You’re going to feel like you’re failing a lot, and that’s ok. Starting and running a business is incredibly difficult even in the best of circumstances. Many of the people who are driven to work in cannabis are undercapitalized but enthusiastic and driven by something more than money. Very often what we want to accomplish immediately is difficult if not impossible based on available resources, and that can be very demoralizing especially in the face of all of the money going into brands that have no mission. I try to keep focused on the things I can make happen while managing my own expectations and working towards the long term goals strategically.
As part of my series about “5 Things I Wish Someone Told Me Before I Started Leading a Cannabis Business” I had the pleasure of interviewing Michael Katz, Co-founder, Emerald Exchange. Since entering the cannabis space in September of 2015, Michael Katz has co-founded two award-winning brands: The Emerald Exchange and Evoxe Laboratories. Michael entered the cannabis space as CEO of Evoxe Laboratories, the first company to combine Aromatherapy and Cannabis into self-contained vaporizers. Katz then co-founded and developed The Emerald Exchange, a platform focused on supporting small batch craft sungrown cultivators from the Emerald Triangle, which currently operates a retail pop-up for craft cannabis products in licensed retailers throughout California. Prior to the cannabis space, Michael worked as a Producer for over 15 years on music videos, commercials and graphics, creating brand identity content for some of the largest consumer brands in the world including Apple, Tylenol and Bose. As Executive Producer of entertainment marketing agency Ant Farm, Michael produced branded content for clients including Google, YouTube, Microsoft, Activision, Disney and HP, contributing to many awards including a 2013 Gold Key Art Award and Agency of the Year at the 2013 Game Marketing Awards. Michael then moved on to Head of Production for Wondros Global and 5D Global Studio, owned by Emmy Award winning director Jesse Dylan. Michael is a Board Member of the Mendocino Cannabis Alliance, and a member of the Producers Guild of America and ASCAP.
Thank you so much for doing this with us! Can you share with us the story about what brought you to this specific career path?
MK: In 2015 I launched evoxe laboratories in California, the first purpose driven vaporizer product available for purchase in the market, blending essential oils and cannabis oil to create a targeted experience illustrated by our tagline, choose the mood. When Justin and I met in 2016 we combined two separate events we were working on to create the first Emerald Exchange in Malibu, which was a farmers market designed to create direct connections between small batch cultivators from Northern California and conscious cannabis enthusiasts in Southern California. The events quickly grew in popularity over the course of the year, but when regulations changed and made it harder to put on legal cannabis events, we shifted to a consumer focused platform for retail called the Emerald Outpost in which we represent branded craft products from the same small batch cultivators in the Emerald triangle one would have found at our events.
Can you share the most interesting story that happened to you since you began leading your company?
I’d say the most significant thing that happened since we started the company was the passage of prop 64 which resulted in the transition from a medical cannabis market into a commercial cannabis market. It has been very disappointing to see the barriers raised that have kept the vast majority of existing operators in the space from becoming licensed to operate in the new market. Less than 5% of existing cannabis cultivators have been able to make the transition, so we have seen the loss of many incredible products and many small farmers who have been responsibly cultivating cannabis for decades now unable to make a living. A driving force behind The Emerald Exchange events and our Emerald Outpost pop up is the mission to help as many of these local farmers as possible claim their rightful place in the craft market and see them develop sustainable businesses.
Are you working on any exciting projects now?
Always! Since the launch of our Emerald Outpost retail activations at Herb Delivery in Downtown Los Angeles, 99 High Tide in Malibu and the Leonard Moore Cooperative in Mendocino, we have seen an increase in interest in the small batch craft cannabis products we represent. We’re fortunate to have such great alliances with conscious shops who want to hold space for the unique products from our community. At the moment we’re working with some incredible small farms, cooperatives, and manufacturers:
We are looking to expand our model into additional retail outlets with strategic partners who understand and appreciate the values we hold dear. We are also working on planning our next big event with a focus on social responsibility for the spring of 2020 in Southern California.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
The person most responsible for my ability to function in the world today is definitely my mother. She put a ton of time and effort into my education as a child and taught me the importance of hard work. She created opportunities for me to learn how to maximize my strengths and minimize my weaknesses. She has always provided me with a wonderful example of selflessness and care for others and I am grateful for everything she has taught me.
This industry is young dynamic and creative. Do you use any clever and innovative marketing strategies that you think large legacy companies should consider adopting?
