5 Things I Wish I Knew Before I Started Leading A Cannabis Business: “Be very cautious when choosing a partner.” with Lex Corwin and Fotis Georgiadis
Choosing business partners. Both of my former partners left the company within the first six months for various reasons. My advice to people starting a business: be very cautious when choosing a partner. A start-up partnership means you are going to be with this person 12 to 16 hours a day every day. You not only have to get along, but you have to be sure you communicate well.
As a part of my series about “the 5 Things I Wish I Knew Before I Started Leading a Cannabis Business ”, I had the distinct pleasure of interviewing Lex Corwin, founder and CEO of Stone Road Farms. Lex Corwin is the founder and CEO Stone Road Farms, a California-based line of luxury, organic, hand-rolled joints produced using the highest quality sun-grown NorCal cannabis. Lex founded Stone Road in 2017 with the intent of not only elevating the standards and expectations of the cannabis industry across the globe, but also to build a relevant lifestyle company that promotes wellness, transparency, and value. By launching the first-of-its-class Stone Road app, Lex created a unique rewards program that allows users to bid on various activities and experiences specifically geared towards the thriving cannabis community. By using points accrued from Stone Road product purchases, consumers can enjoy a wide range of events, from sold-out Hollywood Bowl concerts, to cannabis-friendly rooftop yoga in Venice Beach, to private art gallery openings in Beverly Hills. Raised in New York City, Lex moved to Portland, Oregon to attend college. While working towards his degree, he co-managed a boutique, family-owned medical cannabis cooperative. This experience allowed him to cultivate an intricate understanding of the benefits of the plant, as well as to obtain the knowledge necessary to create the best possible cannabis products. At the age of 23 he purchased a farm in Northern California and created Stone Road, making him the youngest cannabis CEO in the United States. Before launching headlong into Stone Road, Lex spent several successful years working in real estate development in Southern California. He is an investor in a number of thriving startups including Matchabar — the nation’s first matcha cafe whose bottled brand of tea is now sold at Whole Foods across the country. Lex is also a key financial component of The Light Phone, a Brooklyn-based telecom startup that has created a credit card-sized, social media-free phone with a 12-day battery life that recently raised over 1.7 million dollars and sold 7,000 preorders in its fledgling Indiegogo campaign. Currently, Lex enjoys life in Los Angeles, building his brand, and spending quality time on his NorCal farm.
Thank you so much for doing this with us! Can you share with the ‘backstory” about what brought you to the cannabis space?
While attending college, I started working on a small family-owned medical cannabis cooperative in northern Oregon. I learned the basics of growing and working with the plant. With this knowledge and money saved from my years working in Oregon, I purchased my own farm in Northern California. Once cannabis legalization became a reality in California, I knew I needed to build a brand. The days of shady, back room deals were coming to a close and the cannabis industry had a deficit of mature, upscale brands. I recruited the lead designer of Snoop Dogg’s “Leafs by Snoop” line and flew her out to the farm to capture the natural beauty for our packaging. With our brand aesthetic nailed down, I started going shop to shop selling our products — and I’ve never looked back since! In the past year, Stone Road has grown over 65% in revenue and we’ve tripled the number of retailers we sell to. The overwhelmingly positive response we’ve received from customers and dispensaries is what energizes me to continue building this business and expand our product offering.
Can you share the most interesting story that happened to you since you began leading your company?
While I don’t have a specific story in mind, I would say the people in this industry have been the most compelling aspect for me. From one of my first hires — a kid from Vermont who moved out West with nothing — even being homeless for a time — who has “Some Kind of Hate” tattooed on his knuckles (it’s a Misfits song…don’t ask me!) and turns out to be the kindest, most gentle soul.
Or the old hippies who are in their 80s and still managing their own organic off-grid farm…and an Emu farm. Or an older gay couple who when robbed proceeded to chase down their assailants in their pickup — one driving and the other standing in the bed shooting a shotgun. (They got their product back…)
The stories and lessons from the people who created this industry and are still here to share their tales are the most interesting part. They are the pioneers who were doing it when the penalties for growing a plant with healing properties could land you in jail for decades.
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?
One of the better stories I can share concerns the farm I own in Northern California. We were getting tons of soil delivered for my 2017 season. My farm is up a long and twisting dirt road and it is very easy to get lost. The truck driver gets hopelessly lost and by the time he arrives, it’s around 10 p.m. and practically pitch black out. This also took place during the spring, also known as the muddy season.
He looks at the final turn which sits between a “soft” (aka very muddy and deep) spot and a steep hill and tells me there’s no way he can possibly make that turn. Knowing that him dropping the dirt 600 yards from my greenhouse would cost me hundreds in a rented tractor or hours of back-breaking labor I pleaded and offered him an extra $100 bucks to try. He reluctantly got back into his truck and started inching forward. As soon as he begins his truck starts to sink in the mud FAST. He hits it hard in reverse but it was too late… his truck is sinking deeper and deeper into the thick mud and also starting to slide down the hill! He immediately jumps out of his truck and starts to verbally eviscerate me.
I had no idea what to do. The driver’s eighteen-wheeler filled with 8 tons of dirt was sinking into an endless pit and he was furiously screaming at me in the dark. Luckily after 4 or 5 beers and a few spliffs I got him to calm down. At this point, it’s midnight and I called my amazing neighbor, who drove his Caterpillar back-hoe over. After an hour of pulling we popped his truck out of its muddy grave. My personal takeaways — trust the guy who has been delivering dirt for the past twenty years and be kind to your neighbors!!! Especially the ones with industrial construction equipment!
