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By Ayad Maher
As a entrepreneur in the cannabis industry myself, when I run into professionals in the marijuana business, who are, nevertheless, driven, hungry, motivated and committed to their personal and professional growth, I try not to let them go without learning one thing or two and have a better understanding of their journey in this chaotic industry. This is only the first post of many upcoming blog posts to introduce successful entrepreneurs and/or professionals in the young legal marijuana industry.
Wayne Schwind is the owner and founder of Periodic Edibles, specializes in making strain specific cannabis caramels, currently operate in the Oregon recreational market. Wayne started the company in July of 2015 as a solo operator, operated for a year and a half in the Oregon medical market before getting the recreational license on February 1st 2017. “There was a lower barrier to entry in the medical market at that time versus the current recreational market. That allowed me to self finance and boot strap the business into the recreational market.” Wayne says.
Periodic Edibles is now serving 100+ retailers throughout Oregon. The business was awarded the third place in the Willamette Weeks “Best of Portland Readers Poll” 2017 for Best Edible Product; a public driven annual contest where the public nominates a company in order to make the top five selected edible products that will be voted on. Then the public votes for the winner from those five.
Wayne has started, alongside with the company’s operations managers and graphic designer, a podcast focused on the business and science of cannabis, called the Periodic Effects: Cannabis Business Podcast. “It has been a great experience putting this show together and help spread real “Cannabis Education” to the masses.” Wayne says.
What made you take the leap into marijuana industry?
"It’s funny how sometimes a real failure leads to a success. I worked for a Fortune 500 company for 5 years after graduating college in 2010. I actually left that job to start a business in the property management industry with two other partners. We started working on that business in 2014 and I left my corporate job in 2015 to start that business.
Due to things not working out with those business partners I ended up walking away from that business in the summer of 2015. At that point I was at a crossroads, I had already left my corporate job and had to figure out if I was going to go back to work for someone else or try to start another business. I always had entrepreneur tendencies growing up and always had the passion to run my own business. I got my Oregon medical card in 2013 and visited quite a few dispensaries as I traveled a lot for my corporate job. I asked a lot of questions during that time to learn more about the business of cannabis, just being curious, and realized in hindsight I was doing market research that whole time. After the property management business failed I realized the cannabis industry would be the best place to start a business if I was going to do so.
A friend had a caramel recipe and I decided to focus on a cannabis caramel as our first product. After bringing that product to market we found increasing supply to meet the demand was a full time job. We are still focused on increasing our supply so that we can meet the full demand of the Oregon market."
Is it different starting a business in the marijuana industry than other ones?
"Very different, the cannabis industry presents many challenges and unpredictable variables. Dealing with changing regulations is difficult on its own. Add to that a market that’s hard to predict future demand and a constantly changing competition landscape.
New industries don’t come along often, when that new industry creates a lot of opportunity, like the cannabis industry has, you are going to have a lot of entrepreneurs move to the space to start businesses. In that process there will be an oversaturation of businesses until the market stabilizes.
Dealing with those changes and new competitors would be difficult in any industry. It’s also a good thing as this brings innovation and evolution to the industry, ultimately allowing cannabis legalization to happen at the federal level giving many of the people that would benefit from cannabis access to it."
What are the struggles/obstacles you’re facing in the cannabis industry? On a personal level and/or professional?
Professionally, banking, 280E tax code and changing regulations present obstacles that need proactive planning to avoid as pit falls. It’s the issues I don’t know I don’t know, and in a new industry like cannabis I’m sure there are many I’m not aware of. But you keep on moving with the information you have and thus far it has been working out."Personally, figuring out how to scale a business and be an effective leader is a constant challenge. The first business I started had the three partners (including me) and one part time employee. At Periodic Edibles we now have a team of 9 people and will probably double that by the end of 2018. Fortunately there are a lot of resources from podcasts, books and the internet for pursuing a self taught MBA. I’ve come to find that reading all the business books in the world won’t make you good at business, reading is the easy part. The hard put is putting that information into practice, and working to change the personal behaviors and decision making that is not working.
