Vangst Partners with the Cannabis Business Office to Launch a Technical Assistance Program Karson Humiston announces a breaking partnership between Vangst and the Cannabis Business Office to launch a new program. Karson is joined by Emma Howard, the program manager of the Cannabis Business Office, and Tristan Watkins, the Deputy Director for the Business Support Division.
In this episode, Karson Humiston announces a breaking partnership between Vangst and the Cannabis Business Office to launch a new program. Karson is joined by Emma Howard, the program manager of the Cannabis Business Office, and Tristan Watkins, the Deputy Director for the Business Support Division.
Emma provides an overview of the Cannabis Business Office, which was established in 2021 to provide access to capital and technical assistance programming for social equity cannabis businesses. The office offers grants, loans, and technical assistance programs to support business development in the cannabis industry.
Karson and Tristan discuss the need for more specialized technical assistance for cannabis businesses. They highlight the gap in the market for expert-led courses on topics such as accounting, HR, compliance, cultivation, and more. The partnership between Vangst and the Cannabis Business Office aims to fill this gap by creating a program of 50 courses that provide real tactical business help and guidance.
Emma explains the process for accessing the resources provided by the Cannabis Business Office. Clients need to contact the office with their social equity license or finding a suitability letter from the Marijuana Enforcement Division (MED) to access the program.
Tristan shares details about the loan program offered by the Cannabis Business Office. The program takes a unique approach by working with a lending group that specializes in character-based lending, focusing on the business's ability to repay rather than traditional metrics like credit and collateral. This approach reduces the risk for borrowers and allows for more flexible repayment structures.
The conversation then shifts to the potential impact of rescheduling cannabis at the federal level. Emma and Tristan discuss the benefits, such as lessening the tax burden and opening up banking options, but also highlight the potential risks of larger businesses taking advantage and pushing out smaller businesses.
In the final segment, Karson asks Emma and Tristan for their predictions for the cannabis industry in 2024. Emma predicts that federal legalization will be a major topic in the 2024 presidential election, bringing the industry closer to nationwide legalization. Tristan predicts an increase in high-quality, specialized products and a decrease in stigma as the market evolves.
The episode concludes with Karson expressing excitement about the partnership and the opportunity to help entrepreneurs in the Colorado cannabis industry through the technical assistance program.
00:00:00 - Introduction and Announcement of Partnership with Cannabis Business Office
00:00:51 - Introduction of Guests and Overview of Cannabis Business Office
00:03:21 - Discussion on the Need for Technical Assistance Programs
00:06:13 - Process of Accessing Resources for Social Equity License Holders
00:08:21 - Influence of Colorado's Social Equity Program on Other States
00:09:29 - Overview of the Cannabis Business Office's Loan Program
00:12:53 - Impact of Potential Rescheduling on the Cannabis Industry
00:15:23 - Potential Benefits and Challenges of Rescheduling
00:18:54 - Instructions for Accessing the Technical Assistance Program
00:19:48 - Predictions for the Cannabis Industry in 2024
00:23:27 - Conclusion and Thanks for Partnership
Quotes:
"Vangst has partnered up with the cannabis business office to launch a program that we're going to talk all about today." - 00:00:00
"We run three different types of programs for our clients. Those include grants, loans, and like I said, technical assistance, so business support, mentorship, training, anything that kind of falls under business development." - 00:01:11
"We really needed to offer our constituency a more technical online learning content that would have the same easy to access feature as the Canada Business Foundations program." - 00:03:21
"I think it really depends on the background of the individual running the business." - 00:05:31
"We work really closely with our colleagues over at the Marijuana Enforcement Division, the MED, and they are actually the body that regulates the social equity license and handles all the eligibility criteria." - 00:06:44
"We've had some really helpful conversations with Massachusetts and Oakland to learn from what they're doing." - 00:08:21
"We found a really interesting way to structure where the state sort of reserved their own dollars for a loan program." - 00:09:29
"I think it's a double-edged sword in a lot of ways." - 00:15:23
"I think that cannabis is going to be a big topic of conversation in the 2024 presidential election." - 00:20:59
"What I'm expecting coming out in 2024, is that the higher dollar per milligram products are going to start buying them out even more, which is only going to benefit the consumer." - 00:22:55
Karson Humiston: [00:00:00] Hey, everybody, and welcome back to the Proud to Work in Cannabis podcast. Really excited to be here today because today we have a really big breaking announcement. Vengst has partnered up with the Cannabis Business Office to launch a program that we're going to talk all about today. And joined with me today, I have Emma Howard, who is the Program manager of the cannabis business office.
