Welcome to the 1st episode of the CannaBiz Success Show! In this inaugural episode, Guillermo welcomes Pat Helmers, an advocate for the cannabis industry and founder of Habanero Media. Pat discusses the power of podcasting for cannabis businesses and the benefits of interview-based podcasting. The conversation also covers current challenges and opportunities within the cannabis industry.
Check out the full transcript of the episode below.
Intro (00:00:00) – Welcome to the Cannabiz 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 (00:00:26) – Welcome to the Cannabiz Success Show. Today we’re having a conversation with Pat Helmers of Habanero Media. He’s the host of the Cannabis Advocate Podcast and founder of Habanero Media, which helps B2B businesses boost their brand authority, influence and trust through the magic of interview-based podcasting which is exactly what we’re doing today. And Pat, as we were talking before the show, what I really love about your podcast is that despite the challenges with, we talked about policy, we know the challenges in taxation and profitability, what you’re really trying to do through your podcast, in addition to advocacy, is bring people together, to share stories of success and the way through, given the challenges.
Guillermo (00:01:19) – And so I really love that about your show. We met briefly at Benzinga. I don’t know if you remember, at a speed networking event early in the morning, and we had all of 660 seconds to chat because then we had to move on. But during that time, I learned that you were a podcast host, and I immediately reached out to you afterwards and I said, we got to get together. And so here we are now. So, Pat, welcome to the show. It’s good for you to be here.
Pat (00:01:48) – Guillermo. It’s an honor to be here. I do remember meeting very fast. I think we met, like, maybe ten people in an hour’s time, maybe. And we had, like, we had just a few minutes in between. It was a ton of fun at Bezinga.
Pat (00:02:06) – Yeah. And I thought that Benzinga was much more positive this year than it was last year.
Pat (00:02:11) – Last year, people were pretty sour in the cannabis industry, but it was more upbeat this year. What do you think so?
Guillermo (00:02:21) – Absolutely. I mean, this is the first year since, you know, the very first, program came online in 1998, way back in California and then some years after that. And as far as I can remember, this is the first year that we’ve had some federal progress with safer banking, on the horizon as well as the possible reschedule. And so that was the big talk. There was a few panels on that. So, we’ll get into that eventually. And so, I felt like it was very optimistic. Despite the challenges, um, with, you know, supply and demand right now that are going on in the industry, we’ll get into that as well. But, before we dive in, Pat, I just wanted to kind of if you could just give us your intro and your story of how you got into interview-based podcasting, but more specifically into cannabis advocacy, because I know you have a podcast that that focuses on the advocacy side of Cannabis.
Pat (00:03:19) – Mhm.
Pat (00:03:20) – Well, it’s a long story, but I’m going to make it really quick. My background is tech actually. My degrees are in software engineering, and I did that for a long time. And I managed a lot of groups of people and software. And I was in the startup space. And my background eventually went from software engineering to actually business development sales. And I kind of taught myself sales and eventually started teaching people sales. I was VP of sales for a startup. It was probably about nine years ago. I came to the realization that the selling podcasts were kind of stinky. I didn’t like them, but I had some things to say about that. So, I started a podcast called Sales Babble, which was called Selling Secrets for Non-Sellers. People like me who don’t come from a background of business and sales, um, kind of learn how to persuade people on some kind of product, product or service and I and that was a lot of fun and I and I decided eventually actually to go into the consulting space and that’s and I’ve done that for quite some time.
Pat (00:04:28) – It was about two years ago that I came to a huge interest in cannabis. I had been growing cannabis for maybe 2 or 3 years. A friend of mine and I, and I kind of I was getting pretty good at it. And my wife has trigeminal neuralgia, which is a nerve issue on her face. And she has been trying all kinds of things, all kinds of meds to fix that. And it’s excruciatingly painful. And eventually we came to the realization that maybe cannabis can make a difference. So, it was in that that I came to this realization, like, I would like to learn more about this business and the stuff that cannabis can be produced and made. And I’m like, God, how could I learn all this? What would be a good way of doing it? And it’s like, oh, I got an idea. I know how to podcast. I think I’ll use the podcast as a mechanism to meet people and to get introduced to the cannabis industry, and that’s what I did.
