strategy um all the there's a lot of things that happen before you know what people think is marketing which is taking it out to market um before you can do that you really have to understand your business, what you're trying to do, um, and develop a strategy that supports that. Got it. That's that's actually I love that because now what I'm trying to understand is like you share this situation or your view of marketing as as what it is. And now I'm thinking because you gave this picture of like I'm sitting in a room with, you know, a bunch of these people. How does how does Josh prioritize who's he gonna pull first? Who's uh notes he's going to take in? What are the priorities of the company? How do how do you specifically prioritize when you when you think through marketing perspective? Yeah. Well, I guess it's really understanding what you know what the business is. Where does the revenue come from? You know what's the you know in this business like certain you know a lot of the revenue came from cultivation. So the the you know we're not spending money to market to cultivation but we're certainly creating training materials and and and you know um teaching people and partnering with the farm and HR to do that. Um the goals for the CPG and and retail is you know understanding that um and also helping connect the dots. If we have the biggest farm in the world we should also have the biggest flower portfolio in the world. So that was, you know, part of what we built, which is making sure we got the right products at the right price. Um, portfolio strategy. Um, a big part of marketing, too. It in my strengths from, you know, 20 years of marketing before I got to cannabis. Um, and a lot of operational experience in cannabis, a lot of it is figuring out what's absolutely necessary, like what should we be spending money on, what do we prioritize? And I always like to, you know, start from never take a a big budget and and break it out. I always budget from zero. So you you know you start at the beginning figuring out like let's look at the product right like do we have the right product does you know um a lot of what I did was I you know I did rebrand glass house and actually really changed the look of all of the brands um fixed a lot of things in the product um you know is the number one selling flower brand in California um it became that during during my tenure there when I got there it didn't look like it does now and all the relevant product information that customers and budtenders need was on the back of the package. So, it would merchandised upside down. So, that's just like an easy one. It's like, oh, okay, we need to go redesign this, put everything that the customer wants on the front, maybe give it a look. Um, and when you see now, it's got beautiful blue color. You walk into dispensaries, it's just, you know, just punches you in the face. And before it didn't look, yeah, it was I cringed when I saw it earlier. there's this like weird primary colors and you know everything the customer wanted was on the wrong side. So you know what do you prioritize? Yeah, I mean it really comes down Yeah. It comes down to revenue goals um sales and marketing working together to try to figure out okay what do we got to do this quart you know where are we going this year and what do we got to do this quarter to get there and um yeah a lot of it is rationalization like we don't have to do everything we don't have to be number one in everything. Um so you know in the first 6 months we did a lot of portfolio rationalization killed brands off um and really tight tightened our focus to go win where it made sense to win. You did mention when when you start working you start off with like the the easy budget or almost no budget. So a lot of operators see marketing as an expense let's say. What metrics does marketing need to own before leadership starts viewing it as a revenue driver instead of a cost center? Um well I I think that you know marketing should should share a bunch of metrics with sales you know um especially in CPG I think um distribution and velocity should be shared sales and marketing because then you're building a marketing strategy to go attack the problem. um awareness. Well, think about it like this. In a in a rec market like California, you got maybe a thousand stores, right? So, there's only a thousand customers. They're not all people that you want to sell to. So, if you're going to build a brand, number one thing is, okay, who are we going to sell to? Like, what shelves are, you know, who do we want to build partnerships with? Who can pay their bills? Who, you know, where can we build relationships and drive velocity? So, if I'm building marketing based, oh, I'm going to go throw this great party and we're going to go get this influencer and that. If that doesn't actually bring somebody to one of those stores that your product is actually in, it's, you know, it's for your ego. So, like I don't market out of ego, I market out of how do we solve the problem. If we're trying to be, you know, if the goal is to have the number one flower portfolio in California, it's do we have the right products? Are they priced properly? Do budtenders understand the story enough to tell them? Do we make it easy for consumers? Um, and then, you know, ruthless trade marketing. So, you know, I think in cannabis we don't have big budgets. Even a big company like Glass House, you know, I spent, you know, a fraction of what my predecessors did because a lot of it was waste. If we look, there was a lot of a lot of wasted money spent on things that don't actually move the business. C can you be more specific? And again, I understand if you know there's there there's not really room for that. But when you say waste, give me an example. Can you give me an example? Yeah. I mean, a lot of places that cannabis companies waste money. Um outsourcing creativity. So, you got to ask somebody else to, you know, what is my brand? What what should we be? You're you're in the wrong game. So, I' I'd rather invest in people rather than outsource creativity. I want to have a strong team and be able to do that. So doing as much in-house as possible, you know, you want to outsource certain things that you don't have strengths in. Like I would outsource, you know, accounting or, you know, or like things like that, but I wouldn't outsource like my the essence of my brand. Um, so it's that also a lot of people waste money in packaging. There's tons of waste in custom packaging. um extra touch points that add you know your COGS in a product won't make sense if you're overspending because you got to have this QR code and maybe that QR code cost you 12 cents by the time you know by the time you're done and if it doesn't add that value to the consumer then it's it's a waste. So, um, a lot of it's just rationalization, getting rid of things that don't make sense. Um, figuring out what the consumer actually wants. Um, and focusing on that. Um, I would say the only channel that you really like if you if you have to spend money, if I was going to spend money in a single channel, it'd be trade marketing and that's it. I wouldn't I wouldn't worry about events. I wouldn't, you know, I'd make content in-house for free. Um, and I would focus and trade because that's the money that's going to actually um market as close to the consumer as pos possible and move product that way. Let me let me quickly get back to the the u the conversation about the packaging because this is interesting to me. Um, h, so how does a brand stand out with not so much personalized packaging, but like or how do I say that you don't have to go that extra um personalized packaging system that's more expensive as you said as a as a waste. How do you stand out from a creative perspective, let's say, by not really going uh that extra mile in terms of spending money for packaging, but making it really, you know, stand out and and get attract. Okay, do this. Um, so I mean this is this is obviously oversized. Uh it's a the real bag is not this big. But um you know the whole idea with with glass house was jars are expensive you know and and so when I got there um we weren't really selling big we weren't selling big flour in everything was in a jar. So going moving to Mylar bags which are which are more cost effective than than a uh you know than a jar. Anyway, if you especially in flower like the customers that we care about the most are the the high volume customers, it's the the packaging is a waste item. So, you know, if I smoke an eighth a day, I don't need 300 jars. Like, what do I do with 300 jars at the end of the year? It's a waste. Um, so, you know, we move we started moving everything into, you know, lesser expensive packaging. And, you know, I take a bag home now. I rip the top off and I pour it into my mason jar. I just keep reusing mason jars, right? So the be like investing in a jar for every eighth is to me is kind of silly. Um you know especially on the low with price compression on the lower end but in terms of how do you stand out on the shelf like when I redesign glass house didn't always look like this it black package before but the thesis of glass house is that you know and the thesis is that the world wants California cannabis right not just glass house but everywhere. And so that's why I I went to this company. We were going to be the biggest grower. Um and I was like, well, let's the game I was playing for. Um I didn't see Schedule III happening the way it did. I was hoping that we'd get to, you know, um you know, uh descheduling and that we'd be, you know, be treated more like alcohol. So when I designed this, I'm thinking of like if I'm going to walk into a 7-Eleven in Omaha, you know, and want weed, I don't think the question is going to be indoor/outdoor greenhouse. it's going to be California or not California. So, you know, when we did this, it was let's just own the California positioning. Um, you know, award-winning California cannabis flower. So, that's so I think you do it with you don't need to send it in. It's not expensive packaging. It's just a, you know, it's a Mylar bag. Just smart branding. Um, that didn't have a strain sticker on it, but all of the information that the customer wants is right is on the the label on the front of the bag. That's a marketing function. We designed the label to um give you everything you want. So, I'll put flavor notes on there, dominant terpenes, you know, in addition to everything that that uh that's required to be on there. Um and in past brands, uh the brand I came I was at before Glass House, I was putting harvest dates on the package and I created a system. I I had I got rid of indica/sativa/hybrid alto together and created I had a brand called high season and I built the product portfolio around flavor profiles. So I just took you know we're growing a lot of you know all the cookies and cake strains were in one color way. All my purple weed was in a color way. Um OG's and gas strains were in a color way. So that was an easy way for people to understand oh okay I like these type of strains. Another thing that you did mention which is extremely important because obviously headquarters does outsourcing with a bunch of different um business options whether that's like accounting or AI or whatever. Um but what I also wanted to touch on as well which is like besides outsourcing we obviously now do have a lot of AI and um everyone is talking about AI automation and data um yet you said stories and people matter more than ever. Why do you think brand trust is becoming more valuable not less in an AI-driven world? Well, I just think that in an AI-driven world, you can already see it like AI is making everything look really homogeneous. Like everything's the same. You know, if people are, especially people use AI for generative things. Like if you if I flip through my Instagram feed right now, ChatGPT, like you could tell and I think people already like tune that out. Like I just I wouldn't take Nike seriously if like it was like, "Oh yeah, you just that was cloud design and you built it in HTML." How do I use AI? Um I use AI to clarify my own thinking and to communicate better. So, um, a lot of it is just I can I can create a stronger brief through AI because I can go work through all the problems and then by the time I finish it, I can go hand a collaborator something that's crystal clear like here's what here's what I want you to do because I've already beat it to death, you know, with my AI for 30 minutes. Um, you know, you especially when you know you have to massage something to really get what you want with AI and and I can work that out with AI before it gets too human because a human can't take that level of criticism or you know what I mean? Um, or like if I want to iterate a hundred times, I will burn a human being out and I do that with the machine, get it here and like, okay, here's the demo. This is what we're building. So, I don't know. I'm able to get get things to Yeah. places where it's e easier for people to understand what what we want. Um, and keep things organized. Going back to obviously a huge experience that you have and um not just the the quantity of the experience. If you were stepping into a cannabis company today, um, as a chief marketing officer, what's the biggest marketing mistake you'd fix in the first 90 days? And I'd like you to give me concrete like what is based on your experience, what you've saw, you step in, what are the first things that you do. First 90 days at a cannabis company, um, in the first 30, you just immerse yourself. Like don't have opinions. you learn, get plugged in, understand what you're getting into, understand your team, assess the talent that you have, see where gaps might be. Um, and also just understand is everybody there? Do they get do they get it? You know, do they want to be here and can they do it? And if and if they can't, then you got to make changes. So yeah, I think it's assessing team, assessing situation, understanding the business, getting a really good look under the hood, understanding your numbers. So sitting with people in data, sitting with people in ops, accounting, um yeah, to kind of really understand what you're playing with, getting into the field, too. So CPG company being going to stores and talking to budtenders and buyers about your product and and understanding, you know, you can see where you're at. You can figure out, do I have a problem with my my product? Is my positioning right? Are we p, you know, where where are we not aligned? Um yeah, just you have a fuller before you can really add value, you have to understand what you're what you're doing. And if you come in and have an idea on day one, like that's ego, you know. Yeah. Uh yeah. So you try to just like really suppress that as much as possible in the beginning. Got it. And remove the glass jars. Uh I mean or just put the focus towards things that are the higher margin, you know. Um but yeah, I mean some of the Yeah, some of the product decisions that made like I didn't I didn't go to this like I didn't do this I didn't start this till after I've been there like well over a year because it the packaging wasn't really the problem. It was like the storytelling was the problem with Glass House in my opinion. And so you know it was really like first goal with that was just let's humanize it. let's humanize the company, tell people it's, you know, you can't hate people that grow weed or we're passionate about weed. So, that was that was one of the first things there with Allswell. It was like understanding that the, you know, that was the first package I changed, but the just the labeling um understanding like what you're getting into and and where the opportunities are. For me personally, this was a lot of information that I was not uh familiar with. So, really appreciate that and thank you. Um and uh if if you can uh share with us where can people find you on social media? I am uh LinkedIn. Um I think it's just Karchmer K A R C H R is my my handle there. Uh Josh Karchmer um or on Instagram Josh. Karchmer and uh or events in California. Um I'm around. Say hi. --- # The Shift, Ep 9: The Cannabis Shift: Stop Waiting, Start Building URL: https://www.tryheadquarters.com/podcast/ep9 Guest: Filip Gacic Summary: Host Filip Gacic breaks down three signals shaping cannabis: why DEA rescheduling keeps dragging on and what operators should do instead of waiting, Germany's quiet rise into a pharmaceutical-grade powerhouse, and the widening split between consumer and pharmaceutical cannabis. Transcript (auto-generated, lightly edited): If you've been following the cannabis industry over the past few years, you've probably heard one phrase more than any other. DEA rescheduling. Every few months, there's another headline, another hearing, another prediction that this is the final moment. And yet here we are still talking about it. Now don't get me wrong, this is an incredibly important story. So why is it taking so long? Does the delay itself tell us something about this industry? According to Business of Cannabis, the DEA officially opened administrative hearings on June 29th to consider moving cannabis from schedule one to schedule three under the Controlled Substances Act. Now, that sentence may not sound exciting, but it's actually a pretty significant moment because for decades, cannabis has been classified alongside substances that under federal law are considered to have no accepted medical use and a high potential for abuse. Moving cannabis to schedule 3 wouldn't legalize it federally. It wouldn't suddenly make recreational cannabis legal across America, but it would recognize a very important distinction that cannabis has accepted medical uses under federal standards while remaining a controlled substance. Now, here's where the story gets interesting. People hear the words DEA hearing and they immediately think, great, this is almost over. But is it though? Because government processes, especially ones involving multiple federal agencies, rarely move quickly. And when you're talking about something that affects healthcare, banking, taxation, research, law enforcement, and an industry worth billions of dollars, it's probably supposed to move slowly, whether we like it or not. According to researchers at the drug enforcement and policy center at the Ohio State University Mortz College of Law, the recommendation to move cannabis to schedule 3 followed a scientific and medical evaluation by the Department of Health and Human Services, which concluded that cannabis is a currently accepted medical use under the Controlled Substances Act. Now, think about that for a second. That's not coming from a cannabis company. This is not coming from an advocacy group. That's referencing the federal scientific review that helped start this process. But here's the question I keep coming back to. If the science has been reviewed, if the recommendations have been made, why are we still having hearings? Well, because science is only one part of public policy. Law is another, politics is another, procedure is another, and all of those things have to work together before a decision like this becomes a reality. Now, what should operators actually take away from this? The cannabis industry has spent years waiting for one medical headline, one announcement, one government decision that's supposedly going to change everything overnight. But successful businesses don't operate that way. They don't build their strategy around what regulators might do six months from now. They build around today's reality. They focus on profitability, operations, customer service, inventory collections, compliance, the things that keep a company alive regardless of what Washington decides next. So what's the shift? The shift is this. Regulations create opportunities, but great businesses aren't built by waiting for regulations. They're built by executing every single day. And that's a lesson that applies well beyond the cannabis industry. Now, what's happening across the pond? Well, Germany is quietly building something very different. And honestly, I don't think enough people are talking about it. If I ask someone to name the biggest cannabis market in the world, most people will probably say California, maybe Canada, some might even say New York. But if we're talking about where the biggest opportunity may be over the next decade, Germany deserves to be in that conversation. In an article titled Canopy Growth Builds European Cannabis Momentum, the company is continuing to expand its European strategy with Germany at the center of that expansion. The report explains that Germany's regulated medical cannabis market has become a major focus because of expanding patient access and an increasingly mature pharmaceutical distribution system. Now, is Canopy Growth the story or is it Germany? Because one of the largest cannabis companies in the world decides to prioritize a market. People should ask why. And here's another interesting point. According to newsfeed citing figures released by Germany's Federal Institute for Drugs and Medical Devices, Germany imported more than 50 metric tons of medical cannabis in just the first quarter of 2026. That's a remarkable volume for a market that many people still describe as emerging. Think about that for a second. That's not hype. That's supply. That's logistics. That's pharmacies. That's patients. That's real business. And I think that's the biggest difference between Europe and the United States right now. Because in the United States, the conversation often starts with politics. Who's going to legalize next? What will the DEA do? Will Congress act? And in Germany, the conversation is increasingly becoming, how do we serve more patients? How do we improve supply chains? How do we meet pharmaceutical standards? That's a completely different mindset. There's another reason this matters. And companies aren't investing millions of dollars because they expect one good year. They're investing because they believe this market will continue growing for many years. Markets don't attract this level of investment by accident. They attract it because businesses see stability, predictability, and long-term opportunity. So, here's a question I'd leave you with. Is Germany simply becoming Europe's biggest cannabis market or is it becoming Europe's cannabis business hub? Because those aren't necessarily the same thing. One sell one sells products, the other attracts companies, investments, talent, innovation. And if you ask me, Germany is starting to look like it's doing all four. Could it be the next global leader in cannabis? May not be the country making the loudest headlines, but the one quietly building the strongest foundation. I'll leave you with that. All right. Pharmaceutical cannabis. And I know the moment you say that, some people immediately tune out because it sounds technical. It sounds medical. It sounds like something happening in laboratories, not in the real cannabis industry. But I actually think that's wrong because this week we saw a story that tells us something very important about where cannabis is going. According to Globe Newswire, Beverage Group acquired exclusive global rights to Cannepil, a cannabinoid-based epilepsy therapy with existing patient access in Europe and potential US development. Now, let's pause there because the interesting part is not just the company. The interesting part is the category. This is not a lifestyle brand. This is not a celebrity pre-roll. This is not another beverage trying to look cool on the shelf. This is a cannabinoid-based medicine being tracked like pharmaceutical intellectual property. And that is a very different category. According to MG magazine, Cannepil is described as a proprietary cannabinoid-based investigational therapeutic for drug-resistant epilepsy and the licensing agreement was made with Argent Biopharma. That matters because when cannabis moves into pharmaceutical language, the whole business model changes. You're no longer talking only about branding. You're talking about clinical pathways, regulatory approval, patient access, manufacturing standards, reimbursement, data, and intellectual property. That is a completely different level of seriousness. Now, investing.com reported that Cannepil is approved for distribution in Ireland, the United Kingdom, Germany, and Australia, and that it is manufactured under European Union good manufacturing practice standards. Again, listen to this. Ireland, the UK, Germany, Australia, EU-GMP standards. This is not the old cannabis conversation. This is not when will legalization happen. This is how do cannabinoid therapies fit into modern health care systems. And that's where I think the industry needs to pay attention because there are really two cannabis industries developing the same time. One is consumer cannabis brands, retailer, flower, vapes, edibles, beverages, marketing, customer loyalty, and the other is medical and pharmaceutical cannabis. patients, doctors, clinical evidence, regulatory agencies, pharmacies, insurance, and long-term treatment pathways. Both can exist, but they are not the same business. And if you try to analyze them the same way, you'll miss the bigger picture. According to RT News, Splash acquired worldwide rights to develop and sell Cannepil for drug-resistant epilepsy and related neurological conditions with an initial 20-year license term. and sublicensing rates. So, does that tell us something? This is not being treated like a short-term product launch. This is being treated like a long-term pharmaceutical asset. So, for years, cannabis companies wanted to prove that cannabis could be a serious industry. Now, some parts of the industry are moving into a space where seriousness is not optional. You either meet the standards or you don't. And I think that's healthy because if cannabis wants to be taken seriously in medicine, it has to operate like medicine. That means evidence, standards, consistency, patient safety, regulatory discipline, not hype, not slogans, not trust us, actual systems. So what's the shift? The shift is cannabis is no longer moving in one direction. It is splitting into categories and pharmaceutical cannabis may become one of the most important ones. Not because it's the loudest part of the industry, but because it may become one of the most credible. I think this is a good one to end today's episode. Um, thank you all for watching. Uh, have a great rest of the day and I'll see you on the next one. --- # The Shift, Ep 10: Why Cannabis Needs Quality Signals URL: https://www.tryheadquarters.com/podcast/ep10 Guest: Claudio Miranda Summary: Budist COO Claudio Miranda breaks down why cannabis lacks the quality signals - ratings, awards, origin - that guide wine and coffee buyers. Transcript (auto-generated, lightly edited): So Claudio, can you tell me a little bit about yourself, please? Cool. Well, my name is Claudio Miranda and I am the COO and co-founder of Budist. We're the cannabis industries's uh leading and first ratings and review platform. You know, we started as a kind of review platform, but have developed, you know, further into competitions, curated events. We also do a lot of expert content. Um, I've personally been in the cannabis industry um, my whole life, not not continuously, but uh, over 40 years and I got my start really as a teenager. Um, you know, actively involved in the traditional market and did that through the mid '90s and really, you know, learned how to cultivate cannabis and and do things of that nature in the mid '90s here in the Bay Area where I'm from right now. And that was at the birth of Prop 215 for those familiar with the history of California cannabis and and and reform and regulation. Um but I got out of cannabis for about 15 years and I jumped back in um around 2013–14 into the licensed market and since then mostly in California I've owned and operated every license type in the state with the exception of lab testing. So I've owned and operated retail stores, uh, large scale cultivation and manufacturing, distribution, delivery. So I've been very very active on the kind of license holder side, operator side. And more recently with Budist, I've kind of flipped to the other side of the table to then help a lot of the brands and the license operators tell their stories in market and to spotlight exceptional products and producers. You did you mention you were out of cannabis for 15 years? Is that Did I get that right? What were you doing? Um I got into mostly like tech and natural products, but really natural products. So that means like organic products um things of that nature. You know, my you know, I've been an entrepreneur for over 20 years. The first company I started was uh the um the nation's first sustainable fresh cut flower company. So my business partner and I basically um pioneered the market for sustainable floral as it's called and that's fresh cut flowers, right? What you go to the store and buy roses for Valentine's Day or tulips for mom for Mother's Day or all the different reasons you buy flowers for sympathy for funerals all those things. And at the time when we started our company, the market was dominated by FTD, you know, um, ProFlowers, Teleflora, all conventionally grown. And if you're familiar with how that agricultural market works, it's very pesticide-heavy because you got to have these beautiful flowers as your output. Um, and we went and tried to reform that through agricultural production and really making sure that all these farmers were using sustainable and organic uh, farming methods to produce flowers. And then what we would do then is turn that around to consumers who made values-based purchasing decisions, right? people who buy organic products and services or or natural or or sustainable products like go to a whole foods store to buy organic milk organic produce. It's that customer that you know stands for the environment and and and for personal health that then is the customer that kind of would buy from us. So anyway, that started a journey in the organic products industry where I launched several companies in organic um floral, organic bed and bath, organic apparel, a variety of different products. And the technology side is that we primarily sold those products direct consumer, you know, through e-commerce, but then we also wholesaled to a lot of natural product stores as well. What when was the moment that you were like, you know what, I want to get back to cannabis? What what happened? So, you were like, I want to get back to cannabis. Yeah, it's a good question. Um, so I mentioned I'd been in cannabis really from the time I was about like 15 years old, about like 25 years old. I was in it for like a decade as a teenager and through college. I paid my way, you know, I went I went to school at UC Berkeley and I paid my way through school cultivating and and basically distributing cannabis. Um, and I got out of it for the reasons I mentioned. Um, and when I exited my last organic products company, I was looking for the next thing to do, like most people do in that situation, I started to consult. I sat on a few advisory boards. So, I was kind of floating around kind of looking like, okay, what do I want to do next? And through that process, and I was mostly consulting for income at that time. And what I ended up doing is like meeting um some folks that were in the licensed market and they're like, "Hey, we love your help with uh some of the services you offer." And I was doing a lot of like technology implementations, marketing services, building websites, things of that nature. And long story short, you know, again, I met some folks that were in the licensed retail market in California. And through that process, I'm like, "Hey, that I I know cannabis really well just through like culturally and in my lifestyle, but I never really connected the dots with what I was doing professionally, right? So, I found that that was a great opportunity. It was a personal love and passion of mine again as a lifestyle decision. And I was able to marry that with my professional background and everything I'd learned working in technology and natural products. So I applied all of that expertise, that knowledge uh to then building cannabis companies. And so I started on the retail side uh managing retail stores, dispensaries and then ultimately I I launched my own with a group of partners. So, it's a very good set of skills and a very good set of experiences that sort of organically got you into cannabis because everything of, you know, everything you've been doing before. So, it it completely makes sense. Um, that's exactly right. Yeah, it was very organic. It wasn't like I had some vision to go in and be some kind of cannabis entrepreneur. It just kind of really happened naturally. Yeah. Do you see a world where buyers are actually using your tool to inform their purchasing decisions for new products or strains instead of relying on what a brand rep is telling them? So, this is a little bit more into the weed of it, a little bit more specific. No, that's a fantastic question and the short answer is like absolutely yes. It's already happening. And here again, you know, we're not reinventing the wheel. You know, if you look at analogous industries and businesses like the wine industry, right? It's very common practice. It's very institutionalized that whether you're a wine buyer, like at a retail store, or you're a wine consumer, like a buyer as in a consumer, you often rely on things like quality signals, right? That are things like awards, right? So often times if I'm going into a retail store, if I'm a retail buyer and I'm looking at some products uh to carry, um you're kind of looking at these quality signals that in some ways go beyond what the story is of the brand, right? And the family and things like that. And those quality signals could be things like awards, right? Like this won gold medal at the state fair or at this or that competition. It could be ratings and reviews in wine. That's very common place. Anyone who's ever walked into a specialty wine store will likely have run into ratings that are next to the wines. So it will be like this Cabernet is 94 points by a well-known critic that works for a publication like Wine Spectator or Wine Advocate or Vinous. So you find that globally. It's not just like an American thing. No matter where I go in the world, I can find uh ratings that go along with with wine in this example or things like awards, right? And and by the same token, and again, these are quality signals, you find things like shelf talkers that speak to like the origin, right? It might be like this is from Napa Valley, California as a geographical origin. That gives that then confers upon that product a sense of quality because of where it comes from. If you know your wine comes from Burgundy or Bordeaux, you can be like those are known for high those are high quality production regions. So there's already something there that informs the buyer that I'm getting a quality product. So what it really does then these quality signals as we call them directly inform purchasing behavior because it helps buyers again whether that that's a consumer or a retail buyer really navigate which products are better than others. And the last thing I'll say about that is that there's a lot of studies that for consumers, if you walk into a supermarket and let's say you have 30 different Cabernet uh brands to choose from that are roughly they range from 20, 30, 40 bucks, like what do you buy, right? Most people would default to buying on price point or maybe the label, the aesthetics of it appeals to them. There's a story there. But what most commonly drives that purchase is they'll see that rating or they'll see that award. So if you saw 20 bottles of Cabernet and let's say they were all roughly the same price, but one of them has a gold medal on it, like a little sticker or placard that says gold medal, triple gold medal, or it said 96 points from like a top wine critic. From a purchasing behavior perspective, uh, consumer behavior shows that you're more likely to buy that product because now you've got like something that validates and gives you more confidence in your purchasing decision. So, but is doing that for cannabis, whether that's an award, whether that's a rating or review, whether that's highlighting the geographical origin like Emerald Triangle, Humboldt as the origin of that product. A certification has a similar effect that tells you this is certified organic, certified fair trade. All of these things go under the umbrella of quality signals that inform purchasing behavior. And although this is used in every other of these other markets I'm referring to, coffee, cheese, beer, wine, spirits, cannabis has not yet adopted this or institutionalized it as a practice. Although it's proven to work in other industries and it's through that model that we gave birth to Budist knowing that if it works for all these other industries it's probably going to work for cannabis and we're already seeing that proven out by the retailers and the buyers who are starting to utilize um our Budist assets and services in this capacity. Are there any differences like big differences crucial differences that you're observing or no? Well, if I understand the question correctly, like if we compare it to alcohol, right? Whether that's wine, craft beer, spirits, um most of those reviewers, they don't review the effect, right? Like usually they're reviewing the quality from things like aroma and flavor and texture and richness and the vintage and things of that