Investor Ideas #Potcasts 649, #Cannabis News- Interview with CEO of NorCal Cannabis
Delta, Kelowna, BC, February 28, 2023 (Investorideas.com Newswire), investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site release today’s podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.
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Today’s podcast overview/transcript:
In today’s podcast Investorideas interviews Jigar Patel, CEO of NorCal Cannabis, one of the largest cannabis operators in California and number one seller of indoor flower, powering beloved brands such as lolo, 1Lyfe, and Panacea, where we discussed surviving in the California cannabis industry, brand creation, inflation on cannabis sales and California cannabis cafes.
Patel has over 20 years experience in the cannabis industry and has been a key player in California’s explosive legal market. Founder of four cannabis businesses as well as being an industry leader in bringing local regulatory compliance to many jurisdictions including San Francisco, Santa Rosa, and Sonoma County, Patel’s leadership brought NorCal’s revenue from $2m to over $70m in just three years.
Patel began his cannabis journey in true organic fashion as he stated, “I guess my cannabis journey really began with consumption of the product at a young age. Like a lot of folks in my teens, I started trying cannabis and for me it was really an eye-opening thing. As the son of immigrants, I sort of had this path where I was supposed to, go be a doctor or a pharmacist and get a house and get married. And that was what the immigrant story was of the American dream. And I think, cannabis opened me up to a whole world, which I didn't really see prior to that and introduced me to lots of folks from different backgrounds.”
“When I went to school at Purdue, I ended up meeting some folks that were growing cannabis back then. Obviously in those days it was highly illegal, and some of those same guys actually had moved to California in the late nineties because of Prop 215 here, and I stayed in contact with them, learned about what was going on in the space and quickly knew that I wanted to be in it. I really dove into the culture of cannabis here in Northern California. Really seeing what it was about and what was this whole prop 215 thing, right? Not many people in those days really understood what it meant, and it was the quasi-legal way of providing medical cannabis to patients. So I quickly realised this was where I wanted to be, moved out here in the early two thousands, then jumped into the political realm and started to understand how I could help effectuate change at the local level and worked with Sonoma County, worked with the city of San Francisco and a lot of other cannabis policies early on. Fast forward to 2015 and I jumped in with two feet and built a grow in San Francisco and that was really the beginning of North Cal. During that time, I'd come across my other two co-founders, Blair Carter and Doug Cortina, who were doing a very similar thing in the same neighbourhood in San Francisco. We quickly realised we were stronger together and that initial partnership was at the beginning of NorCal and today we operate about a hundred thousand square feet of production with almost 30,000 square feet of canopy in our Santa Rosa campus.”
When asked about how NorCal helps differentiate itself from the competition and work towards true brand creations, Patel commented, “for us lead cultivators that have been working with for almost 20 some years, we've stayed together as a team, which is very rare in this space. So we operate three brands. One Life, panacea and Lolo. Really that's the good, better, best of indoor flower, and along with that we also make other products, but our core capabilities are in indoor cultivation. We really believe we are some of the most efficient operators in this space. Because we are efficient it allows us to, especially in our brand Lola, actually lead with quality, consistency, but also price.Because we are so efficient at what we do, we're able to provide that value to the consumer consistently and we believe we have the makings of a real brand. I don't think we've truly seen a real brand in cannabis yet and I think we've latched onto something really good with Lolo. I think it resonates with the consumer. I think the value proposition is perfect.”
When asked about the difficulties when it comes to marketing a brand like Lolo, Patel went on to say, “when we started NorCal, like everybody else, we'd raised a bunch of money and we had brought on a strong marketing team. I think that even when you talked to those folks that were part of that marketing team early on, I think what they will tell you is, everybody had grand ideas for how to really market cannabis, but nobody had ever really done it. They didn't understand how the system worked, they didn't understand the supply chain and as we brought in these great marketers, who came from very diverse backgrounds, I think what they realised quickly was this wasn't digital marketing, this wasn't Twitter, this wasn't any of the stuff that they were used to. This was a knife fight, those were their words. I think it became clear that these monster marketing budgets weren't really doing much. They weren't moving the needle, right? You would get media play out of it. They'd get a lot of attraction, but the ROI of actually selling cannabis wasn't there.”
Patel continued, “I think what we did, which was a little different, was when we did our marketing push early on, we spent a lot of time on business intelligence. What we were able to do there was utilise some of our historical knowledge of what happens in the space, combined with data that we finally had access to, and we were able to look and say, what does a consumer really want? What does a power consumer want? If you look at the power consumer in California, it always came back that they cared about quality, consistency, and price, and a bell went off for us. We don't have to do much. We don't have to spend a bunch of money on marketing. If we can hit those three things and provide that to the consumer, it will resonate. If you look at Lolo over the last year, we sold almost 1 million eighths of flour, which is pretty crazy to think about in a state like California where competition is crazy, and the fact that it's indoor flower I think says more. When we look at other states and realise that most states don't have the ability to grow outdoors, you start to see how Lolo can actually be a brand that actually resonates nationwide, right? As long as the feds don't legalise, which they’re not gonna do anytime soon in our opinion, you'll be able to have, I almost think of it like Coca-Cola bottling plants, different indoor facilities in different states producing the same type of product.”
In recent news, a new bill introduced in the state legislature by San Francisco Assemblymember Matt Haney, Assembly Bill 374, would allow cannabis lounges and retailers to offer food, drink, and live entertainment.
When asked about this new change for the Cannabis Cafes, Patel said, “I think the cafes are great. I think the one issue that we've seen is just the inability to have food and or drinks really takes the recreational aspect out of it. I'm a firm believer in letting people do what they wanna do and I think the more we can normalise that and allow that, the better it is for the plant.”
California’s cannabis industry, though still the largest legal market in the world, has been facing some issues in the legal industry over the past few years.
When asked what measures the state could take towards addressing some of the industrie’s issues, Patel commented, “I think there needs to be a reduction of the excise tax. What they did for cultivation tax in California was great, but again, it needs to be passed onto the consumer and I think that the conversation needs to change from this just being about tax revenue to really about jobs and employment.”
“We have ways to tax and make money as a state. What we really want are jobs and I think that mindset needs to change and people need to start looking at us, not as just a source of income for the state, but actually as citizens” Patel concluded.
No matter what market you’re looking at, there is always a discussion about Black Market cannabis and in California this is a large issue.
When asked about how he sees the black market either developing or fading out, Patel said, “People have been growing weed for 30 and 40 years on their parents' properties. You have this generation of folks where this was their life. When you think about the black market going away, what I do think is, I don't think you're gonna start seeing younger and younger growers getting into the game again. I think that the old timers either will make the transition or at some point give up. I think just if I look regionally, and we pay a lot of attention to what happens in the black market because it's all one market at the end of the day, when I talk to the grow shop owners or just locals around here, what I am seeing is a lot of those 10 lighters and 20 lighters and even 50 lighters that used to proliferate the Sonoma Napa or Sonoma Mendo landscape aren't there anymore and people have no intent of putting 'em back up.”
To keep updated on NorCal’s business and brands or to find out more information about NorCal Cannabis visit their website here.
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