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Meg Sanders is co-founder and CEO of Massachusetts-based Canna Provisions, which currently boasts two popular retail outlets, one in the Berkshire/Western Mass. town of Lee, the other in the small nearby city of Holyoke. The company also produces products under the Smash Hits brand, which touts among its achievements hand-trimmed craft cannabis cultivated in the Berkshire town of Sheffield by legendary grower, Greg “Chemdog” Krzanowski. In addition to tasty strains by Chemdog and his team, Canna Provisions also makes concentrates, edibles, and vapes under the Smash Hits brand. With three business locations in the state, Canna Provisions is a small business, but it distinguishes itself from other cannabis businesses in the state and beyond in one of the only metrics that matters: turning a profit. As Canna Provisions proudly claims in a bio of Sanders, “Where others are closing, reducing, or retreating, Canna Provisions is one of less than 25% of any legal cannabis operator in the US being profitable.”
As impressive an achievement as that is, for Sanders it is but the latest milestone in a cannabis career that reaches back 14 years and includes significant stops in Colorado, extensive help creating cannabis legislation and regulation, and years of high-level consultation for companies throughout the country. “[Sanders] has left an indelible mark on the industry, having successfully operated and divested her Mindful dispensaries in Colorado during the nascent stages of the legal market before returning to operations in 2019 with the launch of Canna Provisions,” states her bio. “Today, Meg’s influence extends nationwide, with her involvement in operations that impact nearly every state with legal cannabis activities.” Cannabis Business Executive recently caught up with this bona-fide force of nature to talk about her multifaceted cannabis career, which now also includes suing the federal government, as well as the many challenges that continue to face hyper-local cannabis operators like Canna Provisions.
“Because that’s when the industry started in Colorado,” she said crisply when asked why she got in when she got in. “When the constitutional amendment went in place for Colorado, and then the Cole Memo came out, people – attorneys, businesspeople, a million different kinds of people – looked at that and decided that the constitutional amendment was enough cover to follow the Cole Memo. So, people just started businesses, even though there was no regulatory framework. The state chased its tail for a minute, and then was finally able to get a bill through that basically said they were going to regulate the cannabis industry and establish a group to be the regulators, to run rules and regs and all that fun stuff. That happened over the next couple of years, and then we had to be compliant, be in METRC, follow all the rules, and also be fully licensed at the local level.”
Her move into cannabis almost seemed ordained. “I knew people that were getting into the industry, so I was hearing a lot about it,” she recalled. “I was also part of a small family office in Colorado, basically running compliance for them, and I had hit a glass ceiling, so to speak, so having this new industry opportunity hit at the same time and having some compliance background was super helpful. It was a perfect storm to jump into this brand new, crazy industry, and really not having any idea about it. To this day, I think people who start in this industry have no idea what they’re getting into, and how hard it is, so we definitely had no idea. We just worked our butts off trying to build a business and do good things. “
The business in question was Mindful, an eclectic assemblage of people, some with cultivation experience. “There were the initial people that were trying to start the business, who I was friends with, and that’s the group that I kept saying I should come work for them,” said Sanders. “And then the regulations required vertical integration, and we were just a cultivation, so we had to quickly find a dispensary partner so that we checked the box of being vertical.”
It was the beginning of something, but exactly what was still being formed. “That’s how that all basically started, but again, at the beginning there was talk of rules and regulations and a commission being established, but none of that existed yet,” she said. “We just started raising money and building the business, and as rules developed we had to figure out how to adhere to them and operate a business under them. That was relatively new ground for everyone, because not all the rules were crystal clear, and there was a lot of vagueness and a lot of what is called interpreting the rules and what they mean.
“Think about it,” she added. “We had a brand-new regulatory body, we had a brand-new regulatory system, we had brand new people that were there, basically all cops that were hired by, at that time, the Medical Marijuana Enforcement Division. And then, as operators, we were all trying to figure out how to do this, what power is required to run all the lights that you need for a one-acre indoor grow, and how do you enter things that are weight specific into software that is not prepared to handle that, because we couldn’t use off-the-shelf software, but were relying on people to build software. At the time, I believe there were maybe three options for point-of-sale software. Looking back, it’s comical what we did, it’s absolutely comical.”
The newness was only exacerbated by a regulatory hubris that could be especially harsh for new cannabis companies, like fellow-Colorado native, incredibles. “They had a spectacularly horrific time, especially in the city of Denver and the treatment that they received,” said Sanders. “It was unbelievable. What the fire department was trying to do, and what the city ended up doing, was a very interesting example of regulations [that] go awry when put in the hands of people who are not necessarily super-trained in how to interpret the rules. That was a unique story, but I would say we all felt the pain one way or the other, whether it was the fire department coming in and inspecting everything, or the building department, which was exceptionally challenging.
