Ron Smalley is renowned in the medical cannabis field as the go-to guy for managing relationships with government officials and the licensing process. His operational insights into how cannabis licenses are allocated and awarded is invaluable for newcomers and old hands alike.
In his almost ten years in the cannabis industry, Ron has worked with numerous clients competing for limited licenses in Massachusetts, Minnesota, Illinois, New York, Florida, Maryland, Hawaii, Puerto Rico, Pennsylvania, Arkansas, Ohio, Connecticut and Michigan. This delicate process includes interfacing with local and state government officials, site selection, design and engineering activities, construction management, lease negotiations, writing business plans, and pro-formas.
On the business operations side, Ron’s entrepreneurial experience includes founding and operating a full-service government regulated environmental business with 45 employees and annual revenues of over $4 million. In his capacity as President and Chief Executive Officer, Ron handled all aspects of the business including budgeting, operations oversight, staff recruitment/training, handling corporate finances, and implementing policies and procedures consistent with governmental licensing requirements and regulations.
There’s no doubt that laying your foundation for success in the cannabis industry starts with Ron’s areas of expertise: local, state, and federal licensing and permitting and compliance.
Can you share with us the story of what first introduced you into this business or helped you get interested in the business?
Prior to cannabis, I worked for over twenty years in the solid waste industry and after surviving the great recession it was time for a change. In 2011, I was fortunate enough to be introduced to a non-profit entity that was recently awarded four of the eight medical cannabis licenses in Maine. The non-profit group had recently secured funding and required someone with implementation and operations experience to assist them. As the Director of Operations, I was responsible for planning and developing two state-of-the-art cultivation facilities and four dispensaries in Maine. During the following twelve months, I was responsible for construction management, hiring of all employees, and assisting in creating and writing the company Standard Operating Procedures (SOPs) and Cultivation Operations Manual. Further, I managed all of the employees daily and oversaw the dispensaries, cultivation facility operations, budgeting, training, technology, and security operations. The following year, Massachusetts and Connecticut created and introduced their medical cannabis programs. Recognizing my new skill set and previous experience with business start-ups, senior management, government licensing/approvals and operations, I entered the field of cannabis consulting.
Can you share the most interesting story that happened to you since you began leading your Company?
In 2011 and 2013 the Department of Justice released what is referred to now as “The Cole
Memorandums”. Most importantly, the 2013 Cole Memo provided guidance for cannabis enforcement. Until this time, the industry was operating in a grey area and federal raids occurred frequently. The Cole Memo provided industry operators with a level of comfort, never seen before. Although cannabis was still considered federally illegal, we now had a glimpse of what the future could hold. It was a very exciting time and opened additional and much-needed opportunities for private financing.
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?
While harvesting a flower room, I was scolded by an employee for not properly placing the plants in the transport bin. We were working in a chain and I was responsible for loading the transport bin and delivering whole plants to the drying room. I was moving rather quickly and tossing the plants into the bins when I heard, “Dude, what are you doing?!” Of course, I looked at him with complete disbelief that I was doing anything wrong. He continued by explaining to me, the time he and others had spent nurturing the “ladies” and creating the best quality medicine that our patients deserve. It was at this time, I was trained how to gently lay each plant into the bin while thanking the plant for all its hard work, creating our medicine.
This experience taught me to respect the plant and the efforts made to grow and produce quality medicine. The workplace environment was like nothing I had seen before, and the staff was incredibly dedicated and passionate.
Are you working on any exciting projects now?
Currently, we are preparing for applications in New Jersey, Maryland, Michigan, California and Massachusetts. The adult use marijuana markets are very busy with opportunities at all levels. Many clients come to me with the excitement of entering the cannabis industry but don’t fully understand what that means. During this period, much of my time is spent educating potential clients about the different segments of the industry. I try my best to provide as much information as possible and allow each group time to understand who they are and where their efforts are best focused.
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 am grateful for many people in my business career and do my best to work with like-minded people. Unfortunately, this hasn’t always been the case and I have had to learn from my mistakes.
I often tell my clients to be careful of “Shotgun Weddings.” I have firsthand experience with bad characters, driven by greed and ego. While working with these business partners, I couldn’t understand their actions and consequences. But as life teaches you, what doesn’t kill you makes you stronger and smarter. With each person I meet, I do my best to learn from them.
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?
What we do requires a level of trust not seen anywhere else in the industry. We are responsible for creating people’s dreams and guiding them in a very difficult industry. The power of networking should not be overlooked.
When working with a new client, I spend a lot of time understanding prior work experience and other value-add information that can be used for customization. Additionally, we provide automated SOP generation and process flow to showcase the client’s level of experience.
