On September 13, 2018, Brandon Pollock of Theory Wellness and Theory Farms, will speak at Kahner Global's Cannabis Private Investment Summit in New York City. This event gathers industry leaders and investors for a day of collaboration and networking.
Theory Wellness is a highly rated retail brand in the Massachusetts market and is leveraging that success into a new venture, Theory Farms. Here, Pollock reflects on the lessons to be learned from the western states and the opportunities that exist for east coast markets.
This interview has been edited for length and clarity.
Can you talk about your journey into this industry and how that shaped what Theory Wellness is today?
I stared working in the cannabis industry about 5 years ago, as a consultant for a company called Harborside Health Center based out of Oakland, CA. At the time, they were the largest dispensary in the country. Working there, I got to see a glimpse into the future of what was headed towards the east coast.
We started Theory Wellness in 2015 as a medical cannabis company, now operating two dispensaries and a cultivation facility. We’re embarking on our newest project called Theory Farms, a cultivation only facility that will help support our existing stores.
You exist in the space as both a dispensary and a grower, what are some of the advantages and challenges of that dual presence in the market?
It’s a really dynamic and quick changing industry and right now we’re proud to operate as a fully vertically integrated company with Theory Wellness. We have cultivation, product manufacturing and the dispensaries so we’re able to control the whole life cycle of the product.
And in an industry that’s largely self-regulated, that represents a real advantage...
Certainly. The biggest issue we’ve seen in Massachusetts is the variability of the quality of the product. Being able to cultivate our own product allows us to offer consistently high quality consumer experience at our retail facilities. There’s a lot of product offered that’s really not the same quality.
Right now Massachusetts has only 2% of the cultivation companies compared to Colorado, even though we’re a larger state. The biggest challenge for any company here that is about to enter the recreational market is not having enough supply. That’s why we’re really excited about our new business where we’re building the facility to supply our own stores as well as other stores in the state.
We’re really limited with the infrastructure we have in place right now. When we talk about California or Colorado going recreational, they already had hundreds of companies in place. In Massachusetts, we have about 30.
Supply is just one of the challenges facing businesses in states that are now coming online. Having seen this play out across the country, what advice would you give to business facing those initial challenges?
I would recommend, first and foremost, start local. The first part of anyone’s plan should be to find your real estate that is compliant with local zoning and finding a town that’s willing to host your business and work with you. From there, they can advocate on your behalf at the state level.
How does that extend to investors?
I liken this to the repeal of prohibition in that the earlier you can get in, the better off you are. I think this is a terrific time to get in and once you wait until it’s legal federally, a lot of the good opportunities will not exist any more because you’ll have more mainstream corporations coming in and trying to take over the marketplace.
Which is already starting to happen in more mature markets such as Colorado and definitely in Canada. Is there still room in those markets for investors?
If you’re looking at a larger market, look for specialization. As the industry evolves, we start to see companies that are really good at one or two things. I’m always cautious of companies that claim to be the best at everything. You might find a company that is doing a beverage that’s really popular or a really good extract product.
After the enthusiasm of an open and legal California market this year, first quarter numbers didn’t quite meet initial projections. What is your response to that perceived underperformance?
California’s interesting because they’re trying to regulate a market that has existed for 20 years unregulated. There already was a huge industry that had no local or state rules. What you see in states like Massachusetts is that they’re starting from the ground up where the only companies that exist are highly regulated.
One of the main issues that California is dealing with now is trying to bring all of these unlicensed companies into the regulated marketplace. Consumers aren’t going to unlicensed businesses that they hadn’t before, they’re just using their existing supplier. It just means that they’re not changing their habits.
When we talk about changing behaviors, besides state and federal policy that we’re all watching closely, marketing cannabis presents interesting challenges as well. When it comes to public campaigns, where would you like to see some movement or see greater potential impact?
In general, everyone is trying to be somewhat cautious now with marketing and not endorse any unsafe or unwise behavior. One really great opportunity is marketing cannabis as a substitute for alcohol, as a healthier alternative. We’ve seen medical cannabis as a successful alternative to pharmaceutical drugs, but an even bigger opportunity is talking about general health.
For Theory Wellness, what’s been the most effective way to communicate that message?
Right now, we’re really active on social media and have the largest instagram following in Massachusetts. There is a rule in Massachusetts where you have to be able to prove that your audience is 85% or more over the age of 21, so right now we are reviewing our available options. Our goal as a company is to be like a craft brewery so that’s the audience we are going after; consumers who appreciate a high quality craft product.
It all starts with our staff. We put our staff through a very intense couple of weeks of initial training to get everyone up to speed on the science behind cannabis and how it can affect people differently. We also have constant ongoing education for that staff. We look at ourselves as a resource for anyone from a novice to an experienced consumer.
Secondly, we go above and beyond the testing that’s required for terpene profiles. Terpenes are the fragrant molecules in cannabis that are responsible for the different effects between one strain and another. Testing for terpenes and explaining those differences is a great way to let people know that there’s more behind this plant than they might think.
The Cannabis Private Investment Summit brings together the best and brightest cannabis entrepreneurs and ultra high net worth investors & family offices. It is the premiere summit for institutional investors, family offices, and ultra high net worth investors. For additional information, please visit www.cannabrunch.net or email us at email@example.com.