nature. You're not like, "Oh, how what was my buzz off that wine?" Like, was I a happy drunk or an angry drunk? right? Like that that's not part of the kind of uh the assessment criteria. Whereas with cannabis, that's a significant component of the assessment criteria, especially when you're looking at wellness products because for for most cannabis consumers, you're consuming to um for a desired effect, whether that's uh to help you go to sleep or alleviate your pain or to relax. A lot of people use it as a substitute for like instead of coming home after a hard day's work and pouring a glass of wine or or or a glass of whiskey to kind of wind down, a lot of folks use cannabis for that wind down. So, it's desired effects, right? And then by the same token, a lot of folks are using it for uplifting, for creativity, to go on a nature hike, for inspiration, and and things of that nature, right? So there's all these effects, the most profound of which are medical and therapeutic effects, but there's also recreational effects that we um analyze carefully and assess as part of judging as part of judges in the case of competitions or in the case of reviews for critics. If you had to audit a cannabis company in one day, what are the first three things you'd ask for before deciding whether they're being run well? Yep. Yep. I mean, primary, look, I'm kind of a marketer by trade. Brand marketing is what I've done for most of my life. Um, if I'm going to kind of put that label on myself, but you know, one thing we find a lot in the marketplace is a lack of differentiation. It's kind of, you know, and just in in entrepreneurship in general, we say, um, why are you bringing this product or this brand into being, right? Does anybody care? And it's a common thing. It's a common mistake that entrepreneurs do is we create things that people don't want, right? And so, you're always kind of asking yourself like, like, what is it that's unique about my offering that's going to get a consumer, a desired customer to care and to buy from me? That's kind of one thing. like why should they buy anything from me, right? And the onus is on me to create value and to deliver that value and to win that customer support. But then also how do I differentiate from other products in the marketplace? And so going to the question here is a lot of cannabis companies and I've consulted with a lot of them. I've worked at cannabis incubators where we where we kind of help companies capitalize them and help get them off the ground. And it's a primary thing that I teach. It's like you got to really go back to like your your reason for being your why and like why am I putting another cannabis product out there because we know especially in the more saturated markets like California there's just no shortage of flower or another vape pen another like you know another 90% vape pen made from distillate that has a strawberry flavor whatever right there's just a sea of undifferentiated products and what happens when you get that saturated market, your only thing you can really compete on is price, right? Because then it's just like, hey, I'm no different from the product or brand next to me, so maybe I can just sell it to you at a better price or I can give you a better discount. I'll get you a buy one get one free or I'll get you a 20% off. And that's precisely what we're seeing in in the cannabis marketplace. It's called a kind of race to the bottom pricing that has led to this phenomenon called price compression where just everyone's racing bottom you know bottom pricing right and that's because you have nothing else to differentiate on. So that's another reason why we created Budist is to say look Brands, you've got some other things you can hang your hat on the story of the farm of the family of the producer of the cultivar unique genetics the region in which the appellation in which it comes from maybe there's something unique in your formulation like you've got to really be thoughtful as to what are the unique qualities of my products and what is that key differentiating factor it's Always great to have something new and innovative as well that no one has done before. That's a little bit harder to pull off. But if you're able to do that, then you start the race much more successfully cuz then at that point you're getting into just operational execution among other things. But that tends to be more routine, right? If you got smart people that know how to sell well or how to run operations well or customer service well, that tends to be a little bit more of a commodity in the market. Whereas what's not as commoditized is knowing how to create a great product that that will really resonate with an audience and that they'll love that is unique that's hard to replicate and that's what you should be focused on first and foremost as a company is creating that uniqueness in the world. Either that or you just go all in on the commodity play and be like I'm going for mass scale. I'm going to be the Budweiser. I'm going to be just I'm going to be the low price leader. My unique quality is I'm just going to scale. I'm going to be the biggest at what I do at the lowest price. And that also requires a lot of skill. But that's all that's really hard to do because there's usually only a small handful or two or three players in the market that the compete on the Amazon level or the Budweiser level, right? Everybody else has to figure out the differentiation game, which is why I emphasize that. Do you feel like maybe the the the sort of um base differentiator in the future might be genetics themselves or do you feel like it's going to be something else? For sure genetics will be a big part of it. 100%. I think that's something that's always kind of been there in cannabis. And you know, not to keep kind of tooting my horn at Budist, but but what's been lacking are the platforms and the people that help translate all this wealth of genetic diversity over to the consumer because the average consumer, they know indica sativa hybrid, right? That's about as far as their knowledge goes. They might know an OG. They might know a sour diesel and some of the kind of common, but when you really get into the the broad taxonomy of of cannabis genetics, it's like wine, right? It's like all the wine varietals, right? It's just it's just a lot there. So I think that absolutely it's important but it's only going to be important to the extent that there are folks like Budist and we're we're not alone here educators journalists other folks in the ecosystem that help translate that universe of genetic diversity to consumers in ways that they can understand and familiarize and help make better purchasing decisions. But the short answer is absolutely genetics is key. The other key factor that we're really kind of uh looking at along with others is you know is origin right uh geographic origin. And there again in wine and coffee and fresh cut flowers and cheese and like all these industries and spirits origin is key. Right? If I'm going for coffee I'm going for Ethiopian or Kenyan or Guatemalan. Right? If I'm going for cheese, I'm looking for that French cheese or or something maybe in Northern California, right? And cannabis is the same thing, right? So celebrating that and the and the coupling of that, if I'm getting award-winning, very unique genetics coupled with this is from Humboldt County, from the Emerald Triangle, this protected region of excellence. Now you've got something to really hang your hat on and tell a great story to um operate well in the marketplace. How do you think that mission connects to the industry's broad uh broader goal of policy policy reform and better access for consumers? Yeah, I mean that's a great question. I mean like um knowledge is power, right? Like you need people who are in informed, right? I I think what's I think one of the biggest things that's plagued our industry is like institutional bias, right? from the government, from institutions within talking about America specifically and and what comes with that. In other words, if we're suppressing knowledge of cannabis, so it's not allowed in the universities, we're not allowed to build industry around it. What it does, it suppresses knowledge, right? So, we've been in a bit of a dark ages of cannabis where we're not able to celebrate everything this plant has to offer. In this conversation, we've talked about the medicinal use cases of what it has to offer on the recreational side, genetics, regionality, all these things. That's like knowledge, right? And so the thing is is that, you know, on the one hand, you need consumers to be aware of that, but you also need policy makers. You also need the whole ecosystem needs to kind of lift that veil of of kind of opacity that has shrouded our industry and bring it into the light where we're able to celebrate all of these incredible things that this plant has to offer across the spectrum I've mentioned from recreational to medicinal and consumers once consumers are empowered with that information then they can make all these more informed decisions. Once policy makers are informed with this knowledge, they can then transcend their own biases and stigmas and institute better regulatory practices. And that's been the big thing, right, with reefer madness. There's been scare tactics and fear tactics that make us think that cannabis is going to make you dumb, it's going to make you sterile, it's going to make you a criminal, it's going to do all these bad things, but that's just simply ignorance. So once we go once we take the path of knowledge and kind of casting a light on these things, it helps policy makers realize, oh, like this is actually something that's beneficial for the world. Maybe I'm going to have my own grandma consume cannabis for this and look at how it helped her. And then through that process, through education, both on the policy side and on the consumer side, that's where we build a mature market. What have you noticed are the best practices when it comes to transferring knowledge? And I want you to be specific if you can like what have you observed as being like oh this is the best way the people the the person the market the the state understands about this. Yes. Um okay that's an interesting as far as for the state being concerned. Um, you know, it's interesting because we, um, you know, I and my partner have a lot of friends that are on the policy side of cannabis and that are actively lobbying um, on Capitol Hill or on the state level and they tell us that they often times reference Budist and they reference what we're doing because they see um, because they see that we're taking an education first approach that is again analogous to things that we're familiar with they're like look how Budist conducts these wine style tastings these hospitality experiences for consumers where in other words going to your question like what's very tangible one thing we do at Budist is we host tasting events these tasting events bring cannabis consumers to our events we have a team of our Budists that are like certified sommeliers in cannabis we're using um a lot of marketing tools to educate the consumer things like, hey, how can you better understand the aroma and the flavor, the effect profiles of cannabis? And we're using various kind of tools in that interaction to educate people about um about cannabis usage. Now, why is that important, right? Because most cannabis events you'll go to is a bunch of people just hanging out, hotboxing a warehouse, partying, just dancing, and all that's great. There's nothing wrong with that. But there's nothing educational about it, right? There's nothing that really touches upon the health and wellness of cannabis. There's nothing that touches upon uh the knowledge and education of cannabis about how cannabis can be integrated into your life, how can it be used throughout the various kind of lifestyle choices you make in your life, how it can help grandma, how it can help you with sleep, how it can do all these things. So basically, um, friends of ours take as the examples of what we're doing in the market to show that cannabis isn't this stigmatized underground kind of criminal element type of social activity. It actually looks more like people going to wine country to go wine tasting for the weekend. It looks more like an educational seminar on coffee cupping or on learning how to discern different like a flight of whiskeys, right? So, it starts to look more familiar. It starts to look more normal. It starts to look like more facets of our everyday recreational life that are happy and enjoying and and that enrich your life. And it's again trying to separate it from the stigma that has been kind of unfortunately falsely created around just criminality and underground kind of nefarious activity. Right? So, so our friends that I'm referring to, use this as an example with policy makers to show, see, this is what cannabis when it's fostered, when it's advocated, when it's institutionalized, um, and when education and when it's education forward, this is how we can look in society, not the way that you guys have been painting it through decades of hysteria and reefer madness. outside of um the effect of cannabis and let's say um uh THC percentages, what consumers value today? What have you noticed that they value today when it comes to using Budist as a platform? Yep. Yep. Well, for starters, you know, you know, I mentioned that we have a team of critics and judges and the way that we assess cannabis effects is one of several criteria or attributes we look at. the how we weight those attributes in importance vary by product type or category. Right? What I mean by that is some products like wine, things like aroma and flavor are really important, right? As we know, as an example, cannabis beverages is one of the fastest growing segments of the market. People want to use that socially, but it's also, you know, you're never going to sit around and enjoy a drink that a drink that doesn't taste good, right? Tastes like crap, right? So, so definitely something that that um you know we all love a well not everybody but most of us love a well-crafted cocktail for example, right? Like there's something about mixology and craftsmanship and making a good cocktail. So, and that doesn't have has nothing to do with effect. So, cannabis has that as well, right? that especially in certain categories like concentrates for example hash we really look at the aroma we look at the flavor and that's a big part of the experience that we talk about and we emphasize that really tastes good and smells good and the smoothness of it like that and that's before the effect is even coming into play. So there's all that side of it. There's other sides of it like innovation uh hardware technology things like vaporizers right whether that's vaporizers like a Pax, for example, like a handheld vaporizer that you load flower in or it could be like cartridges right or all-in-one vaporizers. The hardware there has gone a long way and there's a lot of cool form factors delivery methods that have really cool hardware that we also assessed. So, you know, we just got finished judging the California State Fair. I was one of the cartridge judges. I judged dozens of cartridges and all-in-one vaporizers. And the hardware is a key component of that because if I'm not getting a good hit, if it's not a smooth hit, if it's not reliable, if it's burning too hot or too cool or it just doesn't quite work well with the oil, there's a lot of factors we look into in the hardware alone. And this again is all before you even get to the assessment of the experience or the the effect profile. So anyway, there's a lot of other things that we look at a lot other competitions look at packaging like how cool is that packaging? We know that's important in other consumer goods that you love that you know that Dolce and Gabbana kind of packaging or that Apple packaging, right? For a lot of people, that's an integral part of the experience of buying an Apple product is that box it comes in and the unboxing of the product. So, there's just it's just like any other consumer good. There's all these other things that you can assess and appreciate that aren't just is it getting me high or not or how is it getting me high? Can you tell us where can people find you and where can uh where can they get the um uh Budist uh platform? Yep. Yep. Well, the main hub is budist.com. That's our website. From there, it spokes out. We have an app on the um Google Play and Apple App Store. Uh where you can download the app and that's where a lot of our reviews and you can see our critics as well. So that you can only read reviews but kind of get to know some of these product experts and and taste makers and and kind of learn from kind of their their craft and how they're looking at cannabis. So that's the Budist app. From there you can also go to um our Instagram which is budist_official. Um those are the main kind of components we encourage people that on budist.com you subscribe to our newsletter. That's another vehicle through which we educate and inform our customers. So between all of those the website the newsletters Instagram and our app those are the best ways to engage with us kind of digitally and through our website or newsletter you'll find out about our events. We're doing events in market every month that are like these tasting events. So, we invite people to come join us um if we're in a market near you. Yeah. And it's just a very big community. So, everyone's welcome. Come on over and take a look at what we have and what we offer and what you can find out and again educate yourself about. So, that's great. And where can people find you as uh would you like to share your social media? Um, yeah. I mean, I'm not super active my myself on social media, but it is Claudio's Scope is is my social media handle, but I'm not active. You know, my business partner, who is also my life partner, Jocelyn, she's the CEO of the company, and her social media handle is Josie Bossi, and she's very active on social. So in addition to following as well as she has another account Budding Budist um where you can follow her and there's where she tells a little bit more of the journey uh of building butist as a company and everything that I've talked about here today you can follow along on that journey through her personal accounts as well as budist_official --- # The Shift, Ep 11: Cannabis Is Growing Up: Why Execution Now Beats Hype URL: https://www.tryheadquarters.com/podcast/ep11 Guest: Filip Gacic Summary: DEA hearings end with a surprising Schedule III concession, as Europe prepares to launch its first cannabis medicine for chronic pain. Transcript (auto-generated, lightly edited): If you've been following the cannabis industry over the past few weeks, you've probably heard me talking about the DEA rescheduling hearings. Last week, we've talked about why the process was taking so long. This week, the hearings are officially over. And honestly, I don't think the biggest story is that they ended. I think it's what happened inside the courtroom because after years of debates, months of preparation, and week of testimony, one moment stood out to me more than any other. Not because it was dramatic, you know me, but because it was unexpected. According to business of cannabis, one of the expert witnesses testifying on behalf of opponents of rescheduling acknowledged during the hearing that cannabis meets the legal standard for placement in schedule 3 under the Control Substances Act. Now, let's slow down for a second. That doesn't mean the witness suddenly became a procannabis person. It doesn't mean everyone involved now agrees. And it certainly doesn't mean cannabis has officially been moved to schedule three. But it does raise an interesting question. If even an expert witness called by opponents acknowledges that cannabis appears to meet the legal standard, then what exactly is the remaining debate about? Because remember, this hearing was never really about asking whether people like cannabis. It wasn't about whether individual states should legalize adult use cannabis. And it wasn't about politics. At its core, this hearing asked a much nearer question. Does cannabis meet the legal criteria established under federal law to be placed in schedule 3? That's the question. And it's a very different conversation. According to DEA, the administrative hearing began on June 29th and concluded on July 15th after receiving testimony from designated participants selected by the agency. The next step is for the administrative law judge to review the record before the DEA ultimately decides how to proceed. Notice something? The hearings are over. the discussion isn't now the process moves from testimony to evaluation from arguments to decisions and that's why I think this story matters not because we have a final answer we don't but because the conversation itself seems to be changing a few years ago people were asking whether cannabis had any accepted medical use at all today the discuss question has become much more technical. How should cannabis be regulated? What standards should apply? What does federal law actually require? That's progress. Not political progress, regulatory progress. And those aren't always the same thing. Now, what should businesses take away from all of this? The same thing I said two weeks ago. Don't build your company around tomorrow's headlines. build it around today's execution because even if schedule 3 eventually becomes reality, the companies that benefit the most won't necessarily be the ones who predicted it, they'll be the ones that already have strong operations, strong compliance, strong financial discipline, strong relationships with customers. In other words, they'll already be ready. So, what's the shift? The shift is for years the cannabis industry has argued that it deserves legitimacy. This week's hearings suggest the conversation may finally be beyond whether cannabis has medical value and toward how that reality should be regulated and for this industry that may be the biggest shift of all. Two weeks ago we talked about Germany quietly becoming Europe's cannabis powerhouse. We talked about pharmaceutical standards, patient access, supply chains, and why some of the biggest companies in the industry are investing there. But this week, Germany isn't just talking about medical cannabis anymore. It's putting it into patients hands. And I think that's a much bigger story than most people realize. According to Pain News Network, Europe's first cannabis-based medicine, specifically approved for chronic pain, is expected to launch in Germany and Austria next month. This isn't another vape. It's not another edible. It's not another celebrity cannabis brand trying to stand out on a dispensary shelf. This is a prescription medicine, right? And that's a completely different conversation. Think about how much the cannabis industry has changed. For years, the biggest argument was, "Does cannabis actually have medical value." And that debate dominated headlines. Researchers, politicians, doctors, patients, everyone. Everyone seemed to have an opinion. Today, the question isn't whether cannabis can be medicine. The question is which conditions can it treat? That's a huge shift. And I think that's something people often overlook. Medical cannabis doesn't become successful because politicians say it should. It becomes successful because physicians prescribe it. Because patients benefit from it. Because regulators review the evidence because manufacturers meet pharmaceutical standards. Those are completely different milestones than legalization. According to Pain News Network, the therapy received approval for clinical development focused on chronic pain, one of the most common conditions affecting millions of patients literally worldwide. Now, whether this particular product becomes a commercial success, we don't know yet. But honestly, that's not the point. The point is that cannabonoid medicines are increasingly entering the health care systems through the same regulatory pathways as other pharmaceutical and that's exactly what mature industries do. Here's what I find fascinating though. A few years ago, the cannabis conversation was almost entirely political. Who's going to legalize next? Which state is next? What will Congress do? Now look at the headlines. Clinical trial regulatory approvals. manufacturing standards, prescription medicines, patient outcomes. That's a different industry. And I think this creates something else. Two completely different business opportunities. One side of cannabis will always be consumer products, brands, retail dispensaries, marketing, customer experience, all that stuff. The other side is beginning to look more like biotechnology research, clinical development, intellectual property, long-term healthcare partnerships. those businesses might use the same plan but they're playing completely different games. So here's the question I'd leave you with. Are we still watching the cannabis industry or are we watching the birth of an entirely new pharmaceutical category? Because I don't think those are the same thing. And if Europe continues moving in this direction, Germany may not just become Europe's biggest cannabis market. It may become the place where a future of cannabonoid medicine is built. For years, the cannabis industry fought to prove it belonged in medicine. Now, medicine is beginning to decide where cannabis belongs. And that may be the biggest change of all. I want to finish today's episode with a question because every week we talk about new products, new regulations, new investments, and new markets. But how often do we stop and ask who's actually winning? According to business of cannabis, medical cannabis businesses continue expanding internationally as companies invest in patient access, manufacturing, and distribution. But here's what stood out to me. None of those headlines mention hype. None of them mention celebrity brands. None of them mention viral marketing campaigns. They talk about infrastructure, supply chains, manufacturing, distribution, compliance. In other words, they talk about the things customers rarely see. And I think that's one of the biggest misconceptions in this industry. People often assume the companies with the loudest marketing are the ones winning. But are they? Think about almost every successful industry. Amazon didn't become Amazon because it had the coolest commercials. Costco didn't build its business around hype. Pharmaceutical companies don't become market leaders because they have the best Instagram page, although it sometimes work. They win because they solve operational problems better than everyone else. Cannabis is becoming exactly the same. As this industry matures, I think the competitive advantage is shifting. It's becoming less about who can launch the next exciting product and more about who can consistently deliver. Can you manufacture at scale? Can you meet regulatory standards? Can you keep products in stock? Can you build trust with physicians, patients, distributors, and retailers? Because those are much harder things to copy than a logo or a marketing campaign. And I think that's good for the industry. Mature industries reward consistency, not excitement. So, here's the question I'd leave you with. Five years from now, will the biggest cannabis companies be the ones with loudest brands or the ones with the strongest operations? Because if you ask me, that's where the real competition is heading. So, what's the shift? The shift is this. The cannabis industry is entering a stage where execution matters more than attention. And over the long run, businesses don't win because they're the loudest. They win because they're the most reliable. One more thing, next week we have a really great guest. And boy oh boy, I'm looking forward to it. So, thank you so much for watching. Have a great rest of the week and we will see you next week on the shift. --- # The Shift, Ep 12: Fixing Cannabis Companies from Diagnosis to Execution URL: https://www.tryheadquarters.com/podcast/ep12 Guest: Jessica Ferranti Summary: Scaling or scaling chaos? Jessica Ferranti on the three warning signs - culture, revenue, operations - and fixing them, not just naming them. Transcript (auto-generated, lightly edited): Jessica, tell me a little bit about yourself. Sure. Yeah. So, CEO of the Mycelia Group, Jessica Ferranti. Um, I've been in cannabis for around 10 years, doing quite a bit of of everything, frankly. Um, joined the industry not through, you know, or or by accident. I genuinely wanted to be in this space and be one of the like early pioneers at least in the legal industry of course. uh after about a decade of helping you know in the camps industry specifically helping to uh scale different startups in media technology manufacturing I launched the Mycelia Group last year to be able to help you know a a larger group of cannabis companies grow in scale versus just like one at a time and uh into quite a few different things uh including throwing events in the industry for uh different seuite executives different essentially I call them like networking experiences uh to launching women's scholarships in the space and a whole host of things so it I would say uh a lot has evolved and changed over the last 10 years but the one thing that's been consistent is my love for all things you know cannabis and industry industry wise or industry related so perfect okay so let's let's talk uh Mycelia Group a a little bit more. So, what I noticed is that um you've described the Mycelia Group as a company's um let's say primary care physician. Now, that's a really um unusual way to position a consulting business. So, what does that mean? And what are the symptoms that tell a founder, oh, it's time to to call you call Jessica? Yeah, it's very quarant question. So, um, you know, any anytime you're working with anybody in any industry and or discussing really any topic, the one thing that I've learned, especially in sales, is you want to be able to create something that's relatable, something that people understand, right? That that clicks and is relatable enough that it is transferable from industry to industry or company to company. The reason that I'm using the primary care physician, you know, like language is because that's something that I think that everyone can relate to how it how it is um essentially described right under the Mycelia Group is we're your business's primary care physician. Let's say you have um a certain symptom that you can't diagnose on your own or you need checkups, right, just to stay healthy. Uh or you know what you need and you're just going to the doctor to get some advice. you're going to your primary care, you know, because primarily that PCP understands like your whole health picture. Like you don't have to reexlain stuff, right? Like you know your doctor's got it. They've got the information and you know that if you need any general tests, anything like that, the doctor will perform it. But if you need something beyond that, right, you having a an issue with a certain part of your body or anything like that, what happens there is you're trusting your PCP to then send you to say someone in network like a specialist, right? A doctor, right? A stomach doctor, whatever. When those results come back, you're not just working with a specialist. You're that um specialist doctor is now sending all those results back to who? your PCP because again they're the one they're the ones that are really connecting all the dots. So this is something that people regardless of again industry or otherwise it's something that everyone I think can generally relate to. And so as a company that performs so many different types you know of engagements and helps in so many different areas. It was the easiest to to use that as like a reference point. You know is where your we're your business primary care physician. You come to us if you're looking to stay healthy as you grow. Uh you come to us if you are having symptoms and if you're not sure what those symptoms mean uh or how to treat them, right? You're coming to us if you know what your needs are but you still need the treatment plan, right? You still need that assistance. Um or you're coming to us if you don't know what the issues are. If you are looking to solve a certain thing but maybe don't know who to go to. We're like that first that first triage that then helps you determine what is the best treatment plan. Who should you work with? What what does that look like? So, it's it's about being relatable ultimately. Got it. Got it. And it does really make sense because when you think about it obviously through that u relatability we reach a point where like oh I'm good at uh you know diagnostics and I can tell you where to go as you said where to go what to do who to contact and what we can do but ultimately it's that like sort of diagnostics part that you can figure out um at the very start right yeah and it's it's the trust that you build with your with your doctor right it's the same thing we're servicing so many different companies around the industry and we obviously have a very strong network of our own and again I I use the doctor example because of that that you know psychology behind it because much like a doctor we also have our whole you know we have our in-house people right that are going to be experts in the space that have their core competencies but we feel that at the end of the day when you need a specialist we're not going to try to form fit someone that we have inhouse and match them you know, to a client to solve that particular need. We're going to go just like a doctor and tap into our in network specialists, right? Our go-to person for operational work, our go-to six vendors when it comes to marketing. And each of those six vendors might have a totally different subset of experience or expertise in in you know, let's say um a certain state, you know, or a certain type of company and supporting them. So uh yeah I think ultimately it comes down to having a trusted network and that's something that people take for a lot of people it takes years decades right to build we form that and have created that trusted network so people do come to us it it's not for one single purpose they are coming to us knowing that they now have a partner in their company's health to help them grow you know long term and just like anything else right this industry is built on relationships it's built on long-term you know, long-term strategic partnerships and relationships. So, that's sort of our, you know, that's our superpower in the space. So, so let's let's do a little bit of an experiment and I want you to teach me about how you do this. I'm interested. So, let's say of a cannabis company, right? And uh my is growing fast. You know, revenue's up. We're hiring people. Everything's great. But like every week, you know, we go into feels a little bit harder than the last one. So I'm thinking I reach out to you and I want you to walk me through what happens when someone like me calls you for the first time. How does that conversation? Yeah, that's that's a great what a great question, Phil. You know, ultimately, again, going back to the the doctor example, no one patient is the same. So, I don't come into any single meeting having just like here's my preset questions. You're my team, right? Here are the preset questions. Here's how we're going to ask you and approach this and we're going to have the same strategy or anything throughout. Ultimately, everything is built on a case by case basis. And so when I meet with a, you know, a CEO or founder who's in a position that, to your description, Phil, sounds like they're growing, they're in a in a healthy state of, you know, of um scaling, but each week is getting harder. My main thing is how can we solve what are their issues and what is it that we can actually solve here? I would probably start with asking some questions of like when you say that the week, you know, every week is getting harder than than the last. What does that look like? Does that mean that you're gaining more business, but operationally it's hard to sustain? You know, like things are breaking. Um your schedule's all over the place. You're having a hard time prioritizing what's more important, what isn't? Like these are the thing is regardless if you're cannabis, if you're psychedelics, you're another industry. I often talk about it like like building a foundation for a house. Again, relatability, right? Regardless of the type of house you're building, you still need a solid foundation. You still need like solid operations, right? And like infrastructure, um the right systems, the right tools, the right, you know, people, the right SOPs. Without that, every single time you scale in your business, there's another crack in that foundation. And now you're building upon something that at any point can just collapse underneath you, especially companies that are successful because, right, they're more susceptible to, you know, to like what is what's the phrase? Um like uh crumbling under the weight of their own success, right? So uh that's the approach is as opposed to going in and making assumptions or asking the same subset of questions. It's like let's first identify what what is weighing you down the most. what is preventing you from bringing in a steady stream of revenue or servicing right that stream of revenue and then where are the gaps that we can start to fill based on priority because I will say one one more thing to that Phil