Pat (00:05:32) – I remember I was at the cannabis, they call it the Cannabis Conference. It’s run by Cannabis Business Times Magazine. And, um, I was sitting at a round table, and I was thinking, I want to do something about strains or how to how to consume cannabis or something like that. And we were talking about business stuff, you know, raising capital, staffing, marketing. A lot of the stuff that my background is all in. And they asked me, well, what are you doing? Pat and I go, well, I have a cannabis podcast for business. It just kind of blurred it out. It was a very. In the moment kind of thing. And next thing I know, I started interviewing people on, you know, what are the challenges that you have in your in your business? What’s it been like having a startup in the cannabis space? You know, how did you bring on debt? Did you bring on partners? What are the regulations and legislations you’ve had to address in, in that, that that’s kind of how I got here.
Pat (00:06:30) – And now it’s been like almost two years. I think I have 130 some episodes in. Yeah, it’s been it’s been a lot of fun, Guillermo. It’s been a lot of fun.
Guillermo (00:06:40) – Yeah well congratulations on that. And thanks for sharing that story, about your wife and that’s I’m sure that as you’ve gotten into it, you’ve heard a lot more of these stories that are that are just profound. And how the plant has, has helped people without the side effects. Right, without the ten other issues that that pharmaceutical drugs can cause not to say they’re bad or anything, but it’s a great alternative, and that people are now, doing that. So as an advocate, you know, when I got into this a couple of years ago, there’s really two kinds of, two sides to it, right? There was the people that are very excited and curious about, you’re in cannabis, you’re in the industry and want to have conversations.
Guillermo (00:07:26) – But there were still people that that, you know, shied away from it or possibly maybe said some, some negative things. And so I’m sure you’ve gone through that. But as an advocate, how do you balance the you know, the advocacy side of it, but also the, the challenges in terms of there are some valid concerns, right? There’s the concerns of, of dosing, dosage, product quality and some of the things that are, that are valid concerns from others in the industry, within cannabis. So how have you kind of balance those two things? We’re just kind of staying objective. But also, being an advocate.
Pat (00:08:09) – That’s a good question. Um, and I have bumped into that for oftentimes people ask me what I do and I tell them I’m a podcaster because I help people start podcasts, too. And I’ll say, oh, I got one on selling. And they’re like, oh, okay.
Pat (00:08:24) – And I got one on cannabis in the lead in. And they’ll go, oh, really? That sounds interesting. But every once in a while, I’ll say that to somebody and they’ll go, oh, they’ll act like they stepped into dog doo or something. And that stigma is definitely there when it comes to concerns about cannabis. The more I’ve learned, the less I have. The more I’ve come to realize it is extremely safe. Extremely healthy. A much more healthier alternative to pharmaceuticals and alcohol and all kinds of bad behaviors that people can do, that people do to address, you know, the pains they have, you know, both physically and mentally. I don’t worry overly. I don’t worry over about it much. You know, people over you know how many people overdose on cannabis.
Pat (00:09:22) – Every year.
Pat (00:09:23) – Like none. None.
Guillermo (00:09:26) – I would say zero. Yeah.
Pat (00:09:27) – It’s zero, it’s zero. Yeah. There’s not it’s impossible for you to, you know, unless you have a big bale of it and it hits you on the head or something.
Pat (00:09:36) – It’s like.
Pat (00:09:39) – I don’t think so.
Guillermo (00:09:42) – Yeah. I’m curious, you know, as you’ve gotten into it, it sounds like you’ve started on the on the medicinal side. And that was kind of your pathway in. But listening through your podcast, it sounds like you’ve had some conversations on all the, you know, there’s so many, so much more to cannabis, like here in Texas. There seems to be a much bigger focus on the industrial. We have a hemp program on the industrial hemp side. Has there been things that you’ve discovered in your journey that are that you didn’t initially know, like, like maybe the, the power of the plant from, from an industrial side, building materials and the other health impacts that it can have to the environment, into your, you know, building homes and some of those things.
Pat (00:10:30) – Absolutely. I’m really glad you brought this up, because that, I did not know a lot about.
Pat (00:10:36) – But a couple of years ago, I was at a hemp expo, and I learned so much about the possibility that the plant can be used. The fibers can be used for fabrics, for clothing. The herd can be used for, it can actually kind of be melted and powdered into an extruded into plant and a plastics like material. Certainly, the seed can be used as a food. And the flower that we know of can be used for CBD, for the cannabinoids that are in that. Ihad no idea all that possibility is and what I have learned, and I’ve had some people on to talk about hemp, and I have friends who are pretty close to hear who actually are building a hemp exchange right now. And I know some people who’ve done a lot of genetics too, in hemp. I believe it’s a much bigger market than adult use cannabis. Marijuana, we’ll call it marijuana.
