As the cannabis industry continues its skyward growth curve, there are many professionals who are clamoring to enter the space. The landscape is littered with entrepreneurs who tried and failed to run a successful cannabusiness. If only there were an organization that could provide guidance to help CEOs to avoid some of the pitfalls of their predecessors.
Meet Peter Holzworth, West Coast Director of Operations of The Cannabis Lab, known as cLAB (pronounced see-lab), who is on a mission to help cannabusiness owners to navigate and succeed in the ever changing landscape of the cannabis industry. I caught up with Holzworth to get the 411 on what cLAB is all about, what industry changes are going to impact C-level professionals and on the importance of education at every level of a company.
Cannabis Now: So Peter, tell us what cLAB does and why you think it’s important?
Peter Holzworth: Cannabis LAB (Law, Accounting & Business) is an educational forum for members only. Membership is prequalified and includes C-level professionals (CEOs, CFOs and CMOs) with compliant cannabis companies, dispensaries, ancillary companies — or accountants, attorneys, engineers or insurance providers who apply their expertise to the cannabis industry. CLAB provides an opportunity to network with other C-level executives, receive top tier advice and monthly educational programming.
How did you get involved in cLAB?
As West Coast director of operations, I’m in charge of expanding the cLAB brand while vetting and supporting the leadership of all chapters west of the Mississippi. As the former CIO of BioTrackTHC, I processed and tracked over 1.4 billion dollars of legal cannabis transactions using software specifically developed for this purpose. In 2013, I met Robert Friedman (founder of Legal Learning Series) who wanted to explore working with the cannabis industry. I advocated for education for the industry and cLAB was born.
If someone was considering starting a cannabusiness tomorrow, what advice would you give him or her?
I would encourage anyone considering starting a new business to educate themselves on the particular nuances of the regulatory framework within the municipality and state where they are applying for a license. That will help them to learn to operate their business compliantly and legally. Also, I would suggest that they familiarize themselves with local trade organizations and networking groups where they can network and learn more about the industry.
What key mistakes should a new cannabusiness owner avoid?
Overextending yourself and committing yourself to inappropriate metrics. Not being aware of the elasticity in price that will come over the next 18 months. Going too fast. Be prudent. Be smart. Take your time. There is a lot to learn.
Where is a good place to find investors?
There is available money from a variety of sources, from venture capital to traditional financing sources. It depends upon what aspect of the industry you are engaged in. The industry is really expanding and there are many investors who are interested in getting into this space.
Given that there are various ancillary businesses that can support the cannabis industry, which ones do you see as most likely to succeed and which will need more staff to handle the growing demand for their product or service?
The processing of cannabis into refined products (extracts) that are more “socially acceptable.” The vaporizer and oil market has been growing rapidly as it’s not as intrusive (not as smoke-y or smelly as smoking a joint) and the refined, processed oil market should continue to expand over the next year.
Makes sense. When do you think we will see “Big Tobacco” enter into the market with packs of joints like cigarettes?
I hope that will be a long time to come. As many other cannabis traditionalists, we don’t want to leave our industry to companies such as Monsanto and Philip Morris. There are already large institutional investors entering the market. I foresee a 3-5 year window before some of these “less desirable companies” enter the market.
How much consistency can there be in their industry — especially considering how a given strain can be grown by many different people under many different conditions?
In Washington alone there are over 39,000 registered strains. That kind of protection has been put aside as cannabis is still federally illegal. When we see federal legislation change there will be easier ways for a grower to patent and take control of his or her strain. Ross Johnson out of Nevada has been doing his best to protect his trademark on Gorilla Glue. I think you will see more of this taking place. We have a very talented attorney, Tom Zuber, who patented a particular type of rose. We brought him in to help cLAB cultivators patent strains of cannabis.
Interesting. What kind of community outreach does cLAB plan to do in the future?
We are always looking for the next qualified member. Our membership has been carefully selected. When we admit a new member to cLAB, it’s because they demonstrate expertise. We regularly participate and promote other groups and community organizations.
Is there a non-profit organization that you see as a great fit for cLAB to partner with or donate to?
Obviously the industry has been rocked by the fires in Santa Rosa and surrounding areas. Several of our Los Angeles business partners lost property, greenhouses and their own homes. We are donating money to helping members who have lost their property and their livelihoods due to the horrible fires in northern California.
Which cities currently have a cLAB chapter and which are being planned for 2018?
There are currently six chapters. In Florida, there are chapters in Miami, Broward County, Tampa and West Palm Beach. There are also chapters in Los Angeles and Las Vegas. Bay Area, Seattle and Denver chapters will be launched by the summer of 2018.
Interview has been edited for clarity and length. Interview conducted by Mike Pensive.
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