which is that founders at most stages of growth um I think a lot of their issues are pretty common and one of the main issues is that there's so much to focus on at once they have a hard time prioritizing So like you're one that's the one thing I would say I would pretty much focus on like regardless of you know what issue like you came to me with what are those areas that you're focusing on now and what we essentially would help identify which of those um focus areas are going to have the biggest impact. So we'll put it in like a matrix and be like this looks like it's important. This feels like it's a top, you know, it's a level five priority, but when you look at the actual impact it's making to your business, we actually need to dumb that down to like a level two priority. And a lot of founders just aren't equipped or while they're in the thick of it, they have a hard time, you know, objectively like, you know, looking at their own business from like a third, you know, like a third party view. I'm going to ask you for example later uh because I I wanted to hear a little bit about that in in more specifics. But I do have one other thing that I wanted to now that you're talking about this sort of aspect of you come to me and I ask you questions, we figure out what's actually happening and um relatability and the trust and all that. So I'm interested in like you know when we're talking about most consultants and um in how they approaches like you know with a PowerPoint and a list of recommendations and stuff like that and then you talk about building companies as you said like we need to make sure that we have a good foundation no cracks we have to have a good structure a good skeleton. So um what's different about the way you actually work with founders? How how does that portion look like? Oh man, you're it's a very very important thing that you mentioned because there there is an important distinction between consultancies that are providing primarily strategy or execution or obviously both. You know, I found there's a lot there are a lot of companies out there that are really well equipped in building strategy or execution, but they obviously suffer in one area or the other. I think that for us and and where we tend to focus more is the type we would like to bring in more a better way to put it. We look to attract companies that are more in the realm of needing support and being open-minded to support on both ends, both strategy and execution. Because listen, a presentation is great. Like I could tell you right now, Philip, hey, you have this and this issue and here's the general plan of like how to move forward with it. The challenge is if you're a founder or you're in a leadership team and you're working on 80 other projects, think of how hard it would be for you and your team to now take a plan on paper and actually bring that into action into reality. Like ultimately strategy is great, but if you don't have the team, the mindset or like the experience ultimately to bring that to life, it just dies on paper. It's like what what does it matter at that point? So, one of the areas that we focus on is even like when it comes to fractional executives. A lot of companies in the space suffer from not having the right, you know, the right um expertise on staff because they can't afford it. M if we're plugging in a fractional executive who's going to come in and do say like the strategy, you know, portion of it, um how does the business owner who's bringing them in know how to properly vet that executive, how to properly vet their work that that executive is completing or vet the strategy? And oftentimes like they can't they don't have right that like background. Where the Mycelia group comes in as like really like a a major uh player in that type of of structure is that when we're placing a fractional executive, we're not just putting them in there and saying like cool they'll build a strategy for you know good luck. We're actually overseeing the entirety of the project. So like think of it again the doctor sense. We're doing it from diagnosis all the way through to the execution of the treatment plan. And the specialists and the people we're bringing in throughout the process are all there to fulfill like the overall holistic game plan for that business, not just tackle one issue or one strategy. Everything has to be congruent like working towards the total, you know, the the end goal, the end result. So that that's really the biggest difference is we're not just plugging people in or providing just strategy. We are there throughout the entire process diagnostic all the way through to execution and then we're overseeing the people doing the work to ensure that it's being done correctly. So it's a full package pretty much and it as you said like it's not we're going to be doing this full stop period it ends here. Goodbye. It's like let me hold your hand and let me drive you through this entire thing so that later on obviously you would be able to also make sure that you're following that process even if I'm not here so we don't mess stuff up right um yeah yeah it's that's exactly it perfect now going back to the conversation so without naming names uh obviously so can you tell me a little bit about a company that let's say came to you convinced inced that they might have one problem. But once you got inside the business and you checked everything, you looked everything from all the perspectives, you you were like, "Okay, this is something else completely different happening here." Did you have um Yeah, it happens pretty often actually. Um yeah, I can give you two examples right off the bat even from like when we first launched a few different companies that we we've seen these type of situations in. So, one was um a company that we were that approached us for um some sort of sales support, you know, to come in and like review the revenue operations. They were like, "Hey, we need to have someone come in, review our sales team, maybe let some people go make some new hires and kind of build the strategy out to be a little more effective." And shortly after coming in, which is why we do the diagnostic phase always, shortly after coming in, we found, you know, a portion of that was absolutely correct. Like they needed some revamping in the sales team. Their strategy definitely needed to be updated, you know, to reflect the market that they were operating in, but the the issues that they saw as their sales reps not performing were far deeper than just that. So like for instance their sales team was selling but their team was not manufacturing and producing the products fast enough which was then affecting their sales and longevity right and the retention of their clients. Uh their customer service department had a a pretty significant disconnect from the sales team and marketing was speaking a totally different language and promoting those services very differently than how the sales team was presenting them. So, it's like, yeah, we could come in and just tackle the sales side of things, but this is why just a moment ago, I was describing the importance of coming in and not just trying to plug one hole and looking at it so narrowly. If you're growing or scaling a business, it's not as simple as just one element. Every it's it's like a again, it's like a body. That's why I use the doctor example. Something might be wrong with your heart and that might be an issue with your heart, but there are four other things that are being affected by that in some capacity. Whether it's your diet, you know, and your exercise, there's something wrong with another organ. It a business just like a body, there's a lot of different moving parts. So yeah shortly after coming in you know instead of looking narrowly at one area we looked at the big picture and all the different elements and found it was a comprehensive you know structural issue and once we were able to identify that boom you know business is growing and thriving because it identified it's like if you're a founder sometimes you just don't know what you don't know and that's that's where we plug in. Um the other instance was we were helping to launch a dispensary. Um that dispensary thought that their main challenge was more or less just like helping getting some assistance like on like the marketing side and then again you know for a company that's coming into the space brand new thinks they kind of you know more or less have most things down. You find quickly same situation you know um they don't know what they don't know. And so we came in to assist on the marketing side and ended up finding that they're, you know, they were not prepared for their launch in areas of compliance of um wholesale agreements and contracts. Uh their um their loyalty program like did not exist. Uh their systems and their softwares were like kind of blindly selected. And like that's even like one main area a business owner, let's say like a dispensary owner can come bring in or select like a point of sales system and be like, "Cool, I'm good to implement it and I'm going to have that point of sale system help us." That point of sales system is only going to help to a certain point. like they'll help you get set up in the system, get some users in there, help you navigate a little bit, but when it comes to integrating that deeply with within the rest of your business, you don't know until you know that a month in you have to do all that by yourself. Like the POS system isn't going to help you. So these are the just some of the many examples we've seen where they think it's one symptom, one area and it's, you know, it's a bodywide issue. And as you're you're talking about that and this is this is what makes me more interest uh most interested about all of this we're talking about right now is the fact that you you also mentioned to me uh earlier um that as the mycelium fungi functions is like oh you know within this ecosystem I see that one tree is um underfed let's you know we jump in and we figure out what's happening and all of these metaphors again comparing it to uh with the metaphor of like an entire body. All of this is Can you Can you just repeat what you told me at the very start of this conversation because I really like a very good comparison to how you um function with founders and with companies as the fungi does uh in a natural ecosystem as well. Yeah. Yeah. Absolutely, Philip. So, essentially, you know, a lot of people ask this question, right? Like, why mycelia? You should obsess mushrooms like what's what's the connection there? And yes, while we work in the cannabis and psychedelics, you know, uh, markets primarily, although we do business in a lot of other sectors too, the the reason that comes into play is actually like well beyond the industries that we serve. So mycelia is a play on mycelium, which are the fungi roots that are built, they're essentially they're called like the the worldwide web of nature. So most people don't realize it or recognize it, but pretty much no matter where you're walking, as long as it's like on grass or somewhere in nature, you're walking on top of what is miles and miles of mycelium, these roots that are connected to everything in the ecosystem. And so mycelium, what it does is it controls the environment. It helps um uh here's like a good example. I'll give you the specific one we discussed earlier. So, mycelium can connect let's say multiple trees, right? So, it's a network underground connecting you know all all different organisms in space. When one tree say is lacking in nutrients, the mycelium acts as like that that worldwide web, right? that connect like that connecting framework to notify other trees and other organisms in the area that this tree is lacking in nutrients and so it's sends out these you know these signals and then other trees can actually send nutrients through that that network through that organic network to the other tree to save it. And so I liken that to what we do in the space too because number one we are the underlying ecosystem right that maybe the the invisible ecosystem underground that's powering a lot of the cannabis companies and you know other businesses in that of this industry just more or less silently you know helping to put things in in its in their place and you know help them grow and scale sustainably. The other element to that is one of the biggest challenges we've seen and heard you know feedback from um a lot of other companies in the space around consultants is that they'll hire someone in marketing like a like say a fractional CMO you know and they'll hire someone fractionally for sales and they'll bring in three more consultants for three different areas of the business. The main challenge that they face is that because those fractional executives or the talent they're bringing in the their like core competencies say is just sales or just marketing. They're not communicating. So they're creating silos. So like marketing isn't talking to sales. I'm like they're not worried about it. Like their whole job is just to worry about marketing. Same about sales. same about operations because we're that that fundamental ecosystem like that infrastructure. We're the one connecting all of those consultants. We're the one connecting your in-house say operations team to the marketing agency you just brought in you know to support them or ensuring that your inventory team you know is working closely with say um you know your customer service team like we're ensuring that the overall picture of your health is where it needs to be and that was the whole you know kind of concept behind using mycelium and the fungi kingdom it's the hidden network controlling the world and nobody talks about it. Let's say if someone listening today is wondering whether they're actually ready to scale or whether they're just scaling chaos or whatever it's going on in in their company. So, what are the three biggest warning signs they should be paying attention to? H that's a great question because honestly depending on their business there could be a host of things, right? Um, I think one of the, and I would say easiest, obviously not everyone might agree with me on this, but I think one of the easiest things off the bat is culture. Because if, if the people that you have within your team, and you could recognize the signs if you're you lead with emotional intelligence, if you're paying attention to your crew, right? If you see your team is burning out, um not completing things on time, you know, coming up with a lot of like or presenting to the table, right? Like bringing to the table a lot of challenges they're facing, like if there is some internal friction that starts to become really visible, I think that's like one of the easiest ways to know that, hey, something is wrong because it doesn't necessarily mean it's a fundamental issue in the team culture, right? Like the company culture. It could just be an issue of they're burning out because your team is lacking automation or again, you know, they're struggling because maybe they're not getting paid enough because your revenue doesn't support that. So, I think like one of the easiest things I'd say top line is like your team, you know, listening to your team and recognizing like where they are and hearing them because they are the ones with boots on the ground. Um, the second I would say would be revenue. uh if you are building up your revenue, you know, that's an area where yeah, you should you should leverage some support and some resources in the space to continue that and and continue to grow it. Uh but from an issue standpoint, if your revenue is plateauing, if um you're seeking to scale rapidly and um you you know you're growing and things are good but you don't know if your team could sustain like that increase in revenue. So that would be another another area. And the third would be operations because really again much like we talked about like the house example of the foundation like operations is the lifeblood of of the company. It's how everyone in the company is performing their tasks, how they're staying on top of projects. Um, different things like that. Where can people find you? Where can people find Mycelia Group? What's the best way of getting in touch with you? Yeah, sure. So, you could find us at myroup.com. So, that's my cce agroup.com. We're across all socials at the Mycelia Group. So, really nice and easy to find us. And of course, we're going to be at quite different different um quite a few different shows all over the country. So, you can find us at Ignite, Hall of Flowers, Revalry, MJ Biscon, you name it. So, yeah, we're excited to to see what the rest of the year brings. As the mycelium, you're everywhere. So, that's good. Exactly. Exactly. Uh wonderful conversation, Jessica. Really, once again, amazing stuff. A lot uh of things that I've learned that I did not know before. So, thank you so much. We appreciate that. Um, thanks for having me. You're my pleasure. My pleasure. --- # The Shift, Ep 13: Will 'Let's Grab a Drink' Still Mean Alcohol? URL: https://www.tryheadquarters.com/podcast/ep13 Guest: Filip Gacic Summary: THC drinks are chasing alcohol's social occasions, not other cannabis products. Plus: hemp's regulatory reckoning and the end of 'one' industry. Transcript (auto-generated, lightly edited): For decades, if you wanted to have a drink with your friends, you have one option, alcohol. We are talking beer, wine, cocktails. That was the social experience. But what if I told you cannabis is no longer trying to compete with other cannabis products? What if its biggest competitor is actually alcohol? Because I think that's exactly what's starting to happen. And according to Axio Chicago, THC infused beverages were one of the biggest attractions surrounding this year's La Palooa Festival as consumers continue embracing cannabis drinks while lawmakers debate how these products should be regulated. now because I don't think the story is the festival and I don't even think the story is the drinks. I think the story is changing consumer behavior. Think about it. 20 years ago, if someone wanted to consume cannabis, there weren't many options. You smoked it, maybe you ate a brownie if you're lucky. Today, vapes, gummies, capsules, topicals, beverages, cannabis has become a consumer products industry. And beverages might be its most interesting category yet. Why? Because unlike smoking, drinking is already a social habit. People meet for drinks after work. They go to concerts with a drink in their hand. They celebrate birthdays with a drink. They watch sports with a drink. Cannabis companies aren't asking consumers to build a new habit. They're asking, "What if your next drink wasn't alcohol?" That's a very different strategy. Now, am I saying THC beverages are going to replace beer tomorrow? Absolutely not. Alcohol has been part of human culture for thousands of years. But I do think we're seeing something interesting and younger consumers are increasingly looking for alternatives. Some don't want the hangover. Some don't enjoy smoking. Others simply look for a different social experience. And suddenly cannabis beverages start make a lot of sense. Here's another thing I find fascinating. The biggest opportunity might not even be cannabis consumers. It might be people who have never considered themselves cannabis users at all. Someone who would never walk into a dispensary to buy a flower might have no problem trying a lowd dose THC beverage at a social gathering. That's how entirely new markets are created. Now, according to Axios, the growing popularity of these products is also forcing lawmakers to ask new questions about regulation labeling and where these beverages should actually be sold. I mean, and honestly, that's exactly what happens when a new category starts becoming mainstream. Regulation usually follows consumer demand and not the other way around. So here's the question I'd leave you with. Five years from now, when someone says, "Let's go grab a drink," will they automatically mean alcohol? Or should THC beverages become just another option sitting in the cooler? Because if that happens, we're no longer talking about cannabis competing with cannabis. We're talking about cannabis competing when one of the largest consumer industries in the world. And that's a much bigger conversation. So what's the shift? The shift is this. The next battle in cannabis may not be fought inside dispensaries. It may be fought in restaurants, concerts, grocery stores, and every place where consumers decide what they're going to drink. And if that's true, the cannabis industry isn't just creating new products. It's creating entirely new habits. Now, let me ask you another question. This episode is going to be a lot about questions. So, can an industry become a victim of its own success? Now, I want you to think about this because I think that's exactly what's happening with hemp right now. You heard it right, hemp. So, for years, hemp was seen as cannabis quieter cousin. It wasn't the product making headlines. It wasn't at the center of legalization debates. In fact, after the 2018 Farm Bill, hemp was celebrated as a new agricultural opportunity. Farmers were excited. Entrepreneurs rushed into the market. Investors saw potential. And for a while, everyone seemed to win. But then something changed. According to Axio, really lawmakers in North Carolina are considering legislation that would significantly restrict intoxicating hemp products as regulators across the country continue re-evaluating how hemp derived cannabonoids should be sold and marketed. Now, this isn't just a North Carolina story, and it's not really about one state. I think it's a preview of a much bigger conversation because here's what happened. The hemp industry innovated faster than the regulations evolved. New cannabonoids entered the market. You know, Delta A, we have Delta 10, THCA, hemp derived THC beverages, products that most consumers had never even heard of a few years ago. Innovation moved quickly. Regulation on the other hand did not. And when that happens, governments eventually try to catch up. Whether you agree with these regulations or not, that's usually how new industries develop. First comes innovation, then comes adoption, then comes regulation. We've seen it happen with RI ride sharing. We've seen it happen with cryptocurrency. We've seen it happen with artificial intelligence. And now we're watching it happen with hemp as well. So, here's what I find interesting about this one. The companies that survive probably won't be the ones that found the biggest loopholes. They'll be the ones that can adapt the fastest because regulations change, markets change, consumer preferences change, adaptability does not. And honestly, I think that's one of the biggest lessons in business. building your entire company around a regulatory gray area can be incredibly profitable until that gray area disappears. That's why the strongest businesses usually build around something much harder the to regulate away. Customer trust, brand reputation, product quality, operational excellence, those things don't disappear because a lot changes. So here's the question I leave you with. Did the hemp industry move too fast for its own good? Or is this simply what happens every time innovation gets ahead of regulation? Because I don't think the story is really about hemp. I think this is about every fast growing industry that eventually runs into the same challenge. So let's see what's the shift here. Innovation creates opportunity, but long-term success belongs to the businesses that can evolve when the rules inevitably change. Because in business, the companies that survive aren't always the first to innovate. They're usually the fastest to adapt. And lastly, I want to end today's episode with a question as well um that's been on my mind lately. What business is the cannabis industry actually in? I know that sounds like a strange question, but but hear me out. So, for years, we described cannabis as an industry, but is it really just one industry anymore? Think about everything we've talked about to date. So, THC beverages, hemp derived products. We also talked about medical cannabis, pharmaceutical research, retail dispensaries, cultivation technology, compliance. They're all connected by one plan, but they're becoming completely different businesses. Imagine saying the word automotive. Are you talking about Ferrari, Volvo, Tesla, Caterpillar, Formula 1? They're all technically automotive, but they're playing completely different games. I think cannabis is reaching that same point. Someone developing cannabonoid based medicines isn't solving the same problems as someone opening a dispensary. A hemp beverage company isn't competing the same way a cultivation facility is. A technology company serving cannabis operators isn't even selling cannabis. Yet, we still put them all under one label, the cannabis industry. Maybe that's becoming too simple. Maybe the cannabis industry isn't becoming the bigger industry. Maybe it's becoming more specialized. And honestly, I think that's a sign of maturity in a way because every major industry eventually splits into smaller industries. Look at healthcare. Healthcare did. Technology did, finance did, agriculture did. Why would cannabis be any different? And that's why I think the next few years are going to be quite interesting. Not because cannabis is changing, um, but because people are finally starting to realize there isn't just one cannabis business anymore. There are dozens of them. And each one has different customers, different regulations, different opportunities, different challenges. And the question I leave you with today is the following. The next time someone says,"I work in cannabis," ask yourself, "what does that actually mean?" Because in 2026, the the answer is becoming more difficult to define than ever. So, what's the shift? The shift is we keep talking about the cannabis industry as if it's one business. I don't think it is anymore. I think we're watching the birth of an entire economic ecosystem and we're only just beginning to understand how diverse it's becoming. --- # The Shift, Ep 14: The Cannabis Industry Is Growing Up URL: https://www.tryheadquarters.com/podcast/ep14 Guest: Filip Gacic Summary: Cannabis is entering a new era - consolidation, sales beyond dispensaries, and blurred lines between regulated cannabis and hemp THC. Transcript (auto-generated, lightly edited): consolidation. I know, not exactly the word that's going to get people jumping out of their seats, but what's happening underneath that word is actually pretty fascinating because for most of the modern cannabis industry's existence, the story has been expansion. more states, more licenses, more cultivation, more dispensaries, more employees, more everything. The assumption was pretty simple. Cannabis is becoming legal. Therefore, the market gets bigger. Therefore, we need more capacity. But what happens when the industry looks around one day and realizes maybe we built too much? That's the question I think we're starting to see play out in some of America's more developed cannabis markets. According to MJBizDaily, a recent acquisition involving 15 cannabis retail locations in Colorado is being followed by the closure of a Denver cultivation operation affecting 141 workers. And this isn't happening in isolation. In Florida, another operator recently announced the closure of two facilities affecting 211 jobs. Now, I'm deliberately not interested in turning this into a conversation about either company because I think the companies are almost besides the point. What interests me is the pattern. Facilities close, operations combine, jobs disappear, assets move between owners, and suddenly the cannabis industry starts behaving like well, every other established industry. That's quite a change from the green rush mentality. There was a period when legalization itself was almost treated like a business model. Get the license, build the facility, open a store, demand will come, except economics eventually shows up. And economics doesn't particularly care how exciting your industry is. If ten businesses can produce something the market only needs from six of them, eventually something has to give. And we may already be seeing that adjustment. A report covered by Forbes earlier this summer found that US legal cannabis employment and sales declined together for the first time since adult use legalization began expanding across the country with price compression and cultivation over supply among the pressures identified. Now, that I find interesting because declining employment doesn't necessarily mean cannabis is disappearing. It could mean something much more mundane. The industry simply doesn't need the same number of people, same number of facilities and companies to produce the same amount of cannabis anymore. Think about what happened to almost every major industry before. At the beginning, everybody rushes in. There are hundreds of companies. Everybody thinks they've discovered the next enormous opportunity. Then competition intensifies, prices come down. Margins get tighter. Companies combine. Facilities close. And eventually a much smaller number of players control a much larger percentage of the market. Airlines did it. Telecommunications did it. Banking did it. Beer certainly did it. So why would cannabis somehow be immune? And here's where this becomes a much bigger question than a couple of cultivation facilities closing. So what does cannabis look like if consolidation continues for another 10 years? Do we still have hundreds of regional operators? Or do we eventually end up with a handful of enormous companies controlling cultivation, controlling manufacturing, distribution, and retail across multiple markets? And if that happens, what do we gain? Lower costs perhaps, more consistent products, more efficient distribution. But what do we lose? Producers, variety, competition, jobs, maybe some of all four. And I don't think we know the answer yet. But I do think we're beginning to ask a very different question about cannabis because 10 years ago the question was how big this industry can become. Today in some markets the more interesting question might be how many companies does this industry actually need? And that's really the shift. Cannabis spent years in its expansion era. We may now be watching the beginning of its consolidation era. And if history is any indication whatsoever, the industry that comes out on the other side could look very different from the one we know today. Why do we buy cannabis the way we do? Think about it. If you want wine, you can go to a supermarket, a wine shop, a restaurant, a vineyard, a tasting room, even a farmers market in some places. If you want coffee, supermarket, coffee shop, cafe, farmers market, but legal cannabis largely developed around one very specific experience. You walk into a dispensary, you show your ID, you look at a menu, you speak to a budtender, you choose your product, and you leave. But is that really the final form of cannabis retail? Because something that happened in New York this week made me wonder. On August 6th, the New York Governor Kathy Hochul signed legislation expanding where licensed cannabis micro businesses and dispensaries can participate in approved cannabis showcase events. Cannabis Business Times described the legislation as expanding market opportunities for licensed micro businesses and dispensaries at approved events, including farmers market style settings. And yes, on the surface, this sounds like a fairly small regulatory change. Cannabis at farmers markets, great. Moving on. Except I don't think that's the interesting part. The interesting part is what happens when you take cannabis out of the dispensary because suddenly the context changes. You're no longer walking into a building specifically because you want cannabis. You're walking around a market. You're looking at local products. You're talking directly to producers. You're discovering things you weren't necessarily planning to buy. That's an entirely different consumer experience. and other industries understand this extremely well. Think about wine. Part of the reason wine has such a strong culture around it isn't just the liquid inside the bottle. It's vineyards, tastings, regions, terroir, food pairings, stories about where the grapes come from. Coffee did something similar. Coffee went from being something you bought in a tin at the supermarket to something where people genuinely care about origin, roasting, preparation, and the person making it. Craft beer did it too. Breweries became destinations. So, why couldn't cannabis eventually develop its own version of that? And I think cannabis is particularly interesting because technically this starts with agriculture. Somebody grew this. Different genetics produce different characteristics. Different cultivation methods matter. Geography can matter. Processing matters. There's an entire story behind a finished product. Yet, the consumer often encounters that story through a package sitting behind a counter. That's kind of a strange thing when you think about it. Now, obviously, cannabis isn't tomatoes. There are age restrictions. There are public health considerations. There are rules around possession and consumption. And none of that suddenly disappears because somebody puts up a farmers market tent. But that's precisely why I find New York's experiment interesting. It asks whether regulated cannabis can exist in a more traditional marketplace without pretending that cannabis is an ordinary agricultural product. And maybe that's where cannabis retail eventually becomes really interesting. Not placing dispensaries, but expanding beyond them. Maybe it's dispensaries, showcases, markets, events, cultivation experiences. Maybe retail becomes less transactional and more educational. We don't really know yet, but I think it's worth remembering that the dispensary model we recognize today isn't some natural law of cannabis. It's simply the retail model that developed around the first generation of legalization. And first generation models rarely end up being the final ones. So here's the question. 