And I also have a returning guest today. I have Tristan Watkins, who is the deputy director for the business support division. Welcome back to you both. Thank you for joining me today. How are you doing?
Emma Howard: Great. Thanks. How are you, Carson?
Karson Humiston: I am great. And I'm so happy. I'm not to have you here since you've never had the chance to be on and Tristan, we always love to have returning guests on. So welcome back.
Tristan: Yeah, I'm so happy to be back. Thanks a lot for the invite.
Karson Humiston: So, Emma, for people who are unfamiliar with you or who maybe are unfamiliar with, uh, um, cannabis [00:01:00] business office, can you give the audience an overview of Uh, what the Cannabis Business Office here in Colorado does, and then a little bit more about, you know, your specific role, uh, within the organization.
Emma Howard: Absolutely. So the cannabis business office was established via state statute in 2021 that provided 4 million allocation to this to establish this office and to provide access to capital and technical assistance programming, primarily for social equity cannabis businesses. So we run three different types of programs for our clients.
Those include grants, um, loans, and like I said, technical assistance, so business support, mentorship, training, um, anything that kind of falls under, um, Business development, and we have spent down most of those 4 million over the past three years. And my day today really involves managing our grant program.
We just announced [00:02:00] about 30, um, plus new grant awardees in the last month. Um, and we are launching some new and exciting technical assistance programs in the next couple of months. And continue to provide. A number of online learning, um, contents for our clients as well.
Karson Humiston: And that brings us into the next point, the testicle, the technical assistance programs, which is, uh, something that we're partnering with you all on to create courses that folks can actually log in and get real tactical business help and guidance. You know, when Tristan and I. met, you know, Tristan, shoot, we maybe met a year, a year and a half ago.
We talked a lot about how it's really, you know, it's, there's a lot of things you can find online to read about how to do accounting in your cannabis business, but to actually learn from an expert on how to do accounting in your cannabis business as an example is something where we saw a [00:03:00] gap and we were excited to partner with you to Create, uh, the, this technical assistance program and then have it live on our website and give access to all of the clients within your network.
Um, so for you guys, when you made the decision to, you know, want to offer this to your clients, you know, why was this something that your clients needed?
Emma Howard: Absolutely. We had a very basic, what we call Canada business foundations platform available for our clients. And Tristan set that up when we first established the office and not really met our clients where they were at in their business development at the time, which was very much the first couple steps, like you said, basic accounting skills, um, HR compliance for cannabis businesses.
And we were lucky enough to partner with a group called make green go out of California that was very familiar with this work. And they had a program ready to offer to our clients, but we realized as our clients continue to build their [00:04:00] businesses, as their businesses developed and they became more specialized in their vertical, we really needed to offer our.
Um, our constituency, a more technical online learning content that would have the same easy to access feature as the Canada Business Foundations program, but to really meet them again where they were at in their business development. and provide something that was more specific to whatever path they were going down in the cannabis industry.
So we love that we're able to offer, like you said, expert, um, content on cultivation, on HR, on compliance, on manufacturing, on hospitality and delivery, which are specific to social equity licensees here in Colorado. And to be able to provide that content. Online and easily accessible for folks who are working more than one job is really helpful to our clients.
Karson Humiston: And, you know, we've seen overall, just in general. So, social equity license holders aside, just to have on [00:05:00] demand, easy to access training that can meet you where you are, to be super valuable for, for the, um, folks that you're working with out of all of those categories that you just described, ranging from, Accounting, cultivation, retail, where is and you might not have an answer for this, but I'm just curious.
Is there one specific area where you see folks struggle with the most? Um, or is it pretty evenly distributed across all of those segments?
Emma Howard: That's a great question. I think it really depends on the background of the individual running the business. Some folks come from other small business backgrounds. They have experience doing things like accounting, HR, payroll. And some folks come from experience as bud tenders or growers. They might have more hands on cannabis experience.
So it really depends on the business, the experience of the owner, um, and being able to kind of offer this complete set of options where [00:06:00] folks can pick and choose which type of classes and modules they want to take in this easily accessed program really means that we're able to provide for all the diversity of experience that we have.
Karson Humiston: So for people that are listening, You know, maybe want to get, you know, a little bit more familiarized with you all, the Cannabis Business Office and what you do to support social equity license holder, or maybe somebody that thinks they qualify to be a social equity license holder and qualifies for one of these grants.