Our strategy is simple, we promote direct connections between small batch cultivators and the consumers who enjoy their products. We think there’s a ton of value in that connection and it’s because of the community we inhabit. People care more and more about where their food comes from and the sustainability of their choices. It’s not clever, but our most effective strategy is educating people about the sustainable ethos behind small batch cannabis, and their ability to choose superior products grown with intention versus commoditized ‘market driven’ brands. When they smell and experience craft cannabis grown in the Emerald Triangle, one of the best regions in the world for it, there’s no question about the character and depth of the results. I think large companies would benefit from working to increase access to licenses for smaller existing operators and sourcing product from them to support multiple parts of the supply chain, instead of viewing that segment of the business as competition to be run out of business.
Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?
● Increased medical research
● The opportunity for Expungement of cannabis related offenses
● The development of the craft cannabis market
● Decreased access to the licensed cannabis market for existing operators and small batch farmers
● The lack of expungement of cannabis related offenses
● The focus on commercialization in cannabis at the expense of its roots in compassion and community.
Unfortunately, most of the things I’m excited for in cannabis have yet to fully come to fruition. At this moment a lot of what I see is big money coming in to co-opt a community that sacrificed their lives and livelihoods for generations and who now are at risk of being left out of a market that would not exist had it not been for their persistence. 70% of California has banned commercial cannabis activity which means that now even less people have access to clean tested cannabis then they did before. The regulations that were adopted completely ignored a robust economy that was operational for years and we are all worse off in this new system, including the state who has seen a huge reduction in expected revenue from the cannabis program.
Can you share your “5 Things I Wish Someone Told Me Before I Started Leading a Cannabis Business”? Please share a story or example for each.
- Your projections are wrong. There’s really no way to know what is going to happen in the cannabis industry at this point. People like to focus on the size of the potential market, but with the bottlenecks in retail and the large amounts of money being deployed to fight for shelf space and market penetration, there are only so many available outlets for new products entering in the space and for smaller brands. A lot of shelf space has been commandeered by early movers who were bringing compliantly packaged product to market, and there are only less than 500 license retailers in the state. It’s important to understand that market penetration will take a while and estimates on short term ROI and revenue generated from sales should be considered accordingly.
- You can’t do it all. Success in this space takes teams, working together, combining different expertise to create a unified whole. It’s important to choose your partners wisely, make sure that the mission and vision for the partnership is completely aligned before moving forward. The excitement of possibility can often mask underlying issues, and with all of the externally created stresses of the business world, and the cannabis business specifically, internal alignment is essential for managing whatever arises.
- You’re going to feel like you’re failing a lot, and that’s ok. Starting and running a business is incredibly difficult even in the best of circumstances. Many of the people who are driven to work in cannabis are undercapitalized but enthusiastic and driven by something more than money. Very often what we want to accomplish immediately is difficult if not impossible based on available resources, and that can be very demoralizing especially in the face of all of the money going into brands that have no mission. I try to keep focused on the things I can make happen while managing my own expectations and working towards the long term goals strategically.
- Take your time. It’s easy to feel like everything has to happen right away when it comes to building a business. The truth is the corporate timeline is long, and especially in cannabis it is so early in the space that anything is still possible. It’s important to move quickly but it’s more important to move strategically and intentionally, so spend time doing due diligence and working strategies out before acting impulsively.
- Find peace. The business world is not for the faint of heart and it’s important to be able to recharge in whatever way works for you. For me it has been connecting more deeply with nature to the point of moving from Los Angeles to Mendocino, to be even more deeply rooted in the community I have come to love. That’s not going to work for everyone obviously, but it’s important to do what we can to create a safe mental space beyond work to let our minds wander.
What advice would you give to other CEOs or founders to help their employees to thrive?
My advice for all CEOs is that they infuse their organizations with a mission to benefit humanity. We are at a point where if the needs of the business world do not align with the needs of the natural world we are in for some troubling times. We should all be working to support a move towards sustainable and regenerative economies and societies.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
The movement that we are currently working on supporting is the craft cannabis movement. We believe that sustainable agricultural practices are a necessary part of the future of humanity, not just cannabis. The community of which we are apart is integral in the world cannabis stage, and it is our mission to reinforce their value, especially considering the challenges they are facing for their very survival. This movement will benefit not just the cultivators utilizing these responsible practices, but also the people who get access to their product in knowing that they are consuming the most high-quality and responsibly cultivated cannabis available. We look forward to the day when federal legalization has happened and we can share this product with conscious consumers all over the world.
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This was very inspiring. Thank you so much for joining us!