Visionary Cannabis CEO and Co-founder of Left Coast Holdings, Willie McKenzie joins Guillermo to discuss cannabis vertical integration, emphasizing the importance of values, policy, and a professional team in the industry. The episode also explores the complexities of tax regulations, the potential rescheduling of cannabis, and the formation of a mastermind community for operators to share knowledge and advocate for industry interests. The conversation concludes with regulatory issues between the hemp and cannabis markets.
“I am passionate about outdoor cultivation; it's my favorite part of the industry. I love the farms, and I love seeing the plants grow.” —Willie McKenzie
Episode resources:
Timestamps:
Introduction to the Cannabis Success Show (00:00:00)
The host introduces the show and sets the stage for the interview with Willie McKenzie.
Willie's Journey into the Regulated Market (00:02:48)
Willie shares his background and journey from the legacy market in California to the regulated market in Michigan.
Challenges in the Michigan Cannabis Market (00:14:36)
Willie discusses the challenges in the Michigan cannabis market, including price compression, outside product infiltration, and enforcement issues.
The Importance of Values and Policy in the Industry (00:19:35)
Willie emphasizes the need for operators to be more involved in policy and the importance of consumer values in purchasing regulated cannabis products.
The potential impact of rescheduling cannabis (00:22:55)
Discussion on the potential rescheduling of cannabis, its impact on the industry, and concerns about political intent.
Challenges with tax code 280 (00:24:28)
Exploration of the challenges faced by cannabis businesses due to tax code 280 and potential changes in the tax situation.
Uncertainty around rescheduling and tax strategies (00:26:01)
Discussion on the uncertainty around rescheduling and the potential impact on tax strategies for cannabis companies.
The importance of collaboration and knowledge sharing (00:30:11)
Emphasis on the value of collaboration, knowledge sharing, and the role of mastermind groups in the cannabis industry.
Influence of policy and advocacy efforts (00:32:58)
Importance of influencing policy and getting involved in advocacy efforts to shape the future of the cannabis industry.
Regulation of hemp industry and its impact (00:37:05)
Discussion on the regulation of the hemp industry, its potential impact on the regulated cannabis market, and the need for clear regulatory schemes.
The benefits of cold-water immersion (00:42:05)
Exploration of the benefits of cold-water immersion, its impact on mental and physical health, and the experience of using ice baths.
Final thoughts on navigating the cannabis industry (00:45:18)
Reflection on the dynamic nature of the cannabis industry, the importance of self-care, and the need to prioritize personal well-being amidst industry challenges.
Hitting the Gym at Conferences (00:45:59)
Tips for staying healthy and active while traveling for business in the cannabis industry.
Joining a Mastermind Group (00:46:51)
Encouragement to connect with a mastermind group for learning and sharing in the cannabis industry.
Wrapping Up (00:47:37)
Closing remarks and invitation to visit the website for more tips and strategies in the cannabis industry.
Intro (00:00:00) - Welcome to the Cannabis Success Show. If you're a cannabis company owner or operator who's ready to scale your business, grow your profits and plant the seeds to take your business to new heights. This show is for you. We'll share expert insights, industry trends, and actionable strategies to help you blaze a trail of success in the cannabis industry.
Guillermo (00:00:25) - Welcome to the Cannabis Success Show. Today we're talking with Willie McKenzie. Willie is the CEO and co-founder of Left Coast Holdings. He's a leading figure in Michigan's vibrant cannabis market. And I would say very challenging cannabis market. He's a visionary and a cannabis CEO. Today we're going to talk about, really, Willie's journey from California into the regulated market in Michigan, which was really one of the hardest hit markets in terms of competition. And we get into all of that. At one point, we're going to get into the thoughts on how, a really hot topic is the path forward for the hemp industry and what Willie's vision is for the future and how we role in the hemp industry, into the regulated market, as well as I love what he has to say about how we can work together.
Guillermo (00:01:17) - This episode is all about tips. It's all about knowledge and how we can work together. Willie has a lot to say about that. Make sure you stick around to the end. When we talk about some really specific ways on how you can thrive, balance all the challenges that that are inevitable in this really tough industry. And just a sneak peek. It has to do with really cold water, but that's what's coming up right now. So, enjoy this conversation with Willie McKenzie. Welcome to the Cannabis Success Show. Today we have Willie McKenzie. He's the CEO and co-founder of Left Coast Holdings. It's also a leading figure in the Michigan market. Also, if you travel to conferences like MJ unpacked or some of the other major conferences, you've seen Willie, speak at many of these conferences, it's pretty common to see him out there. And he's a he's a thought leader in the space. So, we're really happy to have Willie here. Willie, welcome to the show.
Willie (00:02:15) - Thanks, Guillermo. I appreciate you having me, man.
