5 Things I Wish I Knew Before I Started Leading A CBD Business: “Consumers are looking to discover new ideas and products and are open to new messages from new companies.” with Ed Schmults and Fotis Georgiadis
In my opinion, being a large legacy company in the cannabis industry is a disadvantage. If you are a large company, it is challenging to build a brand in a new industry due to entrenched ways of thinking, legacy investments and processes, and firmly held customer perceptions about large company brands. Consumers are looking to discover new ideas and products and are open to new messages from new companies. It’s part of the reason large tech companies buy smaller business, why large consumer products companies buy the hot new company and why large legacy food businesses buy smaller start-ups.
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 Ed Schmults, CEO of Calyx Peak Companies (www.calyxpeak.com). Ed Schmults has over 30 years of experience in global branded consumer products, omni-channel retail, product development, finance, operations, IT and green and socially responsible businesses. He has leadership experience at some of the world’s best-known consumer brands, including Patagonia (COO) and FAO Schwarz (CEO), where product quality and customer experience drive the brands’ success. In addition, Ed has strong operational experience having set up and improved warehouse, logistics and technology infrastructure at five different companies. Ed began his career in investment banking at Goldman, Sachs & Company. He spent three years in the New York and London offices working in corporate finance and M&A. Ed holds an MBA from Harvard Business School and a Bachelor’s Degree in Economics and Political Science from Yale University.
Thank you so much for doing this with us Ed! Can you share with the ‘backstory” about what brought you to the cannabis space?
You could say my background before cannabis was traditional in nature — after getting my undergraduate degree in economics and political science from Yale, I got a job on Wall Street with Goldman Sachs, followed by business school at Harvard, and eventually landed executive posts as COO at Patagonia and CEO at FAO Schwarz. I never imagined that a role in cannabis would be in my future, but I couldn’t deny that I was drawn to the passion and innovation of this industry. Ultimately, I decided to make the jump into cannabis for the following reasons:
· Legalization at the state level was accelerating due to broad social acceptance
· Belief in the benefits of cannabis for medicinal and wellness purposes. I was stunned to find out how many people I knew were already using it.
· Social justice — there’s an opportunity for the industry to help those with a criminal record for possession of cannabis.
· Opportunity to help build a great brand in a new $50 billion industry and move customers from an unregulated black market to a market that is tested and taxed at a local level.
Today, my work with Calyx Peak Companies, a multi-state operator with over 280,000 square feet of cultivation, extraction and distribution facilities across multiple states, is helping bring these values to life. Our passion lies in bolstering entrepreneurs and businesses leading the legal cannabis revolution, like our house brand, Josh D Farms, a highly respected grower that offers consumers a direct and specialized link to one of the most popular cannabis varietals ever, OG Kush. You can’t deny this is an incredibly exciting time for the legal cannabis industry, and we’re lucky to have the support of forward-thinking investors that share our beliefs and values.
Can you share the most interesting story that happened to you since you began leading your company?
The most interesting thing for me has been the discovery that a huge number of people are already using cannabis and CBD products to help with anxiety, sleep, inflammation and any number of everyday conditions. I have really been astounded at how many people, upon finding out that I run a cannabis company, confide that they are users of the product. The market is huge and people are benefitting from cannabis every day.
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 can’t really think of a funny one! Made plenty of mistakes, but nothing particularly funny.
Are you working on any exciting projects now?
Currently, Calyx Peak is expanding our presence across multiple states, build out our brands, and grow our business in California. We’ve been successful in growing our business through new license acquisition — both in states where we already operate and in new states. For example, one of our executives is part of a team that was recently awarded a provisional license to operate a dispensary in Santa Monica, CA. Through our Level 1 cultivation facility in Ohio, we have also obtained a processing license to go with our Tier 1 cultivation license, and recently conducted Akron’s first medical marijuana harvest earlier this year.
We’re also focused on hiring people who are smart and have the initiative and cultural fit to be successful at Calyx Peak. We recently appointed John Chiang, former California State Treasurer, and Dave Jones, former California Insurance Commissioner, to our board of advisors. Chiang’s banking background and Jones’ insurance expertise is going to be crucial for us as we look to expand in California and our other operating locales. We also just appointed Michelle Magallon, former GM of Bud and Bloom, as our Vice President of Sales.
Lastly, we’re ramping up on our branding, packaging and product development work, in addition to exploring opportunities to expand our retail footprint in the months ahead.
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?
My Uncle Brad gave me my first summer job when I was 13 — I mowed the lawn and did odd jobs at the inn he ran with my aunt. On my first day, he took me aside and told me that because I was his nephew, the other employees would assume I got the job because I was part of the family. He asked me get to work early, work harder than everyone else and always ask “what else can I do” at the end of a task so that it would be clear to the rest of his employees that I deserved the job. This advice really resonated with me and has become the building block of how I approach leadership, business, and life.
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?
In my opinion, being a large legacy company in the cannabis industry is a disadvantage. If you are a large company, it is challenging to build a brand in a new industry due to entrenched ways of thinking, legacy investments and processes, and firmly held customer perceptions about large company brands. Consumers are looking to discover new ideas and products and are open to new messages from new companies. It’s part of the reason large tech companies buy smaller business, why large consumer products companies buy the hot new company and why large legacy food businesses buy smaller start-ups.
Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?
The 3 things that excite me about the cannabis industry:
1) The potential impact cannabis can have on people’s lives — for pharmaceuticals, wellness and recreational use.
2) The fascinating mix of people, backgrounds and talent who are working in the industry.
3) The tremendous opportunity to build lasting brands.
The 3 things that concern me about the cannabis industry:
1) Keeping cannabis away from minors.
2) The lack of traditional banking services and the amount of money being spent with seemingly little regard for normal business metrics like ROI.
3) The challenge of the lack of regulatory consistency among states.
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) Regulation is crazy complicated and changes regularly in each state.
2) Related to the point above, packaging requirements are incredibly complicated, evolving and rooted in a last-century approach that requires everything to be printed on the package (rather than referenced online or via email with the opportunity for more thorough information).
3) The level of passion and dedication to cannabis has resulted in a group of very innovative and hardworking professionals.
4) Cannabis is an incredibly complex plant with significant research still to be done to understand its many possibilities. Yields, pest management, nutrients, lighting are complex subjects with profound secondary and tertiary implications for the business and consumer.
5) The license acquisition process is an entire business in and of itself.
What advice would you give to other CEOs or founders to help their employees to thrive?
Value business skills AND industry skills. Truly successful companies will combine both culturally relevant people who have been involved in the industry for a while, as well as new business people who can help grow and scale.
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. 🙂
Lead your life as if a child was always watching you. This would force everyone to behave honorably, with kindness and love. There would be less anger, less dishonesty and more instances of people helping people.
What is the best way our readers can follow you on social media?
Follow on Instagram — @eschmults
This was very inspiring. Thank you so much for joining us!
5 Things I Wish I Knew Before I Started Leading A CBD Business: “Consumers are looking to… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.
