Investor Ideas Potcasts, Cannabis News and Stocks on the Move; Episode 623: Interview with Marlo Richardson, California Cannabis Entrepreneu

From Adams Morgan to Anacostia Park. We all want safer neighborhoods, but what does real safety mean? Real safety means preventing crime before it happens by having police work with communities to disrupt cycles of violence by supporting families with stable housing and providing more mental health and drug treatment. We know that adding more police and locking up more people doesn't make us safer. Real safety means investing in the things that help prevent crime. Learn more at Real Safety DC.

Investor ideas.com podcast.

Good afternoon and welcome to another episode of investorideas.com podcast. In today's podcast, I interview Marlo Richardson, who is a licensee holder who owns and operates a Canadian cannabis grow in California, where we discussed some of the legal bureaucracy and red tape, as well as excessive taxation that is currently facing the California cannabis industry, as well as how she's stayed competitive against the black market aspect of the California cannabis market.

Okay, so today I'm speaking with Marlo Richardson, who is a cannabis entrepreneur based out of California. Marlo, it's great to be able to talk with you today. So could you give maybe just a brief description of sort of your background in the industry and how that's led you to your involvement with cannabis today?

Sure. I actually did some time in law enforcement, so I have a background with security overall, and that's kind of been my intro into the cannabis industry. I had a friend that needed to get a security plan done for his licensing in the Palm Desert area. I was able to complete that for him. And at the same time, my mother was going through a lot of pain and ended up having hip replacement surgery. And the only thing that would basically cure her pain was different cannabis ointments. And so I really became interested in the process. And he introduced me to the Los Angeles market. They had a social equity program, and I literally applied within the last 40 minutes and immediately got an invoice. And that was pretty much the start to my journey in the cannabis industry.

So there's obviously a lot of discussions about California's market today. And being as you've been based out of there, can you maybe talk a little bit about just sort of what's going on within that side of the industry today and maybe some of the issues that you're facing.

Taxes are definitely a huge issue for licensed business. I can't even name the different taxes that I have to pay in California, but you have your state tax, you have your local taxes, you have your, you know, your cannabis tax. If you're cultivating, excuse me, cultivation tax, your excise tax, it just goes on and on and on, in terms of. Everyone wants a percentage of what it is that. That you're doing, and that is definitely probably one of the number one issues. Another issue for Los Angeles specifically is the social equity program. I grew up in a pretty, you know, disadvantaged area, and I just kind of. I guess I don't know if it was luck or, you know, just some divine fortune, but, you know, I went to college, got a good education, ended up with a good job, made a good living for myself prior to the cannabis industry. But the impact that most people I know that have had in the cannabis industry, it starts, you know, with. With finances. And if someone doesn't have the money, it's very difficult to get into the cannabis industry. It's expensive. I spoke a minute ago about the last 4, 40 minutes, and when I applied and got an invoice, that Invoice was almost $25,000. I don't know many people that are, quote, suffering, but they give you 10 days to pay this, you know, significant amount, and if you can't pay it, you're basically, you know, unable to continue with the process. So there's a lot of challenges in that area.

How are you seeing, I guess, is anyone looking into how to address these problems? I know that there was recently that letter sent to Governor Gavin Newsom specifically addressing the tax issues, specifically addressing how this industry is getting hamstringed by the illicit industry that can exist sometimes even next door to a legal operation or down the street and not have to pay any of those taxes or fees and can just completely decimate a legal operator just on a cost basis. Are you starting to see that because there's enough now legal voices and there's enough kind of energy behind this that this might be addressed? Or does that seem maybe not as hopeful at the moment?

