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The Kaya Cast podcast is a weekly show where we interview thought leaders in the cannabis industry about their experience and expertise of working with cannabis. The aim of the show is to help cannabis retailers do what they love and share their stories.
Welcome to the KayaCast, the podcast for cannabis businesses looking to launch, grow, and scale their operations.
Tommy: Wesley, thank you so much for joining us today.
Wesley Hein: Thanks, Tommy.
Tommy: How can a retailer better leverage their suppliers?
Wesley Hein: Retailers, is held in incredibly high regard. Because without healthy and successful retail, there is, no supply chain. I'm involved with the Cannabis Distributors Association. We spend an inordinate amount of time trying to lessen burdensome things on retail. Even though we're not retailers. Because the retail license type is the most difficult, right? It's on the front lines. They get inspected more, they get taxed more, they get robbed more.
So the entire supply chain, honestly, when retail says jump, really should say how high, but retailers should be very careful about this. They jump 99, 10 percent of the time. They're like, lower the price, lower the price. And in, most cases, I think it should be hold your price, right? Raise the price. They're selling really well. We can't raise the price here because there's people around us, but my God, you guys have something.
I mean, a funny little anecdote is before I was in cannabis, I had a record labels in the music industry and the music industry had this habit of when new releases would come out, like the hottest new release, those would be the most discounted things in the store. And then we had this executive came in from the toy industry and he's like, Okay, I got to get this straight and new records coming out. Let's just say Michael Jackson, right? Date myself, right? New record has come out and that is the least expensive thing in the store. People are going to buy that no matter what. It's like when there's a hot toy, they don't discount it. There's a hot car. They add dealer prep to it. When a movie is opening up. It is not discounted, right? If there's a line out, it's like, why are you doing it? And we'd be like, well, because we want to sell a lot, right? It's like so dumb. And of course artists wanted to be number one and there was all this stuff. And I don't know if we ever were able to get out of that.
It had just become so entrenched. And, people were going to the wrong metric and be like, well, I want to get to gold, right? If somebody is willing to buy Michael Jackson at this price, they're going to buy it at this price and then take that extra margin and put it into all of the things that one needs.
So it's not just the cannabis industry, but I don't think I've ever seen as an extreme example. It's the cannabis industry on the pricing, and I think a lot of it has, just as you said, has to do with the desperation, you know, the additive effect of taxes, the additive effect of the competition from the unrelated market, the additive effect of some of these things has really made it, you know, pressure, but getting back to that point,
I'd sort of come down and go, hey, I'll give you a shot, but I need to know you have a ground game. I want to see velocity. And if I have something sitting here. I'm not going to discount it the first thing I do. I'm going to call up and go, what are you going to do to get this thing to sell? And not all products sell. But a good brand,, that has ground game, is going to go out and go, okay, let's do this, let's do that.
And sometimes it doesn't sell, and you just get it off the shelf. And then focus on, those things. You know, one of the, another somewhat apocryphal story, but it's true. We'd have something selling really well, somebody would go in and we wouldn't see it there. We'd Where is it?
Well, we sold it. Do you want to order more? No, because we got a discount from these people. But you've been selling this, you have it. This happens less because consumers start to develop loyalty. But even that mindset of, I can get a better deal on this unknown product. Whatever, pre roll. And invariably, and this is where shelving fees come in, I can talk about MedMen because they're out of business, but when they were going through one of their many, many, management changes, managers came in, management came in at the top and said, this is crazy, we're gonna start charging shelving fees.
Well, the good brands were investing so much to make products sell through, what do you mean we're gonna pay? Sorry, it's your top selling SKU. And we take that money, and by the way, you don't pay really that well, but we take that money and invest it into all of these things. And it's an expensive product to make. And this is a win. How about a high five? We've done it. We've given you something and you're selling it and it's working. It'd be like shelving fees. And a lot of the good brands said no. So who says yes? People are like, Oh my God, I finally, I haven't been able to get any, but I have such a great pre roll.
They put it there, but they don't have the people. They don't have the brand recognition it didn't sell. Now you start having stale inventory, right? It's so backwards.
Tommy: When a SKU isn't selling, what can retailers do with their suppliers to push it without reducing price?