Guillermo (00:02:17) - Yeah. You bet. So today, I'd really like to be. I'd like to jump into, the path of, you know, how you got into the industry, what others can learn. Because you're in the Michigan market. This is a more of a mature and a large, a market. And so, we'd like to get into, you know, what others can learn from that. but before we get into it, I'd really just like to maybe just give your background and the story of how you got to where you are today.
Willie (00:02:48) - Yeah, absolutely. So I've kind of always been involved in the cannabis industry. At some level, I started growing in 2006. I live in the Bay area. It was not really a big deal there. started off with a single light in my garage. kind of grew. That went to a 12 lighter and a bigger garage in the Oakland Hills, then to a warehouse in Berkeley. And then I wound up, heading up, up north, getting some property up in the hills and taking a crack at, at outdoor cultivation.
Willie (00:03:20) - And so last season was my 10th outdoor season consecutive. And this season obviously will be my 11th. I am passionate about outdoor cultivation. It's my favorite part of the industry. I love the farms. I love seeing the plants grow. so that's kind of my, you know, development, obviously coming from the legacy market and entering into the regulated market, has been pretty bumpy. Not an easy transition to make, but I'm definitely glad that I did it. And it's been worth all the headaches, for sure.
Guillermo (00:03:52) - So 10th season, can you know, for those who aren't familiar, I mean, can you talk about like that those first years in that that process of applying for a license, securing land and getting up and up and running those first few years?
Willie (00:04:08) - Yeah. For sure. It's a if you don't come from a regulated space or, legal background, something where you're involved in heavy paperwork, just the application process can be daunting. And it was for me in California, you know, I had four medical farms and I couldn't license them for one reason or another.
Willie (00:04:29) - But I did start to go through the process and just looking at what the things I was going to have to do felt like, oh my God, how could I possibly do this? and so luckily, when I came to Michigan, we got connected with some good attorneys, and I hire people to do the paperwork. and there's a lot of paperwork involved. And so, it's important to hire people who know how to do it and who can do it right and submit it and get it passed through relatively quickly, because time is of the essence in this industry. we did bootstrap our first assets here. So, we bootstrapped an outdoor farm and our first store, and we were able to get those off the ground with minimal expense. You know, one of the things, coming from California to Michigan, just the barriers of entry are much lower. So going into a state where property is less expensive, labor is less expensive, construction, everything is just much less expensive in Michigan. That allowed us to come online, relatively inexpensively.
Willie (00:05:22) - And then we did eventually go out and raised some money.
Guillermo (00:05:25) - Yeah. And so, you're strictly can you talk about your, your business model. There's a lot out there in terms of those who maybe have a brand and they have light assets, or some get right into retail or a combination of it. Can you talk about your business model and how you're set up? I mean, are you're strictly on the cultivation side of the supply chain?
Willie (00:05:48) - So we're actually vertically integrated. And I'm glad you asked this question because I like talking about business models. It's something in cannabis that, you know, there's a lot more options than people think. And everybody kind of has this old school idea, which is very narrow, of I need to be vertically integrated for tax purposes. And obviously, you know, there's this talk of rescheduling that would make some of the tax problems go away, potentially. but, you know, this idea of vertical integration is super challenging. I mean, you have to have a ton of money and a really robust experience team to not only operate one business in the cannabis industry, but multiple businesses in the cannabis industry, and then to make them play together harmoniously.
Willie (00:06:32) - So we have an outdoor farm where we grow 50,000 plants, essentially row cropped. We have an indoor cultivation facility. We have, you know, 360 lights, we have a manufacturing facility. And then we had four stores, but we have sold off three of them. So, we're now down to just one store. And that's kind of here at our HQ. And one of the advantages of going into vertical integration is you do get to see every facet of the market, right? We experienced everything. We've experienced all forms of cultivation, indoor outdoor greenhouse. We've experienced the manufacturing; we've experienced the retail. And we can now look back at the three, four years of our books and see, okay, well, what really is working here? And for us, outdoor cultivation is working. And so, we have gone heavy into outdoor cultivation, specifically for bulk sales. You know, bulk wholesale, not even branded sales for us based on our core competency and what we see in the market, that makes the most sense.
Willie (00:07:36) - So we are vertically integrated, but we're heavy into outdoor cultivation.
Guillermo (00:07:41) - And have you seen, you know, because you talk about these are three different things. I mean, the retail skill set, the management of a retail skill set is very different from manufacturing and the cultivation. As you were getting started and making the decision, like to your point, you don't just want to do this for the tax offset to your to your cost of goods sold. but in any case, we may see 218 going away this year. It's always good to make those decisions for, for business reasons. Right. So, how much you know, can you, can you drive higher margins, have better control of your of your product? How were you able to ensure that you had the right team to be able to excel in all the in all the areas early on, especially, like you said, sometimes labor and finding talent is a challenge. But how were you able to overcome that as you were, you know, growing up pretty complex business, I would say.