Pat (00:11:38) – People would use, I think industrial hemp is huge, absolutely huge and good for Texas for getting on top of that, because they’ve been horrible about being on top of adult use or even medical. I don’t think you have a medical program at Texas way behind. Unlike their neighbors, Oklahoma to the north of them.
Guillermo (00:11:59) – Yeah. Big. Do you have a medical program? And, you know, one of the things that I heard in Benzinga, we had the, the numbers being thrown around, but just how huge of a market, Texas can be. And so, I think that’s on the horizon. And if you look at the potential, you know, total addressable market in Texas, you know, with the reschedule, we’re possibly looking at maybe those conversations will come up and, you know, our legislature only meets twice a year. Nothing was accomplished in farm in terms of moving things forward this year, but with the potential reschedule.
Guillermo (00:12:38) – That was one of the conversations that at Benzinga is that it could possibly bring about the conversation and possibly looking at, you know, starting our rec program here. So, a lot of potential, but things haven’t, haven’t moved forward yet. And so, you’re absolutely right so Pat wanted to kind of switch gears here and talk a little bit more about what you do with you know, B2B and interview-based podcasting. You have you work with clients who are trying to maybe start a podcast or connect with other cannabis companies. So, what do you talk about opportunity within cannabis, but also within podcasting. I mean, it’s all it’s on the one hand it’s there’s a lot of podcasts. It’s very crowded. But on the one hand it seems like on the other hand it seems like many are just not taking, this opportunity to get their voice out. I’m a service provider.
Guillermo (00:13:41) – And when I first started doing this, I quickly realized that the challenge is not so much your skill set. It’s becoming. It’s getting known. It’s coming out of obscurity so that others know about you, your mission, your value, and podcasting is a great way to do that because, like, we’re having a conversation right now, right? We have this dedicated time to talk, and others get to listen to it. And so can you talk a little bit more about podcasting, interview-based podcasting and what an operative, what an opportunity that is right now for others.
Pat (00:14:17) – I think you said it really well. I don’t know if I can even say much better because that’s I mean, because a certain degree that’s the great, the great secret about podcasting that people don’t fully understand. I think a lot of people get into podcasting thinking that it’s going to be like television or radio, and I’m going to have advertisers and they’re going to get on my I’m going to grow really huge.
Pat (00:14:41) – I’m going to have advertisers. I’m going to get income from that. That very rarely happens. Most podcasters don’t go more than 10 or 12 episodes before they lose steam, and they run out of energy because they come to realize that podcasting can be. It takes a certain amount of energy and time, as you know, right? I mean, we’re setting aside a big part of our day right now to do this. And it, but they don’t see podcasting from a couple of points of view and understand exactly how they grow. In my mind, one of the best ways to monetize a podcast is, too is the guess that you meet can actually become prospects for your service. That’s a really important thing. And the other thing is it’s an opportunity for you to create content that you can then use to market yourself in lots of different places. People are always looking like, what am I going to put on Instagram? What am I gonna put in Facebook? What? You know what? What would that look like? You know and podcasting is an opportunity to do that.
Pat (00:15:51) – Podcasting is also an opportunity for you to learn something that you don’t know anything about. By finding you could pick a topic on anything, you know, let’s say I want to be, you know, let’s say I want to become a veterinarian. I could start interviewing veterinarians, you know, what’s it like being a veterinarian? What’s, where did you go to school? It was like opening up your, you know, your practice. You know, what is the biggest challenges that you have? You know, it’s actually in the relationships that you build. It’s the relationships you build in the interviews that you can use to. It’s not going to be radio. That’s not how it’s going to get monetized.
Guillermo (00:16:33) – Yeah. And, you know, as a as a virtual CFO, I think it gives people the kind of the opportunity to see, like what it would be like to work with you. Right? Because we get to talk a lot about what we do success stories with, with clients.