Can you talk to us about, you know, the, how they find you, the experience and process of working with you so that they could access these resources that we've put together?
Emma Howard: We work really closely with our colleagues over at the Marijuana Enforcement Division, the MED, and they are actually the body that, um, regulates the social equity license and handles all the eligibility criteria. So, if folks come to us, we [00:07:00] help them connect with the MED and identify if they're eligible under one of the three eligibility categories, those being, very briefly, income, location, or previous arrest, conviction, or civil asset forfeiture as it relates to marijuana prohibition.
And once they've received that license and gone through that vetting process through the MED, then they're able to access all of the programs that we have. We do have a couple programs that are open to any cannabis business owners, notably that Cannabis Business Foundations course that I mentioned earlier. Once folks have that social equity license, we're very easily reached via email, and you can find us online at the Cannabis Business Office if you Google, um, or always happy to answer emails or calls that come our way.
Karson Humiston: And Colorado's really been, we've really set the standard for a lot of other states. And so I, you know, a lot of other states have. Have, I don't know if I want to use the word copy, but I guess copy is the best word. I mean, yeah, copied, uh, [00:08:00] other successful programs here in Colorado. Have you have other states reach out to you saying, Hey, we would like to have a.
Social equity program in our state. We would love to help people get their business off the ground. Do you get those inquiries from other states or are they just copying from the sidelines?
Emma Howard: I think a combination of both. We have a lot of communication with folks across the country who run these types of programs. Everybody does a little bit differently. Everybody has their Um, adult use set up a little bit differently, but we definitely tried to partner as much as possible and we are very proactive in reaching out if we see a program that another state or municipality is running that we would like to model hours off of.
We've had some really helpful conversations with Massachusetts and Oakland, um, to learn from what they're doing. I think one notable program that we've run that I'd love for Tristan to share more on is our loan program. That [00:09:00] is one of the first of its kind in the country and, um, has definitely been a, a pinnacle of success.
Karson Humiston: Yeah, Tristan. We'd love to hear more about the loan program, especially of. You know, folks are able to access some capital. I think it makes it much easier for them to take advantage of all these 50 courses that Venk's produced with you all because in order to implement good HR, you need to hire an HR person which requires, uh, some level of capital.
So this is very top of mind for people.
Tristan: Yeah, happy to talk about it. And as a real quick plug when it comes to sharing across other states, um, Colorado is part of camera, which is a cannabis regulators. cannabis regulators association, and they actually have a sub committee specifically on social equity implementation. So it's a really great place where multiple representatives from multiple states can get to really share sort of best practices there.
Um, but yeah, so talking about the loan program. You know, that's another thing that, you know, we looked around at other states. [00:10:00] Colorado was really one of the first states even trying to go through this. So we did kind of have to take kind of forge our own path. However, um, we found a really great group called new projects.
Um, they manage loan. They manage a loan and a grant fund for just the city of Portland. Um, And, you know, ultimately they, they found a really interesting way to sort of navigate those, those challenges that are, that come with banking and lending and the prohibition of cannabis at the federal level. Um, so working with them, we, we had to get really creative.
There was a lot, a lot of discussion around really the best way to implement this, but we found a really interesting way to structure where the state sort of reserved their own dollars for a loan program. We managed, we were able to, Give those dollars essentially to new project so that they could run a loan program sort of in a segmented budget, if that makes sense.
So generally, when you're thinking, thinking about lenders, they [00:11:00] have to worry about their own bottom line, sort of their own risks. And of course, cannabis loans themselves are inherently risky, not just because it's federally prohibited, but because cannabis itself is a risky industry as it is. Um, so a lot of groups are really, really.
Cautious about even attempting this, and normally they want very heavily collateralized businesses in order to kind of get through some of these problems. We reduce the risk by basically taking on all of financial obligation with this. So it's all of our dollars being managed by a loan group of a lending group that is that specializes in character based lending or mission based lending practices, meaning that instead of looking at things like.
Credit cash flow collateral and feel the other sees they look at character. They really get to know the business themselves and they really make their assessments based off of the business's own ability to actually repay you through. Almost like softer metrics than your [00:12:00] more algorithmic driven approach at most lending institutes too.
And what's really great about this is that actually benefits both sides, right? Or so actually that has more than just the single benefit to the borrower than we get our dollars. It also means that the lender themselves that is working with the borrower, they get to really, They know their books just as well as the borrower does.
So they can structure these loan repayment deals in ways that actually really works for the borrower. So instead of saying, here's your money next month, you have to immediately start paying back on it. They might be able to create different, you know, repayment structures, like, okay, you have an entire year when you're only going to pay on the interest.