Guillermo (00:08:37) - Not many businesses have so many pieces that are so different in terms of the skill set it takes to manage, a vertically integrated operation.
Willie (00:08:46) - Yeah. I mean, the team is everything, right? Like, I come on podcast, I talk on LinkedIn, I go speak at conferences. But the reality is that I'm not the one doing the work right. We have very talented people within the business who run the retail, who run the manufacturing, who run the cultivation. and without them, it's nothing, right? Like, I'm a bro science outdoor grower from, you know, Northern California, who sold weed and turkey bags or sold cannabis in turkey bags. Sorry. The industry nowadays requires a level of sophistication that I just don't have in those particular verticals. And so, when you're building a team, it is crucial that you find people who not only know the industry and the plant and the consumer, but also the professional side of things. Right? And this is where people get into sticky situation because they go and hire somebody who's passionate about cannabis, which is important.
Willie (00:09:42) - But then they don't maybe have the necessary hard skills in management, running a business, you know, operations, finance, whatever the position they're hiring for. And you wind up with businesses that get in trouble because they're lacking in that professionalism. And so, for us, the biggest thing has been finding professionals who have real world experience in whatever they do, whether it's cultivation or manufacturing or retail, that both understand the cannabis industry and are interested in it, respect it like the like the products, like the consumers. because if you bring in a professional from outside, so you bring in a retail operator from fashion or something like that. If they don't understand the product, they don't understand the consumer, they're not going to be successful because those skills don't always translate.
Guillermo (00:10:32) - Yeah. And. And so, I guess you would say, you know, just being completely immersed in the industry early on is a big part of that, right? That the relationship side of the business, it's no different than anything else. But I mean, to me, it's been even more so in this business.
Guillermo (00:10:49) - That seems to be a little bit more, close knit or what have you, is that you got to get out there and make those, those connections. Was that a big part of how you were able to build the right team and get the right people, or, what would you say is was the biggest part of you getting the right people in place in terms of relationships?
Willie (00:11:10) - Yeah. I mean, I would say cannabis is kind of clicky. like, almost like high school, unfortunately. it's tough for outsiders to get in, and you talk to, like, professionals who are coming from outside industry and who are interested in the space and want to come in and just can't find opportunities, or they get plugged into organizations that really aren't ready to make the kind of changes that they're there to make. And so that's unfortunate for me. The majority of the of the good hires that I've made have come from LinkedIn. I mean, I obviously am active on LinkedIn, being active on LinkedIn, having a public facing, having a public face for your business and letting people know what you're about, what your core, values are, your ethos.
Willie (00:11:55) - That's the kind of stuff that attracts good talent, isn't? Unless you're, an asshole, then you're not going to attract good talent. But, if you have the capacity to, you know, be on LinkedIn, talk to people, comment on people's stuff, maybe put out content if you're comfortable with it. I don't think there's any better way for you to attract top grade talent than being active on a platform like LinkedIn.
Guillermo (00:12:20) - I completely agree. I mean, that my story and how I came, I started, I was in corporate and then I, I was independent, you know, a solo entrepreneur. And then I came on to work with, with, with, with Anders. And a big part of that was connecting on LinkedIn because of the content, I would see that the firm was putting out there. Podcast. and the big piece of that is really not just the content, the quality of it, but also being personable on LinkedIn, where people can really get to know you. And I think that's something that that really stands out about you is that I could get better at this, but I'll post a business article or financial metrics on LinkedIn.
Guillermo (00:13:03) - But I don't post, myself, you know, taking a nap, on the hammock on the weekend, which is really what I want to do or what I did this weekend. But, you know, I think that really is what connects people is, is, is what you do on LinkedIn is where you're really not just sharing the business side of things. but also the, the personal side. Right. Because. As you said, it's a tough industry to get into. But we haven't even gone into the, into the challenges. And I think if everyone's honest out there, there's a lot of burnout. There's tough days. There's things that you don't see on LinkedIn. And so, to me, like posting how you're balancing your life, what you're doing for yourself, to keep going every day is, is, is really important because I think it inspires others to do the same and, and to be better and to be high performing. Because the answer is not always just work more and work the weekends to, to get to things done.
Guillermo (00:14:03) - And I've, I've learned that the hard way. So maybe we can talk about what have been some of the biggest challenges because I, I doubt it's been a an easy journey over the last ten years. But, what have been some of the, the challenges in the Michigan market in those early years? We know it's very, very competitive market. I don't know if you expected that as you were applying for your license, but can you talk about some of those challenges over those first few years and over the last ten years?
Willie (00:14:36) - Yeah. So, when I applied for my license in Michigan, we had to show finances. And at that point, you know, you had to post up maybe $1 million of assets and half $1 million of liquidity or something like that, depending on what you're applying for. But then like, say, 4 or 6 months later, they do away with that. And hey, and then they cut the licensing costs in half. And so it really became a free for all, right.