“And I get it,” she added. “They had their normal workload and then all of a sudden a brand-new industry starts and there are thousands and thousands of buildings and store fronts and people trying to operate businesses in certain areas and not even understanding the building department rules. I can put myself in their shoes and certainly understand where their frustration was coming from, because they were literally dealing with people that had no idea about even the building department process. So, of course, [the inspectors] got mean pretty quick, because they were just like, ‘These are the rules, they’re on the website, you can get a printed copy. This is how we operate.’ And people are like, ‘What are you talking about? I just want to put lights up.’”
And on the other side, there no one to speak of who was particularly experienced at growing at scale. “I don’t think anybody was a competent grower on a commercial scale in Colorado,” said Sanders pointedly. “No one was, and [the difference between] operating 10 lights in a basement and 1000 lights in a warehouse, your problems are exponential, they’re not multiplicative. No one had seen these particular bugs or these particular infestations or diseases on plants so that when you get a whole bunch of plants together, you see it in a different scale than one plant that you kill at home. I don’t think anyone understood that at all, and keep in mind, there was no resume that anybody could give me. It was, ‘Here are some plants on my iPhone.’ That’s how we interviewed people, or we would get samples from them. ‘I grew this, isn’t it great!?’ No testing, no anything. It was, ‘Sure, okay, we’ve got the three of you showing us phone pictures, and I guess yours look the best and you seem like the most responsible, so we’ll choose you.’ That part was really, really tricky. It wasn’t like they could take me to their other commercial grow, or there was anyone to call for references. There was none of that, and we got burned. Honestly, we got burned a ton of times.”
It was a baptism by fire that most if not all of the early forced-vertical Colorado companies had to experience, and one that made many of them more resilient than they otherwise might have been. When asked what the “got burned” experiences looked like, Sanders replied, “Representation of what people were capable of and believing in systems that they’ve never done before. That part was incredibly difficult.”
Still, those years did set the stage for what was to come, and many of the lessons learned remain relevant today. “I was the CEO from basically 2010 to 2017, a long time,” said Sanders. “Our vision was to get the stores and our supply chain nailed and grow without having to build out more cultivation. We had a strategy of basically tapping growers on the shoulder to be contract growers for us, and that was a pretty successful program. We had a set rate of what we were going to pay per pound for plant material, and that was relatively easy to do in Colorado, because once we had gotten our stride, and then when adult-use hit, there was plenty of cultivation.
“None of these guys were salespeople,” she added of the growers. “They grew product, but they didn’t know how to market or unload it. It was actually fun trying to find really great growers that didn’t want to have a sales force out there marketing their products, and certainly didn’t want to package or label it. We were able to buy bulk from good companies, and that was fun. It was also mutually beneficial, and then we definitely always had a vision of extraction. We did that relatively early in the process and started creating concentrates. I mean, live rosin was developed in my facility. It was done by a handful of humans that came up with something that was really amazing and is still very popular to this day. Then it was really about stabilizing the stores and creating a retail vision that made sense, and that was branded and thoughtful. I think even then we understood that we weren’t just trying to crank as much weight out of the retail store as possible. Because it was so competitive in Colorado, it was about really trying to develop a customer experience that made customers sticky.”
Sanders also experienced product over-saturation in Colorado. “It actually happened quickly, especially in the Denver Metro area,” she said. “We got to $20 eighths in what felt like a nanosecond. It was just a horrible race to the bottom, and the same thing is happening in markets today. Basically, it’s operators who don’t understand how to create a differentiation in their products or in their store experience for consumers, and so the only way they can compete is on price, or the only way they think they can compete is on price. And it just takes a handful of players to drop their prices significantly. We deal with this all the time in Holyoke with our next-door neighbor, and I’m like, ‘Why do we keep dropping prices? It’s not necessary.’ To me, it just screams that we don’t understand how to speak to our consumer.”
LivWell Buys Mindful
LivWell bought Mindful in 2020 in a deal that shored up missing pieces for the larger vertical cannabis company. “I think the biggest thing that we brought to the table for them were stores,” said Sanders of the deal. “For whatever reason, they did not get any licenses in Aurora. It was a limited license situation in that city, so I think our two stores were super exciting for them. And then, John [Lord] always had a math equation. His math was – and I don’t think he was wrong about this – that basically you need 10,000 square feet of canopy for every retail store that you have. That was their math, and we fit the equation. We had 7 stores that were all well-located. We were not stupid about our locations. In my opinion, something that we did incredibly well was site stores or acquire stores that were in the right space.