Guillermo (00:16:47) – And I’m a testament to that you know, I’m now with the Summit Virtual CFO by Anders. And I would have never known about the firm, had it not been for their podcast. And that’s actually how I connected with them is I was, you know, that’s a very niche, podcast. Right. And that’s the great thing about podcasting is that it’s very specific. And I was a Virtual CFO, self-employed consultant, and I wanted to go out and learn about what others were doing in the space. So, what did I do? I went out and googled Virtual CFO, and this was the first one that popped up. And there wasn’t very many people talking about it. And so it’s got all the attention of the folks who are trying to, deliver that service in the market because it’s something new for CPA firms. And most CPA firms are growing from the consulting side more than anything. And so, that’s the way I connected.
Guillermo (00:17:39) – And it not only for selling, but I see it as also a great opportunity, you know, for us to hire people, right? People get to know what it’s like to, to work with us and, and to what we’re all about. And so it has so many, so many other side benefits that, in addition to, you know, creating those connections that eventually lead to business as, as you said, um, would you be able to share some, some success stories in terms of those that you’ve worked with and how they’ve been able to, to connect and, and generate business or any other unique ways into how podcasting has helped folks that you’ve worked with there?
Pat (00:18:21) – There’s been many in the in the cannabis space, where people have been on the podcast, um, they’ve kind of got their message out. Somebody listened to that and said, I would like to meet them, and I’ve been able to, like, broker them.
Pat (00:18:37) – Usually people are either looking for partners or vendors, or maybe someone to distribute their product, you know, or that’s been a lot of that’s been a lot of fun. Yeah, I can think of a specific example.
Guillermo (00:18:56) – Absolutely. Yeah. Those connections. Right, because one of the challenges in the cannabis has been relationships. You know, we talk about that all the time. As we’re talking with the retailers, for example, the relationship with the brands is so important. And managing those relationships and having that face-to-face contact. And so that a great success story of how you kind of bridge the gap and introduce people where they need those connections. And, you know, what about, has have you experienced challenges like, you know, when you’re talking with, with clients or folks who are trying to start up a podcast, you know, I can tell you, like my biggest challenge, before I started this or even speaking on podcasts, was just feeling like I could, like, I could do it right, like, I’m an expert.
Guillermo (00:19:52) – Like, I have some knowledge in this. Maybe some would call it the imposter syndrome, and that came up. I’m wondering, do you do you deal with that? Have you ever dealt with that yourself? Can you say or have you worked with others that you know that is maybe their challenge and starting up their podcast? And one of the things that was really helpful for me, was just the definition of an expert, right? If you know more than the average person, if you’re a CPA, well, you’re an expert, right? You don’t have to be the only CPA in the country to have a podcast to talk about it but is that something that you deal with? As you know, folks are trying to start a podcast and they come to you for help.
Pat (00:20:36) – Not I haven’t really bumped into it with any of my clients, but I certainly have it.
Pat (00:20:44) – I have imposter syndrome.
Guillermo (00:20:47) – That’s hard to believe.
Pat (00:20:48) – I’m. Oh, yeah, I have, I’m writing a book called the Tao of Sales Babel, and I’ve been working on it for two years, and I’ve been actually using the podcast as a mechanism for writing the book. I used to interview a lot of people on that podcast. Now I just do solo episodes in each episode I write out and then I publish it, and I actually in little pieces every week. I’m writing a little bit of the book, and over the last couple of years, I’ve pretty much got it all written right now. Now I’m going through my second or third draft of it. So, that’s been a great tool of podcasting is it’s given me. The rigor, you know, to get it done. Actually, with that said, when I read it, I go, who am I sometimes to write this book? I’m a nobody, you know.
Pat (00:21:45) – What are people going to say when they read this part? What are they going to think about this? And it’s all kind of silliness. Like if I was talking to somebody, to me, I’d be saying, oh, Pat, you’re an idiot. Like, you totally know what you’re talking about. And what do you care what those people think? You know, most people are going to appreciate what you’re doing here, right? That you’re trying to make the world a better place. Um, but yeah, I, I, I experienced that.
Guillermo (00:22:11) – Yeah. Yeah, it’s been hard on yourself and. Well, nobody else is. So that’s an interesting name for your book the Dow is and using the Dow is the name and there can, can you talk a little bit about why you chose that name. Um, is that this has to do with the, the Chinese, teachings and how, how have you worked that into selling? I’d be curious.