Willie (00:15:04) - And a lot of people apply for licenses in Michigan. So, we saw a really steep decline, when price compression hit. Add to that the fact that the state of Michigan has taken a very hands-off approach to enforcement. The attorney general doesn't prosecute anything cannabis related. So, the CRA really kind of took a hands off approach. So they're not doing much. And so, we wind up with, different than California where people are, back dooring product out of the system. And it's winding up in bodegas in New York, in Michigan, you know, bad operators are back during product into the system. So, they're buying the distillate from California, the biomass from Oklahoma, the this and that. And the other thing, the indoor flower from California. And they're bringing it in their back door and they're selling it in the regulated market. And so for me, somebody who made a decision to, to no longer operate in the gray area, who doesn't want to look in my rearview mirror anymore, who wants to run a straight up legit business? It's been super challenging because the market is essentially rigged.
Willie (00:16:09) - It's manipulated. We have never seen in the state of Michigan what the real supply looks like, because it's always been adulterated. There's always been outside product in the market. And right now we're actually seeing some change. Go on. there's a guy named Josh Childers. he, Sorry. Josh Schweitzer. he owns Infinite Cow to one of the highly regulated, highly regarded testing lab here in California. He went out and tested independently, paid for it himself. He bought products off the shelves and all the, you know, a bunch of stores in Michigan. He tested 33% of the products on the shelves in the stores in the state of Michigan have converted CBD distillate. So that's not product that comes from the regulated market, that's product that comes from hemp that has been chemically converted into delta nine THC. And so that means that a third of the distillate in the state of Michigan is not from a regulated farm. It doesn't come from regulated plants. It hasn't been tested. It hasn't gone through the same stringent applications that that we as growers in the state of Michigan have.
Willie (00:17:18) - You know, those products, those hemp farms are using pesticides. They're using things that we can't use here in the state of Michigan. They're growing product extremely cheap. And then it's coming in here and it's diluting the market. And so that has been the most challenging piece is the fact that we're so highly regulated and so under enforced. If you're going to have a highly regulated industry there's gotta be enforcement. That's just the bottom line.
Guillermo (00:17:43) - Yeah. You see all the states that are it's the policy, right. It's a it's getting stricter particularly on the hemp side, bringing the products into the market. I know you're speaking to, to, both markets, but it's really the enforcement. Do you see any change because, Michigan is one you mentioned price compression. It's one of the hardest hit markets. I would say in terms of just looking at the if you just track the price per item over the last few years, it's gone steadily down. And that's maybe not a reflection on. On competition necessarily, but also just how strong the this outside market or call it the illicit market.
Guillermo (00:18:31) - However term you want to use has influence price. But what's been the best way around this is you know, in my mind as a consumer, I would say you mentioned values earlier is I know that when I'm purchasing a product, just knowing the values, the testing, where it comes from, that it's from the regulated market. It makes me much, much more confident as a consumer are more likely to buy based off those values. But cannabis, particularly in the flower category, which is 50% of sales in most markets, you know, coming down, it's tough to really compete on value. Right. And so, it continues to be an issue. But is there any way have you is there anything that that you've seen as successful to deal with the price compression to that is any strategies, any, any way to deal with, with price compression especially for the consumer that's buying on price and THC level.
Willie (00:19:35) - Yeah. I mean, on the operator side, you know, we have to be more involved in policy.
Willie (00:19:43) - We can't just sit back and complain about stuff that's happening to us. we have to get out and get involved, and we have to support people like Josh Weider, who are, you know, fighting a good fight. The CRA has made an announcement that they are completely banning converted CBD oil and that it shouldn't be in the regulated market, that they're going to enforce that. That's great. That's going to have a positive effect not only on operators, but on, like you said, consumers. Right. Because the consumers in the state of Michigan voted to have a regulated adult use cannabis market, that means that they want tested products where they can confidently go into a store and know that they're buying something that was grown on a licensed farm that has been tested, and that's exactly what they should get. And they're not getting that right now. So, from an operator standpoint, we have to be more involved in the policy process from a consumer standpoint. You know, just because something is super cheap in a store doesn't mean that it's good, right? Like I wouldn't hire the cheapest contractor to work on my house.
Willie (00:20:43) - Why would you buy the $7 vape cart to put in your lungs? that doesn't necessarily make sense to me. I am, more value driven than price driven, though I understand that these are tough economic times, but there are things that just don't make sense to me. Like, you know, Michigan is the has the lowest adult use retail pricing in the United States. You can buy 15 vape carts for $100 here in almost every store. You can buy ounces for 40 bucks. 25 bucks you can buy gummies for $2, pre-rolls for adult. It's just wild. And consumers weren't asking for that, right? That's a result of market manipulation by bad operators. And so I think that, hopefully the state is going to get to a place where they're going to do enough enforcement that we can come to some sort of a homeostasis, stability in the market where both operators are comfortable and consumers get good pricing that they feel good about, and they get products that they feel good about.