“But they also wanted a larger manufacturing footprint, so I think that’s also why it made sense,” she added of the deal. “It’s funny, I don’t even know if I told [John], but there was a time early on when I was like, ‘You’re going to end up acquiring us because we’re building something to be acquired or merged to become part of something bigger.’ He had the same vision, and the math just worked. At the time, we had brought on significant talent for management, and it was really helpful to get that help with fiscal discipline. My friend Tom calls it budget physics or business physics, and he always talks about how the numbers just have to work. No matter what, you can’t accept numbers that don’t work. You have to get the numbers to work, and that doesn’t mean make them up. It means you actually have to operate in a way that they add up.”
Sanders was by this time moving into her consultation phase in the industry. “I wasn’t involved in the transaction so I’m kind of looking backwards,” she noted. “During 2016 and 2017, I was still CEO of Mindful, and in my role we were actively pursuing licenses in other states. We have three retail licenses in Illinois. I’m still an owner of them, but I don’t do anything operational. We were also working hard in New York and a handful of other states, and what we came to understand, especially after Connecticut legislated for medical, is that in every state that was looking to turn the programs on, they did not have the talent to launch the program, so we were really desirable, and we had a lot of a lot of consulting contracts.”
It essentially constituted the beginning of Will and Way, which was founded in 2015 to provide total cannabis solutions. “That was the spin-off entity from Mindful which had its own entity that we were using for consulting. What ended up happening was that my partner, Eric [Williams], who is also an owner and COO in Canna Provisions, is incredibly talented at the legislative process, whether it be at the local level or the state level, and this was also a skill-set that was really needed. Alongside his ability to work for the various elected officials and powers-that-be in local towns and municipalities, I was able to come from the business side and represent what the business looks like, which was something that was not happening very much. Advocates were speaking with legislators and were speaking with towns and municipalities about how important it is to have safe access to cannabis, but now a lot of businesspeople were also talking to them. They only had one part of the story, but they didn’t have the other side of the story that can make it enticing for cities and states to look at adding cannabis to their list of products that they’re going to allow.
“It was just a perfect storm of a lot of states coming online,” she added. “We were instrumental in New York, Illinois definitely would not have passed medical without Eric and me working on that, we were instrumental in Florida and Arkansas, we worked hard for licenses in Nevada, and we had licenses in California. We were all over the place with our consulting work. My role was to help sell our consulting services and represent the business side of how business works in cannabis.”
Sanders was a business owner previously but never a chief executive before Mindful. I asked if she defined her core business identity in a specific way. “No, I don’t think so,” she replied. “If you were to ask me what are the talents that I bring to the table every day right now at Canna Provisions, I think part of it is being a leader that encourages and supports and pretty much demands that we’re a learning organization. That means we’re always working on being better ourselves, not just better as a business, but we invest in each other. I’m committed to providing leadership opportunities as well as leadership education for people that are up and coming in our company. So that’s definitely an area of passion for me, but I also think the other area that I excel at is I’m a bit of a regulatory ninja. It’s a weird skill-set that I can see the rule, and then I can see what the problem is, and then I can figure out how to fix it without costing a million dollars.”
She provided an example from an early issue they had with Canna Provisions. “We were delayed due to investors that were stalling in approving us expanding our cultivation in Massachusetts, and it was a significant distraction,” she said. “It was frustrating, and it was not what we agreed to do as partners. We agreed to fulfill the business plan, but they had enough negative control that they could stop us from expanding for no reason other than they wanted to pull money out of the company. I’m not faulting them for that. I’m just saying that’s not what we agreed to.
“Eric and I are extremely frustrated by that, but I figured out that we have about 1800 or 2000 square feet left on our license,” she added. “I can’t afford $750,000 to expand next door, but what can I do within what I’m allowed to sign off on to expand our canopy? I figured out that we can do a hoop house, and it counts as indoor in Massachusetts because the only thing that defines indoor cultivation is lights. So, I hung two lights in the hoop house and said it’s indoor, and I got it through. We added about 2000 square feet of canopy to our indoor grow, it ended up being like 650 pounds, and it cost us hardly anything to do it because I didn’t need a lot of the things you need with indoor. I didn’t need AC, I didn’t need heat, I didn’t need any of it. I just used the sun and the summer to grow, and we were wildly successful with it. That’s a really good example of, here’s the problem, here’s what the rules say, so how do I build this and stay inside my operating agreement and stay inside the regulatory rules and most importantly get it signed off on by the CCC. That’s what we did, and we still use it today.”
