Industry

“Despite Popular Belief, There is No Gold Rush” with Dennis O’Malley and Len Giancola

Be in it for the long term for the right reasons. It’s a capital intensive business where margins are tight. Despite popular belief, there is no gold rush. Conversely, it is not a lifestyle career. People in cannabis are as hard of workers as anyone I have seen. They are farmer’s by day and engineers by night, and there are no day or time boundaries. At the end of the day, you are changing people’s lives, and it is well worth it.

I had the pleasure of interviewing Dennis O’Malley, CEO & President of Caliva, the largest vertically integrated cannabis company in California. Driven by a passion for enabling people to choose their own health and wellness options, Mr. O’Malley has launched Caliva into a rapid growth phase, racing to become the #1 trusted brand in cannabis. Mr. O’Malley has over a 20 year track record of leadership roles in fast growing companies in emerging markets as well as successfully raising capital from institutional investors and in addition holds multiple technology patents. Most recently Mr. O’Malley co-founded and lead a venture backed software company that enabled brands like Red Bull, Nike, Adidas, The North Face, and Reebok to scale their revenue through ambassador marketing programs. The company was sold in 2016 for a 10x revenue multiple. Mr. O’Malley holds an MBA from Santa Clara University where he graduated with honors.

Thank you for joining us! Can you share with us the story about what brought you to this specific career path?

Trust. I knew the founder of Caliva and he asked me to come on to help grow the company. I knew nothing about cannabis, but had worked for the founder previously and he has my highest respect as a person and as an entrepreneur. I trusted him and said yes on a handshake.

Can you share the most interesting story that happened to you since you began leading your company?

New Year’s Day 2018. I was with my family in Newport Beach away from our flagship store in San Jose. My flight was at 7am, in time to make the 9am store opening on January 1st — the first day of legal cannabis in California. I received at text at 6am alerting me that a line had formed around the building three hours before opening. Overall, it was an amazing day, and our first customer drove hours and spent the night in our parking lot in order to purchase THC cream for his joints.

Can you share a story about the funniest mistake you made when you were first starting?

I made a ton of them, and honestly still do. Early on I tried to institute a mobile app for distributing samples from wholesale sales reps to dispensary customers. The mobile app was awesome, easy to use, met compliance, allowed me to track reps and samples — ultimately the perfect app — except for the small issue that no dispensaries allowed the use of mobile phones in their stores.

Can you tell us what lesson you learned from that?

Timing and fit on strategies. Cannabis is a very nascent market. There are a ton of inefficiencies, but many are not ready to be solved. I read a book to my daughters about Edwina the Dinosaur. Reginald Van Hoobie-Doobie (real character) was a smarty pants that knew dinosaurs, including Edwina, were extinct. But guess what… Edwina nor the other characters cared. I try not to be a Reginald van Hoobie-Doobie anymore.

Are you working on any exciting projects now?

Tons. However, I am most excited about where we are going in beverages. We have announced a great partnership with Tarukino, a technology-driven cannabis company based in Seattle. Tarukino’s Sōrse™ technology solves common issues with beverage consistency and taste by encapsulating cannabinoids in a water-soluble form that is odorless, tasteless, and disperses completely in water. We are excited that Caliva has secured exclusive rights to utilize Tarukino’s Sōrse™ emulsion technology in California to launch our new line of great tasting, consistent, effective, and shelf-stable beverages.

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?

There are tons professionally, and a couple who I called out here. In reality, the people that have helped most — and endured most — have been my wife and three daughters. A start up is difficult enough, but a start up in a federally illegal business has added complications. I am grateful for their trust and strength.

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?

I hope large and legacy companies keep doing what they are doing! I mean who isn’t inspired by 5G? Our creative team, lead by Rosie Rothrock, keeps Caliva marketing light, fun and cheeky. Most recently I enjoyed our new retail bags that simply say: “This is going to be fun.”

Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?

I am excited by:

1) The New Consumer

2) Banking regulations going away

3) Growth of CBD in the health and wellness arena

I am concerned by:

1) Serving the New Consumer

2) Preparing for new Bank regulations

3) Ensuring Caliva has a strong footprint in CBD as well as health and wellness

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) Lack of out of industry partners

It is very difficult to have partners outside the industry (In example, technology ERP or Tier 1 auditors). Cannabis is effectively re-creating the wheel in every aspect because outside of industry firms aren’t yet prevalent.

2) Corporate tax implications

Running a cannabis business requires a complex tax strategy, especially around 280E. Hiring knowledgeable finance and tax teams to help from the beginning is critical.

3) Struggle of industry pioneers

There are many people who came before us who set a trail for cannabis to become legal. Getting to know them gives me a real respect for the hurdles they overcame.

4) Broad benefits of cannabis

Everyone I meet has a story of how cannabis changed a life for a loved one. The stories never stop. I was initially naïve on the broad spectrum of uses and opportunities for cannabis.

5) It’s ok, it’s legal

When I told my 8 year old about what I did and about cannabis, her response was “Why would someone make a plant illegal?” I should have been more loud and proud early on getting into the cannabis industry. 99.9% of people I speak to are overly supportive of natural health and wellness options that can be self-prescribed.

What advice would you give to other CEOs or founders to help their employees to thrive?

Be in it for the long term for the right reasons. It’s a capital intensive business where margins are tight. Despite popular belief, there is no gold rush. Conversely, it is not a lifestyle career. People in cannabis are as hard of workers as anyone I have seen. They are farmer’s by day and engineers by night, and there are no day or time boundaries. At the end of the day, you are changing people’s lives, and it is well worth it.

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?

That’s an easy one. Inspired by “The Kite Runner” is #FYS — Forgive Yourself. We all spend a lot of time beating ourselves up. It’s ok. Learn from the past and move on. Maybe along the way you can help someone else do the same.

What is the best way our readers can follow you on social media?

https://www.linkedin.com/in/domalley/ but I am a lot less interesting than https://www.instagram.com/gocaliva/

Thank you for all of these great insights!

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