I wrote the eBook as a way to incentivize anyone interested in the cannabis industry to sign up for our Podcast Newsletter.I wrote an eBook to cover many of the obstacles and challenges a business would face, it’s titled "8 KEYS How to Launch a Successful Cannabis Edible Business."
I’m also learning a lot about food manufacturing. On top of operating in the cannabis industry, we’re also trying to scale an artisan small batch caramel, and I don’t have a background in culinary or food production.
Fortunately my degree is in Chemical Engineering. I describe that degree as learning how to take something a chemist would make on the bench top and scaling it from making 10 grams in the lab to 10,000 pounds in the field. That is pretty much what we are doing with the caramel, the small batch my friend made would produce 30 caramels per batch, and we’re now making around 3,000 caramels per week."
Due to the stigma behind marijuana, have you ever dealt with contention from your family concerning your pursuits in the cannabis industry? How being in this industry has affected your personal and/or professional life? How did you handle it? What would you do differently in hindsight?
There was definitely concern from a professional perspective. I left school with a significant amount of student loans and need a steady flow of income as I’m still paying them off. I made sure to leave my corporate position on good terms so that I could possibly return if my business ventures didn’t work out."The anti-cannabis stigma still carries momentum. I grew up in the Midwest and went to college for engineering, my parents couldn’t have been happier. Having the conversation about leaving a well paying secure job to start a company in the cannabis industry was an interesting conversation with family, and there was some hesitation.
However I was concerned that if they knew I was working in the cannabis industry I wouldn’t be able to get hired back, due to the stigma, you’re not really sure where a person stands on cannabis as it’s not openly talked about, all though that is changing. Because of that I kept my new cannabis business off the radar for a while. Until I was certain that I had traction and something that would work, once I felt really confident my business would succeed, I came out of the cannabis closet so to speak.
That stigma cannabis carries truly does have momentum. I strongly believe in the potential of cannabis to provide real relief for people and opportunities for small businesses, and even I was hesitant to openly discuss my association with cannabis. However all of that really seems to be changing. And I’m not sure I would want to work for a boss or owner that wouldn’t hire someone who consumes cannabis. That type of thinking seems narrow minded with the science and information we have today, it’s a head in the sand approach and I would be concerned with that person’s decision making process and how they would run their business."
If you smoke weed and you’re comfortable talking about it, how did it help you in your personal and/or professional life? And what that piece of advice you would like to give to stoners?
"I’m not sure I could give any advice to stoners, as they already use cannabis. All though I don’t really like that term “stoner” as it seems loaded and carries a lot of assumptions. I know a lot of “stoners” that are successful and ambitious.
I could offer some advice for the non-cannabis potential consumer. Cannabis can help with a lot of different things, while it’s no miracle cure all, it is great to help balance your body and mind if used in the correct way.
Over consuming is not an enjoyable experience. Starting with a very low dose for a couple days in a row is a good idea. See how it makes you feel and slowly increase your dose until you find an experience you enjoy. A low cannabis dose could easily replace a glass of wine each night, and from what we know so far, cannabis has a pretty strong case for being much healthier than alcohol.
That covers the medical use of cannabis. I think cannabis can also be used in a recreational way to help increase creativity, at least that is what I use it for. Cannabis is not a social drug for me, like alcohol might be. I use cannabis to focus and work on a specific project for 2 or 3 hours. It helps motivate and focus me around 6PM when I still have a few hours of work left to do.
Regardless of how you decide to use cannabis, finding a great retail or dispensary establishment with knowledgeable budtenders is critical. You will have 100 questions when you first consider using cannabis. The place you decide to purchase cannabis from should be able to answer all of those questions for you. If you feel like you are getting the run around or weird answers to your questions, look for a new store to buy from."
How do you see the competitive environment in the industry?