The Road to Canna
After leaving Mindful, Sanders and Williams continued consulting, but before long they realized that the rigors of the road far outweighed the rewards. “Consulting is not just a job,” explained Sanders. “It’s like a lifestyle, and Eric and I were spending 50 percent of our time on airplanes and in hotel rooms. We both had small kids, and it was just taking a toll. It takes a toll on your body, and it takes a toll on relationships. You’re trying to get home for recitals, and then there’s weather delays. It was just stressful in lots of ways. I mean, it was super fun, don’t get me wrong, we had a ball, but it wasn’t a healthy way to exist. We’re also together personally, and we were just trying to figure out how we could be together in the house and not always together on an airplane, waking up in a hotel room and not even knowing what city it’s in. It was just a hard-on-your-body and hard-on-your-brain-and-soul lifestyle.
“We were watching Massachusetts pretty closely at the time,” she added. “We had some clients that we had been working with, and once the regs went through and we saw that there was going to be licensing and this was actually going to move forward – because it took a long time from when the voter initiative passed to get it through. And knowing there was a lot of Colorado influence on the rules, and that we knew how to operate under these regs, we decided to focus on Massachusetts because then we would not have to get on airplanes and instead we could be home every night.”
While they were not involved with helping fashion Massachusetts’ regulations, “When we saw them, we felt like, ‘Okay, we know this scheme, we can operate here,’” said Sanders. “We didn’t come get clients in Massachusetts to operate. We came in to basically consult, but because they weren’t operators and they’d never done it before, every group that we were working with said to us, ‘Why don’t you guys just operate? And we were just like, ‘No, no, and no.’”
But the allure of certain parts of the state grew on them. “Over 60 percent of municipalities and towns in Massachusetts had either banned or had long-term cannabis moratoriums in place back then, and less than 40 percent was left over to pick and choose from. So, we started looking at those, and then this group that we were working with – the Canna Provisions group – took us to Holyoke, and then they took us up here to Lee, and we really fell in love with both towns for different reasons. I in particular just fell in love with Lee. I was super homesick for Colorado, and I can tell you that coming over the pass and entering the Berkshires off of the Mass Pike is as close to feeling like Colorado as you’re going to get if you’re not out west. It was kind of this big sky, rolling hills, mountains (in air quotes), and rivers. I was like, ‘Oh, my God, this feels very familiar,” and I always felt really good when I came here.”
Other positives were apparent as well. “Holyoke was 40 minutes from where we were living in Connecticut, and Lee was an hour and 10 minutes away, so it worked with our kids’ schedule, it worked with everything,” said Sanders. “We also happened to have a passion for both locations, Holyoke for a different reason. We both were very passionate about urban redevelopment, and the mayor at the time had a vision to bring Holyoke back with cannabis as one of its drivers, and supported building a whole canna-tourism model there. Of course, he quit and moved on before we saw that vision through, and now all we have is a bunch of stores. It’s become a competitive market that was supposed to have a bunch of ancillary businesses to support it, but at the end of the day it’s still a great city. We love Holyoke and we want to see it become what we think it can be, with lots of consumption and consumption-friendly areas and events and things like that. We love both of the locations that we’re in, we’re thrilled to be there with our retail stores. We went from operating to consulting, got tired of airplanes and hotels and the lifestyle of consulting, and decided to hunker down and just focus on math, and then kind of fell in love with an area and here we are.”
Outright ownership came quickly. “Originally, we were brought in as founding partners, which was great, and then we went and helped raise money and brought money to the table,” she said. “And as always, the money shows up exactly like it always does. The hardest part about business is that you have to have these investors, and we have had a handful that were lovely and still with us. But for the most part, we exited and ended up doing a leveraged buyout. We went and got a loan and bought them out and said see you later.”
Lee opened in 2019, Holyoke opened in 2020, and Sanders and Williams bought out their partners in 2021. Canna Provisions currently has about 7000 square feet indoor, and 10,000 outdoor. “We get one outdoor harvest,” she said. “In the hoop house, we’re going to get two. We’ll have plants in the hoop house in a week and a half, we’ll pull them down at the end of May, and then we’ll reload it at the end of May and do a whole other cycle.”
Due in part to the strength of Chemdog’s status as a quality grower, Canna Provisions sells pretty much every gram it produces through its stores. “We have a small wholesale following,” said Sanders. “It’s a drop in the bucket compared to what we do retail, but it’s to trusted partners that we know are going to pay us. And sometimes we have bumper crops of specific strains, so it’s a monthly decision on what we’re going to put on that wholesale menu. We do it without a sales team, and we do it without doing pop ups. This is a very small craft cultivation that has a strong following from a handful of retailers.”