Guillermo (00:21:44) - Yeah. So? So what? I like you.
Guillermo (00:21:46) - Like you said, you can't change that consumer. that's buying on price. Right. And so, I almost what I hear you saying is that you got to focus on your right on your right market. Right. And you got to drive that value and find those customer segments that are buying on the price and that really value the testing quality. all those, different attributes. And so, you mentioned the, the challenge of, of profitability. Just switching gears here towards policy, and you mentioned that, it's been a lot of hard work by a lot of people. It was really easy to put cannabis as a schedule one substance in the in the 70s, but it's taken. A really long time. A lot of agencies. A lot of complexities to finally start moving towards a schedule. Three. What was your, I guess it kind of caught me by surprise. We'd all been predicting April. in the back of my mind, I'm like, it makes sense a lot politically, leading up to the election, that the process would start in April.
Guillermo (00:22:55) - Were you surprised on the 30th when you when you heard the news or how did you feel about it?
Willie (00:23:06) - I have mixed feelings about it. Right. I think that it is political pandering. I don't think that there's any real good intent behind it. If anything, I think there's probably bad intent behind it. you know, as a move to get the pharmaceutical industry involved here, you know, there's a lot of questions, like there's no other schedule three substance that you can buy outside of a pharmacy that doesn't have, Prescription from a doctor. So how does that affect us? You know, like we have invested weed operators, have invested millions and millions and millions of dollars in retail stores. Are they going to allow us to keep operating those, or are we going to have to get licenses, pharmacies like what happens there? And then I think, you know, everybody's excited about 280 going away, potentially going away. I'm excited about that too. That definitely changes the face of the industry. That changes a lot of businesses, makes unprofitable businesses profitable, which is great.
Willie (00:24:06) - But I think that overall, I would be much more I'll be much more positive about De scheduling. because I don't think that this comes from a place of good intent for operators. I think that, I think that we're being used as pawns here, and I don't think that it's going to shake out well for us in the end, unfortunately.
Guillermo (00:24:28) - Yeah. I mean, I think it's no big secret just with the timing and the election that it's hugely, politically driven. When you say potentially to add go in a way, for, for those who aren't familiar with the tax situation basically to add disallows a good portion of business expenses that would otherwise be available. you're vertically integrated. So, a lot of the cultivation has a higher level of offset against taxable income, and so does the manufacturing. But regardless, at the end of the day, under 280, which disallows business expenses for companies that, traffic in a schedule one controlled substance, leads to an effective tax rate or a tax rate that could be 70, 80% or 100% of your income.
Guillermo (00:25:22) - And so it makes it very challenging to, to grow cash. Cash after taxes. Right. To grow cash. I mean, you mentioned earlier how tough it is to get started to raise $1 million just to get up and running, and then your operations are challenged, in terms of generating cash. And this is on top of a tough market with, with price compression and all these things. So, it is tough. But why do you say, potentially going away? Do you, do you feel like, the reschedule may not happen or are you unsure of the timing of two ATP going away in which current year?
Willie (00:26:01) - Yes.
Willie (00:26:02) - I mean, like, we just filed our taxes and we had to file under the assumption that two was still here because so far, it's just an announcement. Nothing has actually happened. There's they're under no, requirement to actually go through with it. And so, yeah, I still question everything. Right? I don't trust the government. I don't trust politicians.
Willie (00:26:26) - I think they just do whatever's in the best interest for them in the moment. And ultimately, like, I don't think they really care what happens to us. So yes, I realize that if we get rescheduled to schedule three, two aids will go away. I'm just not sure 100% that we will get rescheduled. That's just kind of my take on it. You know, I guess we're going to see what happens here towards the end of the year. There's a lot of talk, and you know a lot more about this than I do. But, you know, we are we, we just wrapped tax season, but a lot of cannabis companies file extensions. And so, a lot of us haven't filed taxes yet. And so, there's a lot of conversations going on within operators about, hey, are we filing? Are we taking into consideration, to add, are we going to file amendments. Like, what are we doing here? And for us, we're filing with two ADP, and then planning to file an amendment.
Guillermo (00:27:22) - And in the subsequent year. Yeah. And you're referring to the amended returns. And a lot of this, it's going on like, Tru Lieve was the first to do it in terms of here in the news. but two separate things that that you're referring to there. Whereas, you know, there's a reschedule, which means, to add would go away in the current year, 2024 tax year or 2025. Then there's these various, tax strategies that a lot of cannabis companies are using. some has been publicly disclosed with the MSOs filing amended returns, but it's not clear what the tax position is or the strategy around it. What is clear is that some have been successful in receiving the refunds, but the tax positions are still uncertain. And so, it's those two things there where 280 will go away. But there's this opportunity to file three years of amended returns based on, you know, the tax position that you may take there, which could be, which is uncertain. So it's, it's one thing to, be conservative with your tax filing this year, in regards to the reschedule, but there's also a more aggressive tax position that you can take in amending the returns eventually if the reschedule happens and, we move forward, then the 280 would go away in the current year or next year, and then this amended return would not be an issue anymore.
