While impending regulation had closed 530 Edibles’ kitchen doors, legalization opened the path toward new opportunities. As a result of the passage of California’s adult-use initiative in 2016, more and more cities were considering cannabis operations, including Redding, the largest city in Shasta County, just a few exits down the freeway from 530 Cannabis, my newly renamed store. (I rebranded the store that same year since the word “collective” would become obsolete in the face of the new regulations, the company eventually being restructured from a mutual benefit to a stock corporation.)
Redding had a ban on retail cannabis in place for several years, but with the new law, a new city attorney, and new city leadership across the board, it was ready to look at incorporating commercial cannabis activities into its economy. Throughout 2017, 530 Cannabis hosted site visits to most of the City of Redding leadership. I was always transparent that should that city decide to allow cannabis retailers, I would be applying for a license.
I knew I wanted a store in Redding, and I thought it was highly likely that the city would allow stores in the near future. However, I didn’t know how I would come up with the capital necessary to open a store in the vastly evolved landscape of robust security and surveillance requirements, more expensive products, greater staffing expenses, more costly real estate, and last but definitely not least, the hefty state and local license fees. All I knew was that I couldn’t do it on a wing and a prayer with a four-figure capital investment like John and I did in 2009. In 2017, 530 Cannabis was trending toward $3 million in gross revenue with fifteen full-time employees, and I projected that a Redding store would do, conservatively, at least that. I needed to consider outside investors for the first time.
As 2017 progressed, Redding moved its cannabis conversation along through three separate workshops, each focusing on the different aspects of commercial cannabis. I was one of the panelists on the dais during their retail panel, and I spoke at the podium at the others. I had also started my own conversation regarding investors with a consultant I had hired.
In developing a growth strategy for the new store, I was looking not only at Redding but also at the cities of Corning, Orland, and Goleta. With statewide expansion plans, it was unrealistic to think that I would be able to bootstrap multiple stores at both ends of the state.
I also needed a new brand. 530 Cannabis was a regional name and consequently a regional brand. It was also a brand in which my ex-husband still had a minority interest. With the new store, I was going it completely solo, and I had ambitions of eventually building out stores up and down California. I needed a brand that could have statewide relevance. I chose the name Synergy. It is a word we hear often enough, yet I doubt many see or realize just how simply beautiful it is. The word derives from the Greek synergos, which means “working together.” Simple. Beautiful.
The word “synergy,” as my shrink pointed out, also sounds a lot like “sin orgy.” Leave it to the Freudian in the room to pull the sexual innuendo. However, the coincidence was innocent, and, in this case at least, a cigar was just a cigar.
I started working on the logo. I had my attorney set up another corporation, and I began to build out the business plan I would need for my investor pitch.
Redding’s commercial cannabis diligence process was extensive. The months of informational hearings ultimately yielded a seventy-page draft ordinance that, after going through the additional public hearings and local approval process, was passed by the city council in March 2018. Their selection and permitting process was laid out in the ordinance, and it was rigorous. The city anticipated accepting retail proposals by June.
To submit a proposal to the city, I needed a location. There were only two buildings in the permissible zones that I was interested in, and my number one choice was not available to rent but rather listed for sale for $675,000. Unfortunately, I didn’t have any way to buy it. Through the sheer strength of my reputation and with the help of the listing agent, I was able to get the owner to take it off the market and agree to lease it to me, contingent of course on my ability to secure a Redding permit. With that enormous obstacle out of the way, I started working on my proposal for the City of Redding.
A viable location was only the tip of Redding’s proposal iceberg. The proposal also had to include the complete store layout, the available customer parking, any anticipated impacts on traffic, and the surrounding environment; the city wanted to know what systems I would use to control odor; they wanted a copy of my full security plan; they wanted to know how I would handle receiving products and distributors; they wanted to see design elements of the store, my timeline for opening, the number of employees I anticipated needing; they required a full business plan with financial projections, how much capital I expected needing to open; and finally, if investors were involved, they wanted their names and addresses.