Pat (00:22:40) – A lot of people don’t know much about it, but they do know it. Like you’ve probably heard the term, the journey of a thousand miles starts with a single step. All right. Have you ever heard that? It’s the idea that the best way to get going. You just get going, right? Lao Tzu wrote that he was a guy who lived about 2500 years ago, and he kind of took all the lessons that he had learned from the great library of the emperor at the time. And he wrote it all down in a book called The Daodejing, which roughly translates kind of how the way things are. And I bumped into that book, pieces of that book back when I was an engineer at Bell Laboratories. There was something that said that the greatest leader is when the job is done. The team says, we did it. It was this whole idea of leading from behind. And I thought, dang, that’s pretty sharp. What is that? And I kind of dug into it and I started reading Daoism The Dao to Ching, and I absolutely fell in love with it.
Pat (00:23:49) – And then about maybe ten years ago, I started blogging on it. Remember back when blogging was a hot thing? I would take these Daoist little poems that are in the book and I’d rewrite them for selling. You know that. What is the you know, what is a bad customer? A good seller’s job is stuff like that. And, um, it was really, really it was really fun. It was very fun to read but then I set it aside and never did anything with it until a couple of years ago. And I came to realize, you know what? This is something that’s really. A big part of who I am. I don’t really talk about Daoism a lot in selling, although I’m experienced, I use it all the time. This idea of what they call Wu Wei, that kind of the balance of not overly pushing people, just allowing the sale to happen. Great selling is, in my mind, is when the buyer says, oh, that’s what I want to buy.
Pat (00:24:49) – They sell themselves on it. And there’s ways of creating a conversation and inculcating that in a way that can happen. And it doesn’t feel pushing, it doesn’t feel icky or anything like that. So that’s how I got that’s how I got into Taoism. And that’s why I thought about, I should write a whole book on it, just in the context of that. But that’s how I got the name. Well, the Dao sales battle.
Guillermo (00:25:17) – How will be looking forward to reading that. And it sounds very interesting in the way you’ve put it together and I can say, you know I, my background is in corporate. Right. And then I went into being self-employed as a consultant and even 20 years experience, I can tell you the biggest challenge. I knew nothing about selling and marketing. And so, I’m glad there’s folks out there like yourself that are teaching.
Guillermo (00:25:50) – But I wish I would have learned this in college. I wish it would be taught to CPAs in college, or some level of entrepreneurship. Sadly, it’s not. And so that something that I, you know, want to want to improve upon and share with others. But where so you mentioned like you got to start somewhere and that’s, that was my challenge is like, okay, it feels like you’re starting so slow, right? When you’re either starting a business or starting to market your services. And it takes time to get known, doesn’t it? I mean, it, it’s a, it could be a also a long journey. And you got to do something in the meantime. For you personally, you know, you have 130 episodes, you know, I see you as a pro and someone I look up to, but where did you start? You know, can you tell us a little bit about that? Like, how was that first step?
Pat (00:26:46) – When I started. Like when I started the podcast. When I started podcasting. Is that the question? Or when I, you know, well, my other podcast is like over 500 episodes and 630. So it’s, you know, I started that I, you know, I was working full time. It’s a lot of it was I would wake up very early in the morning and I’d work on it for a couple hours, and then I go to work, you know, and then maybe I would come back at night and maybe I’d spend an hour or maybe not at all. But then I’d spend a fair part. I spent a few hours every weekend on Saturday and Sunday. And if you add it all up, it was, you know, you get a couple hours, you get ten next to, you know, you’re working ten, 15 hours a week on it, you know, just on the side. And, I think probably one of the best things I ever did was be fearless about asking for advice.
Pat (00:27:43) – That’s probably the most powerful thing that people can do is like it. Just admit it. You don’t know what you’re doing. Ask people, if you were me, what would you do? How would you approach this? And people were unbelievably kind and caring because I really wanted to learn it all myself. There were things about it I didn’t know anything about. So, I like learned how to make a web page, like how to make a website. You know, I learned how to edit recordings. I learned how to, interview people and ask great questions, you know, and not try to, like, monopolize the conversation like some podcasters do. And I, some really great people helped me for but, you know, just by asking me, just by me asking what advice do you have, you know, so, it took a while. It was it took a long time. It probably took me six, seven months before I actually launched in the very first episode.
Pat (00:28:35) – But, I’m really glad I did. It has been really, really amazing. Yeah.