Are you working on any exciting projects now?
I’m in the process of developing a CBD line, putting the finishing touches on a flower line, and expanding further into Northern California. I also have my sights set on other states, specifically New York, where legalization seems to be around the corner.
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 wouldn’t be here without my father’s help. Not only has he helped me financially when I first started by company, but he’s been the best resource for business and life advice. He even flew out during my first harvest and donned the gloves and hairnets and helped cut the crop!
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?
Reward your most loyal customers. I wanted a unique way to reward our biggest buyers so I recruited a childhood friend to build out our Stone Road app, which was the first experiences-only rewards app in the cannabis industry — available on IOS and Android. Every product we sell has a QR sticker that when scanned in the app unlocks access to a world of experiences rather than just goods. This platform allows us to offer our customers tickets to cannabis-friendly yoga classes in Venice, Hollywood Bowl tickets, even surf lessons. The updated app also now has a full product guide plus a find-a-store feature.
The app saved the business — being able to access the data from our biggest buyers allowed us to discover that 78 percent of all app scans were from women, and more importantly, they were from three shops! I altered Stone Road’s brand identity to match the new information we gleaned from the app data. We started sponsoring every and any women-run, women-focused, or women-branded event. And soon this strategy worked. Our sales took off and now my biggest focus and challenge is rapid production ramping without sacrificing the Stone Road quality.
Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?
Things that excite me:
1. Federal legalization — being able to ship our products around the nation would be incredible. Also a business credit card!!!
2. Medical trials — getting scientific proof of the healing qualities of the plant rather than just anecdotal evidence.
3. The economic growth — we have only scratched the surface in terms of industry growth. Once federal legalization occurs and we can treat it like a consumer good rather than a drug there will be hundreds of thousands of good-paying jobs created.
1. A few large firms will monopolize the market, which is exactly what’s taking place in the Canadian market.
2. Pharma companies will use their immense lobbying power to rig the market to their benefit. Healthcare and capitalism don’t mix well. Look at the pricing model for life-saving drugs currently.
3. Big tobacco will start massive grows and push out all the small-scale artisan growers out of the market. How many craft tobacco growers do you know…
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. Choosing business partners. Both of my former partners left the company within the first six months for various reasons. My advice to people starting a business: be very cautious when choosing a partner. A start-up partnership means you are going to be with this person 12 to 16 hours a day every day. You not only have to get along, but you have to be sure you communicate well.
2. Communicate openly with your team. You can’t do every job forever. In the beginning, I put in eighteen-hour days for weeks on end. Doing literally every job myself from managing the farm, rolling the joints, producing digital and promo content, managing the social media, keeping all the books and all legal compliance, all the while spending every day trying to open new accounts! I burnt myself out and now realize the importance of trusting your team and having open lines of communication.
3. SAVE MONEY! I spent too quickly in the start of my business. An incredible month could be followed by a month of almost no sales. You can’t predict the future so spend wisely.
4. Get to know every part of your business. Make sure you know how to do each job in your company so you can best assist the team members in that role.
5. Do what you know. When I was first starting sales a dispensary owner told me “wax is the future! you have to start selling that” — so I quickly brought a concentrates line to market…not knowing anything about concentrates! Not only did it distract me from our core product — pre-rolled joints — but I wasted nearly $10,000 and time I could never get back.
What advice would you give to other CEOs or founders to help their employees to thrive?
Support your employees. Get to know them as a person and what makes them tick. Remembering the name of their dog or kid so you can check-in with them is important. Surprising them by bringing their favorite lunch in. Making employees feel valued ensures that they will put in the extra effort to help the business.
Open communication. Sometimes the best ideas come from your employees. Making sure not to stifle healthy debate is vital to a successful operation. Each employee has a different mindset that can help you discover how different market segments will react to a new product. Also you want your employees to feel they can discuss anything with you. It creates a better working environment so when that inevitable obstacle surfaces you don’t have people wanting to jump ship but actually buckle down and help you grind it out.
Honesty and transparency. There’s a fine line between being 100% honest with your employees and being honest without over-sharing. If you had a less than stellar month and are not sure you’ll be able to make payroll. Let them know sooner rather than later so they can be prepared to wait a few extra days for their pay. If they understand the situation early on its much better than them finding out on payday that their hard earned check will be delayed. Lack of trust leads to poor engagement, lower productivity and higher employee turnover rates.
Recognize great performance. Everyone likes to be recognized for their hard work. Make sure you are not only praising the team but single out individuals that went above and beyond. A simple note is a great motivation booster. It helps to make sure each employee feels integral to the success of the business.
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. :-)
A cannabis-related movement that would bring the most amount of good to the most amount of people is the burgeoning hemp industry. Industrial hemp has the capability to drastically change how we create most of our consumer products. The end of the plastic era for instance would ensure we could stop poisoning our oceans with non-biodegradable single use plastics. The advent of hemp pulp for paper would slow down the rampant pace of deforestation. Hemp based fuels would slow the climate change we are only starting to witness now. From building material, textiles, to food-products hemp can be applied in hundreds of ways. It’s easy to grow, inexpensive, and highly sustainable. With the 2018 farm bill that legalized hemp in the U.S we are going to see hemp widely utilized across a wide spectrum of mediums. My goal would be to help expedite the mass adoption of hemp across the world.
What is the best way our readers can follow you on social media?
Our instagram: @stoneroadfarms
This was very inspiring. Thank you so much for joining us!