10 years from now, when people think about buying cannabis, will they immediately picture a dispensary or will that seem as limiting as saying the only place to experience wine is a liquor store? And that's really the shift. Maybe the next evolution in cannabis isn't another product. Maybe it's changing the place, the context, and the experience in which consumers encounter the product in the first place. I want to finish today with something that's becoming increasingly difficult to define. Where exactly does the cannabis industry begin and where does it end? Because for most consumers, the answer used to be pretty obvious. Cannabis was sold in a dispensary. Alcohol was sold in a liquor store or a bar. Everything had its place. Nice and simple. Except it's not that simple anymore. Hemp derived THC products, particularly beverages, have increasingly appeared in conventional retail and hospitality environments in parts of the United States. And that creates a rather strange situation. You can have two products that produce intoxicating effects from THC, but depending on how they're produced, where they're sold, and which regulatory framework they fall under, they can exist in completely different systems. One might be sitting inside a licensed dispensary. The other might appear in a setting consumers don't traditionally associate with cannabis at all. And that's where this gets interesting because this isn't really a conversation about whether THC beverages are good or bad. It's a question about categories. According to Axios, the growing presence of hemp derived THC beverages outside traditional dispensaries has created increasingly complicated questions for lawmakers around age restrictions, around labeling, product testing, and where these products should actually be sold. And I think there's a very reasonable question hiding underneath all of that. If two products contain intoxicating THC, should consumers expect the same rules, the same testing standards, the same labeling requirements, the same age restrictions, or does the legal origin of that THC justify treating the products differently? Because from a regulatory perspective, the distinction can be extremely important, but from the perspective of the person looking at a can in a refrigerator may not be obvious at all. And that's a fascinating problem. Regulation tends to organize products according to legal definitions. Consumers tend to organize products according to what they actually do. Those two things don't match. Think about alcohol. Consumers generally understand that beer, wine, and vodka are different products. But they also understand that all three belong to the same broad category, alcohol. There are expectations attached to that category. Age restrictions, labeling, rules about where you can consume it, social expectations around impairment. THC is developing in a much stranger way. We have state regulated cannabis, federally legal hemp, hemp derived cannabinoids, medical products, pharmaceutical cannabinoids, and products that can look remarkably similar to ordinary consumer goods. That's a lot for an average person to understand. And maybe we're approaching a point where the legal definitions and the consumer definitions of cannabis are starting to collide. Because once cannabis derived or hemp derived products start appearing outside the traditional cannabis environment, the dispensary is no longer doing all of the explaining for you. The package has to do more. The regulation has to do more. Consumer education has to do more. and age controls become an even more obvious part of the conversation. So I don't think the interesting question is should THC products be sold outside dispensaries? That's ultimately a regulatory and public policy decision. The more interesting question is can we continue regulating products primarily according to where the THC comes from when consumers primarily experience what the THC does? because those are two very different ways of looking at the exact same product category. And that's really the shift. Cannabis used to have very clear boundaries. The dispensary was one of them. Hemp derived products are beginning to blur those boundaries. And now regulators, retailers, and consumers are being forced to answer a surprisingly complicated question. When a cannabis related product no longer looks, feels, or is sold like a traditional cannabis product, do we still treat it like cannabis? I don't think we've completely figured that out yet. --- # The Shift, Ep 15: AI Doesn't Smoke Weed URL: https://www.tryheadquarters.com/podcast/ep15 Guest: Kit Kenney Summary: Kit Kenney explains why AI-generated cannabis branding misses the mark - and how Minnesota brands can earn trust through authentic design. Transcript (auto-generated, lightly edited): Minnesota is one of the newest adult use cannabis markets in the country. Uh legalization created enormous expectations, but building the actual industry has been a much slower and more complicated process. Businesses are still dealing with licensing delays, supply limitations, high prices, and the challenge of understanding what consumers actually want from this development market. And that raises an important question. While everyone is focused on regulations, licenses, and revenue, who is paying attention to the customer? And that is exactly why I'm speaking today with Kit Kenney, a Minnesota cannabis sommelier legacy operator and someone who understands the market from both the industry and consumer perspective. So Kit, welcome to the shift. Thank you for Thank you for having me. Appreciate it. Okay, so um Kit, let's let's start off very quickly a little bit. I want to I want to get to know uh you a little bit more and I want the audience to get to know you a little bit more who who might be watching outside of Minnesota. So tell me about your cannabis experience. How did you end up here? Okay. Also, I'm just going to pre uh preview this by saying that I have ADHD. So if I'm moving around and shifting, which I want to do all the time, I will be cuz that's just who I am as a person. So follow along. I use a lot of hand movements. Um, man, how did I even get into the cannabis industry? I guess we will try to make this like a long story short, but I've been using cannabis for a very long time since I was 18 and 38 for the last uh 20 years. And up until the last few years, I never recognized that I had been using cannabis to treat my ADHD and get to like a dopamine baseline. Because of ADHD, I have severe symptoms of anxiety and depression. And so I was utilizing cannabis uh at that time to relax my body, calm down, bring down my mind, push my thoughts to the back of my head so I can, you know, uh show up for myself every day. And it wasn't until I got diagnosed a couple years ago that I realized, oh wow, I've been using cannabis medically for 20 years and didn't realize it, honestly. So I used to be a salon owner and I had my own salon. I was a hair stylist and I I loved it for a very long time. And the reason I loved it is because I like helping people feel better, whatever that is, right? And so retail was a big thing in my salon because I believe that if one product can could help your hair look better, feel better, you know, solve a problem that you're having, your life is going to be easier, you're going to be happier, right? And so, uh, long story short, in 2020, I live in Minneapolis. George Floyd was murdered here. And everything kind of came to a head here to me personally, and I was like, "Wow, this doing hair is not deep enough for me. I need something where I'm really like touching souls in a much deeper way." And so I was crazy and I just signed a 2-year lease and the pand so and I'm like, "Okay, what am I doing? I want to get into cannabis. Um, where do I start?" I had an opportunity through um a personal client of mine who was in the industry. So they let me into my biz cuz I already had a full clientele in the hair industry. And basically 6 months after I had started my business, COVID shut down. And so I my salon was shut down for three months. And I'm I'm a business gal and I love hustling um for something that I'm passionate about and care about. And so for those three minutes or 3 minutes 3 months I built cannabis, my underground cannabis dispensary or worked on it. Uh went back to four went back to my salon for 4 months when we reopened and I paid off my salon lease and walked away. I was like I can't do this anymore. I want to go all into cannabis and I'm just going to walk away from my career and start over even though the only things I know are the words sativa and indica. Like you got to start at the bottom. And I knew that seven years ago in this industry, we weren't legal yet here in Minnesota, but uh I knew that I'd have to start at the bottom and work myself up, work my way up, right? And so it was crazy cuz 13 months after I started cannabis, I closed my salon down to work in the legacy industry full-time. So, I've been in the legacy industry for six years, total of seven years in cannabis. And so, I mean, that is maybe the short of of it. Got it. And and this is interesting, but uh what what I want to uh also touch on as well. You kind of like mentioned it too is why have you chosen to become such a strong voice for Minnesota consumers? Now this is your this is sort of you know obviously the legacy brand is one thing and sort of that business aspect but why did you decide what sort of got you into this is really what I need to speak about? Absolutely. I think one of it one of the things is that someone like myself a a queer woman is not we don't have as many of those people in our industry and vocalizing for us. And so I really wanted to insert myself into a maledominated field because we need more people like me to be loud about what the consumers want and looking for. So I consider myself a bridge between our consumers and our growers and farmers because I'm spending the time and you know emotional time with my clients understanding why people why people need cannabis. That's that's perfect. And obviously you and I re spoke previously and one of the things that we sort of kind of discussed as well was obviously that sort of I don't maybe like a disappointment generally speaking. So from that consumer focused perspective where has the industry disappointed you the most when it comes to um how cannabis functions in Minnesota and uh obviously across Minnesota and over Minnesota as well. For me personally, the industry has disappointed myself and the consumers on the consumer end of things. So that comes with uh education. I think there is a lot of ego that needs to be dropped because at the end of the day, this is a business. This is not our personal emotions. We need to put on our business hat instead of our like personal emotional hat. And remember that even though yes we are all passionate about it and that is the why behind we you know this is the why why we do this we still need to remember that we need to be professional and run things in a way that are set up for the consumers. So I would say the biggest disappointment right now for me personally in Minnesota is that the consumers are asking for functional lower dose or different types of products that not that are not out there currently. And so something that I believe is that our industry in Minnesota is not delivering as a whole in that aspect. Can you break it down a little bit? This is very interesting and this is important because listening to this podcast is definitely going to want to learn from you as someone who's really in touch with reality and with the consumers. So, can you break it up a little bit? What what does this mean specifically? Um, you know, you spent a lot of time listening to consumers. So what is what is this that sets Minnesota cannabis consumer apart from those in more established markets and what are they asking for that brands are still aren't that brands are still not delivering you did touch on that can you yeah I will get I will definitely get into it I think the biggest thing is like how we are changing in just the industry is that we are working in a wellness and medicinal space right so consumers want to combine their daily rituals with real problem solving and often times there aren't products made to address that. So, some of the feedback I've been getting over and over and over again is that weed is too strong and people are asking for type twos or type 3es to combine with their cannabis. So, in the industry, people are only making a type one. And if you don't know what that is, a type one is high THC, low CBD. A type two is some CBD, some THC, a type three is just CBD. Right? So, I'm continuously asked for joints that are type two or part CBD, part THC, so people can utilize these all day long, but not have to be like so blasted. It's more of just like a light buzz or a light hum, you know, where it's like, okay, I just want like, you know, a light pressed down on my body. I don't need to be like blasted back. And I'm not saying this is all consumers, right? There is a need for all products. I just believe that the market, the cannabis industry, and the niche that we are missing on is more of that functional every single day all day long type of products. So, one of the other products I would absolutely love to see that I haven't seen anywhere are teeny tiny mini gummies. I think somebody should make teeny tiny mini gummy gummy cubes that are like one or two milligrams. We can sell up to 200 uh milligrams here. And so it's like you could sell somebody 100 mini gummy cubes, right, at 2 milligrams each. First of all, they're cute. It's a it's a tiny gummy versus like a mint or a large gummy and you're getting it's like vitamins, right? You don't just get, you know, 30 and you're done. You're like, "Okay, this is my 90 supply and then I'm going to reorder." And so figuring out how to service, you know, our community in those smaller smaller little niches, I think is really important because I do believe that high people who are consuming a lot would still possibly utilize products like that, especially if you're trying to cut down or something. Got it. Got it. No, that makes complete sense. Also, now that I think about it, that really would be awesome if there's like a, as you said, like like vitamins. Literally, that would that would pretty much be it. Um, now, so obviously as Minnesota is kind of a younger market, let's let's say that way. That's a nice way of saying it. Nice way of saying it. Uh, if you were if you were advising a brand, right, entering the Minnesota market and what what sort of mistakes would you tell them to avoid? And when it comes to marketing and brand awareness, what opportunities are businesses overlooking in this particular market? Okay. So, are you asking me which question would you like me to answer first here? Let's go first with the with the question about brand comes into the Minnesota market and then we can sort of dive into the uh marketing side. Absolutely. Okay. Into the marketing side of things. So I really only work on the front end of the industry right now. And so branding is a big part to me. But I do what I do see what is missing right now is diversity within your workforce. And so if you are working with all people that look like you, how can you have other opinions? How can you have other experiences to integrate into your business? We know because of many studies that the more diverse your company is, the higher grossing, the better off your company is. And so I think one of the big things here is missing the diversity part and hiring people that might not be even in the industry but want to get in and giving people an opportunity to get into the industry. I think we so many people are pushing like no, if you're not in the industry, you can't come in here. And it's like, whoa, we could really value this person who was a manager at McDonald's because they showed up for work every time. They know how to you, you know, talk to people. They know how to deal with mistakes. And so, I think one of the biggest uh mistakes that businesses are making are, you know, not seeing the bigger picture and allowing more people to come into our industry. Got it. No, that people are going to see things from a different perspective, right? like I don't know all everything, you know, and someone who's got a different perspective, who's never been in the cannabis industry is going to see things from a different point of view. Doesn't mean they're right or wrong. It just gives you more to work on. No, it's just logical. I mean, if you have, let's say, 10 people that are exactly the same, there's no conflict. And conflict is needed in order for you to evolve. Obviously, notice mistakes. People don't really like the same things. So why don't we have different approaches, different mindsets, different perspectives as you said so that we can actually acquire the conflict which is going to take us to oh I if everyone likes the same idea then what are you testing like there's no test like what are you doing what are you doing um pretty much and and um now going to the um the marketing side which is um specifically when it comes to marketing and brand awareness I wanted to talk about that So, what opportunities are businesses overlooking in this particular market? If you can be like obviously I'd like to see if you can be a little bit more specific on what you've noticed. Yes, absolutely. So, I would say that there's a couple of things. One of the biggest things is overutilizing AI. Consumers can spot that. That kind of can feel like really messy branding. So something that I noticed a lot is that a lot of advertising, posters, even packaging is way too crowded. And so it is hard for consumers to read, figure out information. Our brains are so overloaded every single day with so much information that it's like I need as little information as possible to get to get through to the consumer. So I'm always like, okay, in what ways can we make this easier to read? in what ways can we make this more functional for a consumer? So, I just feel like the AI is so obvious and feels disingenuous and it's like we're creating products for consumers, not your niche friend group. And I think that's something a lot of people uh can forget here uh as well. The other thing with branding that I believe needs to happen more is utilizing joy and fun. We are not joy maxing enough in the industry. Uh that is like what like the fun factor is very undervalued here and that is what cannabis is for me. That is my life prerogative is to enjoy life and have fun. And so like how can we add in a fun factor uh so we can show up to the community. Maybe that's hosting an event. Maybe that is the way you show up online and you really engage or you with consumers or maybe you have some funny videos that show the more humorous realistic side of things that also I feel like shows vulnerability as well. So, I would say the biggest mistakes companies are making are not utilizing local artists to make their branding and uh not incorporating more experiences into their products and dispensaries. Got it. And it it seems like a like like you're sloppy. Like if you're doing AI constantly and you're really overlooking and completely ignoring, as you said, local designers, it feels like you're sloppy. You did it seems like you didn't invest a lot of time in it which sort of gets me to a picture about you which is like if you didn't really invested a lot of time in this aspect which is very important again marketing and branding what can I expect from you in other aspects of the business right I mean a million% and that is what I'm seeing here in the Minnesota market is that branding is kind of a lastm minute thought a lastm minute ditch effort if you are going to start a brand you need a brand kit built out by a person, not AI, because AI does not smoke weed. I think that's the like what we really need to remember is that AI does not consume cannabis, so why would they be able to make the posters for the consumers that do? I mean, obviously they do. Obviously, some people can't afford to hire someone, but that's why we have the trade and barter system. Do you know how many artists are out there wanting to trade for products, weed, cannabis, gummies? It's like you'd have a million people like I'll do it for you. You know, you're utilizing your community and then you can showcase an artist. Yeah. And this is the very good point that you brought up there is that AI doesn't smoke cannabis, which ultimately because like at the very end of the day, AI is an intelligence thingy, right? Where based on the past. B based on the past and again it's not based on human emotions. What is cannabis used for mostly? It's for your emotions. That's the reason. So it really counteract and it counterdictates what the whole AI versus cannabis situation is. So that really makes sense. and and you again since since you've um you you have your own legacy brand, I wanted to also talk a little bit about this. So um legacy operators helped build cannabis culture and played an important role in getting the industry to legalization. Right. Absolutely. But their contribution is often overlooked. Now this is again a perfect question for you because as someone who has built a legacy brand, how do you grow within the legal market without losing the authenticity, the personality and consumer trust that made people support you in the first place? Absolutely. So the first thing to not losing the consumer trust is to learn how to listen actively to what the consumers are saying. you're not just hearing the words, you're able to repeat back to them, I need this because I want to feel this way. Uh, and so by being really honest with yourself and actually listening to what people are wanting and needing is going to be the first step to keeping your brand authentic um, and honest. I believe in radical candor. So, being very upfront, but being kind at the same time. Something we have here in Minnesota is called Minnesota nice, which has kind of always been a little h but I do feel like after everything that we've gone through this last year, I mean with Alex Prey being murdered Renee good, it's like Minnesota nice actually is the best and uh and so I do believe that you know hard work listening to the consumers being honest with the consumers when you mess up when you you know up when you make a mistake you know you're I'm hon on, you know, be honest. There's nothing wrong with that. I'm going to trust someone who says, "Hey, we packaged this wrong or we said something wrong and we meant this and we were corrected and now we're relearning and we're so sorry we gave you this information. Please allow us to learn alongside with you." Yeah. And so I just think that, you know, that is a crucial part. And being able to pivot on a dime is the other thing in the industry that if you can't do that, it's going to be really tough to grow in the ind in the recreational side because things are constantly changing. We're in a new industry where we've never done things before. So, we are all making it up as we go. You just have to be like gentle on yourself, too, and understand that like we're messy, too, and we're going to make mistakes and it's normal. We're humans. People make mistakes. If you're not reporting on those mistakes, you don't seem genuine, you know. Absolutely. Yeah, that that is uh I agree with that 100%. So, let's let's do a little bit of an experiment. I want to see how how this will work. Let's say you're uh your only responsibility for the next five years was to strengthen the relationship between cannabis business and consumers. What would you change first? I would probably change the way that there is real brand accountability within communicating with your consumers. And so it feels like a lot of the time our industry has spent a lot of time like convincing people to sell weed, but then we aren't teaching them like how to utilize it and put it into our daily functional spot or like our daily functional uses here. And so it's like we need to be radically honest about cannabis and what the products do and being more honest about, hey, this is not for everyone. I think often times we're like, cannabis, anyone can use it. We're going to find a product for you. Like this gummy might not be right for this person. This joint might not be right for this person. At the end of the day, cannabis just might not be right for you, even if you've tried it a bunch of times. So, don't force this idea on consumers that they have to be utilizing the products you're utilizing. It's really just teaching them responsibly and listening to their bodies. Like, cannabis is all about emotional education. And once you can learn how to listen to, oh, these are my needs. This is how I am feeling, then we can kind of negotiate, okay, what product is going to best suit you? And maybe there isn't a product that's going to best suit you. And I know that kind of feels like a disappointment, but at the end of the day, it's honesty, and I'd rather have someone be honest with me. Got it. H how important are safe spaces and community and word of mouth? It versus just social media like how important is that? Yeah, absolutely. That's I think one of the best questions. Uh over the last seven years, the feedback I have gotten from almost every single one of my consumers that has gone to a rec dispensary anywhere in the United States is I walked in and I felt dumb and I wasn't help properly and I was very overwhelmed. Uh like what can we do about that? Um what is when they feel dumb? Why why why did they feel dumb? Right? That's a great question because our industry has been doing a disservice to our consumers the entire time. We have been built on legacy growers and legacy dealers who have just sold weed, not educated their clients, not research. They're just doing it for the money. That's not everyone, but it is a lot of people. And I've seen a lot of harm done by people in the industry. And so that's why I got into it. I had someone who was sexually harassing me that I was buying cannabis from. And I was like, I'm not doing this anymore. So, I'm going to start a business for someone like me, someone who needs a safe space to show up, someone who's not going to be harassed by the person that I'm getting it from, someone who's going to be carrying farm-to-table fresh products that knows every hand that your products are touching. So, safe spaces are important. Um, and we know that it's if you feel seen, that's what it's all about. And that's why I'm in this industry, Filip, is like I'm here to make people feel seen and heard. Cannabis just kind of comes like next. I know it doesn't it's not even the first thing that I talk about with consumers. It's more so like, hey, where are you at? How are you doing? What's going on in your life? How can I be of help to you? Oh, you want to talk about your dog that just died for five minutes? I'm here for it. We can smoke about it later. And that's why I feel like your followers and the people that you're working with appreciate that about you is you know what what this what you're saying is literally the opposite of the recipe for success. But somehow you are successful even though don't follow this recipe for success. You are successful and your people cherish that. So absolutely you are a very good example of yes you can do this stuff and still be successful. So right you can sorry to interrupt. I'm like you can be kind and create safe spaces and have a really successful business. They don't have to be separate. Like trust is not built by THC percentages. It has been built when customers consistently feel you know seen, heard, understand, engaged. And if we can do that the sales will take care of themselves. If you can educate your consumer and make them feel good, boom, you're selling product at the end of the day. I don't even think you have to have the best product. If you have a space that makes people feel welcome, it makes a big difference. Yeah. You're very passionate about cannabis and that's Can you tell? That's something that I cheated sometimes like with my friends, you know, but in the best way because I'm like so excited. And we just have an industry that needs to be more curious. At the end of the day, be more curious. Literally unlearn everything you've learned about cannabis and start over. Like not over, but just being like there are other ways to address this industry head on. And it's not just in corporate ways. It's about being a freaking human. Yeah. And that's like direct feedback. I'm getting from consumers, you know, it's like I can't tell you how many people have said, "Thank you for creating a space for me." And I'm like, "You're welcome. I created it for me, you know, and that therefore I created it for you." So, as I work on my mental health and I work on my soul care, I'm able to help other people with soul care as well. And it's so exciting. We just all want to heal. We all just want to feel better. Yeah. And we deserve that. You're going to be a very big refresher for my podcast. Thank you. I'm very excited. I would definitely say I'm a breath of fresh uh air and you know I'm vulnerable. I'm messy and I used to not always be like this. I had a huge shield on the first 3 four years I sold cannabis cuz I was had the worst imposttor syndrome. I didn't think I was good enough. I had every guy around me who was in the industry telling me you can't sell anything for 45. You're being way too loud. Like stop being loud, you know? And that really I listened to that for way too long. So it's like what you tell yourself, right? And we are thankful that you got out of that and that you are here where you are right now. Uh not just again, not just for yourself but also for the consumers as well, Kit. Uh I really appreciate this conversation today. Thank you so much for doing this and um absolutely and continue being awesome as you are. Absolutely, Filip. Dude, thank you for creating a safe space for me to just voice my passions for our industry here in Minnesota and our consumers. And at the end of the day, a lot of people might disagree with this, but I'm here for the consumers, not cannabis. And of course, I'm here for cannabis, but I put consumers first. And you should and everybody. So, thank you for that again. Yes, of course. --- # The Shift, Ep 16: Cannabis in the Mail, and the FDA on TikTok URL: https://www.tryheadquarters.com/podcast/ep16 Guest: Filip Gacic Summary: Regulators are listening to Reddit, the Postal Service may deliver medical cannabis in Georgia, and Cambridge adds a piece to the health puzzle. Transcript (auto-generated, lightly edited): Apparently, the FDA wants to know what you're saying about cannabis on TikTok and Instagram and Reddit. Yes, the same FDA we normally associate with clinical trials, pharmaceutical uh approvals, laboratory data, and very serious people reading very serious reports. now wants to listen to social media. And when I first read that headline, I'll admit I found it slightly amusing because if you're looking for reliable scientific information, Reddit would not necessarily be the first place I'd sent you. But then I looked into what the FDA is actually asking for. And this became much more interesting. According to Marijuana Moment, the FDA is currently seeking an outside contractor to monitor conversations about marijuana and hemp products across platforms, including Tik Tok, Instagram, and Reddit. And they're not simply looking for how many times somebody says the word cannabis. The proposed monitoring would capture information about products, ingredients, claims, consumer condition, sentiment, and other characteristics of what people are discussing online. But here's where it gets even more interesting. The FDA also wants research involving actual dispensary customers. According to the same reporting, the agency wants a survey examining things like product preferences, desired effects, medical conditions, frequency, and history of use, average purchases, and even preferred dosages. Now, that is fascinating because think about the information regulators normally have available to them. clinical studies, medical reports, laboratory testing, adverse event reporting, controlled research, all incredibly important, but none of those necessarily tell you how millions of people are actually talking about cannabis when nobody in a white coat is standing in the room. Social media does. And yes, obviously, social media also is full of absolute nonsense. People repeat things they heard from somebody who heard it from somebody else. An algorithm can take one ridiculous health claim and put it in front of 10 million people before breakfast, literally. So, no, TikTok comments should probably not replace clinical trials anytime soon, but that's not really what the FDA appears to be trying to do. The agency says its cannabis work involves developing cross agency strategy and policy around cannabis products. And this kind of social listening can potentially fill gaps in understanding how products are actually being discussed and used outside controlled settings. And that raises a question I I genuinely don't know the answer to. What is more valuable when you're trying to understand realworld customer behavior? Asking a few thousand people carefully designed questions or quietly observing millions of conversations people were already having because those two methods can give you very very different pictures. In a survey, people know they're being studied on Reddit. Trust me, they usually behave like nobody's studying them at all. I mean, and sometimes that messiness is useful. Somebody might mention an unexpected effect, a product being used in a way regulators didn't anticipate, a dosage trend, a health claim suddenly spreading across TikTok, or a new cannabinoid becoming popular before traditional data sets even notice it. That's information. Not necessarily good information, not necessarily true information, but information nonetheless. And this is where I think the story becomes much bigger than cannabis because governments are beginning to operate in a world where enormous amounts of real time human behavior are publicly observable. We voluntarily document what we buy, what we take, how it makes us feel, what we believe. what we're afraid of and what somebody on TikTok convinced us to try last Tuesday. Researchers 20 years ago would have dreamed of having access to that kind of data set. Today, the problem isn't finding the information. It's figuring out which parts of it deserve to be believed. And that's the part I'd be watching because there is a very big difference between using social media to identify a question and using social media to answer one. If thousands of people suddenly start reporting the same unexpected experience, perhaps that's something worth investigating. But popularity doesn't turn an anecdote into scientific evidence. 10 million views don't make a medical claim. So maybe the real value of social media isn't that it tells regulators what to believe. Maybe it tells them what they should be asking about next. And that's really the shift. The FDA listening to cannabis conversations online sounds funny until you realize that TikTok, Instagram, Reddit, and platforms like them have become one of the largest continuously updating records of consumer behavior we've ever created. The question isn't whether there's useful information buried inside all that noise. There almost certainly is. The question is whether anyone can reliably separate the signal from the absolute chaos. Here's a sentence I genuinely didn't expect to say on this podcast. The United States Postal Service may soon be delivering cannabis. Yes, the same people bringing you your electricity bill, birthday cards, and the package you forgot you ordered three weeks ago could potentially be delivering medical cannabis directly to patients homes. And no, cannabis has not suddenly become federally legal across America. We know that like that's no news. This is happening in Georgia and the details are actually much more interesting than the headline. So, according to Cannabis Business Times, the Georgia Medical Cannabis Commission voted on August 13th to propose a rule allowing medical cannabis to be delivered through the United States Postal Service, as well as private carriers, including FedEx, UPS, and DHL. Georgia currently has more than 45,000 registered medical cannabis patients and the proposal would allow licensed dispensaries to ship directly to registered patients, caregivers, and certain health care institutions within the state. Now, before anyone starts waiting beside their mailbox, this is still a proposal. The rule is open for public comment and Georgia regulators are expected to consider it at a public hearing on September 16th. But I think the fact that we're even having this conversation is remarkable because think about how bizarre the relationship between cannabis and the federal government has been historically. And now we're discussing whether a federal agency, the United States Postal Service, could become part of the infrastructure delivering medical cannabis to patients. That's quite a sentence. But here's where I think this becomes genuinely interesting. Georgia regulators aren't presenting this as some revolutionary new cannabis experience. They're talking about access. Andrew Turnage, the executive director of Georgia's Medical Cannabis Commission, explained that Georgia is geographically large and that patients have struggled to access the medication the state regulates. His argument is essentially very simple. Why make a registered patient drive several hours if their medication can safely come to them? And suddenly the question becomes uncomfortable in a very interesting way. If we're going to call cannabis medicine, should we also start treating it like medicine? Because Americans already receive prescription medications through the mail? That's completely normal. Nobody sees a pharmaceutical package arrive and thinks, "My god, the postal service has entered the drug trade." We understand the distinction. It's medication. It's regulated. it's going to a patient. So if medical cannabis is legally recognized within a regulated medical system, why should the delivery mechanism automatically be different? But there is another side to this. Cannabis isn't an ordinary prescription medication under federal law. And putting an intoxicating controlled substance into the mail obviously creates questions. Who receives the package? How do you verify them? What happens if it's delivered to the wrong address? How do you prevent diversion? Georgia's proposal tries to answer some of those questions. Reporting on the proposed rule says shipments would require certified mail or an equivalent service, tracking, identity, and patient registry verification and a signature from the authorized recipient. And there is another extremely important limitation. We're not talking about somebody in Georgia ordering cannabis from California. The proposal is specifically about Georgia dispensaries shipping to registered Georgia patients inside Georgia itself. Interstate commerce is an entirely different conversation. But this is why I find the story so interesting. Cannabis policy usually changes through enormous announcements, legalization, rescheduling, new legislation, but sometimes the more important changes are incredibly mundane. Can it go in the mail? Can a pharmacy dispense it? Can a doctor prescribe it? Can insurance eventually cover it? Those questions aren't particularly glamorous, but they're the questions that determine whether something actually functions like medicine in everyday life. So, here's a question I would leave you with. If cannabis is going to occupy a legitimate place in medicine, at what point should we stop building an entirely separate system around it? And at what point should it simply start using the infrastructure that medicine already has? I don't know exactly where that line should be, but Georgia may be about to test it. And that's really the shift. The remarkable part isn't that cannabis could arrive in someone's mailbox. The remarkable part is that we're reaching a point where for a registered patient receiving regulated medication, that idea might eventually stop sounding remarkable at all. I want to finish today's episode with something slightly uncomfortable because on this show, we've talked about cannabis becoming medicine. We've talked about cannabis beverages. We've talked about changing consumer attitudes. We've talked about access. We've talked about normalization. So, I think it's only fair that when research comes out suggesting something we may not particularly want to hear, we talk about that, too. And this one definitely got my attention. So researchers from the University of Cambridge recently conducted one of the largest anal an analysis ever looking at recreational drug use and stroke risk. According to the University of Cambridge, the