Guillermo (00:28:43) – Yeah. One of the things you mentioned in there is work. You’re working while you’re doing, your podcast. And so, cannabis is a niche. You know, we talk a lot in our firm. We have various niches or verticals. And we actually had just recently did a webinar on how to start, how to start a niche, how to niche, you know, and one of the things that I learned as I was getting into this is kind of similar to what you said is, you were doing something else, you know, just because you go into a niche or something very specific. Um, it you don’t completely drop what you’re doing and get into that. You were running parallel with what you were doing with your work, and then started doing this at the same time until you got things going off, off the ground. So that’s one thing that I just want to share with the listeners is like, you know, when you’re moving towards something, it’s like, what kind of level of, can you stomach kind of that big leap? Right? And every individual person needs to assess where they’re at and how big a leap they can make and what they’re comfortable with.
Guillermo (00:29:53) – And that’s really, um, different for everybody. So you talk about, about selling and, and it’s very true. I mean, the word I use is positioning, right? When you position yourself as an expert through podcasting, putting out your information out into the world where others can see it, it’s more of a position that people can come to you. And that’s a much better and different selling experience. Or it doesn’t feel like selling than going out and trying to sell yourself. Right. That’s much tougher.
Pat (00:30:29) – But I like to think of I’m just here to help people. I think I think of sales as the helping in industry. How can I help you? How can I help you? Maybe I can, maybe I can’t, but I might know somebody who can help you. I’m not. I never presume the person I’m talking to is a real. Is going to buy. I’m just trying to qualify them to see if they’re qualified, prospect and whether they would be a good fit for them, but I don’t assume, but I do assume they might know somebody who might buy.
Pat (00:31:00) – I do assume that, yeah.
Guillermo (00:31:03) – So yeah. So, what I mean, you there’s folks listening, and they might say like, you know, I have no idea how to how to even start this, how to sell in a way that, that is not salesy, that the things that you’ll be talking in your book. Is there one thing that for maybe someone who’s just starting, um, and it could be someone in cannabis who’s trying to, promote their, their product, maybe a, a retailer, trying to talk more about their brand and their location, or maybe someone like that is a service provider that’s a CPA firm. Um, do you have a tip that how do you start to, to, in that selling process without being so salesy and do what you’re talking about today is be more of a helper, of an advocate.
Pat (00:31:54) – I think it goes directly to what you were saying, Guillermo, about having a niche. I think a lot of people don’t know exactly who they are and what they’re about.
Pat (00:32:03) – I’ve met people in businesses, and I ask them what they do, and they just ramble for 5 or 10 minutes. I think the most important thing that you can do is to understand your brand is to really nail down and understand, be able to repeatedly embrace into your soul your value proposition. And by your value proposition. It’s as simple as I help this set of people, a small set of people who have a specific problem or desire. And what I do is I provide something, a product or service, so that when they get it that they’ll experience this benefit and this benefit and this other set of benefits. And you’ve heard of the elevator pitch? It’s kind of like that variant of that. When you get that nailed down and you fully understand that’s who you are. Then you’ll know when you’re talking to, you’ll be talking to people whether they’re fit or not. You’ll be able to express clearly how you help people, because you’ll be speaking in their language of the benefits that they would experience.
Pat (00:33:16) – The most important thing you can do is to nail down your value proposition.
Guillermo (00:33:23) – And then. Absolutely. And then and then deliver on that. Right. You said something very interesting there that was, to make the connection with the clients, with the customers that are also right for you. In cannabis, there’s a big, challenge right now that’s, that’s prices have come, come down. Right. There’s price compression. And so, retailers are having to go out and really understand their market, who their customers are. And the answer has been heavy discounting and that hasn’t been an answer. Right, it’s finding the consumers, the customers and the market segments that resonate with your brand, with your products and then delivering on that time after time with the right experience. You know, I’ve heard this statistic that. You know, there’s the average cannabis consumers purchasing on, you know, price and THC level.
Guillermo (00:34:22) – But the statistic is that 30% of the market is what’s really driving this price compression. It’s these folks that are really buying on price, but the others are these cannabis curious consumers. I consider myself that where I’m looking into cannabis to see how it could help me sleep better. And I’m not really buying on price. I’m buying on a specific experience or a solution that that I’m looking for. And, that’s been a lot of the conversation. After Benzinga, I was at MJ, unpacked. And that was one of the big things in the conversations in cannabis is like getting to the right customers, right? Understanding your customer segment and not chasing that 30% that’s buying on price and discounting your product. And so, what you’re saying resonates in cannabis, but with any service provider, right. And that can really be a challenge, especially in the beginning, when you’re just trying to get some business. Right. And that’s what’s happening in cannabis too, is like, we just want to make the sale.