When I finalized my proposal and submitted it to the City of Redding, it was 127 pages. I had not outsourced a single page. I had written it all myself rather than hire one of the numerous consultants who had suddenly cropped up in recent years, touting themselves as experts on California cannabis policy and selling themselves to operators unfamiliar with and daunted by regulatory language. Given that I’d been on the front lines of that conversation in 2015, I felt more than qualified to draft my own proposal.
The city set the proposal submission date for early June 2018. All applicants were to drop off their proposals (and the eight additional copies required) at the same time so that a city official could briefly explain the process that they would use to rank the proposals and how long they anticipated needing to decide. In its ordinance, the city had capped the number of permits allowed at ten, but officials had stated they anticipated that it would issue significantly fewer. There were eighteen applicants, several of whose proposals were thicker than mine. Competition was going to be fierce for the undetermined number of permits, and I could not assume I would be one of the lucky few. Longevity as an operator and my reputation were undoubtedly huge advantages in my favor. But I had a significant problem: I didn’t have investors yet.
My proposal stated that I anticipated needing $300,000 in capital to get the store open the way I envisioned it and that I was looking to get a loan for that amount from investors. The proposal listed them as “pending.” My venture capital consultant had made some introductions, and I had made my pitch months prior to submitting my proposal. A couple of them had even been to visit 530 Cannabis and had seen the proposed site for Synergy. I explained to my consultant that Redding was not going to award me a permit without knowing where my money was coming from and that listing the investors as “pending” on my proposal wasn’t going to cut it. But still, they wouldn’t commit. Time was running out.
When I was called in for my panel interview with the City of Redding officials, they kicked things off by asking what I felt to be the weak spot in my proposal.
Without hesitation, I replied, “My financing mechanism.”
The heads around the table nodded in agreement.
I made an executive decision then and there.
I told them my financing plans had changed and that I would not have investors; I would be self-financing the entire project. They requested an addendum to my proposal outlining my new financing plan, which I emailed to them that same afternoon. I drastically stripped down the expenses and plans for the project to reduce my budget; then I itemized where I was getting the money. I used some of 530 Cannabis’s cash reserves to fund a short-term, no-interest loan to Synergy; I did the same with some of my staffing company’s cash reserves; and I used as much of my personal cash reserves as I could safely afford.
I showed the City of Redding how I was going to build out Synergy without taking a single investor dollar.
And so, on July 7, 2018, when Synergy was green-lighted as one of the six retailers to proceed on to the application process, I moved forward with the plan I had outlined in my proposal.
I terminated my engagement agreement with my consultant, pulled up my bootstraps, and marched forward under my own financial steam, one of the most empowering decisions I’ve ever made.
I had indicated in my proposal that my goal was to get Synergy open by September. That meant I had a lot of work to do in the next six weeks. I had to restructure the 530 Cannabis team to compensate for those who would be leaving to join Synergy. I had to interview, hire, and train new team members for the new store. All new Redding team members had to go through the background-check process with the Redding Police Department. The Synergy building itself needed a full remodel. I had to submit retail cannabis applications with both the Bureau of Cannabis Control and the City of Redding; their proposal process had merely cleared me to apply for a permit, but I still had to navigate their application process. I had to develop a budget for my buyer so that he could start setting up distributors to have on standby for delivery for opening day. I had to coordinate installation of security cameras, alarm system components, internet and phone, new door locks and keypads. I had to have the signage installed. And in the middle of all the nuts and bolts of getting Synergy off the ground, I had to make time for media and local politicians. It was a lot.
Below is the actual text reply I sent a good friend when he asked how the final forty-eight-hour lead-up to Synergy’s grand opening was going:
Getting there and it’s going great!