Guillermo (00:28:55) - Right? It kind of goes away because there's only three years. So, there's a lot to think about there. not a shameless plug, but we'll be doing a webinar for, with an attorney that talks about these strategies coming up here next month that we can dive deeper into that. But it is pretty complex and a lot to think about in terms of your risk of doing this, and setting enough cash aside too, to make sure that that you got something there for, for the future, should your tax situation not pan out the way, the way you planned? anyways, I just wanted to share that thought there, but, so switching gears, from the reschedule, here, will, what have been you mentioned vertical integration has worked for you in terms of execution and all the good things that come with that. But what have been some of the things that have worked really well for you in, in a market like Michigan over the years that, you talk a lot about on LinkedIn of, you know, sharing our knowledge, this tax thing that we're talking about here is it's the same thing on the financial side of things, is that I say, let's all share what's going on as much as we can so we can help each other on the tax side, right.
Guillermo (00:30:11) - Understand the risks and all that. Some have done that, some have not. but you're very big on sharing knowledge. You have a mastermind group, maybe you can talk about the group, and what, what you would share to the listeners of what's been, you know. What has helped you be more successful? Or what are the things that are really like low hanging fruit? Others you know can learn from as there as they're getting started.
Willie (00:30:40) - Yeah, absolutely. You know, I launched this mastermind community Q4 of last year because I saw, you know, in other industries, these things exist, right? There are peer groups where people share information and kind of help each other, support each other, and it just wasn't happening in cannabis. We're coming out of the shadows. We've been siloed for so long, and as operators, we're making big decisions. I mean, multimillion dollar decisions on a regular basis. And we're ultimately largely making them in a vacuum. Like, you know, if you're not making it by yourself, maybe you're making it with a business partner, but you're not bouncing these things off of other experienced operators who have been through this.
Willie (00:31:22) - And, you know, though cannabis is new, there are mature markets here, right? You have Colorado and California and Oregon, Washington, like if you're in a, in a, in an emerging market, if you're not talking to operators in other states, you're making a mistake because these are people who have been through what you are about to go through. And yes, every state is a little bit different, but the cycles are the same. And so the biggest hack is getting involved, networking with other operators, not seeing people as competitors, but seeing people as potential collaborators and just knowing that a rising tide does lift all boats and that if we get together, we can make the industry better and we can make our businesses better, like the tax thing. For instance, if the majority of the operators in the United States were to take a position on to add in 2024 and say, hey, we're not filing, we're not filing two aid taxes this year, the IRS would bend they're not going to deal with that.
Willie (00:32:21) - But it's that's not how it's happening. It's every man for themselves, every woman for themselves, every company for themselves. And so, we're just doing our own thing and the results are scattered. And so, what I'm trying to do is bring operators together and create that united front. Like, for instance, in the state of Michigan, you know, having 50 operators who are all against, CBD conversion oil, that's powerful, you know, and as the as the community continues to grow, I think we'll continue to be more powerful and have a bigger voice, both at the state level and ultimately at the federal level when this thing goes federally legal.
Guillermo (00:32:58) - Yeah, yeah. You mentioned earlier, the most important thing is to influence policy, to have a vote. And that's what's really valuable. It's not just sharing the knowledge, but, getting together to get to get involved, to talk to your policymakers, I think like. you know, I've worked in corporate where we had a PAC, you know, and a lot of small businesses don't have a PAC or ways to get involved.
Guillermo (00:33:22) - But when you bring these groups together, you can come together. And because it's a skill, like learning how to talk to your legislator, how to get in front of them, realizing that just a simple, you know, donation gets you in the door and gets the conversation going, because we've learned that a lot of this is about, education. You know, it's just we've seen how uneducated policymakers are, not just to your point that it is political, but it's also, I think, of a very big lack of education. And then you see it, in states that are trying to pass recreational use programs is that you have a lot of opposition, and people are voting with the lack of education. And so, that's really important. So, is your mastermind group just, cannabis operators or how do people get involved in your in your mastermind group?
Willie (00:34:17) - So it's for operators both plant touching and ancillary. We have separate groups for plant touching and we have separate groups for ancillary. And then we also do a bunch of stuff together where ancillary folks get to network with plant touching operators.