researchers combined evidence from 32 previous studies involving more than 100 million people and among the substances they examined was cannabis. The result, cannabis use was associated with approximately a 37% higher risk of stroke. Now, before somebody clips that sentence and we all start screaming at each other on the internet, let's actually talk about what it means. Because 37% higher risk doesn't mean 30% of cannabis consumers are going to have a stroke. That's not what relative risk means. And an association also doesn't automatically prove that cannabis directly caused every additional strokes observed in these studies. The researchers themselves noted substantial differences between the studies they analyzed and potential limitations in parts of the observational evidence. But they didn't stop with observational studies. They also used something called mandelian randomization. Very simply, this uses genetic variants associated with certain behaviors or disorders to help researchers investigate whether an observed relationship may actually be causal rather than simply being explained by other lifestyle factors. And according to the researchers, genetic liability to cannabis use disorder was associated with an increased risk of stroke overall, particularly large artery stroke. So, no, this isn't something I think we should casually dismiss, but I also don't think the responsible headline is cannabis causes strokes. No, science is usually much less satisfying than that. It gives us evidence, then better evidence, then conflicting evidence, then another study, and eventually hopefully a clearer picture. In fact, previous research on cannabis and cardiovascular risk hasn't always produced identical conclusions. Some studies have found increased cardiovascular risks, while others have struggled to establish significant associations once other factors are considered. And that's precisely why studies this large matter. They add another piece to the puzzle. But here's what I find particularly interesting about the reaction to stories like this. Cannabis has spent decades trapped between two completely ridiculous extremes. On one side, cannabis was portrayed as this uniquely dangerous substance that would apparently destroy society. On the other, you occasionally hear cannabis discussed as though because it's a plant, it must somehow be harmless. Why do we need either extreme? Alcohol can be enjoyable and harmful. Prescription medication can save your life and have serious side effects. Caffeine has benefits and risks. We seem perfectly capable of holding two ideas in our heads at the same time with almost everything else. So why does cannabis have to be either miracle medicine or public enemy number one? Maybe normalization actually means allowing cannabis to become boring enough that we can discuss it honestly. Benefits where the evidence supports benefits, risks where the evidence supports risks, and uncertainty where the science simply isn't finished yet. Because if cannabis really is becoming part of mainstream medicine, consumer culture, and everyday life, then research like this becomes more important, not less. We should want to know what long-term frequent use does. We should want to know whether dosage matters, whether the method of consumption matters, whether THC concentration matters, whether age matters, whether cardiovascular conditions change the equation. Those aren't anti-cannabis questions. They're scientific questions. And personally, I think an industry becoming normalized should make those questions at least easier to ask, not harder. So, here's the question I'd leave you with today. Are we finally mature enough to have a cannabis conversation where good news doesn't automatically make you pro-cannabis and bad news automatically makes you anti-cannabis? Because that's the conversation I'm much more interested in. And that's really the shift. Maybe true cannabis normalization isn't when everybody accepts cannabis. Maybe it's when we stop needing cannabis to be either completely good or completely bad and simply start demanding the best evidence we can get. --- # The Shift, Ep 17: Roots, Suits & Skills: Who Gets Hired in Cannabis? URL: https://www.tryheadquarters.com/podcast/ep17 Guest: Stephanie Pow Summary: Cannabis recruiter Stephanie Pow explains why the industry's best hires combine plant knowledge, business skills, and a trusted reputation. Transcript (auto-generated, lightly edited): Cannabis industry talks constantly about growth. Mhm. But growth requires more than new markets. It requires the right people. And that is where many cannabis companies struggle. We regularly see businesses hired too quickly, place people into roles they're not prepared for, promote individuals without giving them the support to lead, and then blame the employees when unrealistic growth plans fail. At the same time, experienced professionals are competing for fewer opportunities. Job descriptions are becoming increasingly demanding and personal connections can sometimes appear to matter more than actual ability. Mhm. So, is cannabis dealing with a shortage of qualified talent, or are companies simply failing to recognize, hire, and retain the talent that already exists? To explore that question, I wanted to speak with someone who understands both sides of the hiring process. My guest today is Stephanie Pow, a global cannabis talent expert and the founder of Emerald Lane Recruitment. Since entering the industry in 2019, she has helped cannabis companies around the world build teams across cultivation, operations, executive leadership, and international expansion. Stephanie, welcome to The Shift. Thank you so much for doing this. Yeah, thank you for having me, Filip, and that was a great intro. You nailed on the head some of the things that we see with talent right now, especially in the 2026 market and where we're at today. So, I'm excited to talk deeper in all of it. That's perfect. I'm really happy that you're here with me because obviously you do possess a very big pile of knowledge and I really would like to hear from you on this specific subject which I'm pretty sure you're going to nail. So, before we go into anything, give me a little bit about yourself. How did Stephanie end up being where she is right now? How did Stephanie end up being in cannabis? Yeah, a bit of a a journey and the twists and turns. I'm actually just celebrating it was my seventh birthday in cannabis recruiting in July last month and now in September it's my 10th anniversary of being in the cannabis industry. So, it was a wild journey. You know, I had a whole professional career for about 10 years before I joined the cannabis industry. I worked for the federal health care uh Health Canada in in Canada. I'm I'm from Canadian I'm Canadian. Um I worked for Health Canada. I thought I wanted to do policy development. I moved down to the state level. I did cancer management, chemotherapy planning, intensive care, pandemic planning back in 2009 before we knew what was coming um and really got disenchanted with how far the government was from the patient. Also didn't agree with an 8:30 to 4:30 schedule for the rest of my life. Uh so pivoted out of government, ended up in nonprofit, worked in breast cancer research. Again, saw how the patient was cared for and how much pharma was funded and pivoted out of that. Same time I wanted to be a digital nomad so I started to build my life to be a digital nomad which led me to a few years of doing consulting and temp work uh on the Wall Street Bay Street of Canada uh where I sat on the executive floor on the I trading floor of large financial companies uh supporting the co-founders of international businesses and really got to understand what that looked like. Uh and then 10 years ago I needed to quit my life. I booked a one-way ticket to Costa Rica and started a bit of a free bird life and while I was there I met somebody who said, "Do you want to come to Humboldt County uh and get to know the hills?" And I said, no. And then a few months later I said, yes. And so 10 years ago um I made the exploration over to Humboldt County into the hills. I got to know the industry, the medical side of the industry, the legacy side of the industry, the OG's who really know the plant. I was really submerged in that industry and that place for a couple of years and then moved back to Canada right before Canada legalized and joined one of the first recruiting firms as Canada was building the federal framework for adult use back in 2018 when we opened and then one of the first pioneering recruiting groups in Canada. So, that's how I fell into both the industry and recruiting. And then from there, when I joined the industry, it was the gold rush years. So, we are green gold rush, you know, 2017, 2018, there's billions of dollars flying into the market, companies had huge budgets. We would get calls and reqs saying we need 10 people, we need our whole sales team, we're building a whole second floor of our building. Like, money was it, we'd have so many reqs on our desk. So, I really got thrown into the deep end of what it recruiting meant and we really recruited across all types of roles while I was in that first recruiter role and I was very candidate facing. And through that work because of the boss, uh the woman I worked for in my first company, she had a lot of international notoriety. So, we were actually doing a lot of international searches back in Canada and this is all in cannabis. Um in 2019, 2020, I started recruiting for European companies and South American companies within our team. We had UK roles within our team. We also were doing US searches for international groups entering the US. So, I was really getting this broad landscape of the world and what talent meant and what the people needed and what people we are bringing in and who are moving around and who are moving across borders and what new companies needed and what maturing companies needed. And so, this is really interesting landscape and then, you know, did that for 3 years under that company, I transitioned out and now I've been on my own. I launched Emerald Lane Recruitment 3 years ago and since then now we've scaled to being in 13 countries, five continents and nine states and we continue to expand across the US as well. And we're pretty bullish on the cannabis market and all we do is the people part. So, it's been a wild journey. I can't believe it's 10 years, but it's an honor to talk to you today. And I I say all the time, any wisdom I have, there is wisdom I've gained directly, absolutely. But, also this being in this place of privilege where I get to have very confidential, high-level conversations with executives and and individuals across the entire value chain, cuz I am still doing some of the recruitment actively myself. I a lot of the wisdom, a lot of the knowledge I share is not mine. It's what she others who working and on the ground and in the roots tell me, and then I get to share that back. So, it's always an honor and a privilege to share words with others on this because I learn so much from so many others who are actually there building this thing together. That's amazing, and I love the fact So, so this is in in every single understanding of the word journey, this is a journey. Like, you really do have a journey behind you, and that's amazing. And I really do appreciate the fact that you are sharing the knowledge, just like you've gained that knowledge, which is extremely non-selfish of you. So, so that's that's definitely something that I really do appreciate. And I I believe a lot of people that are going to listen to you would also appreciate. Um okay, so let's let's dive into uh the the aspect of what you were just talking about right now. And you know, you've recruited across nearly every part of the cannabis supply chain. When when a company tells you it needs to hire, what do you look at to determine whether it actually has a talent problem or a leadership and business structure problem? How does that work? Can you explain that to me a little bit? Yeah, so we work with all types of operators across the supply chain. So, we work on all type of permanent roles. We do not do any sort of staffing or temp work. Um we leave that to the others, but we do permanent full-time positions um from junior all the way up to executive. So, we have this really broad knowledge across and then across the entire supply chain. So, we are working with all types of operators. We just got to the end of our fiscal year, so I was doing some review of our our clients from last year, who we worked with, who are our key stakeholders, and we work with, you know, mid-size companies, single-state operators, multi-state operators, up to Nasdaq-listed companies. So, we've really worked across the the chain there. And ultimately, when a client comes to us with a need, I find that depending on the maturity of the business and the where they're at, so obviously the larger corporate corporation corporation types companies, publicly traded, Nasdaq-listed, tend to have more of a clear understanding of who they need. So, their mandates when they come to me are very clear typically. It's like, we need this role because somebody left, because they're building a new department, because our, you know, our new strategy leans in that direction, we're opening a new market. So, sometimes it's very very clear. Other times, it's tends to be, and especially if it's companies that are in rapid expansion, new market entry, um new business entry, or owner-operators who are not necessarily cannabis people, come to us and they're like, here's what we think we need. And so, we do spend a lot of time building out an org or not necessarily in the org chart, but the job description and really having that dialogue of like, let's look at what expectations are, where is your actual gap, and what do you actually need in the market for that person to fill it. So, we do do a lot of that coaching and advising when when the right time is. Right now, we have a client, same thing, they just came to us, um they need some support on a a sales and commercial role, but they haven't actually necessarily had that function within their business, and they have very specific needs for that person, and so we're helping them understand how to structure it, then we're also understanding how we put a job description and mandate and um key deliverables around it, and then ultimately how we build a comp plan around it. So, um because that's commercial and sales, that's sort of how we would work through it, but ultimately they've identified a a problem within their company and then we can actually find the talent that's going to need it. Um, we don't offer right now, just being a small shop and just where we're at, we don't do any sort of like HR services and we're not necessarily spending too much time on the back end strategy side of things. We tend to get more of the mandate and the specific talent role. Um, and so any of the challenges they're having internally will sometimes get wind on that, but we're really looking for the way that we fill it and then through our conversations, through our work, through getting the candidates through the process, we can sometimes hear some of the different areas, but we're really filling that mandate for that particular search or helping our clients understand what that mandate really needs to be. Got it. And when you talk a little bit Can you specify when you talk a little bit more about the maturity of the company? What does that mean specifically? How do you determine the maturity of a company? Yeah, that's a good question. Often I say maturity with a a quotation marks um, because our whole industry is a startup, right? Like I think I was talking to somebody this week from the Colorado market and I think what Colorado's almost 30 years and and and some of them since the early medical days, but that was such a different market, right? So really we've only really had markets that look like the way we've had it now like for 20 years. Um, and with how fast time goes in cannabis, it's like that's a snap of the fingers and anyone who's spent time with a college person, uh, you know, they still have a messy room and still, you know, have their parties and and they still are kind of figuring out what they're going to do with their life, right? So I think we all are still in that phase, but when we look at maturity of companies, I typically look at it like what what stage of their business are they in? So are they pre-revenue? Are they pre-operational? They just got a license. They're a retail license holder. Um, they just opened a new distribution group in Germany. They've just got a new license available in in, you know, Germany they didn't just do new licenses. Um, and so there's just like, you know, ways that like is it new? Is it pre-revenue? Right? There's a specific talent we're going to need. And again, if we're pre-revenue, are we experienced cannabis operators or are we new to the industry and we're an entrepreneur or we're entrepreneurial from another adjacent industry and now stepping in, right? And so how we look at talent for both of those companies are going to be pretty specific for those groups. And then we look at more mature, so we can talk about markets. So we all know the markets that have been around a little longer than the others, right? Um and we also can look at the markets that are new coming online. So obviously there's going to be some history and some knowledge there. Um and then also looking at the maturity of the business, how long has the business been around for? Um how, you know, how many years has it been in operation? What does its revenue look like? What does its structures look like? And so we're looking at more of those mature companies that have maybe done it enough times or a few times and been able to take that knowledge and that team and move forward. Or are they taking people in those early stages um and we're still building a lot of that early stage startup. So startup, growth stage, um and then sort of maturity and and and again, all of us are growing together in the same direction. Got it. Got it. That makes sense. And uh at the start of the conversation you did obviously point out that um when you also started working, uh there was this sort of huge influx of uh funds and into the market as well. So can can we just sort of reflect a little bit on that one? Cuz cannabis companies often hire aggressively when investments arrive or a new market opens. Then they make cuts when projections fall short. What are companies repeatedly getting wrong when they build teams for growth? Yeah, that's a really good question. So I was actually talking to somebody earlier today on executive and he was like, "Ooh, you're in the glory days in Canada." Like the the the the billion years. I was joking. Now we're in the million years, but we I was there for the billion years. And um and so yeah, so in those early days, you look at the Canadian market, right, which is a case study for the world. The US market had this too. It was, "Okay, let's get billions of dollars and then let's build these massive teams." So an example I use is like I remember hearing about the marketing department for one of the large Canadian publicly traded LPs, you know, back in 2018, 2019, 2017, you know, they had 30, 40 people on their team. Now, that team probably is a handful of those people, right? Um and so the money was just coming in for hiring and so those individuals were kind of jumping in on on the larger companies and this is happening in some of the smaller companies, too, because there was this promise of we're going to get bigger, we're going to get bigger, we're going to get bigger, so keep growing and growing and growing. And then obviously the markets shifted and changed and COVID happened and no one could have predicted this global pandemic and then we had some shifts and change and then the US never actually opened and so there's all this like stop start stop start that our industry and our world has gone through since the 2017, 2018 days, early Colorado days, you know, everyone talks about the good old days in Colorado, California, right? So, like we had those rush how much a pound used to sell for. Like we have those numbers. Someone said that to me yesterday, like we used to get this for a pound. Like we still talk about the good old days, right? And so when it comes to talent, what we saw is that all these companies hired big and then let everyone get go and it was like this weird compression, especially in the Canadian market, that's figuring itself out now many years later, but we're still seeing now the industry re-correct into a startup industry where we're building small, lean, nimble, specialized teams and then building it strategically role by role. And so we're not seeing we're seeing those lessons that the billions wasted, the billions spent now being integrated into new operators where they're being much more fiscally responsible, sometimes because they have to be because there's less financial inflow because of all the challenges from that first investment group that came through, but there's also this idea that like we are a startup industry and your marketing team shouldn't be 30 or 40 people initially doing every small role. It's like they should have marketing team and then build in the specialized role or bring in an agency or bring in a fractional. And so we're seeing this evolution, but we did see that challenge when companies grow too fast. And then the other thing and I hope that I hold compassion for in our industry and I talked about again this earlier on today with the executive I spoke to was because of the inconsistency in the market and the constant regulatory shifts especially in sort of the US market in the US states. You know, there's a lot of companies that they didn't they didn't they you know, they were planning for something that was supposed to happen or that was happening and then it changed and then suddenly you know, this person was talking about vapes in one of the states and how vapes were allowed and vapes were not allowed and so their whole strategy around vapes and their whole team and their whole facility suddenly closed. And that was out of their control. They didn't when they hired all those people for that facility or opened that facility, they weren't like, maybe we'll lose our whole facility in the next 12 to 18 months. So I think there's also a lot of unpredictability that ends up affecting talent, but you know, we're expecting CEOs and CHROs and people planning to have this like crystal ball and hindsight's always 20/20, but a lot of these strategy and people and talent decisions are being made in the present state with the hope that we're going in one direction and unfortunately sometimes we're often going in different directions without us or the operators choosing that that choice. Okay. Okay, that is quite interesting. But now okay, so speaking of talent, since you do work internationally, you you work across different countries and markets. Let's let's go a little bit on the skill side. Which cannabis skills transfer well internationally and which positions require someone who truly understands the local market regulations and culture? Great question. So yeah, to date we work we worked in 13 countries and five continents and we opened an office in Bogota, which is really exciting. We're seeing a lot of growth in South American markets. I spend my time in half time in Europe and we've also been doing some work now in in Thailand and Southeast Asia Um, Europe as well and in North America. So it's really exciting to see the growth around the world. And so, when we look at global the global supply chain and the global markets, what is consistent across every market is cultivation. So, that has been the number one type of role that I've specialized in to date across all of my markets, all of my searches. I actually said that to someone earlier today. Like, those plant-touching heads of cultivation, director of cultivation, director of cultivation ops, general manager, group head of cultivation. Those people who really understand the plant, that is a globally trans- transferable skill because there often isn't local talent to do that, right? So, like we have a country we work in, Jersey. It's one of the UK Channel Islands, and their government's trying to encourage industry. So, they have been very cannabis-friendly and pro-cannabis, and there are some operators there now, and and more operators coming there. But, their government understands that a lot of that talent is not local. And so, when we've done some international searches to bring in some very specialized cultivation talent, they can get work visas and immigration visas very fast because they're considered specialized talent. Um, so all the like a lot of the plant-touching is a our number one type of request and the number type of international role I've done. Um, and anyone wanting to go international pretty much needs to understand GACP, GMP. Although, post-harvest is GMP, but a cultivator needs to understand what that means, and needs to have interacted with quality assurance, QAP, QA AQA PRPQ, all the different things that are talked about that. always a a a translational um, knowledge skill that we need to have if we're going to move into a new market. Um, the other thing that we've seen translate across markets is sales. So, um, although there's certain types of sales that are very regionally specific. So, we are helping a lot of um, North American and Canadian companies hire their European sales people. Um, we've also done some US-based sales people for European companies. And so, looking at people with that local um, um knowledge, but that overall broader um understanding of the global supply chain, right? So, both of those parts are needed. But, with sales specifically, which is the top I would say top three type of role, um that regional nuance, those regional relationships, those local relationships are important. And then, depending on if you're doing like a brand, if you're a brand representative within a state, that reputation, how you present yourself, the you know, the retail stores you know, the dispensaries you know, um are really going to be important and specialized. And then, if you're going broader or you're working on more of the B2B side of things, understanding more of the globalization can be supportive or national. So, sales itself can be translated across borders and also is something someone can really, really good at within their own state or region. Um and then, other roles that we see be translated is technical skills. So, like R&D, product development, um you know, we do see different form factors happening around the world where the flower is still the predominant way that the rest of the world um consumes medical outside of North America. And so, individuals, we've done some head of product, head of R&D with with people that have known very specific products and then can translate that into some of the newer markets. So, that's been really interesting. Um and then, ultimately, some of the fundamental global uh global best practices, like for a fractional CFO or a CFO or finance, you know, those are based on finance principles, not cannabis finance principles. Cannabis is is is the knowledge space that we see be translatable, but that's something that can go global because it's all basically the fundamentals of of finance. Um and then, there's nuances of regional taxes or regional um you know, competition and all of that. So, there's this this dance that we do. Ultimately, we play in this game of global immigration. So, no matter how awesome you are and you want to go into a new cannabis market, you have to still play the game of immigration, right? So, ultimately, the cannabis industry still has to respect that. You know, visas are hard to get. There's open and closing of various immigration policies right now with where the world's at. In the US, cannabis is federally illegal. Well, immigration is done at the federal level. Now, there's some challenges right now with the borders with some of the cannabis people over the years. It's very common um story where executives have had some challenges. So, it's it's constantly evolving in terms of where people can go. The one conversation I do say often to people though is if you work in the retail side of the industry and adult use, it's all predominantly in North America. Um and so that and that's sort of what we see for the next indefinite time. I would say 5-plus years until we see any sort of adult use framework outside of North America um in say Europe. Um and so, anyone who comes from retail background, you know, staying more regional national is going to be just a realistic expectation. But now, I'm pretty sure that I know the answer to this question, but still I'd like to ask you. Maybe I'm wrong. Is it getting harder or easier when it comes to those migrations and and switches from country to country and and continent to continent? How's Is it What's the What's the status with that right now? I just think there's a lot of So, that's a good question. So, I'm going to talk about it specifically in cannabis talent cuz obviously, there's political conversations we can have that, you know, neither of us could probably want to or want to waste our time on that. Um but I think in cannabis, it's actually becoming harder. And the reason why is because we're getting more specialized talent within the country itself. So, 5 years ago, 6 years ago when I was doing my first European searches, we were bringing Canadian heads of cultivation and master growers and head growers into the European market because there wasn't that many growers who had been in Europe and had the experience and worked in GMP facilities under GACP principles. And so, we were bringing in international talent. But now, there's a lot more people who are from the European region who have experience cuz the industry's been there for, you know, 5 plus years in some of these places. Um and so, those individuals now can be brought in with from local, you know, local experience. Um and that doesn't take immigration and visa costs and risks and all of that, right? Cuz a relocation is a high-risk investment for a company. Uh I had a CEO talk to me notoriously about that. Um we placed somebody in a in a global role and um the person was there and everything was going well with the person, their performance, but I heard her that there was um their family wasn't necessarily adjusting to where they were living, and that was also putting a lot of pressure on the individual, and then ultimately that got back to the executive team, and then the executive called me to talk about it, and like their leadership team, and you know, they come from big business, non-cannabis, and they were like, "That is a big risk anytime we do a relocation is that the family might not integrate." And so, there's these considerations that companies have to think about. And And again, there's global moves happening all the time in big corporations, small corporations, but when margins are thin and it does cost tens of thousands of dollars to relocate someone into a new region, especially if there's visa stuff, especially if there's now new um you know, immigration papers we have to get and all of that, there's a huge risk that the company's taking on and the candidates as well, and the individuals taking the job, but there seems to be less appetite for that risk if there's a more global a a more of a regional talent pool, even if they might not be as great as the international one. So, that is a trend that I've definitely seen for a little bit where there is more of an an a domestic talent pool, and that's where companies are preferring to find their people. And so that's from a perspective of the the let's say the candidates that are uh getting hired. But if if we look at the cannabis industry, cannabis likes to describe itself as a community-driven industry. Were or actually a better question is are there gaps? And if there are gaps, where are the biggest gaps between the culture companies advertise and the culture candidates actually enter? That's a really good question. So again, we're in a startup industry, right? So everyone is new. Everyone's figuring it out. You know, companies are trying to do what they can to get revenue, right? Ultimately, a job company's job is to make revenue. That's what a company is, right? Uh it gets revenue and profits and survives. You know, there's deeper business structure in there. I'm not the MBA person to go through it, but um you know, there's this idea that like that is the purpose of a business. And so when they're starting out, they're just trying to make revenue. They're just trying to survive. They're just trying to keep their feet under the water and and not you know, not go under the water. And so some of this stuff is nice to have, but if you can't even figure out how you're going to have your lights on in 6 months, then defining a perfect corporate culture strategy, alignment, motto that's followed in every department, and every person, like that will come. But that's not the main priority in the beginning. And or there's other so many other priorities. And so I think companies do what they can to understand what their culture is, but ultimately, it's still a business and it's still going to do what it can to survive and it's still going to have phases of growth. And so we've all all like a lot of people on this call have worked, you know, I did. I worked for government. Big. About tens of thousands of people work for the government. And I had a woman who I worked for, a boss that I worked for. I And that person was not like it was a very toxic environment. And years later, I was talk I had a wedding, actually. And I talked to somebody and someone was telling a story at a table and I was like, sounds like the person I worked for. And it ended up being the same person. And that was in the government, like the structure, the federal government, which has been around forever. And so there's still challenges in culture and toxicity and management in in big structure, but we get mad that the cannabis industry has it and the cannabis industry is only, you know, yeah, we're still in our infancy. So it's responsibility of every person, I think ultimately, every manager, every leader, every executive, every operator, every employee, how do you want to be at work? How do you want to treat people? What ethics, what values, what energy, what do you want to create around you? And all of us taking self-responsibility, while the corporations are also taking responsibility at the level with where they're at, but ultimately letting that trickle down and ultimately all of us having empowerment to be the best selves in the industry. Cuz a lot of the toxicity I hear about, cuz I hear a lot of stories, I have a lot of secrets, is not necessarily from the top. And it's from an individual making a choice. And that's not a reflection of the company, that's a reflection of the individual within the company. And sometimes there's companies where a few of those individuals find each other and they do things that are not so great and and sketchy and not as ethic, but often it's like one or two, you know, bad eggs or rotten apples, whatever they say. And so I think ultimately, you know, the culture that we describe of companies should be better defined. And I I appreciate when companies make some effort around that and hire against metrics and all of that, but we'll get there. And ultimately, like we still have business culture to follow. Like cannabis is still a business and there's some amazing hearts and minds and passions industry and visionaries for what the future could be and we're getting there. We still have to go through the process of business to get there. And so ultimately that idea that every company can just be so deeply cultured like is lovely, but where does it start with? The individual and collectively and then when someone's doing a job search, it's how do you find those companies that align with your values and those that are having a North Star that you want because it's ultimately too about that match between, you know, what we can deliver, who we are, and then what somebody wants and what aligns for them. And I want to I want to very quickly ask you about this because this is something that is extremely interesting to me. And when you say culture, obviously, we know what culture is. We we know what defines a culture of a nation, of a country. What does culture mean to you? What does culture mean in business? Can you tell me a little bit more? Ooh, I don't know if I'm going to get some roasted for this one cuz I, you know, I I think it's understanding the sort of values, missions, and model that a company uses to guide itself forward and how it both internally treats its people, how it externally treats its clients and customers and partners and vendors, and then ultimately how they deliver what they serve to whatever market they're they're serving. So, um when we look at sort of like the model on the ma- on the wall or like here are six core principles or here's what we belong to or how we're different from someone else. Um if that's really well defined and that can define the culture. And then ultimately, I think business can't have one specific culture. There's a whole bunch of microcultures, right? If I even think across the cannabis industry, yes, you can have a company that's culture, but how they how the retail store acts versus the