Today we had:
Law enforcement’s visit and training with our security team
Councilmember visit
Building inspection
Water department inspection
Planning department inspection
Tech team connecting Wi-Fi access points and hardware
Surveillance team installing phones and final security hardware
Display cases stocked
I had a snack, I think
Unexpected trip to the City
Reception area set up
Boogie got a drink from the fountain . . . again
Two customer groups showed up ready to shop
Mock transactions
Customer flow practice
Trip to Costco
Trip to Office Depot
Omg I’m exhausted
More meetings scheduled for tomorrow
Second building inspection for tomorrow
I think I sent a couple emails
I know I responded to some texts
Didn’t sit down once
Got stockroom personnel organizing the Limited Access Area
Walkie-talkie protocol and lingo training
Cleaned up a homeless person’s camp in the dumpster enclosure and behind the building
Had an absolute effing blast!
I hit my target opening date of September 1, 2018, and Synergy was off the ground. In its first four months of operation, Synergy did $1.3 million in gross revenue. The following year, the store did just under $7 million and paid back all of its startup costs in the first six months of 2019. The significantly higher revenue was a result of the significantly larger population base in Redding, as well as Synergy’s sales floor square footage, which was more than double 530’s. It was a whirlwind from start to finish, and I loved every second of it.
Synergy had become Redding’s first state-licensed cannabis retailer, and 530 Cannabis had received two of California’s first ten licenses awarded by the Bureau of Cannabis Control. My stores and my team had successfully navigated the grueling transition from a Wild West, unregulated cluster to the most tightly regulated industry in California.
When Synergy opened its doors, we were, quite unexpectedly, the only game in town for the first seven months of our operation. I had figured that all but one of the other five stores that had been green-lighted at the same time as Synergy would be on a similar opening trajectory, but they weren’t. Seven months provided a tremendous head start that definitely allowed us to build our brand and develop customer loyalty. But eventually the other stores began opening, and my staff members were nervous that the new competitors would take our shiny new customers. I wasn’t.
I explained to the team why we didn’t have anything to worry about. It wasn’t because the competition wasn’t real but simply that they were not our concern. We had our own job to do.
I coached them that rather than focus on the competition, it was our job to refocus on ourselves and to continue to do what we did best. I coached them to remember the reasons that we were there: to provide every customer a concierge cannabis experience, to be every customer’s go-to for cannabis product knowledge, to simply be the best.
I never saw my pursuit of being “the best” as a competition, however. I didn’t compare my efforts to someone else’s as the standard; I simply set the bar based on my own expectations for and of myself and my businesses. Essentially, I was competing with myself, since being the best was and always has been about personal growth and challenge. I knew if I got up every day, kept my lens focused on doing the best I could in all ways with a constant eye on how I could improve, then success would inevitably follow. This was the culture I tried to promote and the attitude I hoped to instill in the team.
Since 530’s inception, I never stopped looking for ways to improve the business and its operations. This was such a constant focus that I would tell prospective employees during interviews that if they were the type of individual to thrive in a dynamic work environment with lots of change, then they would probably love working for the companies. I always explained that some of the constant change was due to the flux in regulations, but mainly it was due to my figuring out new and better ways of doing things.
I was direct with the interviewees that how we did things today would not necessarily be how we did things tomorrow. I wanted them to know what they were getting into, but it was also important to me that they understood why. I wasn’t trying to make people’s lives difficult but instead to be staunchly committed to my never-ending pursuit to be the best.
Rather than worrying too much about what the other stores were doing, I encouraged our employees to focus on our own success, and our motives behind it; I coached them that our job was to, quite literally, mind our own business.
As a result, that was precisely what we saw manifest: our continued success even in the face of competition.
I never focused on my success at the expense of the competitors; it was never a choice between my success and theirs. I always believed that there were plenty of customers and business to go around.
I would acknowledge the competition’s existence occasionally but only as an opportunity to evaluate my own operations: Were our processes as efficient as possible? Were our customers happy? Were we maximizing services to customers? Were we doing our best every single day?
Always keeping my lens focused on our own operations, on our success, as opposed to focusing on the competition is a nuanced, yet critical, distinction of perspective.
The universe is abundant, and I knew I could achieve all the success I wanted without it ever being at the expense of another.
That was my truth, which, of course, became my reality.