5 Things I Wish Someone Told Me Before I Started Leading a Cannabis Business: “If our customers are successful, we’re successful.” with Kyle Sherman and Fotis Georgiadis

I had the pleasure of interviewing Kyle Sherman. Kyle is the Founder and CEO of Flowhub. A legalization advocate and entrepreneur, Kyle continually defines the company vision, strategy, and growth as Flowhub innovates the way cannabis retailers manage complex compliance mandates, supply chain data, sales transactions, and reporting. Kyle brings extensive cannabis industry experience to Flowhub, with previous experience working with notable brands such as Dixie Elixirs, Weedmaps, and Neos Vape Pens as a Chief Compliance Officer. Kyle has been named a Top 100 Cannabis Leader by Entrepreneur Magazine, 30 AND UNDER by Business Insider, and is an Associate Producer for the documentary “Weed the People” which aims to educate mainstream audiences about medical cannabis as a human rights issue. In 2014, Kyle lobbied the Colorado Department of Revenue to build the Metrc API, which is now the standard used for cannabis tracking in 11 markets. Kyle also serves as a Founding Director and Treasurer on the Cannabis Trade Federation (CTF) board, an organization focused on building an inclusive industry and passing the STATES Act.

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

I was living in Los Angeles when a doctor recommended medical marijuana to help me sleep. I was amazed at how well it worked. I had no drowsiness in the morning, enjoyed a better quality of sleep, and had less anxiety. When I heard that Colorado would be legalizing adult-use cannabis, I immediately moved there because I saw the future of regulated cannabis. Through a variety of cannabis jobs, I ended up working as a compliance officer and got really interested in the state’s track and trace system, Metrc.

At this point, I knew I wanted to start my own cannabis software company that would solve the frustrations I experienced firsthand and create that bridge between the dispensary and the government’s system. It’s hard to believe that just five years ago in 2014, all compliance data points were manually tracked. I founded the company in 2015, raised a seed round in March and then launched Flowhub in 2016. Today, we’re helping hundreds of dispensaries across the United States simplify compliance and improve business performance.

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

Metrc is the system the government uses for enforcement and compliance of cannabis laws. I’m very proud that I lobbied for opening the Metrc API (application programming interface) so that third party applications like Flowhub could push data directly and save hours on manual data entry. Opening up the first software integration to Metrc has made it easier for dispensaries to remain compliant with government rules and regulations that seem to be constantly changing.

It took a lot of patience, but I learned so much about the government, the way it works, and how you can really make change happen. I’m now involved federally with Cannabis Trade Federation (CTF) as a founding board member and Treasurer driving forward legislation with the STATES Act. This important bill will allow each state to create their own policy on cannabis, and would address the industry’s banking and tax issues. Politicians on both sides finally are looking at us as a responsible and professional industry. It’s rewarding to participate in this movement.

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?

I wouldn’t characterize it as a mistake, but it was funny. Apparently, it got out that employees in the early days at Flowhub would consume cannabis for brainstorming sessions or even just personal use. The comedian Jimmy Kimmel got wind of it and talked about Flowhub in his opening monologue. Listen, we’re on the same page as the industry’s customer base, and if Jimmy Kimmy wants to have a little fun with us, we are totally okay with that.

Are you working on any exciting projects now?

We sit on a tremendous amount of transactional data that tells the story about the acceleration of the cannabis market, new demographics, and consumer behavior. In both the medical and adult-use space, we’re seeing cannabis beginning to align with other conventional norms. In the same way that regular retailers learn from shoppers, so do dispensaries. They are learning that chocolate edibles sell well for Valentine’s Day and that Superbowl party planning involves a trip to your local dispensary (in addition to chips and guac). They know now to stock up on goods and staff up for the Wednesday before Thanksgiving, now known as Green Wednesday because it has become one of the biggest shopping days for dispensaries. They know cannabis products are being used for a variety of wellness applications as viable alternatives to over-the-counter pain treatment and alcohol consumption.

We have a front row seat as consumers make decisions on what products to buy and have years of historical data demonstrating significant trends and changes in the market. We play a large role as an informer to our clients and will be able to help new entrants into the market as they choose which products to manufacture or decide where to open their next store. Our data also helps multi-state operators save time, money, and make more informed decisions as they expand their footprints into more states.