cultivation store or or both cultivation department versus the quality department versus the R&D science department versus the executive department versus sales department. There's different subcultures. And based on who your manager is and what market you're in and what you're doing, there's going to be another subculture in there, right? So, it's all these little microcosms that create this giant ethos, which should be followed under, you know, these core values. But, ultimately, it comes down to sort of the the evolution in the way that that we all come together. And so, when companies in cannabis are trying to define culture itself, you know, we can look at cannabis culture. I just saw a post on this today. Someone was like, "Hey." And I talked about this yesterday with someone. Everyone's like, "Well, cannabis culture." Well, what is cannabis culture? Because there are so many things under cannabis culture depending on who you are. And there is one way that we can think about it. Uh and there's the legacy and sort of the OG and where we came from. But, like, there's also there's also patients in that. So, were the patients the OGs or was it the growers? Was it the people building the products? Or was it the people out there getting and growing for the patients they had or the patient receiving the product, right? Like, there's just so many ways we can look at what the culture is. And so, cannabis tries to lump itself under cannabis culture and then get mad. And so, there's so many subcultures within that. And so, same thing within a business. We're going to have different types of organizations, different types of subcultures. And ultimately, you'd hope you'd have an ownership uh leadership group that would have a common vision, a common defined idea of this is how we're going to do things, this is how we're going to show up every day, this is how we're going to move and navigate through this world. And hopefully, that trickles down, you know, into those those sort of small subgroups and then also be redefined, you know, up. But, that's a good point. I like what you said there about the cannabis culture where you've asked the question of uh and what about the patients? That's That's all of a sudden now something completely different from what you would expect one to understand the cannabis culture mean. So, it is it is a very, very good point. And uh So, through Emerald Lane, you've built both a business and a global professional community, right? We can We can We can name it that way. How much of a career growth in cannabis is based on competence and how much depends on being visible, trusted, and connected to the right people or is it a combination? What's What do you see? What What is your perspective? Yeah, it's another great question. So, I actually have a post that I'm going to be putting out that I was sort of riffing through about that because I think I'm seeing sort of the desire around talent change from an internal perspective from companies where previously it was more about and it still is but it was before before but more about talent. So, I was talking about heads of cultivation. So, it's a sneak peek on this post. So, before a head of cultivation, you know, if I think of 6 years ago or 8 years ago when I was starting to recruiting in the space or my 7th years, you know, if we needed a head of cultivation, it was who's actually grown cannabis before. It might be some legacy experience, might be some ACMPR or MMAR or some of the early Canadian medical space or early American medical access but ultimately it was like who can grow cannabis and get that person into a job. Now, when I'm working on these heads of cultivation roles, the often talent profile or the candidate profile I'm looking at is somebody who's understood cannabis cultivation, who's worked in a facility that's reputable and and legal and licensed and operational and has also built a broader understanding of business, professionalizing, of leadership, of operations. So, we're looking at someone who's more well-rounded and some of that has been gained on the ground and some of that will need to be gained externally, right? If you've never taken a course on lean or six sigma, you know, or or you can take that on the side, right? But we're looking at candidates who have more of a mixed profile or more of a diverse background. And so, those people early on who built a bit of reputation for themselves but didn't necessarily have the experience to back it up, I think companies are starting to look between the lines now and being like what have you actually actually achieved and not just a personality?" But at the same time, when we look at people who are in the market, we're looking at who they know. And so, you know, I tell everyone looking for a job in 2026 in cannabis, it's like, "Get really good at something, right? You probably already really good at something. You have a zone of genius. You have something you've done again and again and again." For us, it's recruiting again and again and again and again. Right? Are you cultivation? Are you operations? Are you sales? Are you marketing? Are you QPs? Are you, you know, dispensaries? Are you medical? Like, whatever you've done, do it and just do it really well. And then also, as you go, be a good human. Goes back to the culture side of it. Leave a good reputation for yourself. Recognize that every time you make a choice, that choice will come with you. And in this little industry with really big ears, everybody knows everybody. And so, or somebody knows somebody. And so, if you choose to not act in integrity, if you choose to not use a cultural North Star that you would be proud of or that you think would be desirable by others or whatever language you want to use, that will likely go with you. And so, ultimately, that network matters. Your word of mouth matters. But that now more and more comes down to be a good person and doing a really good job at the thing you're telling everybody you do a good job at. And so, it's like this really interesting space. And then when we look at getting better at your job and where we want to go, I think right now it's complementing the opposite side of what you have or know. So, we have this constant debate in the industry between roots and suits. Roots and suits. Legacy, the, you know, the chads, the legacy, the the people who don't know cannabis and people who've been in cannabis forever. And this is constant debate. It's constant debate, you know, constant infighting in the market. And what I'm seeing now with the talent profiles we want, the people who are really excelling in this industry, the type of profile that our clients are really excited about are the people that have both or can speak both languages, right? And likely you come from one side or the other. But how do you balance yourself with learning? So if you are someone who is a root and you have known the plant forever, actually talked about the time we're like, "Yeah, I'm a third generation grower and I've been this like super cool, like amazing." But maybe you have a gap in some of the more suit side of the industry. Maybe you've never taken a course on organizational leadership or leadership training or organizational best practices, again, like Lean Six Sigma. Maybe taken a GACP, which is good agricultural and collection practices. Don't butcher me if that's off there. Or GMP, right? Maybe you take a course or study or maybe you ask for your employer to help you find some additional skills and that's how you balance that. Maybe you take a course on budgeting or P&L management or something you just don't really know and that will then come with you and balance it out. Then the other side of it is if we have the suits people who are coming from CPG or pharma or agriculture and you know your thing very, very well and you're excited to come into the cannabis industry. How do you gain additional knowledge about the plant? How do you gain Maybe you're going to dispensaries and you're learning about all the different brands and talking to budtenders once or twice a week just to kind of get to know people. Maybe you are asking if you can go into the cultivation the grow once a month to be on the ground if you're a salesperson and you're trying to understand what's happening there. Maybe you're going and taking like the Ganjier program or taking something where you're really learning about the plant or sommelier you know, cannabis sommelier program or going to one of the conferences on on your own or again, the company's sending you and you're starting to get to know people and start to get to know and ask and learn and show up with that willingness to have that knowledge and then you combine all of it, right? So I think those are the people that are going to do really well and that comes from that desire to be a part of the industry. It comes from the desire to build your network and build your reputation and build what you know you can do Um, while also looking at how you stay your like with the longevity and sort of forward thinking of of where the industry is growing to. Got it. So, I I feel like I heard a lot of you have to be aware of yourself, you have to be objective about yourself in order to be able to be seen and appreciated quality matter. Um, one last question that I have for you and this is on my mind because as someone who's working B2B as well quite quite a lot, I'm quite interested. Is there a disconnect within companies or execs in understanding um, the value over quality or quality over value when it comes to individuals that they're going to be hiring. What I'm trying to specifically ask you is this guy is going to be more expensive, but he's got a a crazy experience behind him. This other guy has a little bit less experience, a lot cheaper. Where are you going to go? Is that something that you're noticing and how do you handle that in in your business? Yeah, it's hard to make a broad paint across the entire industry and every type of company because there's different levels of executives and different size of companies. Ultimately, some companies have very tight budgets. The whole industry is under financial constraint, so we can't see paying anyone anything they want, right? There's there's P&L there, there's budgets, there's projections, there's planning, so you know, when our clients come to us, often they have a set salary range and that's just based on their numbers and their operational budgets and how they're going to run their company. And so, if we have a $60,000 a year job and someone wants 120, it's just not the right role for that person, right? And vice both sides of the the conversation. And I have lots of conversations about that and it's probably a whole 'nother day. Um, but ultimately, we do our job and I think all consultants' jobs is to reflect back from to our clients what we're hearing from the market. So, one of the things that we do is if a client tells us a salary range and we feel like that might not be the best aligned for the market, we will tell them when we can. You know, "Hey, we placed a recent role. We were $10,000 more than that. Would you have flexibility?" You know, we kind of talk to them. They ultimately tell us what they want us to go to market with and we do. And then part of our job of being in the market is to listen to what we're hearing. And we had this recently with a a search we were doing in one of the markets and we were hearing constantly from people from candidates or potential candidates that we're headhunting, "Oh, I want $15,000 more. I want $10,000. I'm already making $10,000 more. I'm making $15,000 more." So, we were able to take enough of that data and go back to the client and say, "Hey, you gave us this range. We've you know, found a couple of people, but if you really want some really good talent that we think is the right level that what you need, here is what they're telling us they're making from your competitors. Here's we're hearing is competitive in your market. Do you have flexibility here?" And if you don't have flexibility, well, then you can expect that even if you bring a person in junior, they're going to work 6 months, they're going to get a knock on the door from one of the other companies, you're going to headhunt it out. So, maybe it's worth kind of considering a little higher. Or again, if you don't want to, just know that the talent's going to be a little bit shifted. Maybe we're going a little more junior with the person. Maybe we have one less year of experience and we're looking for someone who's stepping into that role from a more junior position. So, we do a little bit of finessing with our clients. Um, but ultimately, you know, people can identify good talent and I've also seen creative not creative, but we are seeing continuous evolution of compensation in cannabis and where we have, you know, base structure and commitments on both sides, base compensation and base salary, annual salaries, etc. And then we're also seeing performance-based bonuses um, and measurable bonuses that are paid out often more often like quarterly or even monthly across almost all type of role. So, even our most junior quality assurance roles we've done recently have a bonus compensation part of their job. And that allows them to then know that they can perform and they can show up and the company, you know, will be committed to to to to providing that if they can based on profitability and where the company's at, but the person has that ability to kind of have a little extra on top of what they make. And so, I think there is sort of that balance we're seeing between performance-based and base salary. Um and companies are a little hesitant sometimes to give a high high base until they see performance, but that's where we see these bonuses especially down milestone quarterly monthly payouts that allow both sides to come to the table and say, "Hey, if you perform, here's how we're going to do it." And ultimately that comes down to contracts and what's said in in you know, making sure it's all in writing and there's ways that we coach our our clients and our candidates through that. But I think companies are willing to pay for good talent, but the good talent also needs to perform for that pay. And it becomes both ways. That makes sense. And uh that it's a very good way of sort of um piggybacking on both sides and trying to figure out what's the best solution, which obviously at the end of the day is uh the most practical. Uh Stephanie, thank you very much for sharing your knowledge with me today and with everyone's going to be watching this podcast. Um where can people find you on socials? Yeah, well, thank you so much. I feel like there's so many things we could have kept going down the rabbit hole with, so maybe for the next conversation, but um yeah, in terms of finding us online, um you know, I'm on LinkedIn a lot, so Stephanie Pow is my LinkedIn handle. Uh I'm going to be getting my content back up there and running. I uh I just got a little busy with this little startup that could, but here we are. Uh and so, I'll be getting more back on that. Um I also attend a lot of conferences. I'm all you know, all over the world. So, if you're at any sort of conference, I tend to announce where I'll be or I'm doing some speaking events, so you can definitely get in touch with me there. Um our company website is emeraldlanerecruitment.com. Um that provides a little more insight into ourselves, our recruitment, our executive search, as our and our fractional um talent acquisition services that we offer. And also will just kind of provide some context about who we are and what we do. Um and ultimately emeraldlanerecruitment is also on LinkedIn. So, if you follow the page, you'll get to see about the new exciting job posts we're on. And that's really where you can find me. That's amazing. Thank you so much. And I feel like yes, we do have a lot more that we can discuss, but let's let's save it for maybe another time because I feel like this is going to be uh we're going to have a little bit of repetition sometimes in the future, for sure. You are a true uh pot of gold when it comes to knowledge in this specific area. And I feel like it is great for people to understand uh a lot better how recruitment works across the world. Um so, thank you for that. And I'm really looking forward to maybe doing another one in the future as well. And again, whoever wants to, they can follow you on socials. And uh I think I think that's it. Really, really appreciate it. Thank you once again. And uh I wish you a very fantastic rest of the day. Fantastic. Thank you so much. --- # The Shift, Ep 18: Weed Stopped the US Open: Cannabis Etiquette After Legalization URL: https://www.tryheadquarters.com/podcast/ep18 Guest: Filip Gacic Summary: Weed smoke stopped the US Open. A new study flipped the munchies stereotype. And AI is coming for cannabis jobs. Transcript (auto-generated, lightly edited): [music] Let's start today with something that happened last week at the US Open. Because cannabis somehow managed to interrupt one of the biggest tennis tournaments in the world. Without actually being anywhere near the tennis ball. World number one Aryna Sabalenka was playing her third round match when she suddenly stopped, walked over to the umpire and said, "Someone is smoking weed." Apparently, the smell was that strong. Now, nobody actually knows exactly where it was coming from. Smoking isn't allowed inside the US Open grounds, but recreational cannabis is legal in New York and smoke from the surrounding Flushing Meadows, Corona Park can drift into the tennis complex. Sabalenka herself said she didn't know whether it was coming from the crowd or whether the wind was carrying it in from outside. And to be clear, she wasn't particularly outraged about people using cannabis. Her position was basically do whatever you want, just please don't do it next to the tennis court while I'm trying to compete. Fair enough, but I actually think this little moment at the US Open represents a much bigger conversation we're starting to have around cannabis. But as for decades, the cannabis debate was mostly about one question, should this be legal? But once something becomes legal, a completely different conversation begins. Where is it socially acceptable? And those two questions are not the same thing. Cigarettes are probably the easiest comparison. Smoking cigarettes is legal, but that does not mean you can light one wherever you want. Over time, society developed boundaries, not on whether you're allowed to smoke, but on where your decision to smoke begins affecting everybody around you. Restaurants changed, offices changed, airplanes changed, stadiums changed, and eventually those boundaries became completely normal. Alcohol has boundaries, too. Drinking a glass of wine with dinner is completely ordinary. Walking into your Monday morning meeting with a bottle of vodka, slightly different situation. The product didn't suddenly become illegal, the context changed, and I think cannabis is now going through its own version of that transition. We spent so much time discussing the right to consume cannabis, that we've spent considerably less time discussing the etiquette of consuming cannabis. Because cannabis has one very obvious characteristic that makes this particularly complicated. Smell. If somebody drinks a beer 20 m away from me, I probably have absolutely no idea. If somebody smokes cannabis 20 m away from me, there's a pretty good chance I know exactly what's happening. Which means one person's personal choice can very quickly become part of everybody else's environment. And that's where this stops being exclusively a cannabis rights conversation. Because you can completely support somebody's right to consume cannabis, while simultaneously believing that you shouldn't have to smell cannabis during dinner, at work, at a sporting event, or anywhere else where smoking isn't appropriate. Those ideas don't contradict each other. In fact, I'd argue that being able to hold both ideas at the same time is probably a sign that cannabis normalization is actually maturing. Because normalization doesn't mean anything goes. Normalization means cannabis eventually gets something that alcohol and tobacco already have. Social rules. And some of those rules might happen on how cannabis is consumed. An edible doesn't produce smoke. A cannabis beverage doesn't produce smoke. Smoking obviously does. So maybe the next stage of cannabis etiquette isn't even primarily about cannabis. Maybe it's about consumption methods. Shared spaces and understanding when your personal choice starts becoming somebody else's experience. And that's why I found the US Open incident so interesting. Sabalenka wasn't giving us some grand political statement about legalization. She was basically saying, "Guys, I'm trying to play tennis here." And strangely enough, that might tell us more about where cannabis culture is heading than another legalization debate ever could. Because the first stage of normalization was asking society to accept that adults consume cannabis. The next stage might be cannabis consumers accepting that legalization comes with etiquette, too. So here's my question. 10 years from now, what will the unwritten rules of cannabis actually look like? Where will smoking be completely normal? Where will it be considered rude? And what will future generations find it strange that we ever had to debate that this at all? Because the law can tell us where cannabis is legal. Culture still has to figure out where cannabis belongs. We all know the stereotype. Cannabis gives you the munchies. And it's probably one of the oldest cannabis jokes there is. But a new study published last week asked a much more serious question. What happens when changing someone's appetite isn't a side effect? What happens when that's actually the point? Researchers from the University of Sydney looked at cannabis use among people living with eating disorders. And this wasn't a tiny survey. The analysis included 5,383 people with diagnosed eating disorders or disordered eating serious enough to cause distress. And the first thing that surprised me was just how common cannabis use was. More than half, 56% reported using cannabis within the previous year. And among those cannabis users, 42% were using it daily. But here's where this study becomes really interesting. Because cannabis didn't appear to have the same perceived effect across different eating disorders, people with anorexia nervosa and people with ARFID, which stands for avoidant restrictive food intake disorder, frequently reported that cannabis helped with things like food anxiety, nausea, and their ability to actually eat. But then, researchers looked at people with binge eating disorder and suddenly the picture changed. In that group, cannabis was not perceived as having the same benefit. Some participants actually described it as making their symptoms worse, including triggering overeating. And think about how interesting that is for a second because we're potentially talking about the same characteristic of cannabis, increased appetite, increased interest in food. A changed experience around eating. For somebody who is struggling to eat, that could potentially be useful. For somebody for somebody struggling to stop eating, the exact same effect could potentially become part of their problem. So, is cannabis helpful or harmful? Maybe that's the wrong question. Maybe the better question is, helpful for who? Because I think we're slowly moving away from this idea that cannabis has one universal medical identity. Cannabis helps pain. Cannabis helps sleep. Cannabis helps appetite. Those statements sound nice, but human beings are considerably more complicated than that. Even within something we casually call an eating disorder, we're talking about completely different conditions, completely different behaviors, and potentially completely different responses. And there's another side of this study that we absolutely have to mention. Among the cannabis users surveyed, 18.4% said they believed they had a problem with cannabis. Another 14% say they thought they might have a problem. That's a roughly one in three cannabis users in the survey expressing at least some concern about their own relationship with cannabis. So, again, this isn't a simply you know, like a success story. The researchers themselves are not saying we discovered cannabis is a treatment for anorexia. This was a survey based on people's own reported experiences. It can tell us what people believe in cannabis is doing for them. It cannot prove that cannabis actually treats their condition, and that's an incredibly important distinction. What the researchers are saying though is that these results are interesting enough to justify proper clinical trials. Well, specifically warning that dependence and other adverse effects also need attention. And personally, I think that is where this story becomes much bigger than eating disorders because maybe the future of medical cannabis becomes much more specific. Not does cannabis help appetite, but which cannabinoid for which patient with which condition and what concentration? And producing which effects exactly? Because medicine doesn't usually work by saying, "Well, this seems to make people hungry, so let's give it to everybody who has a problem involved living involving food." That's not medicine. That's a stereotype. Medicine is understanding when an effect is useful, when it's irrelevant, and when that exact same effect could actually be harmful. And cannabis may increasingly have to meet that standard, too. Which brings me sort of back to the munchies thingy, something cannabis culture has joked about for decades might actually demonstrate one of the most complicated things about cannabinoid medicine. The effect itself isn't necessarily good, and it isn't necessarily bad. The patient determines whether that effect is useful, and maybe that's the question we should start asking much more often with cannabis. Not does it work? But for whom? Let's finish today with a prediction about the cannabis industry. And I'm genuinely not sure whether it's exciting, terrifying, or probably a little bit of both. So, artificial intelligence is coming for cannabis jobs. At least that's the argument being made by one medical cannabis executive this week, Michael Sassano, founder of SOMAI Pharmaceuticals, and I hope I'm pronouncing that right. So, they published an analysis September 5th arguing that medical cannabis companies could eventually operate with dramatically fewer employees because artificial intelligence can take over large portions of the administrative work happening inside these businesses. And I want to be clear here. This is not a study predicting exactly how many cannabis employees will lose their jobs. It's an industry executive making a prediction about where he believes the business is heading. But the reason I think it's worth discussing is because when you actually look at how cannabis companies operate, his argument isn't as crazy as it initially sounds. So, think about what happens behind the scenes of a regulated cannabis business. Finance, accounting, inventory, compliance, quality assurance, regulatory paperwork, sales administration, customer service, human resources, reporting, data analysis, a huge amount of the industry isn't somebody standing inside a cultivation facility touching a cannabis plant. It's somebody sitting behind a computer moving information from one system to another, and that is exactly the kind of work artificial intelligence is getting increasingly good at. Sassano's argument is essentially that AI takes over the workload. While humans remain where regulation requires accountability. So the computer might analyze the information. It might prepare the documentation. It might identify the problem. It might even recommend the next action, but somewhere in that process a trained human may still need to review it. Approve it and legally put their name behind it. And we're already seeing pieces of this sort of future appear. Cannabis technology companies are building AI into ERP systems. Order processing, compliance, cultivation monitoring, and business analytics. There are systems that can monitor temperature, humidity, CO2, um, and plant health even. Looking for problems before human cultivator might notice them. There are tools processing orders that previously required somebody to manually enter information into an ERP. I mean And this is where I think the conversation becomes much more interesting than AI is going to steal everyone's job. Because I think the better question is which cannabis jobs actually require human? Let's take cultivation. Artificial intelligence can analyze thousands of data points inside a grow facility. It can detect patterns. It can monitor environmental conditions 24 hours a day. It doesn't get tired. It It doesn't forget to check something. But does that mean you no longer need an experienced cultivator? Probably not. Maybe it means the cultivator stops spending their time collecting information [snorts] and spends more time making decisions with it. Now, let's see compliance. Cannabis companies generate enormous amounts of paperwork because they're operating in one of the most heavily regulated consumer industries in the world. AI is basically designed for exactly that environment. Read this, compare that, find the discrepancy, flag the problem, generate the report, but then comes the question of accountability. If an AI system makes a compliance mistake, who's responsible? The software company? The cannabis operator? The employee who approved it? The executive who decided nobody needed to review it anymore? AI can make a decision incredibly quickly. Regulation still wants to know which human is responsible for that decision. And then we get to the part I find most interesting, the customer itself. Imagine walking into a medical cannabis dispensary 5 years from now. Instead of immediately speaking with somebody, an AI system knows the products available, their cannabinoid profiles, your preferences, your previous purchases, and potentially enormous amounts of published cannabis research. From a pure information perspective, that system could theoretically know more than any individual employee ever could. But is information the only thing the customer needs? What about judgment? What about trust? What about somebody noticing that you are confused, nervous, or that you're asking the wrong question? What about somebody actually saying, "I don't think that's what you're looking for." That's much harder to put into a spreadsheet, and maybe that is the real test AI is about to give this industry. Because whenever technology automates a job, it forces us to discover which part of the of that particular job was the value of the employee entering information into five different systems. Probably not. Was it remembering which form needs to be submitted every Tuesday? Probably not. Was it answering the same basic question 50 times every day? Maybe not. But judgment, relationships, accountability, creativity, understanding another human being, those become much more interesting. And this isn't unique to cannabis. Every industry is having some version of this conversation right now. But cannabis is an especially interesting experiment because it's simultaneously agricultural, medical, pharmaceutical, retail, and incredibly regulated. There are physical jobs AI can't simply perform from a laptop. There are regulatory jobs where humans remain legally accountable. And there are administrative jobs where frankly, we may discover that we were employing people because technology wasn't good enough yet. So, I don't think the interesting prediction is AI will replace cannabis workers. That's too easy. The much more interesting question is what happens after we automate everything that can reasonably be automated? What's left? Which human skills suddenly become more valuable? Precisely because a machine can do everything else. Because maybe AI isn't just about discovering how few people it takes to operate a cannabis company. Maybe it's about finally discovering what we actually needed the people for. [music] --- # The Shift, Ep 19: How to Build a Career in Cannabis: Trust, Growth & Ownership at HQ URL: https://www.tryheadquarters.com/podcast/ep19 Guest: Vedrana Pavicevic Summary: Discover how HQ turns curiosity, reliability, and ownership into real career growth while helping shape the future of cannabis, together. Transcript (auto-generated, lightly edited): So today's guest is someone I know very well and someone who probably understands HQ from more angles than anyone else in the company. She works closely with our CEO as his personal assistant, but her role goes far beyond that. She manages multiple projects, collaborates with different departments, and has had a front row seat to how decisions are made, how opportunities are created, and how people grow within HQ. Since her and I are very close, just a little disclaimer, this probably won't be like a typical formal interview, we're going to have an honest conversation about what it's actually like to work at HQ, what makes our culture different, and why talented people, even those who have never considered the cannabis industry, might want to become part of this industry. So, welcome to the shift, my very good friend. uh Vedrana or Vedrana or V as a lot of uh our guys like to call her. Thank you for doing this. I'm so excited and just doing that with you. It's way better. I feel comfortable, you know, but I'm really happy to do this for HQ for us. So yeah, and this is going to be a fun chat. You and I, we go way back way like I know we shouldn't say anything wrong. That's that's that's the only thing, you know, but other than that, it's good. Who's who's going to be the judge of what's wrong or what's not wrong? True. Um, anyhow, so before we go into some of the specific questions I prepped for you, I I want you to give me a little bit about who Vedrana is from your perspective. Oh, wow. Okay. So, I'm someone who I'm thinking where to start. Uh because I I think what comes to mind first is someone who really I don't know if this is relevant right but you know really enjoys spending time with their family with people who I love with people who I care about. I want to help. I want to be there. I want to experience. I'm like I'm present you know. Uh that's how I would describe myself and that's what I want to give people around me and I give myself to things. I I just feel I grow. I feel again really really present. Want to feel everything focused on what is going on in the moment, living in the moment. So I'm typically that way and I was able to bring a lot of that personality into my work. So that's tied to that and that's how I feel comfortable. I just feel like I'm myself. Um there's not really much of a difference between whether or not with you and uh it's maybe the topics are different. Um so I just feel comfortable in who I am now. I think you know I've done things that I proved myself that are oh we can do things differently. I grew up in a small town and uh I ended up being in America when I was 21. It doesn't really happen. Uh you also have to figure out ways to do that. Uh so back then cuz you know we are millennials. It wasn't and everything was served on like a short 30 second video on TikTok like how do you do things? Uh which also might not be true. Uh but we had to figure things out. I remember researching for hours cuz I had a goal. I had a dream. I was like I have to do this and I'm going to go into talking to people who I never met before. I probably I I don't even know who they are actually. So there were people who were writing things and reading them. So you would have to trust their judgment. Then you go into the process and then you go into action and then I inform my family. And this is this is not a drag or any type of an insult to any other generations. But we as millennials, like we've we've sort of kind of grew in this ecosystem of new and old, modern and and sort of conservative. And it's it's just we've understood how you need to be resourceful at stuff. And I feel like that's the reason why we are successful in our jobs as well is because we are literally selfresourceful. Like we can do whatever you want. We can find whatever you want. And even if there's like no electricity, like back in the day, back in our day, we didn't have ChatGPT. We didn't have internet all the time and stuff like that. So, we know how to find stuff out. Um, but I love the fact that you've started off with your personal um aspect and then sort of switched to to work, which I would I would say I agree. you are a person that wants to help and I feel like that's sort of how you're known in the company as well is like if you need someone something you go to Vedrana like she knows how to do it she knows how to help she know who to contact so that's um true as true can uh be that makes me happy you know that that's what I take back I take that energy and drives me more you know what I mean that's what I figure within myself so Yeah. Um, but going back to who Vedrana is at work a little bit more, let's let's touch on that and go into detail. So, you work closely with our CEO and um, across multiple projects at HQ, so you're not really like one sort of thing specific like you're really everywhere. What have you learned about the company that most employees might never see um from their own roles? Yeah. Well, working closely uh with him, I think we should just it's David I'm going to say you know how I speak. So, working