The problem is when we have these great people introducing these programs, they're not always in a position to follow it through. They can do as much as they can, but it's pretty difficult to follow, let's say, $100 million that you've got granted to a certain area to make sure that it's actually going to who it's supposed to go to. And I think that's where the failure lies, is it's not necessarily the people at the top. It's a lot of times the people in the middle that are taking care of people that they know or taking care of people that are going to give them some sort of a kickback. And there's been a lot of people that have gotten in some serious trouble behind those type of activities or whatnot in politics. But I don't think it's going to stop because at the end of the day, you know, people will take those type of. You know, one thing that I think a lot of people can do that find themselves in a position where they're looking for financing is you got to look at yourself sometimes. And what I mean by that is people are willing to invest in you, but you've got to have your stuff together. And I've had so many people, you know, approach me and want to do different things, and they come to you and they're looking for financing, but they don't really have a plan. And it's hard to want to, you know, no matter how much you want to help and support someone, it's hard to be supportive when people aren't really sure what they want to do. Because at the end of the day, you're in a position to have to figure out, well, how am I going to get that investment back? And so people have to really take that part of it into consideration. And sometimes we have to look at ourselves.

So I guess when you're looking at that landscape, obviously there's a lot of difficulties. You mentioned specifically for, you know, people who, ideally this industry is helping, which is, you know, minority communities, which is people who have had prior convictions or any sort of penalties from being involved with cannabis in the past. That's the areas we're trying to be supported. Is the main issue still the investment, or is it also the fact that there is that lack of knowledge as far as the business understanding what kind of operation they're entering into and how competitive this landscape is. I mean, you know, as much as I want everyone to have more mom and pop operations, there's a lot of interest in this space and there's a huge competitive landscape that you're. You're facing off against, from people who are very small to people who are gigantic corporations that are in, you know, eight to 20 states.

Are you seeing that that is being addressed as well, as far as the education lack? Because I know that there's a lot of people, even just cannabis consumers, who. It's easy to get hyped on the sort of bandwagon of this without understanding, like, okay, you need to know business, though. You can't just know weed.

You know, you are hitting all the nails on the head. That is definitely one of the biggest challenges. People sometimes think that they know business because they've run, you know, kind of like a Street operation. It's not the same. Because when you're talking about things like we mentioned earlier, the taxes and all the different fees and the regulations, you know, you make a couple of wrong decisions and they take that license away, you're back to doing. Doing it, you know, the traditional way where you're now putting yourself at risk to get in trouble or to get fined. And there are some companies that are doing their best to try to educate people, but again, people only know what they know. And so even though these companies put forth a lot of effort into educating and helping people, it's just. It's not easy. And I don't really, you know, have an answer for it other than, again, speaking for myself and other people that are interested. We have to look. We have to seek the information, we have to seek the knowledge. We have to seek the business sense and acumen in order to be successful.

Is there any sense that. It's another thing that I've discussed with a bunch of different companies, especially ones that are entering into multiple states, that the limited license model is starting to really reap benefits for certain states where you're seeing that they're onboarding a newer program. Obviously, California can't just undo what's already being granted, but would you think that that would be beneficial if we slowed down on the granting of licenses in California or. Or only focused on small licenses or like, is there a solution that could be easier as far as forcing people to maybe have a different understanding of the business or narrowing down the amount of competition that's entering in there? Because I do find that, you know, whenever you're looking at cannabis, a big issue is the muddying of the water. There's so many people jump into this space, so many people with different backgrounds, and negative product that's going out into the market has an impact on the legal industry always. And looking at California, there's a huge competitive factor with the illicit market. And to compete with them, you've got to make sure that every product that hits the market that's legal is good, and it has to be competitive, otherwise you're tarnishing that reputation. And people are always, you know, I've worked in a dispensary myself, and you always hear like, oh, it's the legal weed. You know, I don't need to buy that bullshit. And it's so hard to change that stigma from someone who smoked weed their whole life. And I know that, that, you know, like I said, it only takes one bad retailer in your area, and suddenly everyone is Going to the illicit stores because they went to that store, the staff weren't educated. They got sold over dried bud and they're like, well, fuck this, I'll go next door and pay half the price. And to my guy who's all dreadlocked up and doesn't give a shit about the rules, but actually knows the weed product that he's selling.