Wesley Hein: In some cases what you can do is, it's just like we need more people to be able to try this. We need you to have somebody parked in the store and educate, and then what's going to happen is we're going to hear from those consumers, right? We're going to hear from those customers. If they come back and want it, then we're like, okay, it was an education piece. If they come back and go, Hey, you know what? Nothing special. Maybe it really wasn't special. And then the only thing that should be done with the discounting is, it's on the way out, right? That's just a, like, and look, then you're dealing with, and a lot of people will call the brand and just go, What can we do? In some cases, without really devaluing it, if you're trying to get a beverage introduced, be like, buy the vape, right? And we'll give you this beverage, right? Of course, California, maybe some other place you can't give the beverage, but they can buy it for a penny. Which is always funny. It's like dangerous to give away for free, but a penny and it's no longer dangerous, but okay. You're doing and saying, we think this thing is great. And. We want, the first hundred people, to be able to sort of try this and we're going to ask that you fill this little thing out after, there can be these.
It's like, How's it being merchandised? Is there any POP? Did the bud tenders get samples, the difference between. A dab at a beverage, and a pre roll, and a fused pre roll. We all know the difference. Somebody walking in, and it's great if the Bundtender goes. I've tried this one. This one was this. You might want to be a little careful with this one. They should know. The second thing is, it's medicine. Even people who do not use it for particular medicine, it has all these beneficial effects and it's just helpful and it works. It creates a bond of trust, and you shouldn't expect a butt tender on a butt tender's salary to be able to buy everything that they need. So one of the things that brands can do is they can figure out ways to get it in. Because they can't give them away, but there's nothing that stops them from selling it to the dispensary for a penny and get those in the hands of the bud tenders and because if the bud tenders like it that's gone a long way.
And similarly, if they don't like it, you have a product that it's not selling, the messaging didn't connect and the Budtenders don't like, kind of might have a problem
Tommy: What is the best way, sorry, what is the best way to leverage your supplier to train your team?
Wesley Hein: Well, I think one, don't put impediments. Some will say, well, we're going to charge you if we're pulling them off. We need to charge you. It's like, okay, again, I get it when you're like, they're like, I haven't paid my taxes and so I'm going to try to squeeze everything, but that's the last thing because then some brands will go, I won't do that.
I'll train the dispensary down the street. So I think it's almost like, Hey, for me to carry things, I want to see you in here doing it. That's one. Two, have somebody trained how to do it. You can't hire somebody because they love weed, call them a salesperson, and say go train, and say this is killer. They need to understand what it is like, what happens.
Most important job ever in my life was being a minimum wage clerk in a record store. Because I thought I understood music until I saw what the randomness it was when a person walks in and they're looking for something. It was incredible. And that's what led to me actually starting a record label. So having people hopefully. They've worked in a dispensary. If not, they've spent a tremendous amount of time. So their messaging isn't, this is great. That doesn't help anybody. What is the competition? How's it different? What consumer is this appropriate for? What are the use cases? What are the things that might, somebody might say about this? Blah, blah, blah, blah, blah. And then be able to distill that down so that a human being, a normal person can understand and say it back and support it with follow up, support it with Marketing materials. Support it with, merchandising and be there.
Right? It really is a cooperative sale and it starts, of course, the product has to be right and then get, getting it there and look at a lot of times things click and it's really fun and people have got it, but to market like California, headset tracks 850 brands. So you think about that. Each one of those might be in multiple categories. Many of those have sub lines. There's our sleep line, there's our this, and so forth. And so it's just an immense amount of content. Truly, noise is no better way of sort of saying it. So figuring out how to cut through that noise and have it. We're well past the days in a market like California where putting something on the shelf and somebody's just going to buy it.
Now there's brands like 710 that have just developed their brand and that brand recognition. And even if somebody gets hired as a brand ambassador, 7 10, I've never heard of that. Every other bud tender is going to go, Oh, man, you got to try that. You know, oh, this stuff, this stuff flies off the shelf. And they've done that. But I will bet their sales team is still in there and we distribute them. So I know that their sales team is still in there articulating what they've done, why it is, because no doubt there's a competitor gone in and said, we're just as good as them and we're less. So they're going to constantly have to go back and say, they're a premium product. This is why we have this. This is why it's that. The neat thing about, Cannabis is, it's, people can experience it. Let the bud tenders have.
