Should you ditch your job to launch a marijuana business?
We talked to five U.S. cannabis entrepreneurs to find out
It's rare for a new sector of commerce to open up, as it will when recreational marijuana becomes legal in Canada. Experienced entrepreneurs are already jumping into the sector, while others are opening their first small businesses with the hopes of tapping into the marijuana gold rush. Thinking of ditching your day job to join them? To get a peek at what you might be in for, Tracey Lindeman spoke with five American entrepreneurs capitalizing on the cannabis boom.
THE TECH STARTUP FOUNDER
NAME: Lamine Zarrad, 37
PREVIOUS CAREER: Mr. Zarrad started his career as a U.S. Marine. After university, he ended up on Wall Street working at Merrill Lynch at the height of the American banking crisis. He left shortly thereafter to work in banking compliance, taking a job as a self-described "bank cop" for the U.S. Treasury's Office of the Comptroller of the Currency.
CURRENT JOB: CEO and founder of Tokken, a digital banking and payment solution for the cannabis industry that strictly complies to regulatory frameworks. He started the company after identifying the trouble legal cannabis companies had in getting bank accounts. The company is in public beta with five Denver dispensaries.
TYPICAL DAY: If he's not on the phone with existing or potential investors, he's dealing with customers, travelling or scoping out the competition. "We have to sift through a lot of noise to distinguish ourselves, and that has been the single biggest challenge."
WHAT HE LIKES ABOUT HIS JOB: "I love the concept, the idea that we're creating something that was not there."
WHAT HE DOESN'T LIKE: "Being exhausted. I have very young children," Mr. Zarrad says. "I don't know how my wife agreed to this."
THE MONEY: Prefers not to say, though he does say that Tokken's margins are "very thin." The company, which previously raised $1.5-million (U.S.), is currently raising a $3-million seed investment round.
NAME: Wanda James, 53
PREVIOUS CAREER: U.S. Navy lieutenant, serial entrepreneur, political campaign manager, owner of multiple restaurants.
CURRENT JOB: Ms. James is the founder and CEO of Colorado dispensary Simply Pure. She was motivated by her brother, who spent 10 years in prison for possession of 4.5 ounces of marijuana – a sentence Ms. James says included years of picking cotton as free prison labour. "In 2009, my husband and I opened a dispensary to be able to put a black or brown face on the idea of cannabis legalization," she says. "We wanted to show users aren't criminals." Simply Pure is about to debut a line of edibles, and hopes to expand the brand to other states. Ms. James also is president of Cannabis Global Initiative, a consulting firm she uses to lobby politicians on the cannabis industry.
TYPICAL DAY: Ms. James usually gets up between 4:30 and 5 a.m. "It's a military habit," she says – to check her e-mails and do admin work. Then she has coffee with her husband before heading into the office, the dispensary or the grow location, where she'll work from 10 a.m. until 6:30 p.m. or so. She does a final round of checks before winding down around 8:30 p.m.
WHAT SHE LOVES ABOUT HER JOB: Ms. James enjoys working with younger, innovative and experimental people – "People who can see the future in ways I can't." She also loves the intersection of politics, business and social justice: "I get to pull those all together under the canopy of cannabis legalization."
WHAT SHE DOESN'T LIKE: The federal government. She also hates the hypocrisy of anti-legalization people who show up to their kids' ball games "with wine and Valium."
THE MONEY: Ms. James won't disclose her salary but does say her budtenders (essentially dispensary baristas) make between $12 to $15 an hour, while the growers earn an hourly wage of $18 to $25. Managers' annual salaries range from $50,000 to $75,000. "It's a regular business," she says.
NAME: Megan Stone, 33
LOCATION: Tempe, Ariz. (a suburb of Phoenix)
PREVIOUS CAREER: Ms. Stone grew up in the Midwest, earning her marketing degree in Minnesota before moving to California at 23. After losing her job during the recession, she returned to school to study design. During her studies, Ms. Stone, a medical cannabis user, also worked as a budtender at an Orange County dispensary.
CURRENT JOB: Owner and principal at The High Road, a boutique studio that does interior design for higher-end dispensaries. Her experience of working at a dispensary made her acutely aware that how a weed shop looks impacts how customers feel about shopping there. "It was always shrouded in this kind of illegitimacy," she says. She tried out new design elements in the dispensary she worked at, to many customers' delight.
DESIGNING HER CAREER: Ms. Stone considers herself to have been very lucky. "A lot of my career has been serendipitous," she says. "My job didn't exist when I started design school. I invented my career."
THE MONEY: Ms. Stone says good independent consultants in the United States – in and outside of the cannabis space – can easily earn $250,000 a year. "I expect to be there or a little past there this year."
NAME: Miguel Trinidad, 44
LOCATION: New York City
PREVIOUS EXPERIENCE: Mr. Trinidad has been in the restaurant business since the age of 17, and is currently executive chef and co-owner of the Maharlika Filipino Moderno and Jeepney Filipino Gastropub restaurants
CURRENT JOB: Executive chef and co-owner of 99th Floor, a purveyor of "elevated" haute cuisine. Trinidad got involved in the idea of making cannabis-infused food in late 2014 after being approached by friend Doug Cohen, a marketing-company owner who is now his business partner. The pair host ultra-exclusive dining events in various cities, in which all the courses are micro-dosed with cannabis. "The dosage of our dinners is low; we call it responsible consuming." Mr. Trinidad crafts his 99th Floor menus based on which types of marijuana are available – a strain with an earthy flavour profile would go well with chocolate, beef and root vegetables.
WHAT HE LOVES ABOUT HIS JOB: Making people happy with his cooking and presentation. "Food is a living art for me."
WHAT HE DOESN'T LIKE: Long hours, many of which are spent on his feet: "I wish the world was made of cushion gels."
THE MONEY: Hosting an exclusive fine-dining event every two months or so isn't currently a big money-maker for the pair; margins are thin even with a per-head price of $150 to $200. They're looking at it as marketing for future expansion and product development.
NAME: Amit "Bamboo" Vachher-Gnanathurai, 39
LOCATION: Oakland, Calif.
PREVIOUS CAREER: Serial entrepreneur and consultant
CURRENT JOB: Co-owner and brand architect of The Highest Grade, which Mr. Vachher-Gnanathurai describes as an "intellectual-property company." The company licenses its proprietary cannabis-extraction processes – such as its "virgin cold-pressed extract" – for use by licensed manufacturers. The company also makes cannabis-vaping hardware, sold at legal dispensaries throughout California.
WHY HE DOES IT: He's motivated by his mission to design products that are as sustainable and healthy as possible, free of the chemical byproducts present in many large-scale farming and manufacturing operations.
DAILY DUTIES: In the early R&D years Mr. Vachher-Gnanathurai spent his time in his bedroom perfecting the extraction process. Today, his job as a brand architect entails product development, sourcing and developing the brand's identity.
THE CHALLENGES: Keeping up with the patchwork of state and federal marijuana laws is among the most challenging parts of his work. "We are in a major transition period from a regulatory standpoint, and gearing up and preparing for all the upcoming changes is difficult because the target is constantly moving," he says. The dust will eventually settle, he continues, "but until then it's going to be a wild roller-coaster ride that requires a lot of patience, gumption and problem-solving."
THE MONEY: Mr. Vachher-Gnanathurai – who also works as a business and marketing consultant, as well as a kennel operator – says he and his partner at The Highest Grade haven't yet cut themselves a paycheque. "We issued our first licence last year in April, and were reliant on investment capital until Nov. 2016, at which point we finally became cash-positive," he says. "The goal is to be able to pay ourselves for our time by the end of the year."