"Find your north star. Although a somewhat tedious, difficult and never-ending process, critical to your company’s success (really, any company’s success) is identifying a core purpose/mission for the company. From there, set up policies, procedures, and corporate governance consistent with that mission. You want to make sure that you, as a CEO, wake up with that fire in your belly to serve a higher purpose than yourself."
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 John Montague. John Montague is a cannabis entrepreneur and co-founder and CEO of Maku, Inc. With a focus on health and wellness, John sees cannabis and other holistic remedies as a way to significantly reduce healthcare costs and improve the quality of life for humanity. John got his start in the Cannabis industry as deal counsel for several dispensaries in Florida.
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?
I got started in the business around 2013; right before Florida’s compassionate use program was enacted. In Florida, with respect to THC licenses, licensees are required to be vertically integrated, which means that everything from cultivation to retail must be owned and controlled by one company. My first client was an applicant in Miami. In the early days, in order to qualify, a nursery had to have operating history for at least 30 years and had a minimum of 400,000 nursery plants in production. I worked on that application and they ended up losing out to the Miami district. After that, I went on to represent San Felasco Nurseries, Inc. (“SFN”) and ended up getting a license out of administrative litigation. After that, I moved on to work with as deal counsel for SFN, helping them ultimately sell to Harvest Health & Recreation Inc., a Phoenix, Arizona-based cannabis cultivation company for $65 million in November. Thus, most of my Cannabis experience has been on the private-equity/venture capital side. However, I also provided advertising consulting relating to Cannabis for large media publications, which has been helpful as we improve, grow and optimize our media strategy.
Can you share the most interesting story that happened to you since you began leading your company?
After deciding to start Maku the first task on the list was identifying the proper supplier partners for our first batch of product. We spent several weeks trying a countless number of partner products until we found the right fit for us. That was the easy part. Getting in contact with that supplier took several days between emails, calls, and even direct messages on social platforms. Once we confirmed they were able to meet our needs, we were put in a long line of other businesses waiting for inventory. Given how fast the market has been growing, we realized we could not wait the standard time it would take to get our inventory. So, instead of following the normal order process, we wired 5x the minimum order with no invoice! We were quickly put at the top of the queue. Sometimes you have to show people with more than words how committed you are to your goal.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
We had just gotten our first shipment of inventory in — exciting times for a new company! The product was our baby and ALL of our money. At the time, the team was stationed in West Palm, and we had just recently made the decision to have our shipment fulfillment be in Gainesville. We were so eager to order at the beginning, we had not considered what it might mean to move a whole shipment (valued at approximately $100k) again, or even thought that we might have to move it ourselves.
As we excitedly jumped around all the Maku boxes, these concerns certainly started pouring in. We had over $100k worth of product to sell, with no way to ship it out as the orders were coming in! Thus, for a while, we were sort of on the “lick it and stick,” with us all chipping in on fulfillment.
Our emotions went from exploding thrill to slightly panic. While we perhaps could have shipped around $100k worth of product to Gainesville, at the time it was a solution far too expensive. No, the only way it seemed was to have a team member, load all the inventory in his car and deliver it to Gainesville himself.
It was an anxious four hours or us all. One nail on the road, slam on the brakes, let alone an accident from anyone else…
Once he made it safely and our team quickly began jumping for joy again. I would recommend being sure of the city you will be calling home base for fulfillment, because the last thing you need is to have your entire shipment sent to one city when you need it another!
Are you working on any exciting projects now?
One of the most exciting parts about starting this company was baking in the ethos of not having price be a barrier for potential new customers. There are so many people that can have their lives greatly impacted by trying low THC cannabis based products and we believe price should not prevent trial. Our $5.00 trial program has already greatly impacted people lives who had never tried CBD.
On top of lower barrier to entry pricing we have also been focused on building a strong community foundation. This community is built around quality content, proactive + reactive engagement with customers, and a rewards program. I am very excited to announce we now have a fully functional rewards program that allows people to earn value for sharing content from Maku and referring friends to purchase.
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?
I’d like to thank one of my old clients and good friends who helped us a time sensitive problem. Having friends you can work through complex issues with when you are in need is critical. I can’t share to many of the details but let’s say without good friends where would anyone be? We were in the middle of the holiday buying season and what would have taken 3 to 4 week we were able to finish in 6 days.
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?
Don’t be afraid to commit to personalizing communication with prospective customers. It might seem like a high cost line item but it’s really a long-term line of communication that can have a lasting impact on their future purchases.
Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?
What excites me about the Cannabis industry is that cannabis is a natural product that is not singled out for one age group or one purpose and that it is on its way to becoming a billion-dollar industry. Although, I believe what excites me the most about the Cannabis industry is the number of people it can positively impact. I think it’s safe to say we have all grown up in a time with extreme stigmas against cannabis. It is hard to convince people that for most of the Earth’s lifetime cannabis was not “devil’s lettuce” but an amazing healing flower. With the cannabis industry growing, more and more will be challenged to dig deeper for knowledge and truth. Unlike other big industries that put their name on the board, this one should ignite not just the economy, but also ignite learning and ethics. Readdressing how we view, teach, and talk about cannabis is already starting to dramatically change.