Exactly, man, that's a great point. And do I think that limiting the licenses would help? I think it would benefit someone like me. But as long as it's very expensive to get into, even if they limit the license, that's just going to make the bigger companies or the people that have all of the money more aggressive at coming after the small guys. And the agreement is, well, the law says they're supposed to have at least 51% ownership. And what ends up happening is, yeah, on paper they have 51% ownership, but after all the fees and they employ all their managers and they do this, you know, you've got someone that again, is supposed to be benefiting, that's getting like 3% of, you know, of, you know, the whole pie. And it's just, you know, it's really unfair and it's unfortunate. But the flip side of that is they can have 3% or they can have 0%, because had they not had that investor, they would not be able to do anything. So it's kind of, you know, lose, lose for them. But I guess 3% is better than nothing, right?

That's a harsh reality to swallow, but it is what it is. That is the truth. Right? You can either benefit a little or not at all. And that's tough to deal with I guess as well. When we're looking maybe at the cultivation side, I don't know as detailed about the California logistics as far as what you can do operation size wise in California. But are you at least seeing maybe there's a movement towards allowing for more micro cultivator licenses or smaller scale, you know, cultivation operations that someone wouldn't need to pay an exorbitant fee to get into and maybe could just supply, you know, one of the larger corporations of the companies? They're still making decent money. They're not having to, you know, overburden themselves with a larger scale operation than they can handle. Is that sort of a potential solution for some of the people who are again, are looking to get into this but don't have, you know, some sort of exorbitant amount of capital to just jump in and own a retail store or you Know, set up a consumption lounge or something like that.

I definitely think that if they limited licenses that, you know, the cultivation licenses, that we could benefit a lot more. But in California specifically, they already have limited cultivation licenses. I don't know if.

Allowing more people to grow would actually benefit because this is another harsh reality. The difficulty of having too many cultivators is you have a lot of flour and there's really no way to get it to market without distribution. And a distributor is always going to want to distribute their own flower if they're also a cultivator.

Yeah.

So I guess then when you are looking at the future of California, the future of what can be done or how this might be addressed, what are some of the positives you might see on the horizon? Where are the benefits of that market continuing to evolve? Is do you see, I know that consumption lounges are starting to come into the California market. Is that a different opportunity where maybe there's not as much taxation or regulatory tape to get through? Or do you see that maybe that might change the landscape a bit because other businesses now have an interest in this? Because once you have consumption lounges, you could have restaurants eventually endorse these types of products because, yeah, I mean, obviously there's a huge amount of cannabis in there. I don't assume the California market is going to disappear, but I know that what a lot of people are worried about is just a sort of almost a sweeping of the board element of consolidation where a few large companies are going to buy up an insane amount of small companies who just eventually start collapsing, you know, once it gets into the summer or spring, because X, Y and Z, they just weren't able to make the profit margins that they needed.

Well, as long as they continue to limit cultivation licenses, there's only going to be a certain number of flower. And it's just like any other type of agriculture. You know, if you have someone that's specifically an outdoor grower, weather plays a role. So that may or may not always be good flower. If you have someone that's an indoor grower, that's always going to be a limited space and limited licensing. So I think that, you know, there are enough checks and balances to where the California market will at least be okay, or the cannabis market in general will be okay. But I also like to look at it and in some ways compare it to the liquor industry. You know, there's a price of the product, the marketing of the product, the branding of the product, and whether or not consumers like it. If a small company is able to, you know, capture all of those things, people will buy it, and if they're lucky enough and they're interested, a big company might come and say, hey, people love your product. We'd like to give you X amount of dollars for it.

So I guess with all of this, like I said, there are some obviously negatives. There's also a lot of positives. Are you still seeing that interest as far as investors, as far as just general cannabis? Interest in the industry is still very strong in California. Or have you seen this wane? Because now there are other states people could enter into and there are different opportunities that they could take. Has that dropped off or has it kind of maintained a level, level station?

I think it's been pretty consistent. If there's one thing that I would bet on is that California is the best market to be in. Doesn't matter how expensive it is. This is a place where, you know, you've got a lot of people that are buying five and $10 million homes. So it's not, you know, just the expense part of it, it's the consumer part. It's Hollywood, it's Beverly Hills, it's all the beach cities.

So I guess just in sort of final thoughts, then, when we are.