They also operate a “tiny” genetics R&D component. “We are always rolling through new genetics just to test them out, and we’ve got several new strains that are in the store right now,” said Sanders. “They hit this week, and we also just received a few more genetics that have some specific characteristics that we think are important. So, genetics is always on the table. I think one of the most fun things about this industry is that you get lucky every once in a while and go, ‘Holy moly, did we hit the jackpot with that one seed, or whatever that might be? We rely on Chem very, very much, not only with what he has in his seed bank, but also his relationships throughout the cannabis world about getting awesome new strains in.”
Considering all that, does Canna Provisions also do limited drops? “We do,” replied Sanders enthusiastically. “As we rotate, we’ll try new stuff, and it works. It’s a good story to tell, first and foremost, so it’s fun to do these drops. And then there’s always a loyal following. ‘I remember that from back in the day,’ or, ‘I’ve been waiting for this,’ because we’ve hyped it up. And we do the same thing with clones. We don’t have clones all the time, but when we drop them, we drop them, and I remember the first time we dropped them in Lee, and we had a line of 100 people.”
I asked Sanders how the Massachusetts market has changed since they got in. “Lee opened just like we thought it would,” she said. “We knew we would be very popular only because we were the second standalone adult-use dispensary to open, and one or two is never a bad number. We were busy immediately, cranking really hard, and getting Holyoke going at the same time. It opened a year later, and lo and behold, COVID hit, and sent everybody reeling. We didn’t understand the demand that was going to happen. If you were to tell me pre-COVID, ‘You’re going to be so swamped with customers that you’re not even going to know what hit you, and by the way, you’re going to change your business model five times,’ who would have known any of that? We got into it, and we were all in survival mode. And honestly, we’re all still traumatized, and no one’s dealing with it, which is why we are such a messed-up society right now.
“But we made it through with masks and PPE and sterilizing and thinking that we’re going to get COVID if we even look at a door handle,” she added. “It was just a scary, crazy time. We had to manage staff, we had to manage people getting sick, we had to manage customers, we had curbside, then we had curbside hybrid, and then we had curbside hybrid but come inside again. I mean, it was just very, very stressful, and yes, we were killing it, but at the same time, we needed so much staff in order to execute. At the end of the day, we did fine, but I think the thing that kicked our ass the most, is that industry-wide from 2022 and 2023 prices basically dropped 200 percent, and where we really saw that was basically August forward.”
Still, the Massachusetts market remains oversaturated with product, driving prices down. And yet, Canna Provisions is by its account one of less than 25 percent of the profitable legal cannabis operators in the US. How does it manage that in this environment? Is it growing or maintaining?
“We’re maintaining right now, but we have some things in the works that I think are going to contribute to the growth of Canna Provisions,” said Sanders. “First of all, I think we will see a bounce back here in Massachusetts just like Michigan had. I do think we have some significant oversaturation; I do think stores are hurting and companies are hurting, and I don’t know how much longer any of them can hold on. I mean, I don’t even know how they can pay their taxes.
The distressed assets situation is not good, either. “No, it’s not good,” she agreed. “I know of companies that are seeing between 30 and maybe 100 customers a day, and their average ticket is $15-20 bucks. I don’t know how you survive at that.”
A Different Model
So, how does Canna Provisions survive? “We have a different business model,” explained Sanders. “We avoid certain areas because of fixed expenses, like high rents and those kinds of things that are going to make it exponentially harder to survive. Look at Boston, for example. I don’t know the rent of everybody that is licensed to operate in Boston, but I looked at enough businesses that I can tell you that the rent is exorbitant. So, if your rent is $40k a month, let’s just hypothetically say it’s 40k a month, with 280E included, think about how much weed you have to sell in order to be profitable. And that doesn’t even include people, or buying product, or security, or parking, or any of the other stuff that comes along with this.
“So, what did we do,” she asked rhetorically. “We chose towns and cities that are affordable, that were accepting of cannabis, and that had something like our Lee store, which is 420 yards off the Mass Pike and you can see us from the highway. We’re next door to Dunkin’ Donuts, down the street from Starbucks, and across the street from McDonald’s. I didn’t need to do a market study to tell me where to open. It was a no brainer. Holyoke was different because we were relegated to certain parts of town, which creates a saturated market, and I think they’re starting to understand the pain points of having so many in such a small area.