The top three things that excite me also having a parallel evil twin that concerns me. I mean what if any of those things are done wrong? What if cannabis becomes a billion-dollar industry and the people at the top don’t set an example? What if they don’t help people? Look at the tobacco companies: they fought cannabis for years but now that they can get a slice of the money cake they support …The tobacco companies don’t care about what is good or bad, let alone the plant or the consumer, they just want money. That is the scariest part. What if the opportunity arises to teach and to share comes and the people at the top are filled with greed? The purity, kindness, and harmony, of cannabis, are simply at risk in the wrong hands.
In addition, as a deal attorney, I have seen so much attention focused on the money, politics, and bling of it all. I have heard of the most horrible acts of bribery and corruption in connection with issuing some of the vertically integrated licenses in Florida. When you have a resource that is exclusively controlled by a governmental body, I think that creates a breeding ground for potential political corruption. That’s not to say that I am able to point to specific examples, but I have heard some stories.
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.
1. Shipping — Fulfillment challenge — As a small company with a lawyer, banker, and marketing consultant at the helm, we quickly realized that we did not have the logistical or operational prowess to handle in-house fulfillment with the growth rate we were projecting. Given the industry, it took us quite some time to find a fulfillment center that would handle our product. In the meantime, we had our entire team — CEO down to executive assistant — sitting at the office bubble wrapping, packaging, sealing, and labeling products we sold the day before.
2. Banking — Payment Processing — Everyone in the cannabis business knows that finding a banking relationship is difficult. Staying under the radar as well as one of our team members being a former cannabis banker has allowed us to maintain such a relationship. However, generating a long-term positive merchant processing relationship has been a nightmare. Many of the processors willing to take your business are either fly-by-night processors with terrible customer service and unnecessarily lax compliance departments, or they are European processors that transfer your fund all over the world and back to comply with federal and corporate policy and they charge huge fees and float your cash for a week for their trouble. We thought we found a long-term processor recently, but as of the writing of this article were notified that they were getting out to the cannabis derivative business. We have to move processing in 30 days.
3. Customers don’t grow on trees — The exuberance of starting a company in an emerging and growing industry can cloud everyone’s marketing judgement. Our company has had significant success in generating new customers and revenues over the first couple of months. However, we are now past the phase of selling to family, friends, and friends of friends, and are entering broad based marketing campaigns. The cannabis business is like any other: you have to work and grind it out for your customers.
4. Even though we are in the brightline legal hemp space — the stigma of illicit Marijuana business follows us around. Our company decided to operate our administrative offices in institutionalized start-up office real estate. We disclosed our primary business to the executive director of the building and were approved for two offices. About a week after moving in, our CEO got us on a front-page article in the local newspaper. Four businesses were featured in the article, and, of course, the main photo was someone (not affiliated with our business in any way) surrounded by a cloud of marijuana smoke. The board of directors for the building were quite displeased, and discussed terminating the lease. We were allowed to stay as we do not keep any product on premises, but the risk of expulsion exists.
5. There is not enough empirical research on our product. Part of the struggle of operating a marijuana related business it the lack of scientific research. Due to the burgeoning nature of CBD, only classic early adopters and regular marijuana users are aware of the benefits of CBD. We would like to market to a much broader market. To do that, we have to educate potential customers about the benefits of CBD. Unfortunately, we do not have enough scholarly research to do that effectively. The research winds are changing, but it will be a couple of years before we have enough statistical fire-power to change the minds of CBD skeptics.
What advice would you give to other CEOs or founders to help their employees to thrive?
Find your north star. Although a somewhat tedious, difficult and never-ending process, critical to your company’s success (really, any company’s success) is identifying a core purpose/mission for the company. From there, set up policies, procedures, and corporate governance consistent with that mission. You want to make sure that you, as a CEO, wake up with that fire in your belly to serve a higher purpose than yourself. An example, and a sort of north star for Maku, is our giving program. We have set out and actually carved out in our corporate charter to give away at least 5% of all revenue to charitable causes consistent with our mission. This does a good job of instantly diffusing business disagreements among partners/employees and re-centers us back to our core mission, as well as the giving and actions that relate directly towards that core mission.
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. :-)
I would ask people to join our mission at Maku: we are the laboratories of cannabis and holistic health alternatives. Our mission is to benchmark quality and customer experience, while creating resilient communities where wellness is affordable, transparent and compassionate: own health; own your attitude; own your life. By joining the #spreadharmony movement you are ensuring that we spread holistic alternatives to the masses. Join us at Maku as we spread harmony!
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For more information on Maku
At Maku, are up and running daily on our Facebook, Instagram, and Twitter! We hope readers will come to see what is new on all our channels. For the latest product photos and tips, our Instagram is a fun place to ease the eyes and mind. If they are looking for recipes or to learn more about cannabis history and health, following our Facebook will get you in the right direction. We want to hear where others need help or where they are hurting, give us a shout out on twitter or direct message us! There is always someone available to talk and answer questions.
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