closely with David uh and touching several projects at once, you see the why behind the things. Uh and I think other people would experience that as oh things are changing. Uh I I could see the why and the brainstorming that went to into that. Um and some people depending on their department would see just their one piece uh affected. Maybe it's AR a catalog website changing recruitment process changing. But I get to see how these pieces actually connect into one system. So to me uh what I've learned uh is and the view that I within the view that I have, we are operations company that happens that happens to serve cannabis. M um and every process came about from someone sitting down doing their work and and they would ask themselves, okay, how do we do this better and more reliably for a client? That's how things keep moving here. And that's the mindset usually. Um I can see from David and someone else uh let's say at the top of the company explaining to people affected the why behind the things but I probably get to see it you know in the early stages. So that's really exciting. That's probably something that I not everyone will see entirely you know. Yeah. One one thing that you did mention which sort of stood up was uh we are after all an operations company that happens to be in cannabis. Do you feel like we would be successful such as we are in cannabis, do you feel like we would be successful in other industries as well? Yeah, because of this mindset. Yes. So the the the point, okay, you want to do this better reliably for the client. That's you know the core. Yes, we do have more experience in cannabis. So that definitely helps. I think that's certain reliability that a client will feel and trust and so they will give us literally you know access to all of their data uh that's needed but uh our mindset is figure out ways um solve problems be curious and because of that we would thrive in any industry for sure. Yeah, I I feel like I agree with you because I think that what sort of um makes us different from other companies similar to what we do is the fact that we are really into exploration as you said, curiosity, which is like one of our main pillars in the company. We want to learn more. We want to know more. And with that, the collateral often times is we're fixing stuff because we notice mistakes. and and I feel like we could be extremely um extremely successful in whatever industry you you might imagine. Um, so when when you first joined HQ and we sort of joined at the same time approximately I think there's like a half a year a year difference but what surprised you most about the company the people and the cannabis industry itself because for me it was a very big sort of shocker and I'd like to to hear your thoughts on that. Well in the industry you know I didn't know know much about it. I think makes sense. We are from Serbia. There's so much you can touch on that subject. I just knew something from the movies basically. I so I don't know exactly I would say the word you know surprise. I think I just had to learn and so whatever I took as like okay this is how it is. uh I didn't have maybe that helps you know I didn't have a certain knowledge prior and uh I just came into it with like a tabula rasa, right and just start over and then you see how it goes. Um I think for the what surprised me I would say like you know clients trusting us with uh relying on us on our industry knowledge um trusting us with literally millions of dollars moving through their systems um and because the industry it's is so young I think uh what I've learned is there is actual room to build something and we can be the people who build it and we did it and that's how we gained that trust uh with the client. So that was something that I you know pretty early on when I joined I was able to to understand and and I like the idea that I joined something that is still being figured out because of the industry but because being it's so young and changes a lot of times uh it's not something that's already buil been built and you're just kind of joining and you there's not really much space to grow or like push the lines. you just have to blend in. Uh this is, you know, we figure things out as they come. You know, a new law may come in like two weeks and we're just going to uh adjust. So, you need that type of mentality when you go come into this. So, that was surprising that it's not all set and done. This is not a 50-year-old uh you know industry with all set rules. So it requires people to be a bit more you know adjusting to things and changing processes. So that's was what as I said I could use the word surprise but that's what I learned. One of the things that I've noticed is and and this goes across uh HQ specifically is we've obviously brought in a lot of people from different companies we used to work with uh previously and uh I just had a conversation was like maybe a couple of days ago with a new colleague. She uh came in from another sort of corporate surrounding rather than just like a startup slashcorporate or whatever. and she um she was she was like really constantly working which is great obviously we want people like that but at one point she has finished everything that she had to do during the day and she wasn't really sure what to do and she reached out to her manager he wasn't available at the time she's like what do I do so she literally started going through a bunch of different records just for the sake of being active online like girl look you have to chill out this is like you don't need to be at 80% of your um what's the name of it? Hubstaff activity just like let's chillax and she's like I have never worked in a company where I there's nothing burning around me everything's like stressfree and that's sort of what HQ brings in as well is like I've been here for what four years now almost I've never for a second was like oh my god I feel stressed I don't know what like it's very easygoing it is work requires you to be really on, you know, to to be at your top level. But again, chill. Just chill. Because the industry is like that. Everyone in the industry is like the industry is like that. Yes. There's room for you to be yourself. Yeah. The systems are not so set that you cannot just kind of find yourself and and express that they're not there. We have couple of rules that I would say uh that really matter to us and a lot of them go back to soft skills that I will really like to point out uh later on even but uh but there's just couple of them which do also make sense if you don't understand you're going to get the why you really will I mean our onboarding system is very very good I'm very proud of it and you really get to see from first from the first day the people behind HQ and you get to feel their energy and how we talk and how we introduce you to work. You're going to get a feel of, oh, this is I think this is okay. Like I can express my opinion and I can ask and I can get the answers and I can maybe not even agree with something and point that out. I I there's not an issue. And also let let's go back to the CEO. He's not an invisible uh force and untouchable. You can reach out. I I please, you know, I really not just that he's gonna be reaching out to you constantly just so that he can bother you with a lot of different things. Well, if you get a high from him on Slack randomly, he had an idea what to do with that. And you know, no worries. You know, that's what I told people. I the conversations are welcomed. I would say uh you know I may be the one who stops some things but only because I like I go through his priorities and I will schedule it but please it's welcome and so that's what yeah I would say you know that also was something that surprised me within the company. I didn't work in a company that was certainly like that. Uh so it was a a welcomed change. I felt like oh I really truly can be more of myself. I don't have to come here and pretend the entire 8 hours that does help mentally you know so without that pressure I can just purely focus on tasks and I like I you know do that with enjoyment which makes a difference on the outcome I would say yeah it's it's not a fake ecosystem like we everyone's welcome to share their thoughts we often times do have even fights like I mean I literally fought I think it was like maybe like two weeks ago I fought with Adam on a situation. Adam is our uh chief operations officer and you know uh he's a pretty chill guy but we had a disagreement bought it out like crazy. Uh and it was on a call so it was fun. But anyhow yeah different opinions are you want to have different opinions because if you do not have different opinions then how do you grow? So it it definitely does make a lot of sense but it was a shocker for me too. Yeah. Um, let's talk a little bit about the more sort of controversial subject when it comes to Serbia specifically and maybe Mexico as well because there is a lot of issues with people wanting to grow in their career uh generally speaking. And you know, you go to a company, you start off with a base position and then after like three years you don't get a promotion, you don't get a compensation raise, whatever it is. And there's always that same answer which is like, oh, we just need a little bit more. this is not the time for you right now. Uh let's do this and let's grow this and let's finish this and then we can talk again. So let's let's go on that because HQ gives people opportunities to grow beyond the position they were originally hired for which is amazing. So first that but how how's your own role evolved and what made the company trust you with bigger projects because we sort of started at like in a similar manner and we ended up being here where we are right now. So I tell me a little bit more about that. Uh yes, you know when I look at it it's uh different. It's beyond then um the job description I received almost 3 years ago now. You know I I think you know what I concluded from I would say my my experience and what I would say is probably applicable to a lot of people here and nobody had any bigger projects. um was just to for the sake of doing it and uh it came more from I think showing up reliably on the smallest stuff first. I am someone you know close to David and I could be someone that he can rely on. I think one of my first questions I had an interview with him and um you know interviews with David are very interesting so almost three years ago and I asked him because he's told me ask me questions I was like oh my god he wants me to ask questions on the interview the CEO wants you to speak great uh so I asked him how are you going to trust me and because I think that's that's a huge part of this this whole thing I have I have his life in my I I have a lot of information. Um and that inquires to me I thought, you know, back then like I want him to trust me. I I I will do this, you know. I just how that comes to be. And then he just it seems like he just leaned in and he just gave it to me. And then he will see throughout my actions and throughout the time that we have um how reliable I am. if he had an issue with something, he would bring it up immediately and we'll talk it out. So that's how we built it. And so I approached that with everything in the company as I said with the smallest things, even the bigger projects. And I would take it as like I want to be reliable to a person who contacted me and asked me for something. I don't want them to double check. I want them I want them to know that I did it or I haven't done it or I'm in the process or that is usually my goal and how I approach a task let's say. So when you build that kind of trust the scope just naturally grows and that's actually the lesson I'd give anyone starting out or even here. Uh growth here isn't um something you wait for. I think it's earned in how you handle what's already on your plate. uh your day-to-day stuff. It's because in the industry because of our company not being so strict, not being so this is the process, this is the only way to act. You are able, there is room for you to show who you are. You either can speak to your colleague or your team lead or as I said, you know, go to the top easily uh and you know, let your voice be heard. That's that's exactly the way. Isn't it funny that both of us had sort of a similar subject in our interviews because you said that you've asked him how can you trust me and uh on my interview originally when I started I remember I had a very big issue with him because he did not trust me at all and I was like why are you not trustworthy with me like what's what's the what's the problem we're having here because I feel like you do not trust me at all and then uh fast forward to today we are where we are that's So interesting. I'm in like I'm now thinking did other people have the same sort of conversation with him as well. I've heard you know a lot of the interviews he had with people. It's I don't think those people will ever forget that. No one would. Can you imagine applying for a job? Bear in mind applying for a job and this is crazy because both you and I were telling him constantly not to do that because like he's got a lot more important things to do. But can you imagine applying for a job as like a start position, like a base position? Entry level. Yes. Entry level. And then your first interview is with the CEO of a company. Amazing. Who does that? I don't I don't know a single company where you're going to go and is going to interview you. Yes. You know, he he cares about talent. He cares cares about people. He knows people will change. People will do the change. We welcome. We can get into this but you know the AI and using it in your work for sure it's welcomed it's encouraged in our company uh it's people who will make the change you drive it you have the vision you have the passion that's that's what he cares about he wants to see it he connects to that excites him and I want him to do what excites him as well so I I did you know um let's let's call it approved it and I was like Okay. You know, go talk to people, go talk to talent, and go find people. That's such an excitement for him. And he's good at it. He's very good at it. Yeah. And now, now that you did mention that, I'm interested because you've obviously heard a lot of these conversations. You know, a lot of people in the company, what type of person genuinely thrives at HQ? And what type of person probably wouldn't enjoy working here? And I want you to be specific about stuff like tell me if you like this, this, or that, you're not going to enjoy being here. or if you like this this or that you're going to love I I I think I could say overall um if you are curious and can control your ego or low ego uh people it's people who will ask you know why does this process exist uh they will thrive here instead of maybe you know complaining about it and also they're keeping things to themselves and also people who need constant handholding to figure things out. We are you know remote company and you have to be someone who communicates clearly and follows through without st someone standing over you. M um and I want to go back to my point in the world where you know AI can do more and more of the technical repeatable work that's the go whole game now the people who thrive anywhere not just here are the ones with strong soft skills uh judgment communication ownership care um emotional intelligence someone who wants to just execute a task and disappear, who doesn't want to understand the bigger picture or work with people, that person probably won't love it here. You know, we are small enough that everyone's work actually touches everyone's else's. Mhm. Those people. Um so yes this is coming from all the interviews I've seen all the things that I've seen and you know as you know as well how we how we operate daily here and you know understand again really understanding the why and connecting to it and bringing a lot of yourself into work if you enjoy that if there are some people that I know personally that really enjoy set set of rules that they will follow for 8 hours a day and do that repeatedly and they're really happy with that and that's we're probably not the ones for you. You have to figure that thing inside yourself and we probably have a good very good recruitment uh you know process that we will find that out for you uh whether early you know early stages or interview with the CEO or within obviously first two weeks you know of you being here it does come out you have to be yourself so you you people will see it um so I think that you know comes down to to that u if it's one word I would say curiosity but just focus on soft skills we care about people here and care about talent um but again you can be someone who that's you know admirable that you can you just follow the rules and be very you know ABC and you really thrive in that and a lot of industries also welcome that. So really that's kind of the difference between who would thrive here and who wouldn't. Gotcha. Um and I want to explore something now with you and and I feel like we're going to do this together because I have my own thoughts about this as well. If someone's if someone talented, right, is watching this podcast, this video, but knows very little about cannabis, why should they consider building a career at HQ and in this industry specifically? I have my own thoughts as well, so I'm going to let you go first and then we can piggy back. Right. I would say, you know, you don't have to know anything about cannabis to start. Uh the only thing that I would say from here is like it's it's a young industry still being built. So you are definitely not walking into a set of rules that are years and years, you know, uh old and there's a a strict playbook. You can actually shape how things get done. At our company, there's enough room for you to uh kind of work direct. First of all, you're going to work directly with real US clients, real data, real money moving through systems and that's really early on right away. You're going to, you know, be in that situation. Uh you so through that you will understand the cannabis and the products and the rules and the laws. But beyond that, you don't have to know much more. uh what you need to be is sharp, reliable, good with people. Everything I've said above and the cannabis part we will teach you and you will be exposed to it every day and that's how you will learn of course something that's repeatable daily repeatable task. Uh the soft skills part that's on you and that's the part that actually decides how far you will go here or anywhere. M you know, one of the things that I feel like is extremely important that a lot of people do not understand is, you know what I hate the most? When I open up LinkedIn and I'm going through job uh posts and uh job opportunities and there's always a segment within a job opportunity or a job role, whatever it is, that says benefits. And then in the benefits they list out um great compensation. They list out days off during uh a year. Um they list gym membership or something stupid like that. And because of that, I feel like you know what? H doesn't offer any of those benefits. We don't have benefits. Let's just start there. We don't have benefits. all of the things that you sort of read there are already included in the role because that's that should not be a benefit. That should be an actual part of your job. Like you want to work somewhere where you're paid quite well. Yes. Which for us this is pretty good. Um second of all, you want to be able to take a day off, a week off, two weeks off, even like go on a sabbatical, whatever. That should be allowed. It's not a benefit. It's part it's part of your job. It's normal. Absolutely. And then uh what is the last thing that they often times say? Uh it's like an opportunity to grow. Yes. That's not that's not a benefit that should be included. And I feel like extremely important for us to understand is like if that's really the case, we do not offer any benefits. This is all standard. This is included. You're going to get all of this. So, if you're looking for benefits such as, I don't know, gym memberships or whatever, go somewhere else. But if you're looking to really want to make good money and grow and learn something new, but also show and teach other people as well, yes, come on over. Um, you will you will make a change. you know, we shaped the well, specifically as I said, we ended up, you know, being in the cannabis industry, but the way we moved and with the mindset like you can change things out. It doesn't have to be these strict rules that, you know, in a lot of industries, you still can make those changes. And now with AI, I think a lot of industries would be like, okay, you know, you can think do things differently. But in cannabis specifically, that's all you have to know that it's there is opportunity to build something. You will be You you definitely will be proud of yourself. I I you you know I want you to come out of this you know even from after the week that was like oh it was really heavy your workload was a lot but you know we did I did something and someone acknowledged that as well I I am I feel I feel proud I feel good about myself. I want to stay in environment that I'm helpful, where I'm helpful, where people notice that and tell me that. And this is not that I'm not, you know, talking not talking about money. Of course, I am. And we are remote company, so you know, there you go. You don't have to really go to work. You don't have to, you know, stand in the rain at 7:00 a.m. waiting for the bus. Cool. Yeah, it's a benefit. Um, it's part of it a part of our job. And sorry, let me cut you off very quickly. And the two people that probably use this benefit the most are you and me. Like how many times did it have like what we're working where are you? I'm at the cafe. Filip, where are you? I'm on the beach. Where are you? I'm It's literally we're This is like we do not and this is another thing that is extremely important for people is like because there's a lot of parents out there that are tending to their kids and need a job that they're not required to go to work. And it's like but obviously we use a different way. Um we do not we don't we do not invite people to come over and work from an office like we it's like fully remote work and you have to be ready to take responsibility for that and be disciplined but also you can leverage it like you can work if you feel like you can work from I don't know a basement yard or or if you want to go to a park sure go for it as long as it's you know it's not influencing your work. Yeah, we don't, you know, bother with that. It's a really small detail because we just need you. Just be sharp, come focused, present, curious. We just need you and however you can give that to us, that's it. That's true. Cuz that's what I liked about, you know, being here again, authenticity, you know, right? Just comes back to that comes back to people. Uh so there's not just one way of um of having a company or you know having a successful company. There's just not one way. Uh I can understand that there are a couple of things that we can say across the board would be helpful that every company has and follows. Uh, as I said, some people really like the rules and really really want to, you know, have that all and read them and then act that way. I get it works for some. This is just another way that also works. If you have a just a different mindset of you lived differently, you did something in your life that was out of ordinary, out of, you know, not everyone in your family did something, not everyone, you know, your friends did did it that way. Um, you will like it, you know, cuz you already had that foundation. you you think differently and you're not afraid to show that express that that's definitely some this is definitely something that will like work well for you makes sense and that's you know what I have to do I have to tell you like David gave me an audible uh so a book to to listen to that is just amazing that's like that's kind of part of my work right part of my work it's amazing and but this is where he goes to and I am so grateful when I read it. I finished it. I'm like I'm so inspired. Right. It's what's the book? What are you The Gatekeepers? So, it's about the chief of staff in every uh presidency since like 1970. It's amazing. It's amazing. He sees me in that way which you know love. And uh I was able to learn so much and you know how they did things cuz I'm just so obsessed like how do you do the process within the White House? How does the president know what he focuses on every day? It's from people around him. It's from literally chief of staff. I'm so impressed. Like the but you see David's brain to connect this and and me. I love it. I It's so It's different. It's not a typical company in a way that you know as I said really bland rules. No, you really, you know, this job will affect you. It will probably some of the things that I've learned I, you know, I applied into my private life. I've discussed this with some couple of people in the company. This is true for a lot of people and especially if you work closely with him. You know, I would say he did uh he's a driving force. he did, you know, start this and he will not tell you like he did it alone. Like obviously he did it with people who are here for a really long time and he respects them and I understand that but it's he is the driving force. He sets that tone and then we just kind of get into that passion and to that energy and we just kind of push it along, you know. So that's how I usually see it. It's I really like it here. I enjoy it. Um, you know, if you get to come, you're going to work with us. Here's Filip. Here's me. No, just kidding. But, you know, people like this are here usually and you will, you know, get to see us, get to work with us. You will find some en enjoyment doing your daily tasks, which I understand can be, you know, rough sometimes. Uh, but you'll find a reason, you know, why why to show up. So, no, it makes sense completely. and uh having your CEO give you uh an audible to as a part of your task about uh chiefs of staff of the White House is everything. Uh Vedrana, where can people find you in Belgrade? Uh now, so I I walk all the time. You guys will see me. I probably walk like I don't know for how like every day about like 10 kilometers minimum. No. um either at a cafe or you know having matcha and now seriously yeah you can you know Instagram is probably you know something that I use obviously for fun. Uh I do TikTok as well you know because I love I'm a foodie so I love to film that. Um my Instagram name is very embarrassing. It's oh Angel Cake because you know years ago I just wanted to post food on there and then I you know I did post myself a bit so just to change it. Uh and yeah but you know within the company um I'll be one of the people that you will you know probably get early contact. Yes. I mean and you know when you come in you know when you join uh you know you'll get to see me in your first onboarding week. I did you know I was part of the process and created a couple of courses that will help you learn about HQ and um you will you know it'll get you going. you you don't have to ask people for things for small things you will get it explained you will feel more comfortable I understand you're coming into a new environment so we'll make it easy for you as as easy as possible um so you'll get to see me then for sure you know first week come join us and uh Filip you will know about Filip you see Filip everywhere and watching the uh podcast H's podcast the shift is a mandatory thing that you need to do while onboarding and while working here otherwise Glad you said that. I'm glad you said that. So, those are, you know, a couple of rules in the company. That's one of them. Go watch our podcast and learn something, you know. Yeah. You get to feel the energy of people working here, you know. So, I'm really excited to post more like on our Instagram, like to really post more about us. Uh we'll get to hang out soon. Um a couple of us. So, you know, uh we'll keep you posted on what we do. You'll be aware of where we're headed and what we're doing. So, yeah, we should do vlogs. Oh, yeah, definitely. Uh, thank you so very much. This was amazing. And, uh, honestly, it's so weird that we didn't do this before, but I mean, it's like we've, you know, we've know each other so well and so close that it's like this, you know, um, probably never came to our minds. Anyhow, thank you again once more for being part of this this shift. Uh, and I will see you on the shift. You see what I did there? Let's see where they Oh, wow. It's brilliant. You know, this is what HQ does to you. --- # The Shift, Ep 20: Nobody's the Villain: Cannabis' AR Crisis URL: https://www.tryheadquarters.com/podcast/ep20 Guest: Filip Gacic Summary: Retailers, brands & distributors are all stuck financing each other's cash flow. No villains - just a broken AR system. Here's why. Transcript (auto-generated, lightly edited): Today we're doing something a little bit different because New York just made accounts receivable a much bigger part of the cannabis conversation. And depending on where you sit in the supply chain, you might have a very different opinion about what's happening. Here's a situation. Cannabis retailers in New York can purchase inventory from Suppliers on credit, but generally they have 30 days from delivery to pay. If that payment becomes delinquent, the retailer can be reported and placed on New York's cash on delivery or COD list. And once you're on that list, suppliers aren't supposed to continue extending you credit. You can still buy Cannabis, but you're paying cash on delivery, COD. Now, New York has moved that delinquency tracking into Metrc, connecting invoices, payment terms, cannabis transfers, and COD status much more closely inside the state's tracking infrastructure. And this isn't some tiny Hypothetical problem. Right now, 87 New York cannabis retailers are reportedly on that COD list, owing suppliers approximately $3.9 million. So today I don't just want to explain the regulation. I want to look at these From three completely different sides different perspectives. The retailer who needs inventory to keep the store running. The brand delivered product and wants to get paid and the distributor sitting in the middle trying to manage both. Because I used to work in accounts receivable and from my perspective this Is where the conversation gets really interesting. Everybody agrees suppliers should get paid. But what happens when an unpaid invoice doesn't just trigger a collections call? It potentially changes how you're allowed to buy inventory across the entire regulated market. Let's talk about it. Now, let's look at this from the retailer's perspective because from the outside, this seems incredibly simple. You bought the product, you had 30 days to pay for it, you didn't pay, so now you lose access to credit. Fair enough, right? But running a dispensary isn't always that simple. Imagine you're a retailer and You've got $50,000 worth of invoices coming due this month. At the same time, you're paying payroll, rent, taxes, security, insurance, and every other expense that comes with it operating a licensed cannabis store. Meanwhile, some of the inventory you bought on net30 hasn't even sold yet. Your Suppliers want their money understandably, but some of your cash is still sitting on the shelf in the form of inventory. And now imagine you fall behind with one supplier and that delinquency puts you on the COD list. Suddenly another supplier that you have been paying can't continue giving you Normal credit terms. You need new inventory, but now you need cash up front to get it. So, the retailer has a cash flow problem and the consequences of that cash flow problem is potentially creating an even bigger cash flow problem. And there's another issue. What if the invoice itself is disputed? Maybe There's a credit that hasn't been applied. Maybe the quantities don't match. Maybe a payment was sent but hasn't been reconciled properly. Maybe there's a legitimate disagreement between the retailer and the supplier. That's why retailers need a meaningful dispute process because being placed on COD can affect relationships beyond the original invoice. And this is where I Think the retailers argument becomes legitimate. Nobody's saying retailers shouldn't pay their bills. They absolutely should. The question is whether every unpaid invoice represents the same level of credit risk. There's a difference between a retailer intentionally avoiding payment, a retailer experiencing temporary cash Flow problems, and a retailer legitimately disputing what they owe. The regulation needs to protect suppliers from retailers who continuously take inventory they cannot pay. But it also needs to make sure that a legitimate accounting dispute doesn't necessarily disrupt a retailer's entire ability to purchase inventory on terms. Because once credit problems start affecting inventory, the inventory affects sales. Sales affect cash flow, and cash flow affects the retailer's ability to pay the invoices that created the problem in the first place. So, from the retailer's perspective, the question isn't really whether suppliers deserve To get paid. Of course, they do. The question is, how do you create consequences for genuine non-payment without turning a temporary or disputed AR problem into a much bigger operational problem? Now, let's move to the other side of that invoice, the brand. Because everything we just said About retailer cash flow can be completely legitimate, but if I'm in the brand, I have a very simple response. Why am I financing your business? Think about what happens before that product ever reaches the dispensary shelf. The brand has already paid to cultivate or manufacture it. They've paid Employees, packaging, testing, compliance, transportation, taxes, and depending on the businesses potentially a long list of other expenses as well. Then the product gets delivered to the retailer and instead of receiving payment immediately, the brand Effectively says, "We'll give you the product today and you can pay us later." That's credit. And in New York, we're generally talking about 30-day net terms. So, from the brand's perspective, net30 isn't a suggestion. It's part of the commercial agreement. Now, imagine Day 30 comes and there's no payment. Day 40, nothing. Day 60, nothing. Meanwhile, the retailer may have already sold some or even all of that inventory. The consumer paid the retailer, but the Company that actually supplied the product still hasn't been paid. And that is where the brand's frustration becomes very easy to understand because a retailer's cash flow problem doesn't eliminate the brand's cash flow problem. It transfers it. The brand still has payroll. The brand still has taxes. Uh The brand still needs to manufacture the next batch. And now its working capital is sitting inside somebody else's accounts receivable. This can be especially brutal for smaller brands. A large company might be able to absorb an invoice being 30, 60, or 90 days late. a small operator might Have that invoice represent next week's payroll, the next production run, or whether they can continue operating at all. So, when a retailer says putting me on COD could hurt my business, the brand can reasonably respond, not getting paid is already hurting mine. And that's really the argument for having a COD system in the first place. If a retailer isn't paying one supplier, why should they be able to continue receiving inventory on credit from everybody else, potentially accumulating even more debt at some point? Somebody has to stop the cycle. Now, does that Mean every unpaid invoice should immediately destroy a retailer's access to credit? No. Legitimate disputes happen, credits get missed, payments get misapplied, accounting mistakes happen on both sides. There absolutely needs to be a mechanism for resolving those situations. But once we've established That the invoice is legitimate, the product was delivered, the payment is actually due, and the retailer simply hasn't paid, the brand's position becomes pretty difficult to argue against. How long should a supplier be expected to wait? Because credit is supposed to give a retailer time to sell Inventory and manage cash flow. It's not supposed to turn the supplier into the retailer's bank. And I think that's the strongest argument from the brand side. New York's COD system isn't necessarily about punishing retailers from the supplier's perspective. It's about preventing one company's cash flow Problem from continuously being financed by everybody upstream. So, if the retailer's question is, "How do we make sure our temporary problem doesn't destroy my ability to operate?" The brand's question is equally important. How long should I be required to finance someone else's problem before I'm Allowed to protect my own business? And then we have the distributor. And honestly, this might be the most complicated position of all three because the distributor is often sitting directly between the retailer and the brand. the retailer says, "I need inventory. Give me a little more time." The brand says, "You delivered my product. Where is my money?" and the distributor is sitting in the middle thinking, I have to somehow keep both of you happy because distribution isn't just moving boxes from point A to point B. There's an entire financial operation happening behind those deliveries, Invoices, payment terms, collections, credits, disputes, cash flow, and now