Willie (00:34:34) - We meet every week. We have a slack channel that's very active on the ancillary side. There's a lot of referrals going on. There's a lot of people helping each other get business perfecting offers. How are we getting leads? How are we selling to operators? And then on the operator side, we're talking about the big issues in the industry. We're talking about the accounts receivable and how are we collecting money from people. We're talking about people are coming in and putting their big decisions at the group level and getting peer feedback from people who have been through it. And so, it's just immensely valuable for operators to be involved in. You know, if it's not this, I don't I'm not aware of, other communities like this, but, you know, just the mastermind idea in general that, that a group of minds is so much more powerful than your mind alone. And so, if people are interested in getting involved, they can DM me on, on LinkedIn or go to the Elite Cannabis Operators mastermind, community on LinkedIn and send us a message and applied it to join.
Willie (00:35:34) - And it's for executives and founders in the cannabis space who are building businesses, who are like minded, who want to not only help their business and themselves get better and develop, but also help the industry forward.
Guillermo (00:35:51) - Yeah, yeah. Together. We're much stronger. It's hugely important. I know us as virtual CFOs within our firm. We meet at least every Friday. And we. What are you seeing with this client? We talk about things. Those exact same things that you talked about is, is we call it pipeline. But how are you finding new customers? How who needs to connect? if we're seeing anything industrywide in terms of, market fluctuations and it's just hugely valuable to be able to bounce those things off of each other. And so it seems like it's pretty straightforward. Reach out to you and get you get involved. and so, it's, it's great to just be involved like that. So, you're a bit, you know, you've seen a lot, and you see the reschedule is not a for sure thing.
Guillermo (00:36:48) -If you had to just kind of playthings out over the next few years, what would you like to see the most? industrywide from a policy standpoint and just to get, keep things moving forward. From your perspective, Willie?
Willie (00:37:05) - I would like to see. States and the federal government straighten things out on the hemp side, I don't have a problem with the hemp industry at all. I do have a problem when the hemp industry and the regulated marijuana industry start bleeding together, that creates problems because hemp operators are not held to the same standards that we are. They don't have the same cost structures. And so, it's just not I don't see that those industries should come together at all. So I would like to see states continue to not only regulate the cannabis industry, but enforce the laws of the cannabis industry and really protect, you know, the operators in the market, that they that the people of the states have voted for and that the operators have invested years of their time and millions and millions of dollars in building businesses here.
Guillermo (00:37:59) - Yeah. I mean, you went into the business, into that business, understanding that it would be a, a regulated market with, limited or sometimes not limited licenses and some of the states. And so, you know, the challenge too, is just the level of taxation by the states making it making it tougher, you know, for the end consumer, going back to some of the things you talked about with, with the outside market, but you brought up something that I really love to talk about because it was a huge topic at impact. And, I, I wanted to catch you there. We didn't, we didn't end up crossing paths. I know it's kind of like a wild goose chase when you're when you're at these conferences. But a big topic was, was the hemp side, right. Because they're not subject to two AD. But then a lot of states are dealing with some of these products getting into, a gas stations or the unregulated and, causing a you know, getting into the hands of minors.
Guillermo (00:39:03) - when you say the two separate things, how do you envision the hemp side? Is it two regulatory schemes for those who operate under the under the farm bill versus the regulated market, or how would you like to see the hemp market more specifically kind of play out? In regard to the regulatory side of things.
Willie (00:39:26) - So the hemp market, to me, the intoxicating hemp market, let's say, is a stopgap measure before legalization in states where they don't have access. And so, from that standpoint, I support it. You know, I want people who live in Indiana to have access to, hemp products, if that's what they decide. But ultimately, given the choice, are consumers going to want regulated marijuana products or are they going to want converted hemp products? And I think that they want regulated marijuana products. So, in states where there are regulated markets, I would like to see those regulated markets supported. And, if people want to have hemp in gas stations and smoke shops, I'm fine with that.
Willie (00:40:15) - I just don't want to see those hemp products bleeding into the regulated market. And then in states where there are no adult use regulations, I want to see people there having access to hemp products because it's better than nothing. Absolutely.
Guillermo (00:40:32) - Yeah, I'm in Texas and it's definitely, one of those one of those gray areas as well to, but, it's thriving. We've not had a, a very serious, a expanded medical program. I would say, definitely not a recreational use. And I don't see it happening anytime soon. And our, lieutenant governor has, you know, instructed the Senate to look. He I it's unclear, but I, I mean, many say that I think what he's really asking to do is how do we just ban intoxicating products? Delta a delta nine products in Texas. but some seem to think that it's. Maybe he's looking into asking everyone to look into the regulation of these things. So it's going to be really interesting how it plays out. But it's just such big business and so many companies doing well here in Texas, in the hemp space that it'll be interesting how it plays out, especially in light of, of the reschedule.
Guillermo (00:41:36) - And now that Texas doesn't want to be behind, the federal government on our classification. So, yeah, a lot, a lot to, to think about in the future. But, as we're getting close to the end, just switching things to, a lighter side of things, as we wrap up. How cold is that water that you jump in in the morning?