What, what those dispensaries should demand of their brands. It's like, if you want to be on my shelves, and this is why shelving fees cheapens it, you want to buy my shelves, give me 5, 000 for your discount brand. I can't think of anything worse, right? If you're going to have, and of course everybody does, good, better, best. Put the good in the back of the store. So that it's, it's not the first thing they see. If somebody wants to pay to be on, they should probably pay more than a brand you're making more of a margin on, or you're making a higher, of basket. Every sale they make is taking a little bit away from something that they otherwise, might have had.
If they come in, they should be pushing the other discount brand off, not knocking out. Better or best. Again, there's a lot of very sophisticated, merchandisers at sort of retail. They have their plan again. Here's what I'm doing. Here's why and this and that. And those are the ones who have no trouble going, I have a hole right here. I'm going to try it with these guys, but I need them, they're going to need to hit this metric and to hit this metric, they're going to need to do X, Y, Z. And that's what they're focused on. Not selling, shelf space to whoever the highest bidder is.
That's I think that that's just a horrible thing. People will spend money to be on shelves. I think you want people to spend money on the ground game, on the training, on the product, on the materials, and the velocity.
Tommy: You mentioned ground game. What do you mean by that?
Wesley Hein: Maybe there's a better term and you can tell me what it is, but for me that is something where, you have a marketing plan, everything from the package to the name, price is a form of marketing. All of attributes. And then you go, okay, what's our digital campaign? So somebody's going to have, what's our launch, which blah, blah, blah, blah, blah. And that's all great. But then there's the sort of roll up the sleeves, California is immense. I think it's 800 miles from north to south and, a couple hundred miles across. So, it takes, groups of people to be spread out through the state who can go into that dispensary and go, Okay, what do we need to do here? Right? Like, I can see that my, infused pre rolls are in with all of these others. We were the first to have this color, but now other people have this color. Whatever it happens to be, I've been looking at the sales. They're not going. should based on other areas. What do we need to do? Right? They're there in that store, in that specific situation, that? customer base. Not all communities the same, right? Some places you have two dispensaries, right? For, 50 miles around, that's gonna might call for one thing. Another is you might have, 12 dispensaries it feels like on a street. And so somebody's sitting down and really thinking, okay, what do I do, with this, communities. are more economically challenged. All of this stuff, some heavy bias towards flower. And maybe they don't like manufactured products, and yet those still do really well once they get kind of over the bias of it. And that's a brand's job. If you want it true, you get out there and be able to explain. I mean, getting back to low dose, when, when people sometimes would say, Sort of turn up their nose. And they're like, our consumers, you know, they, they, they want the a hundred milligram and I go, I got it. I see the sales. We make them, we have them in our catalog. I get it. But you know, I bet somebody has got somebody at home, their significant other, that might appreciate having something, right?
There's all these things. So somebody is going to be there listening, not doing just what I'm doing, which is a lot of talking, but they're going to listen and go, what do you think it would be? And that's a ground game, right? It's this very individualized, they're going, here's what everybody cares about in this thing, we think this would be great. That's ground game.
Tommy: I want to shift a little bit to The California market in general, you've been in this market forever and you've seen this market evolve over time. What's selling in California today? And maybe they'll give a glimpse to everybody, in other areas of the U S in what they can expect from a mature market in California.
Wesley Hein: When you get a mature market, one of the things that happens is, and I'll just compare it to limited license markets. In a limited license market, there's probably not enough. Retail outlets to satisfy demand, often the border towns are on states, that, have total bans, and so you have stores that are just doing gargantuan numbers, and Life feels pretty good, but there's a down, a little bit of a downside to that, which is, you can sell, like, Hi, I've got weed in this product, and people might buy it. You get to a more open, mature market, and then there's, 50 of those and people have, invested in packaging, they've invested in differentiation, they've invested in innovation. And it's the innovation that is really the thing that is exciting.
What am I doing with these genetics? What's my cultivation technique? And it's not to eke out more. THC, even though, of course, that's one thing. People are really now starting to understand the role of terpenes. So you start creating a blend that's different than somebody else's gummy and somebody else's this and that. Hardware. Consumption devices, our brand, Heavy Hitters, we're very excited about leaning very heavily into tablets, right?