Staying consistent with your message and not being combative is integral to all marketing. It’s also important to be relevant and consistent on social media. Many companies provide copy and paste newsfeeds. While this is important for brand awareness and potential search engine optimization, publishing original content is important and helps you identify with your target audience. Additionally, I do not engage in social media comments. People are entitled to their opinion but there is a time and place for these conversations.
Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?
(Excited about: Growth, accountability, and standardization)
The continued growth throughout the United States and other countries has been fascinating to be a part of. As countries begin to loosen laws related to cannabis, the market will continue to realize additional demand. Governments that have legalized cannabis are able to monitor operators and tax the products. It’s exciting to be a part of an industry that is “growing up.”
Over the past few years, the industry began to be held accountable for compliance and testing. When I entered the industry, the idea of accountability was not clear. Government branches struggled with who was responsible for each area of enforcement. This has drastically changed, and we are now seeing a well-organized industry and government oversight.
This accountability is allowing for the standardization of many areas of the industry. From GMP to testing methodologies, we are seeing companies pay more attention to their products. If they don’t conform, recalls are inevitable and full integration into a federally legal industry (when it comes) will be costly and difficult.
(Concerns: Undercapitalized companies, unregulated markets, and skilled talent)
In recent years, we have had a lack of smart money. Institutional money has remained at a distance due to the Federal position on cannabis. Therefore, startups have had to raise money in smaller amounts and/or with investors that are not a value add to the company. With recent investments by large investors, it appears that we are realizing a change. However, companies need to be concerned with the amount of money they are seeking.
Unregulated markets impede the forward progress that we are realizing in the regulated markets. The negative industry stories we read about generally originate from these unregulated markets. As we advocate for the cannabis industry, it’s important that we pay attention to the events taking place in unregulated markets and prepare to address any negative connotation.
Lastly, skilled talent is a concern as the industry expands. The new markets (State medical programs and adult use) are putting a tremendous strain on the talent pool. As a result, employers are hiring individuals that are not well suited for positions. I have also seen a large turnover in Executive Management. I believe the talent exists, but the industry is growing at a speed that makes it difficult to locate, recruit, hire and train employees on a timeline that works for the startup.
Can you share your top “5 Things You Need To Know In Order To Run a Successful Cannabis Ancillary Company”? Please share a story or example for each.
1. Know your product. Confidence sells and can only be communicated with your client if you know your product. Too many times, companies hire sales staff and don’t provide the required training. They are pressured into keeping up with inquiries and don’t fully educate the potential client on the product.
2. Know your market. Performing a market analysis is always a good start but should not end there. The cannabis industry changes rapidly and it’s important to keep up with your competitors and trends.
3. Know your competitors. Acknowledge and understand who your competitors are. Use them as a reference source to motivate you. Your competitors may be thinking outside the box and you will need to adapt in real time rather than being reactive. Additionally, you can learn from your competitors’ mistakes and benefit from their hard-learned lesson(s).
4. Know the trends. You want to be an industry leader, not a follower. By identifying products that your market desires, you can plan accordingly for product development. If your product line has reached its capacity, you may want to research new product lines by way of acquisition or expansion. Many software companies are adding features to their technology to separate themselves from others.
5. Know your client. If you don’t know your client, you will never fully understand if your product is relevant or how it compares. Your relationship with the client can drive more sales, as the best sales team is a happy customer. I have also used my clients’ feedback to assist in product development. After all, you want to be providing a product that people want, not what you think they want.
Aside from your particular vertical, which other cannabis ancillary industries do you think have very strong potential in the next few years? Can you explain why?
Software (IT) development is going to continue to advance. We live in a world of data and much can be gathered from the national cannabis consumer base. If the data is used appropriately, we can better understand strains, delivery mechanisms and purchasing habits, and much more.
Automation is being introduced from other industries and will have a significant role in the operations of large companies. As demand and competition increase, operators will find themselves implementing automation. If not, labor will become an issue and inevitably hurt your bottom line.
What advice would you give to other CEOs or founders to help their employees to thrive?
It’s important to work in the trenches first and lead by example and experience. The cannabis industry is moving very fast and executive management is being recruited to fill a role, prior to fully understanding the industry. To manage your company, employees, and customers, one must experience every aspect of bringing their product to market. Once you have “worked the trenches” your employees will gain a level of respect for you and know that you understand what they manage and deal with daily.
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 have to say, the movement away from alcohol. We all have seen what alcohol does to individuals and families. It creates disease and violence. Cannabis does not cause overdose deaths and has far fewer health consequences. Health-related costs from alcohol are far greater than with cannabis. And, people who use cannabis are much less likely to become dependent than those who drink alcohol. I would support a movement for cannabis social clubs/bars and encourage fellow advocates to communicate this message to your communities.
Jilea Hemmings is the CEO & Co-Founder of Leaf Tyme. She is running a series on Leaders In The Cannabis Industry.