So you can take this new capital and really start investing it into your business, start growing your revenue and give you another 12 months to really grow your evidence to the point where you can start taking on
Karson Humiston: start repaying
Tristan: not hurting you. It's awesome. Yeah.
Karson Humiston: That's, I actually, I'm so happy that you shared that because I'd never heard of that and it's such a unique way to structure it. And I think that there's so many [00:13:00] businesses in cannabis who You know, capital is so, it's such a cash strapped industry right now. And so people have had to take on these loans at, I've heard this high as 30 percent and now, you know, the loans are becoming due, people are having to make payments on them.
They're already behind on their taxes. They can't make these payments. It's the beginning to the end, at least for the founder. Uh, when you think about 2024, and you know, I'd be curious to get both of your take on this. We think about 2024, potentially rescheduling is on the horizon. How do you think that helps the group of people specifically that you're working with on the day to day, the idea of rescheduling?
Um, for, uh, you know, uh, everything from 280E going away to potentially more cash coming into the industry. You know, how do you think about it, um, and how do you talk to the businesses in your program about it?
Emma Howard: I think it's a double edged sword in a lot of ways. Obviously there are a [00:14:00] lot of obvious benefits that I'm sure your audience is very familiar with should rescheduling occur, like you mentioned, lessening the tax burden on businesses, opening up other banking options. Um, and really lessening the stigma around cannabis nationwide will of course benefit cannabis businesses that are already in business.
We read a really interesting article called cannabis cannibalism right around when rescheduling the notice of potential rescheduling came out that talked about the potential for Larger businesses that are already established pharmaceuticals being an obvious example really taking advantage of the rescheduling and pushing smaller businesses out of the industry and which would obviously really harm our clients who have been fighting tooth and nail to become successful in what is already an incredibly challenging industry.
So I see a lot of benefits to rescheduling and it's definitely the right step forward in terms of federal [00:15:00] legalization. But I think there's also a lot of parameters and potential harms that we have to be aware of and need to consider as we move towards. Um, a more national look at cannabis and what that looks like in terms of a larger industry and notably knowing that there are players who could be looking to take advantage of this and harm those smaller businesses.
Karson Humiston: Yeah, that's a, that's a great point on the larger businesses. Tristan, what, what is your take?
Tristan: Yeah, so thinking about the 2024 timeline, I think I might really hit everything if we extended a little bit, though. One of the things that I think is exciting is with the rescheduling. We might see a decrease in this in this sort of regulatory framework that every state has has applied, and those regulations really are associated with significant increases in just your operation in your operating costs.
And because Uh, you know, as that increases, you lose your margin and it's hard to be a small player sort of as [00:16:00] Emma was getting at what I could see being interesting over the next several, you know, several years after reschedule actually happened is seeing a parallel that you see in the in like the beer industry right now, right?
You have some huge players and you have microbrews and I feel like the microbrew that microbrew model is very challenging in the current cannabis framework. But as things open up, as you can start it, You know, increasing your territory. Um, you know, as stigma starts decreasing and as different forms of capital start flowing, including the ability to work with groups like the Small Business Development Center, the Small Business Administrator, these types of government assisting programs.
Um, I could see really interesting models coming out, right? Like really, really specific cultivar, um, growers or really specific high end products that are Would be too cost would be cost prohibitive to try to produce at a high scale right now, but you get to like these boutique boutique level art artisanal [00:17:00] products that you see that it might be twice as much as, as the standard going rate, but they're really interesting.
They make for really great holiday birthday gifts, things like that, um, that we, we really just don't see as viable right now in the current.
Karson Humiston: Yeah. I just think, yeah, I'm a huge advocate for small businesses and I think about. You know, my personal shopping preferences and I always prefer to shop local versus going to a big chain. But I also see how that's, you know, an incredibly challenging, right. In so many, you know, it's just so many, like, even like local grocery stores, right, they're competing with King super.
And I think it's challenging for them, but I think they often have. A higher quality product that I know and trust and rely on and obviously there's a space for them in the market. I would hope that, um, that, that's kind of how cannabis will emerge. But, but yeah, I think it is to Emma's point and to your point, I think it'll be pretty challenging.
Um, you know, kind of getting back to this program that we're just super, super excited to be announcing and launching with you [00:18:00] today for people, for folks that are your clients. Is there anything that they need to do, Emma, to get access to their bank's login so that they can begin taking these courses?