Again, there's. There's a lot of good reasons to be in California. Are you starting to notice? I think the biggest thing that people are hoping for, and I know that this is the thing that a lot of companies do boast, is brand building is still probably the best in California. Are you noticing that that is actually becoming a real thing? I know that that gets sort of hyped by a lot of companies of, like, our brand. It's so noticed everywhere. But on when you get, you know, people on the streets and boots in stores, you find that a lot of people still don't know what the hell they're shopping for because products are always changing. And I know that that's probably one of the biggest issues that this industry faces is that, you know, unfortunately, everyone's doing research and development, everyone's coming up with new products, new ideas. And so what was there last week is not necessarily there the following week. And because of that, I find that a lot of the recognition parts of our consumer awareness when it comes to cannabis brands are very low. A lot of people, if you tried to say, like, what's the brand you buy the most? They. They'd probably tell you a strain name. They'd probably tell you Sativa or Indica. They'd probably tell you you know, maybe a few of them could name a company, but I haven't seen it translate as much. But I know California's the most established market. Are we starting to see that that is becoming a reality now where you could build a brand there and move that into other states or other markets?

Oh, absolutely. And there are some people that have been very, very successful at doing that. And to be honest with you, in California, if you ask someone what is their favorite brand, they probably have one because we have some pretty quality brands out here. And the thing that I think makes the California market really attractive, when I first started out in this business, they said all celebrity don't do well. Well, I brought napalm for the rapper actor exhibit to market and I would have to disagree. We did a really, really great with his brand And I think 90% of it was the fact that he's got millions of followers and can actually, you know, promote it. Because the cannabis industry still has a lot of restrictions on how they can advertise. And as long as, you know you've got someone on social media that can do a video and say, haha, this is what I have. I mean, we had Snoop Dogg holding it, we had all of these other people that are putting it in front of millions and millions of people, it easy to build that brand. And I think there's a couple of other brands like that, but you have to be able to match the quality. There are some celebrities that have a brand that, you know, you would think that it would do really well because of the type of celebrity that they have, but it's kind of just their name, like they're not really involved and if they're not involved in pushing it and supporting it and promoting it, it's not going to do as well. I'm working with someone, I'm very, very excited. I can't wait to say it. But I have a brand that'll be coming out and this guy is like the epitome of the ultimate cannabis smoker. He's been in movies doing it. And it's just, you know, I'm excited and I know that he wants to promote it and it's those type of things that make California a huge market.

That's a really great point. I'm really glad you brought that up. About the inslebity, the celebrity endorsement within California of you have a surplus of celebrities. Obviously they all work there or have to go there at some point. And it's also a place where again, you have this cannabis culture and that is A great point of the marketing is the biggest issue that I see from every company is like, how do you get people to hear about you? And, you know, you've seen that. Honestly, most recently I've interviewed several companies and their biggest success has been one random person on TikTok, you know, using their product or showing the brand or something like that's the only way they've gotten recognition has been through people like that or again, influencer, endorser, whatever you want to call it. So that's good to hear that that is the, again, still the brand building area, because I think that that's also what people. You know, I'm from Canada, so my perception of the US is California is where it all comes from. Like, that's my understanding is. So that's who I always look to for like brand building out from there to begin with.

Yep, you got it.

You also mentioned just one thing and I just wanted to just touch on it just briefly at the end here is, you know, quality.

Always everybody's talking quality, but it's one of those things that's really hard to narrow in on of, like, what is good quality plant? Because I think everyone has a very subjective expectation when it comes to cannabis. I know people who, you know, very old man about their weed smoking preferences and to them good bud is very different than someone who, you know, only does, you know, dabs or concentrates and things like that. It's a big range. How have you seen the quality, I guess, change the quality standard change in California? Because you've been there for, you know, more than, more than a day or two. You've seen how this landscape has evolved. Are you noticing that the quality is kind of still where it was when you entered into the space, or has it rapidly changed because of competition? Where you're now seeing that the standard that used to be acceptable has been, you know, raised to three or two tiers above that sort of thing out there.