"The current competitive landscape is highly dependent on the specific state. Some states have high barrier to entry and a limited amount of licenses available. Those states are normally very expensive to operate in, however there is limited competition once you get started.
Other states have a lower barrier to entry and are highly competitive, Oregon is like that. California will also be pro small business and Colorado is similar.
Oregon’s landscape is very competitive and over saturated by my estimates. We are around one year into our recreational market. I think the first year a state goes recreational is a land grab. It’s a huge advantage to be one of the first products available on the shelves when now anyone 21+ can purchase products. Those new consumers have no past relationship with other cannabis brands.
However market share is quickly spoken for after a rec program has matured for a year. I’ve gotten the same feedback from talking to retailers in Colorado. From what I’ve learned, it seems the best time to start a business is either right before a new state starts a rec program, or about 3 to 4 years after a rec program has been executed, like in Colorado.
A few years after a rec program goes live the landscape will be more stable with less new companies starting up, meaning retailers will have more time to consider putting new products on their shelves. All though you need a damn good business plan, product and marketing strategy to steal market share from the established brands in that rec market."
What would you like to see changes in the industry?
"I’m fairly happy with the current state of the industry. Of course there are many micro changes I would like to see. However the big picture has an overall positive look for the long term.
Legalizing cannabis is a serious change in the laws and culture. To do that correctly takes time. I don’t think rushing faster to federal legalization would be a good thing, all though we do want that to happen eventually.
That is also speaking from a selfish perspective. I am happy with the state of the cannabis industry in Oregon as I have a profitable business. However there are many medical patients that could benefit from cannabis that don’t have access to it in states with no cannabis program. Taking that into consideration I think there is a strong argument that we at least need medical programs in every state as soon as possible.
There is a lot we can learn from the states that have already legalized cannabis, either medical or recreational. The case studies are out there and the pro cannabis stance is looking to be the correct one."
What do you know today that you wish you would have known when you first got started in this industry?
"I think this question should be “what are the 100 things you wish you would have known” J Honestly a lot of things. A lot around how a highly regulated market operates, especially a new market like cannabis. Like who are the decision makers at the state level and how are they making those decisions? Having the small business voice heard at the high level were decisions are made is important. I’ve been getting better at building those relationships and knowing who the right person is to ask when I have questions, either cannabis related or food manufacturing related.
There is a lot around hiring a team and building culture that I’m constantly learning about. Figuring out how to correctly protect the brands IP and go about accounting, banking and contracting with lawyers has also been a learning curve."
If money is not an issue, what would you rather do?
"Probably something similar, I would need a purpose or goal to work towards, so maybe something bigger that doesn’t need cash flow for survival. I think absolute retirement is a fantasy. The brain is like the body, if you don’t use it you lose it. I will probably be doing some kind of work into my 90s. The goal is to be able to do what you want when you want. And thus far I couldn’t be happier with the business and my current reality."
What’s next for you?
"Over the next 3 to 5 years I will be highly focused on expanding Periodic Edibles while further securing our current market share. Our goal is to be in 200+ retailers by the end of 2018 and a tentative goal of launching our product line in a second state. That is something we won’t rush and only move forward on if we’re confident with the odds for successful execution.
I will also continue working on the Podcast and uploading weekly episodes. The Podcast is a great long term marketing tool if it’s successful. The only way it will be successful is if I provide real value to the listeners and those interested in the cannabis industry.
All though we make a high quality artisan caramel product line, I almost view that product as the commodity, and our business as the product. Meaning we have positive internal relationships with our employees that result in a great end consumer experience. I think employees that take ownership and enjoy their work will naturally innovate. That means we should only keep getting better over time.
Having our business operations be the real product also explains why we are doing the podcast. By providing real insights from interviewing other cannabis business owners and scientists, we hope to build a loyal audience that will stick with us for the long haul. We want to give the community more than just a cannabis caramel, the cannabis caramel is great, but we have so much more that we can do!"