“But without the additional wheel of it happening – consumption, consumption events, those kinds of things – it’s not a fully baked model yet, so it remains to be seen,” she added. “But that store actually grew over ‘23. Our ‘23 grew over ’22, and we expect 24 to be better than ‘23. So, go figure. That’s more about getting boots through door and maintaining a healthy average ticket. Those are all things that I think attribute to our success. We work really hard to train our people in the store so they are the consummate professionals that we know they can be, and that they work in an environment that is healthy for them and that they like to be in, they like engaging with the customers and we teach them a lot of sales skills so they can upsell and make sure that we’re maximizing every customer that walks in the door. That doesn’t happen overnight, and it doesn’t happen without a lot of management and a lot of training.”
With respect to taking care of existing customers or courting new ones, was Sanders a believer in the 80/20 or 70/30 rule? “I think it depends,” she said. “In Lee, we’re a big tourist area and a lot of second homers live here, so we have sticky local customers. But if you were going to ask how many new customers we saw in February, we had a nice February because we actually got snow up here and people were coming up to ski, so we were busy last week. That was very nice, and a lot of those people are brand new, or they haven’t been here since last year. But I will also share that in Lee we have over 10 customers with exactly 363 visits. They visit every day, and we’re closed two days of the year, so I can’t ask them to come in more frequently.
“In Holyoke, it’s a little different,” she added. “We have a much more local contingent, but then we still get people that are driving up to Vermont. And for whatever reason, ESPN loves us, so the people from Bristol love to come to Canna Provisions, and it’s generally during ski season or during the summer. But that’s who we see, so it’s just one of those things where if you do good things, you provide value and your customer feels valued, they’re going to be stickier.”
Stickler for Cleanliness
One practice that used to be seen in dispensaries, and one I admitted liking, is deli-style sales, something Sanders will never allow in one of her stores. “No, because that’s disgusting,” she said firmly. “No one does it right. It’s a health issue, and no one understands this. We saw it in Colorado.
“The E. coli alone,” she added, switching into very effective mom-mode. “You don’t want that product. It’s one thing if you’re smoking it, and I think that’s probably what saves most of us from a bunch of heartache. But I’m telling you, it’s not the right thing to do for a mass consumer market, and here’s why. We don’t do it like a deli does it. If we did it like a deli does it, meaning we have separate containers, we put a clean sheet of paper down every single time, a new pair of gloves, and we open up a new pair of chopsticks or whatever we’re using so you’re not cross-contaminating, and we’re not letting anybody’s nose in that jar. Do you know the number of times I’ve seen people sneeze?”
I did not know and did not want to know, but she had convinced me. Canna-deli bad. I did, however, raise the somewhat related subject of remediation. “I don’t know how people can afford to remediate, especially in the Northeast,” she replied. “Because our power is so expensive, with what it costs to grow and how much remediation costs, I don’t know how they afford it. It’s a loss leader. Whether they do it or not is neither here nor there to me. They can’t afford to do it and they don’t even know it yet. It’s too expensive. And by the way, we irradiate lots of things. Fruits and vegetables in your market right now have gone through the same process. I’m not advocating that you do it or don’t do it. I’m just telling you; this is something that is done with stuff we eat all the time, and we don’t cook those things, we just shove them in our mouth.
“I hear you loud and clear, but I’m not going to weigh in one way or the other on whether I think the industry should or should not do it,” she added. “What I think is more important is that fiscally it does not make sense to do it. We’ve run them out. We don’t have to deal with it very often, because we run a really tight ship, but it happens every once in a while, especially if it’s outdoors, and they just go to extraction. It’s why we have amazing, branded products with partners like Tree Works and Root & Bloom.”
She continued, “I do think remediation is a very interesting topic, but anybody that bought weed from the legacy market with no testing didn’t know what you were getting either. You had no idea, and look what’s happening in California right now, they’re not even testing for pesticides they say they’re testing for. I can take you to five grows right now and tell you how illegal they are, because they’re absolutely spraying these plants with horrific things, and worse, they’re not even training their employees or protecting their employees while they do it.
“So, lots of hot topics there,” she added. “Should we treat it with pesticides or not? Well, we’re in Massachusetts, so we can’t, because we have a very limited arsenal of what we can use. And I personally think part of the issue is because of how we started. I’ll use Colorado as a really good example. We didn’t have scientists on board who told us, ‘Hey, by the way, this is the lifecycle of a mite, and this is how you use ovicide or miticide,’ and what we ended up doing was creating super mites that had extra thick skin, so the stuff that was supposed to permeate them and kill them did not.
“We had another IPM strategy that I really love, and I’m actually looking for bees right now, because bees also get mites,” she said. “It’s one of the biggest threats to them. Basically, the good bugs eat the bad bugs, then the good bugs don’t harm your plants, the good bugs eat each other, and then when there’s only one left, he dies. But what was happening with some of the IPM bug providers is they were putting the spotted mite in with the good mites and inadvertently infecting more grows than they were helping. Once people figured it out, they got even smarter about IPM and a lot of them started just making their own mites to help in the fight.”