increasingly COD compliance. Let's say a retailer is approaching the end of their payment terms. They're a good customer. They order consistently. Maybe they have historically paid, but This month they're struggling. From a relationship perspective, the distributor might want to give them some flexibility. Maybe another week solves the problem. Maybe there's a payment coming. Maybe keeping that retailer stocked ultimately helps everybody. But from the brand's Perspective, every additional week means their money is still outstanding. And from the regulatory perspective, there are rules around when delinquency has to be reported. So suddenly what used to be a commercial judgment becomes much more complicated Because the distributor isn't only asking will this customer eventually pay me. They also have to ask what are we required to do? And that's where the Metrc integration becomes especially important. payment terms, invoice information, delinquency status, and the Movement of regulated cannabis are becoming much more connected. If a retailer is already on the COD list, you don't simply make a sales decision to extend them another 30 days because they're a valuable customer. Their credit status matters. And imagine what That does internally. Sales wants the order. The retailer needs the inventory. The brand wants to keep its shelf space. AR sees overdue invoices. Compliance sees COD restrictions and distribution has to somehow make all of Those realities work together. Then add disputes. A retailer says we already paid this. Accounting says they can't find the payment. The brand says the balance is still outstanding. Maybe there's a credit that hasn't been applied yet. Maybe there's a short shipment. maybe somebody entered Something incorrectly. And now resolving that issue isn't just about cleaning up an aging report. It can potentially affect whether that retailer is able to continue purchasing on credit. So accuracy becomes incredibly important because reporting someone who genuinely hasn't paid is one thing. reporting Someone because your own accounting isn't reconciled properly is something completely different. And I think that's the distributor's biggest challenge with this entire system. They have to be aggressive enough to protect the brands and collect the money They're owed, flexible enough to maintain valuable retailer relationships, accurate enough not to create unnecessary disputes, and disciplined enough to follow the regulatory requirements all at the same time. And that's why I don't think this is a Simple collection story. It's a communication story. Sales needs to know what AR knows. AR needs accurate accounting information. Accounting needs to understand what's happening with credits and payments. Compliance needs To know when a regulatory action is required. And everybody needs to be looking at the same retailer information because once credit status becomes connected to compliance, a bad handoff between departments can become a much bigger problem than an overdue invoice. So the retailer is asking, "How do I Keep operating?" The brand is asking, "Where am I getting paid?" And the distributor is stuck answering perhaps the hardest question of all. How do I protect both relationships while still following the rules? So, after looking at all three sides, I don't think There's a villain in this story. Retailers need enough flexibility to actually operate. Brands deserve to get paid for the products they've already delivered, and distributors are stuck trying to protect both relationships while staying compliant. But, I think New York's new system makes one thing very clear. Accounts receivable can no Longer be an afterthought because once a payment behavior becomes connected to COD status and compliance, an overdue invoice isn't just an accounting problem anymore. It can affect inventory relationships, cash flow, and potentially the entire supply chain. And maybe that's ultimately the point of This system, not to punish retailers and not to give suppliers unlimited power, but to create accountability on every side. Retailers need to pay what they legitimately owe. Suppliers need to report accurately and resolve disputes quickly. And distributors need systems that make sure everybody is Working with the same information. Because in a market this interconnected, one company's accounts receivable is another company's accounts payable. And if either side stops working, eventually the whole supply chain feels it. --- # The Shift, Ep 21: AI Is Changing Work. Here's How to Become More Valuable. URL: https://www.tryheadquarters.com/podcast/ep21 Guest: Filip Gacic Summary: AI won't replace you - but it will change what makes you valuable. Hear how to build a career around curiosity, initiative, and business skill. Transcript (auto-generated, lightly edited): Would you believe me if I told you that I work for an American company from Serbia? Completely remotely for a pretty competitive salary in an industry that when I first entered it, I knew almost nothing about. And maybe the most important part, I'm actively encouraged to do more of the things I'm good at. This podcast you're watching right now, it's part of my job. Talking to CEOs, founders, executives, people across the American cannabis industry is part of my job. coming up with ideas, challenging things, trying something new, sometimes getting it wrong, and figuring out how to do it better. That's part of my job, too. And I don't live in New York. I don't live in Los Angeles. I don't even live in Belgrade. I live in Požega, a small town in Serbia. And somehow from here, I built a career inside the American cannabis industry. Now, I'm not telling you this to sell you some ridiculous work from your laptop and make millions story. We have enough of those on Instagram already. I'm telling you because I think there's something very interesting happening in the world of work right now. On one side, we're constantly being told that AI is coming for our jobs. Every week there's another headline, another company automating something, another tool that can write, analyze, design, research, organize, answer customers, process data, things that people used to be paid to do. And understandably, people are nervous, especially young people, because imagine being 20 years old right now. You're choosing what to study, what skills to learn, what career to build, while somebody is simultaneously telling you that technology that barely existed a few years ago might be doing parts of your future job 5 years from now. So, what's the safe career? What you should learn? What job can't AI replace? And here's where I think we're asking the wrong question because I don't think the most interesting question is will AI replace people? Of course, it's going to replace certain tasks. It's probably going to change certain jobs completely. And yes, some jobs will disappear. That's what technology has always done. But there's another side of this conversation that we don't talk about nearly enough. What happens to the value of genuinely talented people? Because where I'm sitting, they're becoming more valuable. Think about it. If a company used to need 10 people to perform a certain amount of work and AI, automation, and better technology mean that five exceptional people can now accomplish the same thing. Suddenly, the question isn't just how many people do we need. The much more important question becomes, who are the people we absolutely want on that team? And that changes everything because simply being present isn't enough anymore. Doing exactly what somebody tells you to do isn't enough. Knowing how to complete the same repetitive task every day isn't enough. And I don't think having ChatGPT open in another tab suddenly makes you future proof either. What becomes valuable is the person who asks questions. The person who learns incredibly quickly. The person who sees something that doesn't make sense and says, "Why are we doing it like this? The person who brings an idea nobody asked them for. The person who understands the business beyond their job description. The person who makes a mistake learns from it and becomes better because of it. Someone who can communicate. Someone you know can trust. Someone who genuinely cares about what they're building. Because you can automate a spreadsheet, you can automate an email. You can automate reports. You can automate enormous parts of administrative work. But somebody still has to look at the business and ask, "What should we do next?" And here's the interesting part. At HQ, we love automation. We use it constantly. We use AI. We've built technology specifically because we don't want talented people spending eight hours doing something a computer could do in eight minutes. And still one of our main focuses as a company is finding talented people. Not simply filling positions, finding talent, curious people, ambitious people. People who just don't want a salary deposited into their account every month, but actually want to become excellent at what they're doing. Because when we find those people, we don't want to replace them with AI. We want to give them AI. We want to automate the repetitive parts of their work and see what they're capable of doing with everything else. And that is what I want this episode to be about. Not why you should be afraid of artificial intelligence, not why everybody should suddenly quit their job and work in cannabis, but what it actually means to be valuable in this new economy. what companies like ours are looking for and why. If you're sitting somewhere in Serbia right now, ambitious, curious, maybe feeling like you're capable of more than what you're currently doing, there is an entire international industry that you probably haven't even considered, and that's cannabis. And no, you don't need to know how to grow cannabis. You don't even need to know much about cannabis because behind every cannabis company you've ever heard of there are accountants, salespeople, data analysts, marketing teams, developers, operations people, customer service teams, finance professionals, managers, strategists, and thousands of other people who've never touched the plant like me. That's the side of the cannabis industry I want to show you today. And more importantly, I want to talk about what kind of person this industry is looking for. Because if AI really is changing the work, the value of work that is, maybe the goal shouldn't be finding a job AI can never touch. Maybe the goal is becoming the kind of person a company would be crazy to lose. So why cannabis? Because here's something I learned very quickly when I entered this industry. Cannabis is still being built. This isn't banking. This isn't an industry where every process has existed for 50 years. Every department has a 200-page manual and your job is simply to follow it. Regulations change. Markets open. Companies grow incredibly quickly. New problems appear constantly. And that can be chaotic. But for the right person, it's also incredibly exciting because you actually have an opportunity to influence how things are done. And I think that's something a lot of talented people are missing in traditional corporate environments. A friend recently told me something that perfectly illustrates this. He works for a large corporation and they aren't allowed to use Canva. The explanation is security and obviously companies should take data security seriously. But from the way he described the situation, this wasn't somebody carefully evaluating Canva and determining there was a specific security risk. It sounded much more like something we've probably all experienced in large organizations. It's easier to say no because saying yes means somebody has to take responsibility, somebody has to evaluate the idea, somebody has to potentially change a process. And sometimes saying no is simply what management is expected to do. That environment can be incredibly frustrating for somebody who's curious because eventually you stop bringing ideas. You stop asking why. You learn the system and you stay inside it. Cannabis often feels completely different. It's an industry where sometimes the system doesn't exist yet. So, somebody has to build it. And that's exactly where talented people become interesting. Maybe you're 25 years old and you notice a process that makes absolutely no sense. In the right company, you don't necessarily need 10 years of seniority before you're allowed to say something. You can say, "I think I can make this better." And if you can actually prove it, suddenly you're not just doing your job anymore. You're creating value. That's also why I think cannabis can be such an interesting industry for ambitious people in Serbia. You get exposure to American companies, international businesses, technology, finance, sales, marketing, operations, and an industry that's still figuring out what it's going to look like. And at HQ specifically, that's the kind of environment we want to create. We don't want talented people waiting for permission to think. We want people who bring ideas, people who challenge processes respectfully, people who see something inefficient and ask, "Why are we still doing it this way?" Because if part one was about becoming the kind of person a company doesn't want to lose, this part is actually important. You also need to find a company that actually gives you room to become that person. When I joined the industry, I knew almost nothing about cannabis. And I think that's important to say. I wasn't somebody who had spent 10 years studying this market. I didn't come in knowing every regulation, every company, every product or how the industry was supposed to operate. What I did understand was business. And because I didn't know how things were supposed to be done, I started asking questions. Why are we doing this manually? Why does this process take this long? Why is this information sitting over here when the person who needs it is over there? Why don't we measure this? Why don't we automate that? And something happened that I think ultimately shaped my entire career at HQ. Instead of being told to stop asking questions, I was encouraged to ask more of them because this is a young industry. There are flaws. There are inefficient processes. There are systems that were built quickly because companies were growing quickly. And that's not necessarily a weakness. That's an opportunity because every time you identify one of those flaws and actually figure out how to fix it, the company gets better. Do that enough times and that's how you start becoming a leader in an industry that's still figuring itself out. And this industry is much bigger than people in Serbia probably realize. The legal cannabis industry in the United States alone currently supports around 412,500 jobs in 2025. Legal cannabis retail sales were approximately $29 billion. And here's another number I find fascinating. New York alone added more than 16,000 cannabis jobs in the latest reporting period. So when I say cannabis industry, don't picture one guy standing behind a dispensary counter. Picture an industry worth tens of billions of dollars with hundreds of thousands of people working across finance, technology, sales, data compliance, operations, marketing, accounting, logistics, and management. And many of those skills aren't cannabis skills. They're business skills. That's exactly how somebody like me could enter this world knowing almost nothing about cannabis and eventually find my place in it. So, if you're considering an industry like this, I wouldn't ask myself, do I know enough about cannabis? I'd ask, what am I exceptionally good at? And what could an industry that's still being built do with someone like me? --- # The Shift, Ep 22: Why Cannabis Brands Need Better Stories URL: https://www.tryheadquarters.com/podcast/ep22 Guest: Kyle Rosner Summary: Kyle Rosner of High Times joins The Shift to explore how authentic stories and strong communities help cannabis brands build lasting connections. Transcript (auto-generated, lightly edited): So today on the shift, I'm joined by Kyle Rosner. Kyle's career in cannabis has taken him through almost every side of how this industry tells its story. He originally entered the space through film making and video production, including an early chapter with High Times. He later helped build 420 Interactive, working directly with cannabis companies on media, branding, strategy, and how they connect with consumers. And today, his career has brought him full circle. He's back at High Times, this time as a director of partnerships, helping shape what's next for one of the most recognizable names in cannabis culture. So, I wanted to talk to Kyle about what he's learned from seeing the industry from so many different angles, how cannabis media and branding have changed, what high times means in a very different cannabis industry than the one he originally entered, and what almost a decade in this space has taught him about the business behind the culture. So, Kyle, welcome to the shift. And how did I do there? Thank you, Filip. Very well researched. You You nailed it on the head there. Okay. I love that. Um, so this is obviously, you know, you're pretty much everywhere. You have a lot of experience. So, I'm pretty confident we're going to um have a lot of fun today. Uh, especially with the knowledge that you can share, uh, with the audience. So, right off the bat when when I sort of got this up for for the podcast, um, immediately what I thought was that your relationship with High Times is interesting because this isn't your first chapter there and you originally came in through video production. That experience ultimately helped lead to 420 Interactive and years later you've come back as a director of partnerships. When you look at High Times now versus the company you first walked into around 2018, let's say, what has actually changed both inside the company and in what High Times needs to be for the cannabis industry today? Absolute legal disclaimer. This is a separate entity than the previous uh iteration of high times. Um you know as a filmmaker storytelling has always been part of my DNA. You know that's why I obviously you know loved cannabis and really wanted to bring my skill set video media production to the cannabis industry. So you know I was I just graduated from college. I was randomly applying to jobs online, looking in the legal cannabis space and saw somebody looking for a video editor. Um, that's how I wound up meeting my now two business partners at 420 Interactive. They had rang me up and said, "Yo, we're over here at the High Times office." The previous owners of High Times were in the middle of a public fund raise looking to use the Regulation A uh strategy to raise public funding and help grow the company. You know, really good intentions definitely to start there. High Times is just one of those iconic brands and you know I snuck see some High Times in my dad's closet growing up. It's just instantly recognizable to people outside of cannabis. You know, you don't have to be a cannabis expert to recognize High Times. It's been around since 1974. It's penetrated the cultural ethos of of you know the globe. So super recognizable name. It got me frothing at the mouth. This is you know exactly what I've been looking for. They liked my video editing work and flew me out to the LA office where, you know, I was spearheading, you know, since, again, the company had just been acquired by the previous owner. So, the teams were still in flux and they were looking for somebody to definitely spearhead video production. So, I was there working with my partners at 420 Interactive um spearheading the regulation a fund raise, made a lot of cool fun videos for that. learned all the strategies of public fundraising, uh, email marketing, SEO, media buying, all you know, really a crash course on all the things while there for my six month, you know, 9 month stint at the, you know, old iteration of high times. Got it. And so when you look at it from from from your perspective right now, what would you consider being like the biggest change that happened? What would you like cultural ethos? You know, was owned by previous more VC oriented people, let's call it. So they were looking at this as more of a traditional business model versus the culturalformational icon that it was. You know, media companies in this day and age are tough unless you're, you know, David Ellison, you know, with multi-billion dollar backing. It's hard going out there and pitching businesses to advertise with you and and, you know, showing value where you can while also trying to pay the bills and keep your lights on. So, being acquired by Josh Kesselman and the RAW team brings, you know, a real business behind the media company. you know, he treats this definitely as a cultural icon first and is just happy that it's been revived and, you know, injecting some more outside of the box ideas and a whole new team energy behind this this new iteration and bringing it back to its roots again of, you know, journalistic integrity, telling Gonzo journalistic stories and popping up in cool ways, you know, outside of of the traditional cannabis business, you know, arenas. Got it. So pretty much it's like a full perspective that has changed. Absolutely. Got it. Okay, that makes sense. And now it like when we switched to because this is also very important. 420 Interactive. So when you and your partners built 420 Interactive, you weren't looking at cannabis from the perspective of one brand. You were getting exposure. We wanted to work with with all brands. You know, our again our crash course uh at High Times kind of brought us together and gave us the idea like, hey, you know, we can execute this for other people and bring, you know, a valuable skill set that a lot of these cannabis operators are missing out on. You know, storytelling and having that marketing fundraising engine as as part of your team, which you need. you know, you could be the best cannabis cultivator in the world, but if you don't know how to market yourself and storytell and, you know, get your business flowing in the right ways, then you're not going to get anywhere, you know. So, so would you say that building cultural relevance while, you know, is extremely relevant as itself? Absolutely. Again, storytelling, no matter what business you run these days, storytelling needs to be part of of the structure of the company, right? Whether you're in trucking or you know canning you know people are hungry for for stories and video content these days and you know media just needs to be part of your business ecosystem or that's the that's the world we live in. Everyone's content addicted and they're hungry for you know informational avenues. That's that's actually very uh important that what you mentioned there because something I noticed looking through your career generally is that you seem to have moved increasingly towards people and stories and you started as a filmmaker went heavily into digital strategy and brand building with 420 interactive and now a lot of your high times work you know profiles the actual people and culture behind cannabis. it. What what I want to know here is was that a deliberate shift or did working in this industry eventually convince you that the human story is more powerful than the marketing strategy? Um, you know, just seeing all the different characters and again business outlets, you know, again working at 420 Interactive as an incubator accelerator, you know, we we really worked with a lot of startups and, you know, some big established brands in the cannabis space, but seeing the spectrum of, you know, people who are solopreneurs to a big corporate machine and how they function and again the the the weave that penetrates them all is is storytelling and, you know, personal stories and being able to commun communicate that to keep a customer, you know, retention in, right? A customer and building a community is what's key to a successful business. There needs to be a reason people keep coming back. That's why Josh at RAW so successful in my opinion. He puts himself out there publicly. He's truly the face of his brand and people resonate with that. You know, there's lines out the door to meet him at every convention that that he pops up at. You know, you don't see that for a lot of other companies and brands. people still don't know who the CEO of some of these other cannabis conglomerates are and so you know why why should they be invested in your company if they don't even know who who's there? Yeah. Do you feel like it's it's when when speaking about that, do you feel like there is a relevance and importance towards that personality sort of and I'm using probably a word that might sound crazy, but like a personality cult when it comes to people representing their own companies or do you feel like it's, you know, it it's a good addition, not extremely relevant, or do you feel like it should go that way? It's, you know, again, people really push, you know, everyone's a LinkedIn influencer these days. I just feel like for job security, you need to kind of have that personal branding these days and kind of build your own community that that follows you wherever you go cuz, you know, people are job hopping a lot these days. You know, they don't know where the next mission is going to be or who they're going to be with. So, hence the key on on the education around building a personal brand and you being, you know, your own product and and you know, being part of the market that way. So, you know, there's layers. There's some people who want to remain behind the scenes. Hey, I've got a successful business here and you know our systems are working and I don't need to put my face out there, you know. Gotcha. Okay. And so also switching back now a little bit to High Times as well is so you've described joining High Times the first time as giving you a front row seat to the culture and the people behind cannabis. Now, you're responsible for partnerships at a brand that helped define that culture before legal cannabis even existed. How do you and and I want you to give me like your sort of uh thought trail here as well. How do you personally decide which partnerships move high times forward without turning uh counterculture institution into just another corporate cannabis media brand? Absolutely. And I mean cannabis has kind of penetrated the mainstream these days in my opinion and that's why we need to be doing more outside the box things that are not your traditional cannabis community events. For example, we just did an amazing high times partnership, the submersion festival here in South Jersey. It's an EDM music festival. This was their biggest year yet. You know, you I'm sure you look like you enjoy music festivals. Might have been to a few. You know, Bonaroo, Coachella, all these type of things. Alcohol is everywhere, but these people are bringing in a variety of substances and plant medicines, cannabis being, you know, one of them. So, I don't understand why these companies don't, you know, cannabis is mainstream now. These are giant multi-state corporations that out operate, you know, just like some of these alcohol businesses. So, why wouldn't they be included in the conversation as part of these mainstream music events? So, what we did at the high times hub is I part was able to reach out and negotiate a partnership with submersion festival. again, one of the uh south, you know, northeast's biggest EDM music fests. They had about 4,000 people there. And we built out the High Times hub and I partnered with six local New Jersey brands and a dispensary partner to be able to sample out cannabis, have a huge cannabis presence at this fest. You know, honestly, there was only one little alcohol booth there, which you don't normally see, you know, a lot of festival goers. and the population in general I feel is moving away from alcohol and and cannabis is going to be that replacement for them. So was a cool mainstream way for these brands to interact directly with consumers, local buyers who would who would obviously become loyal to them and you know what better way than under the High Times storytelling umbrella. So I'll be producing a documentary about our time there as well that'll live on the High Times YouTube channel. Again, I've been finding when I talk to, you know, a lot of these media brands as the dire director of partnership, you know, these cannabis brands, they get excited when I'm pitching video content. Sure, you know, some of the traditional digital media things like running meta ads or, hey, I want to hit your email list or do sponsored articles and cool and all, but that's not moving the needle these days versus, you know, video production and having, you know, a permanent presence on the High Times YouTube channel, for example. there's a case study you could show off over and over that grows year after year, more people discovering the story you wanted to tell or the experience you were part of. Tell me about the documentary uh that you just mentioned. Uh what can you share about that one? Uh, you know, I just wanted to kind of recap our our our time at Submersion, what it meant for the brands to be there, why, you know, music festivals are involved are evolving to feature cannabis, why alcohol is down, and kind of tell that story. I've recently produced a number of other documentaries and shows as part of the relaunched high times. One of them being a documentary about the Woodstock cannabis brand and the cultural impact of the famous Woodstock music festival and now how again that has rebranded and relaunched itself as part of the cannabis conversation. Another show we recently produced that was super successful again bridging the cultural gap between cannabis and mainstream. Uh as high times we produced a show for the World Cup that came to the US called kicking back. We had our host Ethan Zohn. He visited uh a handful of cities around the US who were hosting the World Cup game, meeting the fans. He's an ex-professional soccer player, playing some pickup soccer games, um and you know, exploring the local cannabis scene as part of the World Cup. You know, all these all these Europeans visiting the US for the first time. And you know, they could buy from legal dispensaries. It was weird for a lot of them. So, you know, again, telling cool stories, weaving in brands in an organic way as part of that. and you know having a a cultural piece there that lives forever. Yeah, that um that is absolutely an interesting thing to keep an eye on. But um let me really quickly go back to the documentary about alcohol and cannabis. And this is a very interesting subject to me because I've recently done an episode on that as well where I I believe and I please um I might be mistaken about the actual numbers. I feel like there is roughly around 40% forecast of alcohol usage decrease in the upcoming generations and I wanted to ask you what do you feel like without spoiling the the documentary obviously but what do you feel like is the reason for that? You know, I think the younger generation is just more wellness conscious, let's call it. A lot more information out there about what we're putting in our bodies and how substances make it make make us act. You know, cannab, you know, alcohol, I feel, has lost that that millennial and younger generation right now. And and cannabis is that replacement. You know, you're not hung over the next day. You're feeling good about yourself. You're getting into a vibe. And I just think people, more and more people are realizing who didn't grow up with alcohol advertisements, you know, in their face like uh some of these older generations are, you know, not even aware of it. Yeah, I agree. I feel like that's probably the reason especially when it comes to the availability of information that maybe um previous generations can really grab easily and uh process quickly when in fact today we have AI, we have um the search engines and all the other stuff and it sort of gives you a better um better base for you know conclusions. Um so one last question that I have for you which is specifically um talking about that you spent close to a decade moving between film making agency work cannabis brands and high times and you've seen the industry during both the enormous optimism of the late 2010s and the much harder reality that followed. What do you understand about cannabis as a business today that the Kyle who first walked into high times would have completely misunderstood? Um, you know, fundraising is always super important, but you got to be lean and mean, you know, to survive long term and have systems in place. I think in 2018, everybody was super excited. California just went recreational. a lot of VC and you know private money was flowing in and these guys thought you know the the funding would would never end, right? They were blowing money on giant parties and and uh you know some of these giant trade shows and you know not really putting the right people and systems in place to truly be build you know something for the long term. Um, so not to say there aren't still people who are enthusiastic or excited. You know, I think cannabis is is the perfect opportunity to bring back small business in America. You know, we really need to let these mom and pop dispensaries thrive and and, you know, give people the opportunity to create a living for themselves, which is what cannabis should should always be about. Um, something, you know, again, you know, I was very naive, I feel, coming into the cannabis industry. At the end of the day, you know, again, some of these guys who say their legacy were potentially nefarious characters, right? You know, they were there a lot of lot of drug dealers who who, you know, which is what this was. You had to be a risk taker to want to be involved in cannabis. So, you know, there's always uh walking a fine line seeing who's real, who's claiming to be real, and and you know, who's built. That's why I think building publicly is so important. So, you know, you can show who you are and what you've accomplished and and show you're a real person. Got it. Do you feel like there is a little bit of um um you know, missing that cannabis spirit from what it was before to what it is right now or do you feel like it's sort of going towards a right direction? No, it's going towards a right right direction. A lot of those people again who maybe were nefarious actors have now fallen out of the industry or people have gotten wise and there's still a lot of enthusiasm as new states come online like Virginia you know and even New Jersey and New York where I'm based. Um lot of excitement. They're excited to have it here. A lot of cultural movement happening. Um you know again one of the most surprising things I learned during our Kicking Back documentary. Who would have thought Missouri and Kansas City is one of the largest cannabis markets in in the country? Um, so you know, it's super cool to explore kind of states you wouldn't think would be, you know, cannabis popular and seeing a thriving cultural community there. Uh, [clears throat] you know, a bunch of small business owners all trying to make it and do it and have fun together. Yeah. No, 100%. Okay, Kyle, thank you so much. Really do appreciate what you've shared with us today. This is really really important stuff and um obviously coming from someone who's who's got such an experience is extremely helpful for whoever is going to be watching this episode. Um very quick, where can people find you? Tell me your socials. What are your plans on future events? Sure. Yeah. And you know, my name is Kyle Rosner. You can find me on LinkedIn. I'm GoodKyleSmokes on Instagram. You can get more of my uh let's call it cannabis cultural side there. check out some of our submersion footage. You'll see my face popping up on the High Times channels. You know, again, check out the YouTube and and stuff like that at High Times. Um, and you know, before we go, I want to just say thank you to Headquarters. Your CEO has been an amazing mentor uh towards me. Met him at my first iteration at High Times in 2018, you know, and 420 Interactive has worked closely with headquarters over the years. I can't vouch enough for the systems that you help companies build and integrate yourself into. and, you know, being a key resource if you want to be a successful cannabis business. Thank you, Kyle. I really do appreciate that. And what about events? We we're missing that one. Uh, next event, we've got the Massachusetts Cannabis Cup coming up with High Times. If you're a Massachusetts based cannabis company, you know, hit me up to get involved. That party is going to be December 11th. You can catch me at a Hall of Flowers coming up here at the end of October. I also do a monthly event in New York City called Legacy to Legal where I highlight a lot of the legacy cannabis operators who've been able to successfully transition to the legal New York market. We've got an awesome venue and and you know, it's invite only. We invite the who's who of the New York cannabis scene. So, if you want to, you know, inject yourself into the best of the best, I' i'd highly recommend coming out. Awesome. Thank you so much once again. I really do appreciate your time. I feel like we're going to do probably a part two sometimes in the future. Maybe after uh the documentary and after a couple of these events as well, so we can go through those too. But again, thank you so much for your time. Really do appreciate it. Um have a great rest of the day and uh we will definitely chat soon. Amazing. Appreciate you.