We started long ago as flower, but really, when we started using the heavy hitter's name, it was Vapes. We got known very much as a vape company, and then we went into, Edibles and other things. Even the same consumer, benefit from different consumption methods and a tablet is so discreet, can be used frequently for those who use it frequently, and has an effect that's very different
That's the thing with California, which is, if you don't differentiate, and true of every, I think, very competitive market. If you do not differentiate, and if you're not able to explain and articulate why you're differentiated, Then you're going to be compared on price and being compared on price is the death of a brand
Everybody, everybody is struggling in California to various degrees. So you get this immediate boost, or people can get an immediate boost by a discount. But discount's not a strategy, it's a tactic. And it's actually not a very good tactic. The unfortunate thing is this one person discounts, and then somebody else is like, well, we got a discount too. It becomes the new norm. But even more heinous than that, you've now trained sort of the customer that these products that are probably really truly different. So somebody walks into a dispensary and they see three rosins, right? 20, 25, and 30. And there's nothing that's really kind of explaining and a bud tender has not been trained or maybe the brand has done a poor job on it. But it's almost like to a consumer, I'm not an idiot. I'm taking the 20 one. Well, now that basket size is less.
Two guys won the Nobel prize, Traversky and Kahneman. They won the Nobel prize for proving what we've always known, which is if somebody walks in and the first thing they see is 20, then 25 and 30 seems really expensive.
Wesley Hein: And then conversely, if they walk in and the first thing they see is 30, But if they only have 25 or whatever, that seems like a really good price. And yet, we do, as an industry, try to go counter to this.
There's always going to be good, better, best. But it has nothing to do with it being sort of a value. It's the differentiation. And so if somebody says, well, why is this one 60? Well, they're using indoor smalls. They're not buying bulk. It's totally different hardware. The extraction process is, completely different. It's doing multiple passes, blah, blah, blah, blah, blah. And somebody might go, you know what? It's worth 20 cents my body. Yes. Somebody else might go, that sounds great. I have 40. And my, I, what I've consumed before, I love that, that's what I want to pay, and then somebody can say, well, we've got something really good for that. But that person, maybe over time, will go, oh, I'm going to do something special. Maybe they won't, but it hasn't been cheapened.
Getting back to your point about California, and it's why I love it, notwithstanding those things, is that the way to get out of that is to innovate. It's not putting a prettier box on, having a bigger logo, slapping up, billboards all over the place. Cause people figure that out.
If your brand promises buy one, get one, You've effectively just lowered the value of your product by that. And look, I get it, right? I, I, we've all been there, where you're like, If people just tried my product, they would be able to know how great it is. Alright, well then figure out a way for them to be able to try the product, right?
Retailers should be just going, Hey, brand, like we haven't seen you in here. You know, turnover is a real thing. You got to come in and train. Your materials are confusing. You haven't articulated, you can't just say you're better.
Tommy: Before I let you go, what can people expect, uh, from Mammoth in the near future? What do you guys have planned?
Wesley Hein: Funny thing about being in California, it's all consuming, right? So we will continue to have a significant focus because we get back to that ground game. It's hard. It's a lot of work. And if we go, let's launch in these other states. And of course we'd love to be in these other states. It's hard to do a lot of things. We did launch in New York in part because we go, we actually think this is going to be really a lot like California and we're comfortable in a knife fight, so to speak.
And then as soon as we leave, there's going to be 12 other people saying that, right. We have to be able to succeed in that. I, we have, if we, if our products don't sell, I know we spend a lot of time talking about if they don't sell. If they don't sell, we have to have products that sell or you don't get on the shelves. There's just way too much competition. So we're comfortable in those, environments. But we will expand our footprint, into other markets. Our real issue is everything we do is differentiated. Nothing's off the shelf. So when we're, going into a state, we can't say, Oh good, you have bulk blank.