Guillermo (00:35:30) – But, a lot of the discounting is impacting the profit margins. And that’s a…
Pat (00:35:37) – You don’t want to be in the commodity. You don’t want to be in the commodity business. You know, you want to differentiate yourself from everybody else. You want to be a concierge of to a certain core and to a certain saucer. Like, I’ve been to dispensaries where some people are really there to take care of me, and I’ve been to other dispensaries where more or less the bud tenders are order taker mean that just you’re not going to build loyalty. You’re not going to get people continually coming back to your retail shop in that context. But if they feel like I’m getting more than just buying, you know, a pre-roll or a gummy or something, that actually what I’m getting is some service out of it. I’m getting some training, I’m getting some learning. I’m actually building a relationship and getting to learn to like these people, you know? That kind of loyalty.
Pat (00:36:32) – That’s how you get recurring revenue. People keep coming back to keep people coming back. And you want to be, in the case of the dispensary, you want to be that one place that everybody goes to. You want to be that everybody goes there, even though their prices are not necessarily the cheapest. I’ll get exactly what I’m looking for because they’re really good listeners. They know that this strain is really important to some people. They have read some things about this strain, so they offer it because you have some sleep issues. We think this is what we’re hearing. This is what we’re what people are telling us. You should try this one. And it all goes back to who you are and what you’re about. It goes back to your value proposition. That’s what differentiates you from everybody else.
Guillermo (00:37:18) – Absolutely. You bring up Bud Tenders and you know that in the retail side I always look at retail as the, the part of the supply chain that’s, that’s really going to make or break the industry.
Guillermo (00:37:30) – Right. You know, there’s a lot of vertically integrated companies out there. But the retail side is you know, I look at wholesale prices and on the cultivation side there’s a, you know, that’s going to be subject to supply and demand, but where there’s a really big opportunities on the retail side and finding the right consumers and finding creating value for the consumer to build up to be able to achieve, a good profit margin. So. And it all starts with the bud tender. That’s the person on the front line. One of the things that, you know, you talk about a lot about opportunities and, you know, when we’re as we’re on the horizon of the possible reschedule, we know that that would mean, to add ego in a way. Yeah. And so, what a lot of the retailers face with is the non-deductibility of their overhead expenses. And so, we know it’s.
Pat (00:38:30) – Like a 50% tax rate.
Guillermo (00:38:32) – Yeah.
Pat (00:38:32) – Yeah.
Guillermo (00:38:33) – It could the effective tax rate could be anywhere from 50. Yeah. Like you said depending on the profitability all the way to 80 all the way to uh 100% or tax on no profit. So,it’s very challenging. And with the bud tender, the frontline person, your salespeople being the kind of the person that will make or break the experience of the consumer. One of the challenges is a lot of turnovers. But the other side of it is the education of these, of the bud tender. Um, but the retailers also have a hard time spending on overhead, one because of the profitability challenge, but also because of it’s a non-deductible. So that’s one area where, there’s going to be a lot of opportunity as a retailer, start to spend more on the education of their folks and create a more, consistent experience and hopefully reduce, you know, turnover on that as well. So, yeah, I totally agree with you.
Guillermo (00:39:32) – It’s all about the experience and the consistency.
Pat (00:39:36) – Absolutely.
Guillermo (00:39:38) – For that brand. Yeah.
Pat (00:39:39) – Absolutely.
Guillermo (00:39:40) – Well, Pat, we’re getting a little bit close to the end. So, as we’re getting a close here, maybe one final question that I like to ask is you, we just talked about opportunities, within, you know, I talk about tax and profitability and what maybe just share yourself. What do you see as the as the biggest opportunity during this big year? I mean, we’re coming across the reschedule.
Pat (00:40:10) – Yeah. Yeah
Guillermo (00:40:11) – The safer banking, um, what do you see kind of on the, on the horizon in the cannabis space here over the next year?
Pat (00:40:21) – I don’t know, it’s very difficult to predict. It’s very, very predictable. It’s like it’s like guessing the weather. Next year is an election year. A lot of politicians like to use cannabis as a weapon. I don’t know.