People had to kind of lower their pricing. And when you're lowering your price, it's, you know, it just seems like people don't put as much time and effort into it. So whether it's not a good trim job, and I'm speaking like just for flower, right? It could be great. But there's still a lot of people that are into the look of it. You know, they want to squeeze it, they want to smell it, what's the nose like? And then, you know, and in the legal market you have the testing aspect, which has created an entirely different type of consumer There are some people that really believe that, hey, test at, you know, 30. It's amazing. And that's not always true. You know, it doesn't necessarily mean it's better. Doesn't necessarily mean that it, you know, it has all of the better, you know, terpenes and the flavor profile, it's just, you know, it's kind of, to me, it's like a score, you know, but it's not necessarily an accurate score because again, everybody likes something different.

Yeah. So. So we just say then it's kind of separated into those two categories of more. There's, there's a, you know, a can of sewer looking for, look, looking for bud consistency, quality, terpene profiles. And then there's another person similar to what we've seen in most markets. You know, just looking for the, the THC CBD percentage, which I find the strangest because that would be like going into a liquor store and, you know, asking for a specific alcohol percentage which seems, seems equally crazy. You know, like, well, then again, get the, get the cheapest vodka and you're out the door, I guess.

And even with that, I mean, if you go back to the traditional market, nothing was tested, so you don't know what the heck you were smoking. You know, it could have been 2%, it could have been 40%, who knows? But now all of a sudden it's relevant and it's important to some people.

Yeah, yeah, yeah. I think that that'll. There will always be that, obviously people who, you know, just go by standard metrics. But I do find, at least as more people try these products, I find cannabis is hard to fake. It's, it's, that's. I really like it as a consumer industry because the consumer does drive the end result. And it's just impossible to trick anyone. It's impossible to give them a product and be like, ah, well, it's going to do this. And then they try it and they're like, oh, shit, they don't come back. There's no, there's nothing you can do. There's no fancy packaging you can put on it to swindle people's minds, which I think is the best aspect when you're looking at, you know, for us as consumers as well.

Definitely have to get it right the first time.

Yeah, definitely. Well, I really appreciate your time today and I appreciate the perspective on that market because again, when we're looking at the U.S. it's where all the conversations always lead to is, how is California doing? You know, what's coming out of there and, and you guys are much the leaders as far as what people follow, you know, progressively afterwards and where brands develop and how they develop. So hopefully there will be some sort of regulatory changes or taxation changes eventually to allow for a more equal playing field. Because I think that that's, that's the big ambition for cannabis, right? Is social equity actually being played out, but very lofty goal. Unfortunately, that doesn't always get the, you know, it's a good buzzword, but doesn't get usually people actually moving into action.

Exactly, Exactly.

Well, again, I really appreciate the talk today. Thank you very much.

Thank you for having me.

Once again, that was Marlo Richardson. To find out more information, you can click the links attached in the article or check out her YouTube page at marlonicole business bullish that's all for Today's Podcast. Enjoy the rest of your day. That's all for today's Podcast Podcast is now a certified word trademark on the blockchain through Cognate Incorporated. CM certification. Investorideas.com podcasts are also available on itunes, Spotify, Google Play Music, Stitcher, iheartradio, Spreaker, and Tunein. If you'd like to be a guest or sponsor of this podcast, please contact investorideas.com Investor Ideas reminds all listeners to read our disclaimers and disclosures on the investorideas.com website. And this podcast is not an endorsement to buy products or services or securities. Investors are reminded that all investments involve involved risk and possible loss of investment. Investor Ideas does not condone the use of cannabis except where permissible by law. Our site does not possess, distribute or sell cannabis products. Hello, it is Ryan and I was on a flight the other day playing one of my favorite social spin slot games on jumbaccasino.com I looked over the person sitting next to me and you know what they were doing? They were also playing Jumba Casino. Everybody's loving having fun with it. Jumba Casino is home to hundreds of casino style games that you can play for free, free, anytime, anywhere. So sign up now@chumbacasino.com to claim your free welcome bonus. That's Chumbac Casino.com and live the Chumba Life. Sponsored by Chumba Casino. No purchase necessary VGW Group Void where prohibited by law 21 plus terms and conditions apply.