Like, well, it doesn't do us any good. Um, doesn't matter. You have the most wonderful sources and the most wonderful relationships and the most wonderful this and the most wonderful that. Ours has to be. Different, and better, and unique. And so we have to be able to get directly. And so it takes a lot of time to do that. Um, the other thing is, is that we're not a vape brand, we're not a gummy brand, we're not a tablet brand, not a beverage brand, we're all of those. And so, for, and, and much more. Alright? Infused pre rolls that could go on. We're hesitant to come out with just one thing because if a person hasn't experienced us before, they're going to go, Oh, like if we just rolled out gummies, you guys are gummies. Then if we You know, follow up a year later, whatever happened to be a vape. So it'd be like, that's weird, this gummy company doing vapes. And so we've really worked on what our, our brand promises and message. And we feel that being in multiple categories is really important for that. So it's a, it's a, that first step is a bitch, so to speak, on that.
The second thing is, We did our first, brand acquisition. There's a beverage manufacturer, it's the largest in the country called Space Station. And we acquired that in 21. And that was our first, acquisition.
And then we did our first brand acquisition, which is a brand, a wellness brand, very popular in California called Papa and Barkley. And that, we've known about them, we've been in dispensers with them, we've run into them. I have an incredible amount of respect, and there's effectively no overlap with any of our other brands, and particularly with heavy hitters. Heavy hitters is really, honestly, people who value getting high. They're, they're looking for the best. Poppin Barclay is all about wellness. And yet, it is still, it's the number one wellness brand. It's a premium brand. The amount that they've invested in their products and their brand and their process and their supply chain is staggering. And because of that, we were like, there couldn't be a more, perfect fit, but we feel that it has been, it's been a really good experience for us. And instead of trying to extend. Anything that we have into an area that it's not. They've been amazing entrepreneurs out there that have done incredible things and they could benefit from the platform because we have the warehouses, we have the legal department, HR department, right? We have payroll, we have teams dedicated to sourcing, teams dedicated to, dealing with testing labs, every aspect of that. So a brand like Pop On Barclay could come in and just go, I get to be on that platform. And just focus on product innovation, which is really hard to do when you're trying to do all this others as a standalone. I know when people they go, I'm listening to this guy and he's talking about concentration and concentration is bad because it's going to lead to less choice. In this particular aspect of what I'm talking about in the stage where it's actually quite the opposite. I think what we have is, like I said, we have entrepreneurs that, that they've been stifled in innovation from either lack of resources or also having to do all those other things. We would very much love, to find people doing things that we couldn't imagine doing, doing in a way that we would have never been able to do as well as them, and then giving them the benefit of the platform. And then we think that's a good thing. We think that's going to lead to more innovation, more diversity of product offerings, more experimentation, because products Basically, people are going to be able to go back to what they did. Most of those people started out because they had an incredible idea about how to do something. So, we're really excited about that. Hopefully we'll have more announcements over the next year or so about that.
Tommy: That's awesome. That's really great to hear. And people, our, our mantra is always people should do more of what they love. And when you start a business, there's a passion. It's like opening, you open a restaurant, you have a passion to serve people good food and the business kind of consumes you. You, you have payroll, you have administration, regulation, all these
Wesley Hein: Oh, particularly the cannabis industry.
Tommy: Before I let you go, how can our listeners find you?
Wesley Hein: Um, So, uh, you know, I'm on LinkedIn. I like LinkedIn. And that's probably the best, thing. I don't get that many, direct messages. So I probably respond to, everybody on that.
I love to post, my thoughts on it. I mean, the only thing, and hopefully this doesn't come across preachy, but I really do believe that we have problems in this industry. And, We have to try to fight them. So joining associations, being in associations, contributing to associations, being vocal about these things. And I try to share my thoughts on LinkedIn on those things. I know it can be a little bit of an echo chamber because if you have a thousand people and they all agree, but I feel like then they're reposting something and so forth, and it helps normalize. I go up to Sacramento and meet with the regulators. Meet with legislatures. If they don't hear, they're hearing from people saying milk prices are too high. They're hearing from people going, I don't want dispensaries, right? They're hearing all these different things that if they don't hear from the cannabis industry, we'll never get change. So, that would be my thing.
People can reach out to me, but I'd also wish they would just reach out to their regulators, and be very vocal.
Tommy: Awesome. Well, we will drop your LinkedIn handle in the description to this pod. And, thanks again for joining us. We have to have you back maybe next time we can talk more about the New York market since you guys are going there.
Wesley Hein: Yeah, that would be fantastic. It's really good. Thank you, Tommy, and I really appreciate everything that you do, and I know your retail partners do as well.
Tommy: Thanks so much.
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