Five Things I Wish I Knew Before Leading a Cannabis Company, with Cy Scott and Fotis Georgiadis

The cannabis industry is an incubator in a lot of ways, by not being able to leverage traditional platforms it forces organizations to come up with something unique to generate awareness and adoption.

I had the pleasure of interviewing Cy Scott. Scott is co-founder and CEO of Headset, Inc., turning retail data into real-time cannabis market insights. Headset helps companies in cannabis succeed by promoting better decision making via market intelligence offerings and operational insights in a sleek, intuitive and easy-to-use package. Prior to founding Headset, Cy co-founded Leafly. Since Leafly’s inception in 2010, Cy helped grow the site into the world’s leading cannabis information resource, a model of a successful ancillary brand in this new emerging industry. Along with his work at Headset, Cy founded a monthly Cannabis Tech Meetup hosting cannabis entrepreneurs and technology developers, which has now expanded into multiple regions throughout the US. Cy’s favorite strain is Tangie.


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?
 
 Back in 2010 my co-founders and I saw this incredible opportunity in the cannabis space that was emerging in California at the time. California was the first market to legalize medical cannabis back in 1996, but there was a type of inflection point that happened. A proliferation of dispensaries started popping up everywhere and access to cannabis was more and more obtainable, in a loosely regulated environment. People were even starting to invest in things like lab testing without it being mandated! 
 
 Visiting a dispensary could be overwhelming. You were presented with what seemed like an infinite variety of different strains of all different qualities with different effects. Given we had some experience with building for the internet consumer, we decided to create Leafly — a platform for people to share their experience with the different strains, which we aggregated and presented back to others, giving consumers the ability to make better decisions about the cannabis they purchased. 
 
 As the industry has matured in just a handful of years since, we’ve seen a maturation of the businesses and organizations that are operating in the space and a real demand for analytics to drive business decisions which led us to develop Headset, an analytics company focused on retail-derived metrics. 
 
 Can you share the most interesting story that happened to you since you began leading your company?
 
 The most interesting? That’s a tough one! 
 
 There are a lot of ‘firsts’ that happened as this business expands into a massive industry and those firsts have been amazing. Maybe it was the first time that a publication like the New York Times allowed Leafly, a cannabis company, to do a full-page advertisement. Or maybe it’s seeing an entire country (Canada) legalize adult-use cannabis for the first time. 
 
 Another great first was seeing traditional consumer organizations, like Constellation Brands make headlines by investing in cannabis operators. 
 
 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?
 
 A funny mistake from early on was on one of our first sales calls with Leafly. We went in with an embarrassingly low number we’d agree to during negotiations — the bare minimum we’d be happy with. It was such a low number I can’t even say it out loud. When we started to discuss pricing for the service, we put the question to the client on what they think it might be worth to them they opened with a number 30x what we were willing to take. It was very eye opening in the context of negotiation, but also in how valuable what we were developing was. 
 
 Are you working on any exciting projects now?
 
 Headset is the latest and greatest. We’re an analytics company focused on delivering data that can drive business decisions for organizations in the cannabis space. We work with retailers and dispensaries in the US and Canada and present an aggregated view of what’s selling in the marketplace. 
 
 Our most popular product is our market intelligence service, Headset Insights, which enables organizations to understand the competitive landscape, identify opportunity and measure brand ranking and performance. We aggregate the data in real-time from the retailers, so companies can make decisions based on data immediately. This is incredibly important in an industry like cannabis, which moves very quickly, with new players entering the market constantly, new markets opening up and new legislative changes happening frequently. 
 
 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 have been a lot of believers and backers along the way: investors, partners, advisors, acquirers, family, friends. that I am grateful towards for getting me this far. It is tough to pick just one. I don’t think I could’ve gotten this far without my co-founders, Scott Vickers and Brian Wansolich. We’ve been working together in some capacity for the greater part of 12 years at this point, on three different projects and we still get along. We have a diverse set of strengths, weaknesses and skill sets. Having co-founders that complement and challenge each other is critical for success.
 
 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?
 
 Exactly right, it is very much a dynamic environment and it forces organizations to be creative with marketing strategies. Given some of the limitations we have in the US, where cannabis adoption continues to expand, the typical marketing levers especially in the digital front like Facebook or Google can be very challenging. 
 
 The cannabis industry is an incubator in a lot of ways, by not being able to leverage traditional platforms it forces organizations to come up with something unique to generate awareness and adoption. 
 
 Some areas that are working well in this vertical, that may translate well into other industries, is connecting and working closely with the sales staff that promotes your product. In the cannabis industry the sales associate, or budtender as they are commonly referred to, commands a significant amount of purchasing power, particularly for newer consumers who are still navigating the brand landscape. A marketing strategy that connects directly with these associates can be invaluable for operators, as they are informed on your product and will be more likely to recommend and present to the consumer. This is an example of a marketing strategy that can translate relatively easily, and there are a host of others around analytics, supply chain and business processes that can translate nicely too!
 
 Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?
 
 The most exciting things about the industry are:
 1) The continued acceptance of cannabis legalization around the world
 2) New markets opening up internationally and in the US
 3) Traditional businesses jumping into the space
 
 The most concerning things are:
 1) The lack of change at the US federal level — fingers crossed
 2) Banking issues
 3) Keeping up with all the different markets!
 
 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. Everything is new
 In a traditional SaaS business targeting a vertical, there are clear leaders and established organizations. With cannabis everything is new and you don’t know who will be the winner, let alone around this time next year

2. Market fragmentation
 Building for cannabis, particularly as an ancillary company, enables you to scale more easily than a licensed producer or processor in a given market. But every market is different and has its own set of rules which can prove challenging to navigate

3. Things move fast!
 New licenses, new rules, new markets, new entrants, new businesses! It goes fast so be ready.

4. Traditional VC investment is getting there
 While it is getting there, VC was pretty hard to come by for this space in 2010. It’s much better now, but traditional funds are still slower to move into the market

5. There are a lot of events
 So many markets and so many events, which means a lot of travel.

What advice would you give to other CEOs or founders to help their employees to thrive?
 
 Invest in growth — both as an organization and as a team. Build a platform for your employees to constantly be learning and improving. They will thrive and your organization will thrive.
 
 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. :-)
 
 If you are in a market with legal cannabis, go visit a store. Talk to the staff, learn about the space. I know it can be quite intimidating for some, whether its related to the old stigma or fear of the unknown or even just looking silly asking questions I think the best way to further normalize cannabis is to experience it for yourself and then talk to all of your friends and family!
 
 What is the best way our readers can follow you on social media?
 
 I’m on Twitter posting infrequently but lurking constantly @cy_scott and stay up-to-date on market trends by following Headset at @headset_io

Thank you so much for joining us!