Marijuana Business Magazine September 2019

Marijuana Business Magazine | September 2019 116 Washington state began sales of adult-use cannabis July 8, 2014. Since then, the pioneering executives have passed over many bumps in the road, including falling wholesale prices and difficulties with regulators. Marijuana Business Magazine sur- veyed several Washington state busi- ness owners to find out what they’ve learned over the years and what they would do differently if they could go back in time. “I would probably warn myself that the Washington State Liquor and Cannabis Board (LCB) isn’t an ally,” said Bob Ramstad, owner of Seattle-based OZ. Recreational Cannabis. “I would probably also remind myself that there will be other licensees that are not detail- oriented or rule-following, and that’s OK; they are just different than us.” Diversify, But Don’t Bite Off More Than You Can Chew Some business owners say in retrospect they would have tried to do less with their company, such as focus only on cultivation, while others suggested adding revenue streams within their single specialty rather than branching out into something entirely new. At Arlington-based Washington Bud Co., CEO Shawn DeNae originally thought that a successful approach would be to cultivate cannabis for flower sales as well as processing and infused products to expand her brand’s reach. “I was wrong,” she said of that initial strategy. DeNae built a stand-alone processing company fed by a stand-alone bulk cannabis production company to create bulk oils and branded extractions, tinctures and edibles. “We partnered with the wrong people who failed to follow through on several levels,” DeNae said. “This attempt to establish three licensed businesses cost vast amounts of time, money and heartache.” Jeremy Moberg, the founder and CEO of Riverside-based CannaSol Farms, said that, given a second chance, he would not have chased after the oil market by trying to create cartridges for vaporizers. “The technology changed so fast, and cartridges were so bad for so long, that it seemed like we were throwing failing cartridges away all the time,” he said. “I give myself a little slack because none of these processes were standardized, and we were inventing operations at scale in real time.” If You’re Going to Branch Out, Stay in Your Comfort Area If Jim Makoso, vice president of Seattle- based Lucid Lab Group, could go back in time, he would tell himself not to focus on just one revenue source. “Develop multiple revenue streams inside the extraction space,” he said. “We’ve iterated to this over time, and it has proven to be critical in our development as a business.” One of Lucid Labs’ main revenue-driv- ing business units is its Process Solutions vertical, which provides processing equip- ment to cannabis companies. Makoso said the unit grew “organically” out of the core business of infused product development. In the process of generating new products, the need for improved capital equipment solutions led Makoso and his team to engage with equipment manufacturers. Together, they created new capital equipment tailor-made for cannabis processing. Pivot and Take a Different Tack When Things Don’t Look Promising Other business owners say they wouldn’t have set up shop in Washington state at all—or they would have entered the hemp space instead or charged more for their services. Looking Back at Washington state A half-decade ago, Washington state’s cannabis business owners took the reins of the country’s second recreational marijuana market behind Colorado, and they’ve learned plenty from their mistakes in that time. JimMakoso. Photo by Jules Clifford