Willie (00:42:05) - It is.
Willie (00:42:07) - I mean, the little floating shark I have in there says 30 degrees, but obviously it sits in a layer of ice on top of the water. So, you know, it's somewhere just barely above freezing, 33 degrees, maybe 32.5. you know, it ices every night, right? It's constantly producing ice. So, it's cold in there.
Guillermo (00:42:31) - How long do you stay in?
Willie (00:42:33) - I stay in for three minutes. And when I started doing it, in 2022, like the first content I ever put out on LinkedIn or Instagram or anywhere was just me sitting in my ice bath talking about the cannabis industry.
Willie (00:42:49) - I didn't know what I was doing or where I was going with it, but that was just kind of my thing in the beginning. and initially I had never been on camera before. I wasn't comfortable with it, and so it took me a long time, especially given that I was in really cold water just to get out something that was like decent enough to put on the internet. So I wind up sitting in there for like 5 or 6 minutes doing multiple takes. Luckily, I'm a little bit better on camera now, so I can just kind of nail it in one try and I can get out in my three minutes and go on with my day.
Guillermo (00:43:21) - Yeah, thanks for sharing that. Because you said that you weren't you weren't good at it. Now you're very active on LinkedIn, very prominent. in the in the industry speaking at conferences. But you started somewhere, right. And it was in your, in your cold bath and that's how you got going on camera. And it, it, it impacts a lot of people, you know, people listen, I can tell you for, for me, I add something that I've been wanting to do and, I was doing it, two summers ago in a cold creek, when I was living in South Dakota.
Guillermo (00:43:57) - And that stopped now. But it was so good for you to get in that cold water. And your posts are inspire me to throw some ice in my bathtub. And so, I may be doing that, but it's just such a great way to reduce inflammation and get your I'm sure it wakes you up. Right.
Willie (00:44:16) - Oh, man.
Willie (00:44:17) - I mean, it's better than any cup of coffee I've ever had in my life, I'll tell you that. And it's had so many good, positive benefits in my life. You know, mental health, physical health. It's just great, you know? So, I highly recommend people try it. Try it more than once. try it for an extended period of time. See if you actually feel any benefits from it, because I certainly have.
Guillermo (00:44:39) - Yeah. Well, Willie, we're coming to the end. as we're, as we're closing out, is there any final thoughts, you'd like to share with the listeners? We're we had a really big year with the potential reschedule.
Guillermo (00:44:55) - That looks likely, in my opinion. But a lot of changes coming up, we could see some bigger states. another big thing is we have Florida, possibly, opening up a recreational use market. a lot of big things happening just industry wide. Do you have any final thoughts for our listeners or anything else you'd like to share before we wrap up?
Willie (00:45:18) - Yeah. I mean.
Willie (00:45:19) - Cannabis is never boring, right? There's never nothing going on. There's always a lot of stuff going on. There's a lot of different things at play. It is volatile. It is ever changing and it's stressful. It's stressful on operators, it's stressful on the ancillary businesses. And so, you know, I would say take care of yourselves. Right. Like that's all the stuff that I do, the waking up early, the ice baths, all that stuff is, is taking care of myself. And that allows me to continue to operate here and, you know, not go crazy. So, if you're operating in the cannabis space, just remember to take care of yourself because you can't pour from an empty cup.
Guillermo (00:45:59) - Absolutely. And I saw a picture of you on LinkedIn too, where you're hitting the gym at one of the conferences. And I'm like, there's ways to even take care of yourself. And when you're traveling, because we were in this business, we travel quite a bit. And traveling, can be tough, but there's ways to get out there, get your movement, so you're ready for the day and recharge your battery. Because after all, I mean, you gotta take care of yourself. No, nobody else can do it for you. And that's what helps us be high performing and then come back every day and deal with all the challenges, that we have in life. So, we really want to thank you for, for making some time being with us today. it's really challenging out there. You shared a lot of great, insights into what's helped to be successful and know others are going to learn from that. But most importantly, I think my big take away from it has been, you know, get involved, create community.
Guillermo (00:46:51) - You shared, one really good way to do that is to join a mastermind group or join your mastermind group. So, I would encourage the listeners out there too, to connect with you, just reach out on LinkedIn, see how you can get involved. not only to learn, but you have a lot that you can share with others. And so just always remember that and get involved for not only what you're going to get out of it, but what you're going to contribute. And so, we're here to help. Help you find your success in the industry. And I know. Well, you're a big part of that and everything that you share. So, thank you again. And that wraps up. I think that's a great way to wrap up. And we'll see everybody next time on the Cannabis Success Show.
Outro (00:47:37) - Enjoy this podcast, visit our website anderscpa.com/virtual-cfo-cannabis to get more tips and strategy for achieving business success in the cannabis industry.