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 three I would mention. First, Emily Paxhia of Poseidon Asset Management. She invested in my company when it was still just an idea. She is a Flowhub board member and someone I’m grateful to have on the team. Over the last four years it has been really hard to raise money in this space. She was an early venture capitalist specifically focused on cannabis and someone who’s provided invaluable mentorship.

Second, my parents. I was lucky to have very open-minded parents who raised me to think big. I was homeschooled for five years and during that time we traveled and explored extensively, which gave me a hands-on education. My parents were a huge part of giving me the ability to think outside the box. I’m grateful for that.

Last but not least is my co-pilot and wife Lindsey. She was there with me when we first moved to Denver. Lindsey was a huge part of why we were able to do this. She was eight months pregnant when we moved to Colorado without a plan, and, amazingly, she was happy to support this journey. As a sign we made the right decision, my daughter’s due date was 4/20. Now, with three kids underfoot, she is an incredible mom by keeping the homefront going strong. And it should be mentioned that she was also a huge part of our early (and continued) success. She drove around Colorado with me, meeting dispensary owners and closing those first deals, and last year, she joined me on a California dispensary tour where we lived in a van for weeks and visited over 50 shops. She’s a superhero.

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?

There is no silver bullet and there are no shortcuts. My strategy is to develop strong relationships. A huge part of our success came from going directly to the customer and actually listening to what they had to say. It’s not a clever tag line that closes deals. Instead, we meet customers where they are at and shape our software platform to solve their everyday problems. We take customer feedback and our relationships very seriously. That’s what works. If our customers are successful, we’re successful.

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

Three things that excite me:

  1. More patients are getting access to these products. I read with shock the other day about a pancreatic cancer patient in bed who was being searched by police officers for cannabis. He was taking it for nausea because he didn’t want to take opioids. Helping people is what gets me excited to go to work.
  2. The explosion of technology and products throughout the supply chain. Innovation is happening rapidly from manufacturing to software to consumption methods and beyond. Something new emerges every day.
  3. Participation and diversity of this space, especially women. We have a unique opportunity to be super inclusive in this industry. The best ideas are born of a diverse team. While cannabis is more inclusive compared to other industries with 27% female executive representation, we still have a way to go before parity.

Three things that concern me:

  1. The illicit market continues to operate and in some cases thrive in states where legalization has allowed over supply to occur.
  2. There are bad actors out there spreading misinformation about cannabis. That is problematic.
  3. Banking solutions for our customers continue to be a big problem, and I wish we were moving faster to resolve it. The industry is moving faster than the policy making these days.

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. You may work in cannabis, but at the end of the day, it’s still business. Flowhub was lucky to be in the industry early, but we remain a tech company at our core when all is said and done.
  2. The business changes rapidly, but policy changes slowly. Companies are paying millions in taxes and still having a hard time getting a bank account.
  3. Focus on one thing. There is so much to do that we often jump from one shiny object to the next. Focus your energies.
  4. Be nimble and flexible. We learned to build our products to be agile and adaptable. Change is always coming down the road.
  5. Solve one problem at a time. Early on we tried to solve all the problems with little resources. If I could go back, I’d focus on solving one thing at a time. When you try to “do it all,” you get distracted.

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

Check your ego at the door and hire amazing people. Hire the best people, even at the intern level, and listen to them. The best ideas may come from an intern or a senior executive. Our job as leaders is to build frameworks to get the best ideas to the surface and then drive the team to execute. Ideas are easy, execution is everything.

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?

The movement to bring safe cannabis to consumers. Drug dealers don’t check IDs, but we do (in a manner of speaking). We make sure consumers know where their cannabis comes from and they no longer have to resort to a mystery bag with who-knows-what inside it.

Thank you for joining us!

Authority Magazine

Leadership Lessons from Authorities in Business, Film, Sports and Tech. Authority Mag is devoted primarily to sharing interesting feature interviews of people who are authorities in their industry. We use interviews to draw out stories that are both empowering and actionable.

Fotis Georgiadis

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Passionate about bringing emerging technologies to the market

Authority Magazine

Leadership Lessons from Authorities in Business, Film, Sports and Tech. Authority Mag is devoted primarily to sharing interesting feature interviews of people who are authorities in their industry. We use interviews to draw out stories that are both empowering and actionable.