Was Hop latent viroid (HLVd) an issue? “It’s rampant in California,” said Sanders. “I don’t know what their requirements are for testing, but here we test everything for HLVd. Unfortunately, we did have a bad grower bring in genetics that would have ended-up with it, and we crushed it immediately. But we monitor that very closely, and if we get the tests back and see that a strain does have it, we cull everything. We have really clear and strict cleaning guidelines and we don’t share utensils among strains. We do all the things that you’re supposed to do, but it’s a thing. And by the way, AG is full of stuff like this. AG is full of issues.
“I once walked into a grow in California, where I literally stopped dead in my tracks, and I asked for a big plastic trash bag,” she recalled. “I disrobed in the parking lot and put everything in it, gave it back to them, and said, ‘I will no longer need these clothes. I’m not taking any of them with me.’ It was that bad. I didn’t even want to go back to my hotel room, because I didn’t want to infect everything else that I had. I did have my suitcase in the trunk, so I was able to at least grab some sweatpants.”
I asked jokingly if it was a cartel grow. “It was fully licensed grow of which I was a partner, and I was just like, ‘Oh my God, this is awful. We’re burning all of these clothes.’”
A Canna Provisions Future
Sanders has gone from running seven stores in Colorado to flying around the country consulting, to now running a small business, a trajectory that confuses some observers. “People think that because I have experience in the industry that we’re some secret MSO or something, but that’s just not the case,” she told me. “Eric and I live together in Lee, we’re buying a condo in Holyoke, and we can’t be any more local than we are. We believe really, really strongly that the way you succeed in any business is by participating in your community and making sure everybody knows who you are and knows what you do for the community. You’re able to have those one-on-one conversations with the powers that be or other business owners, and they end up advocating for you because you are such strong supporters of them.
“I’m a board member of the Holyoke Chamber,” she said as an example. “Eric’s a board member and vice president of the Lee Chamber. We’re members of social and civic organizations. I’m a lion here in Lee Rotary, I’m working on my Rotary membership in Holyoke, and I’m on the parade committee in Holyoke, which is a whole other animal. And we won Citizen of the Year from the Chamber as well as from the Kiwanis organization. I mean, we are working hard to be thoughtful members of our community.”
Isn’t that also called good business, especially in a hyper-local environment? “Yes, and we need hyper-local support,” agreed Sanders. “It’s really important, and I think, ultimately, it’s way more than writing checks. Not that there’s anything wrong with that. I strongly believe that we need to fiscally support various organizations. But in a world where cannabis is not deductible, I would much rather give my time. We give money and time, but it’s a huge commitment to be on the parade committee. Starting in January, we meet every Sunday for an hour, and we must work parade week; it’s a requirement. I was the newest member of the year last year because of my enthusiasm and commitment and volunteer time and, and I think that we are a really good partner for an organization that has over 300 members that I interact with on a weekly basis. And what bigger endorsement can I get? If I just wrote them a check, I wouldn’t get that endorsement.”
Are you looking to expand? Do you have a strategic business model? “We do have a business strategy, and there’s actually some legislation being worked on right now in Massachusetts, where we are limited to three retail licenses,” she said. “And from where we are in the business right now, if you want to grow, you need to grow your footprint, so we strongly support an expansion of the retail licensure from three to six. We think that that is a very good thing to do for people that want to do that, and in that same legislation they’re also working on doubling the purchase limits, kind of like what Nevada just did, and that would be significantly helpful. I would say that one of the things that we’re actively looking for right now is a third dispensary because we only have the two. So, we are actively in pursuit of that third dispensary, and we’re also actively pursuing an existing manufacturing operation.”
Are you looking for an operational dispensary? “Ideally one that doesn’t require a ton of Capex would be perfect storm, but there are a couple we’re looking for where there might be some seller financing to finish out the build out, and that would be fine with us. Sometimes, when acquiring existing the operational merging is really painful, so much so that there are consultants that get paid a lot of money to do that, to make sure that you don’t throw the baby out with the bathwater because of the bad management of a merger. But I think any and all of those things are options, and right now there are more than a handful of retail locations that would just hand you the keys and say just take over.”
Are there any that you have your eye on, especially in New England? “No, for no other reason than if I go into New Jersey right now, I’m going to be buying high, period. It’s higher than it will be. Connecticut has proven to be a disappointing market. Hopefully, it straightens out, but I don’t know how long that’s going to take. New York, we don’t even have to say it. It’s a disaster. I wouldn’t touch New York with a 10-foot pole. Vermont, same thing. I’m exaggerating, so take it with a grain of salt, but every meeting they’re approving 100 licenses. It’s Vermont! There are only so many people there.