You know, I'm, I'm just looking at a list of them. We have 50 courses ranging from compliance, finance, sales, marketing, human resources, manufacturing, cultivation, dispensary, retail, delivery, and transportation, hospitality. I mean, that's just a preview and our team worked tirelessly to not only build the content, but.
Build the software so that you could log in, watch clips of the videos, take a quiz, move along at your own pace, come back to a quiz, um, you know, show off once you've passed it, kind of gamify it. So, there's a lot of blood, sweat, and tears in it, and we want to make sure that people are accessing it to its fullest.
So, what do people need to do if they want to get in and start taking advantage of all these trainings that are 100 percent free for your, for your clients?
Emma Howard: We are so excited to have our clients start to take advantage of this. It's super easy. Just send me an email [00:19:00] at emma. howard. state. co. us. With your social equity license or finding a suitability letter from the NED and we will get you set up within just a couple days to access your login and all of those modules that Carson mentioned will be available.
Karson Humiston: So, so, so awesome. Well, uh, I know we're, we're coming up on the time here, but my last question I want to ask. Both of you that I've been asking everybody is what is your prediction for the cannabis industry for 2024? We're, we're coming here. We got a fresh year. Let's imagine that we're sitting here in January, 2025, 12 months from now, where are we as an industry coming to you live from two people who know the industry as well as anybody.
Emma Howard: That's a tough one. Is this, um, best possibility all
Karson Humiston: It
Emma Howard: the world?
Karson Humiston: you know, it can be, it can be, it could be Federal legalization. It can be every [00:20:00] business shut. We had someone say, this was a long time ago, but we had someone say, you know, like Jeff Sessions is going to close the whole, you know, industry. So there's been some wild predictions that people have made.
I think that guy's like not even, he's still even, he's not even in, he's not even relevant anymore.
Emma Howard: Nope.
Tristan: sessions. No, no, he's
Karson Humiston: took it, we took him down.
Emma Howard: It is a good point, though. I do think that cannabis is going to be a big topic of conversation in the 2024 presidential election, and that's going to spur quite a few conversations nationwide, um, at the state level about what legalization will look like as Uh, more states start to legalize and come on board and as we really start to think about what federal legalization will look like.
So my December 2024 prediction is that we are closer than ever to federal legalization and that it was one of the defining features of the 2024 presidential election. One of many.
Tristan: [00:21:00] Yeah, I would agree. I would agree that I don't foresee legalization or even rescheduling necessarily happening in 24 But it will be the largest one of the larger conversation topics Um, at least i'm a big product oriented person and I I am excited at least for colorado because we're starting to see you know, the There's more and more pressure at the product level, right?
There's, there's pressure. We have pressure in the sense that flower itself is about as cheap as it's ever been, um, which obviously has a number of downstream effects on the market. But one of the positives that come from that is that we also have a lot of great competing pressures over sort of the best products, right?
So I remember a few years ago, the first live rising coming out and everyone's like, what's this? And it was absurdly expensive, but you know, it's really clean. There's no solvents and now it's. Now you're finding it in gummies. So what I'm expecting coming out in 2024 is that the, higher dollar per, you know, milligram [00:22:00] products are going to start buying them out even more, which is going to benefit the consumer.
Consumers are going to walk in and even the cheapest product that they can find on the store or on the shelf, it's still going to be a really good quality product. Clean, safe, tastes good, hits all the marks that they're looking for. Um, And as a result, I think helps actually further decrease some of that stigma because it decreases the chances of pointing to it like, Oh, well, that's, that still has butane in it, regardless of the parts per million and all the real conversation.
Or like, Oh, this one had a recall. As you start seeing those decreased sort of negative stories come out, I think the stigma decreases along with it and those people that are sitting on the fence view it as safer and safer and kind of the circle, you know, bring a full circle. I think those people on the fence start maybe thinking about how, which way they want to vote based off the presidential election.
So
Karson Humiston: Very good predictions. We'll circle back in one year. Well, thank you guys both so much. [00:23:00] We're thrilled and honored to be partnering with you and we really hope that we can help people wrap their minds around all the things from compliance to cultivation to manufacturing and be a tiny, tiny step in their journey as entrepreneurs in the Colorado cannabis industry and hopefully create great businesses that can service.
Tens of thousands of customers and really make a, you know, make a big impact in the industry. So, so thankful for your partnership. So glad you were here today on the podcast and, uh, let's get some people trained.
Emma Howard: Thanks so much. Thanks Carson.
Tristan: thanks so much.