Pat (00:40:38) – I don’t know if safer is going to get passed. I don’t know, scheduling cannabis. It’s very difficult to see that happening next year. It’s possible, but people have been talking about it for years, so I really, I would make an assumption none of that’s going to happen. None of that’s going to happen. And you need to run your business in a way that, is successful without it. If any of that happens, you’re going to get a windfall. Awesome. That’s going to be terrific. That’s going to create possibility. It’s certainly going to shake things up. If cannabis gets you scheduled, that will shake things up huge and a huge in a huge way. It’ll definitely be good for the consumer. For some companies, it could be difficult. Some companies have figured out how to, vertically integrate within a state. And if we can start selling cannabis across states, that’s going to be difficult.
Pat (00:41:44) – That’s going to hurt their business. So, I don’t know. I don’t know, my assumption is nothing’s going to happen. But who knows? I could be wrong.
Guillermo (00:41:59) – I would. Okay, so to one thing I.
Pat (00:42:02) – Think you’re in that argue with me, right?
Guillermo (00:42:04) – Everything I think you’re in the minority and it could just be wishful thinking. But yeah, as you know, we were at Benzinga, so we got to talk about this extensively. Yes. But the minority is that it can’t happen. You know, one of the things I think was that was brought up is there’s a there’s a treaty that the US has that would violate trees. So, there’s all these different things that play that could possibly derail this. I would say, let’s talk again after the election. I predict a reschedule and then we’ll see. We’ll see what happens from there. But one of the things you said there is that despite the changes that we still need to find a way to operate in the current environment.
Guillermo (00:42:51) – Right. And that’s what happened with all the heavy investing that happened, in cannabis, before Covid. We know capital is tougher to come by now, but it was all based upon the fact that there would be a rescheduling and safer banking and I agree with you. We have to learn a way to get to profitability, to thrive in the current environment. And I think a reschedule or two aid going away is it is on the horizon, but who knows when it is. And so the challenge is going to be to maintain cash flow to build cash flow through operations, to build a business that that is profitable in the in the current environment, as challenging as it is and as you know, it is possible and there is success stories of retailers, cannabis companies that are successful in the current environment.
Pat (00:43:48) – This will happen in the next 3 or 4 years, there is no doubt about my mind about that. This is it’s not like it’s never going to happen.
Pat (00:43:54) – The you know, the prohibition is going to disappear completely. Disappear. But yeah. Assume it won’t.
Guillermo (00:44:05) – Absolutely.
Guillermo (00:44:05) – And just the, yeah. And the procession, the stigmatization. I mean we’ll get to a point where people we, we grew up with the dare its movement and…
Pat (00:44:17) – Yeah.
Guillermo (00:44:18) – You know, in a period of prohibition. But there would be a point, where people will not be as conditioned, um, as, as we were growing up, going through this. So, um, Pat, it’s been it’s been great, great chatting with you. I appreciate the conversation today. Just to wrap up, what’s the way people can find you or where can we find your book when it is published? Can you give us a little bit more information about that to wrap up?
Pat (00:44:43) – Sure, I’m easy to find. I’m on LinkedIn. Pat Helmers. It’s very easy to connect with me there.
Pat (00:44:53) – My sales podcast is called salesbabble.com, and that’s where the book will be announced. And actually, you can listen to episodes right now and you can start listening to it and hearing parts of it. Right? Right now, it’s because I’m publishing a publishing the whole thing ahead of time. The little bits and pieces at the time, the cannabis podcast is called the CannabisAdvocatepodcast.com, and it comes out every Thursday. And, it talks about all kinds of people in the cannabis industry and all those struggles and challenges that they have is pretty fun. And for people who want to start a podcast, and I just don’t help people with cannabis podcasts, I have other kinds of industries, too. It doesn’t really, really matter. You can learn more about that at habenromedia.net and there’s a whole bunch of information. There’s a newsletter in there. You can go in there and we’ll teach you all about podcasting and how to pick out a microphone, and how to interview people and how to find guests and, you know, stuff like that.
Pat (00:45:57) – So it’s.
Pat (00:45:59) – It’s fun.
Guillermo (00:46:01) – Well thank you, Pat. We’ll get all that included in the show notes. And it’s been a pleasure chatting with you today. Thank you so much.
Pat (00:46:08) – It’s been really fun, Guillermo. It’s been an honor. Thank you!
Outro (00:46:12) – 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.
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