“From a regulation standpoint, maybe there is a full understanding of, ‘We’re just free market and good luck,’ but my challenge with that is that in this business, especially where it is right now with 280E and how hard it is to raise money, most of the funding you’re going to get is either friends and family or predatory,” he added. “I just feel like the landscape to open anything at this moment is potentially more likely than not a license to lose money. Not always, but I can point to several little stores that have opened in the Berkshires general vicinity over the past year; one is no longer open, and they’re just getting their asses handed to them. I don’t want to see that, and I know these people, they’re good people and they had the best intentions. Unfortunately, timing as well as market forces have made it really tricky. I mean, there’s a quote out there that there are 30,000 non-regulated dispensaries in the state of New York.”
Including bodegas? “Yes, including bodegas, where, if you buy a soda for $40, you get whatever. There is all kinds of shiftiness around what’s happening, and that’s not what the regulators or the governor intended. It’s a real challenge when you’ve got that going on, but here we are.”
Canna Provisions is also a plaintiff in a lawsuit filed against the federal government that claims the Controlled Substances Act (CSA) is unconstitutional with respect to its prohibition of interstate cannabis commerce. The case, which was filed in late October in United States District Court, District of Massachusetts (Springfield), is Canna Provisions, Inc. et al v. Garland. The plaintiffs are represented by the stellar law firm of Boies, Schiller & Flexner LLP.
“I am suing the federal government,” confirmed Sanders. “Think about that. I’ve gone from being worried I was going to get arrested in Colorado at the very beginning, because I was well over the plant count to require a mandatory minimum, to suing the federal government. Yeah, it’s a very exciting case. I’m really proud to be a part of it, and absolutely cannot do any of it without the genius of the law firm.
“I do think that it’s a super relevant case, especially when you’re looking at other states’ rights things that are happening,” she added. “In Missouri, I cannot get a divorce if I’m pregnant unless my husband agrees and signs some magical piece of paper. We’ve got IVF under threat in Alabama. So, it’s kind of falling in line with a bunch of states’ rights issues. This just happens to be a very specific argument about the CSA, and that it doesn’t apply interstate. And I know that there were a handful of people that were really mad that we did this but look at all the people that are either part of it, or supportive of it. In my opinion, it’s probably one of the largest groups of cannabis companies to ever come together and do something. I think that’s remarkable, and if we’ve driven that, it’s exciting, because I’ll tell you, cannabis is a team sport. It always will be, and we have to figure out how to fight these bigger giants together, and not fight each other. And it’s the right thing to do. We’re not just a bunch of Yahoos. This is a very, very talented firm that knows how to do this and they’ve been watching this and studying it. It was just about the right time, and I am thrilled that I got the call.”
Per court docs, the other plaintiffs include Gyasi Sellers, Wiseacre Farm, Inc., and Verano Holdings Corp. “I guess I’m bringing some legitimacy to how this really affects what’s going on, and how it affects a small business,” said Sanders of her role in the suit. “We’re the little guys that have been at a big table, and by the way, people should be grateful that I’m there, because that means that I’m having a say in what’s happening, and it doesn’t turn into MSO run wild. That’s the thing. Unless we sit at the table with them, we don’t know what’s being said behind closed doors. So why not get at the table and have your say and push back on things that are important to you, or in areas that you feel like they’re being short-sighted about small business, or whatever.
“And I can just tell you, so far everyone’s been lovely to work with,” she added. “This has been an incredible group that I’m really proud to be associated with regardless. And look, I’m the first one to raise my hand about MSOs. I’m very public about that, but I’m also incredibly close with some of them because we grew up together.”
Before we ended our call, I asked Sanders if Canna Provisions had any new or exciting products that she wanted to shout out. “We have the most amazing thing called Smash Stash, which is 28 one-gram joints in four different strains, all together in one jar,” she enthused. “Take it to your friend’s house for Thanksgiving, Easter, or Passover, and you’re the star of the show because you brought 28 joints. And then we have the Half Stash, which is equally amazing, because you can buy 14 grams and then add edibles on top of your grams. So, it’s all about convenience. We know that. We shop at Amazon.” Smash Stash retails for $165, and Half Stash for $90, before tax.
But that’s not all! Smash Hits now also has the first strain-specific sodas, currently featuring Doctor Durban and Lemon-Lime Haze. A 12 oz. can with 5 mg of THC will set you back $7 before tax.
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