In this episode of Highly Enlightened, host Jon Purow connects with Samuel Brill, CEO of Ascend Wellness Holdings. Prior to becoming CEO, he he first served as Lead Independent Director and now leads the charge at one of the country’s largest multi-state operators. He is a veteran of capital markets, private equity, and corporate transformation—with nearly three decades of experience guiding businesses through high-stakes moments.

Before stepping into the cannabis space, Sam led private equity efforts at Seventh Avenue Investments, managing the portfolio for a multibillion-dollar single-family office focused on turning around underperforming businesses. He’s also served as CIO at Weismann Capital, overseeing investments across credit, real estate, and structured deals.

Sam’s fingerprints are on a range of industries—from medical devices to distressed debt—and he currently chairs the board of Invacare Holdings while advising companies through his consultancy, S Brill LLC. Across it all, he’s been the steady hand in the boardroom, the turnaround strategist behind the scenes, and the one asked to lead when stakes are highest.

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Please note: this transcript is auto-generated and may contain errors.

Jon Purow:

Welcome to another canna-convo episode of Highly Enlightened, my podcast, syndicated by Ganjapreneur. I’m your host, John Purow. Now, before we get to a very, very exciting interview, I want to note that my opinions or any opinions I express are my own and not those of my law firm herbal laws LLC or my cannabis IP licensing company, Palo Capital Corp. Nothing to do with that. All the terrible things I’m going to say are just me, myself, and as I always like to do. We need to do a quick prayer to the video chat. Gods may, our wifi connections be sturdy. All dogs and children remain quiet and may Amazon Prime another time. Amen. Now, I had the pleasure of introducing Sam Brill, CEO of Ascend Wellness Holdings, the large MSO in our industry. Sam, I just want to thank you for taking the time out of your very, very busy schedule to join me and to chat a little bit.

Sam Brill:

Pleasure to be here.

Jon Purow:

Yeah. Alright, so look, let’s get down right down to it. Hit Restore with the hard hitting questions. Get ready. This is going to gobsmack you, not that you’ve seen it when I sent it to you an hour ago. Now, of all the experiences and their skills that you brought from your work history into the cannabis industry, which experience or skill did you think was most helpful and why?

Sam Brill:

That’s a great way to start. I would say that a lot of the skills from outside the cannabis industry are not, they don’t quite fit perfectly with cannabis is its own different animal. So I am not surprised that this is, I guess, challenging to step into this role. I was on the board already, I had a head start. I was on the board for 18 months before I took the role. I was investor in this company for almost five years. We were one of the early lenders to ascend. So I was at private equity prior to this and I have a lot of the skills for restructurings, finding ways to cut costs, generate free cash flow, bring efficiencies to businesses. That really was the skillset that I was bringing that I had done with the companies that we generally take private or private companies that we bring into our private equity portfolio and where we see those opportunities to bring in those efficiencies where they’re doing things that are from the eighties and nineties that they could really fix and think about differently.

And that part I would say was very helpful. So if I’m applying something from my skillset, that certainly was helpful in just the way to think about an organization, the way to think about efficiencies, the way to think about how we do our manufacturing. I invested in a lot of CPG companies in the past. Having a CPG mindset is also helpful, especially since we have significant amount of growth. We have seven growers and we make a lot of phenomenal products. And I would say one of the challenges that I found, not challenges, it’s actually a real great opportunity, is that we make some phenomenal products in the states that we have large facilities and we have some of the top brands by name, but our branding and our packaging doesn’t actually match the quality of what we’re putting in there. And that disconnect was frustrating for me.

I don’t know that I really appreciated it as much as I did. Once I rolled up my sleeve and started working in the facilities, I worked in one of our facilities for a few days alongside our employees. So I got to do everything. I was there literally defaulting plants on my hands and knees all the way to doing actual packaging and got a deeper appreciation for what it is that we do and the hard work that our employees put into making the products that we put out. And it actually maybe more attuned to the fact that when I look at the packaging, I’m like this and I look at someone else’s packaging, I know the quality of the items and I’m not going to pick on anybody, but I know that our stuff is as good or maybe better, but theirs looks so much, I don’t know, it grabs your eye. So somebody there has done a good job of putting marketing, I guess, and I’m like, what? That seems like an easy thing to fix because we should have packaging that reflects the quality that’s in there. And so it’s at every level for bringing in those just a different mindset, focusing on driving down cost and treating every dollar it’s your own. But it really is changing a mindset. And I think that the history of Ascend is we were building the plane while flying it, so to speak. So

We went from zero to $500 million in just a matter of few years. And when you grow that fast, you’re not necessarily thinking every little thing through. You’re just, especially at that time in 20 19, 20 20, I mean you’re growing whatever you can grow because you can sell it. You don’t need to demand plan like you do today where you have real competition across the board. If you could grow it, you could sell it and you can sell it at every price. So the idea was just get the facility open, grow, whatever you can, dialing it in quality level, but we’ll deal with that later, but let’s just get it all turned on. And I think we never changed the mindset of, wait a second, we’ve had four years to fine tune what we do and the quality levels from start to today are totally different. And we never built brands to reflect what we were making.

Honestly, I’m not sure you needed a brand in 2019, especially in these markets that were just turning on the novelty of weed for the first time that you could get at the store near your house was new. You were going to buy whatever was on the shelf. You weren’t going to discern between one product or another. It was just a cool, exciting thing to do. But that world has changed. And so we just need to catch up with the times, appreciate the amazing work that the people at Ascend have done to get us to where we are and now change that mindset to be real leaders in the markets that we’re in.

Jon Purow:

Okay. Look, that was a fantastic answer and there’s a couple of things I want to unpack from it. First off, it’s interesting asking you that question about the skills that were most useful for what you’re going to do in this industry and in this role. Because by comparison to others where it’s like they’re starting a company and they’re building, yours is different in that it’s kind of like the idea of it’s the needs of the company that dictated which of the skills that you have were most relevant to it. And so are there people who are, when it comes to CEOs, the wartime generals, are they the peacetime generals and the roles that they fill? So I thought it was a little bit interesting to just kind of note that your answer was dictated by different factors to a certain extent. Right now getting into what you said, you’re talking about the packaging and match the quality of the brand.

And I can’t help the movie scene that pops into my head, which probably pops into my head at more times than any other movie scene ever, the business card scene in American Psycho. And it’s that the business cards didn’t reflect the quality of the people that they represented, but the ones that were double stock, right? You afford weight to them. And so it’s interesting to me that there’s a conundrum, there’s an issue when you’re putting out super quality product with a flimsy business card and people therefore don’t respect it. And so it actually forces you probably to presumably pay more for the packaging to connote that this is a premium product and are you raising the price by the cost of that additional packaging? Are you building it in? How do you approach that? So I’m curious to just know a little bit more, how did you tweak the packaging? Did you make it more proprietary? Did you think about it from an IP perspective? Since I’m an IP geek, how did you start addressing that issue particularly and troubleshoot it?

Sam Brill:

We have to review all, we did a whole skew rationalization. I answered a couple questions, I went a little off topic, but it was all related.

Jon Purow:

How dare you. I’m sorry.

Sam Brill:

No, to that point, first of all, we have to get our spending in order. We have to get rid of the bureaucracy and all those things so things can flow because you actually know how hard it is to change packaging when you have a giant bureaucracy and the amount of levels that it goes through, even when I’m the one directing it as CEO, it is mind boggling actually. And so one of the first things we did was take out that layer because that layer might work in a Fortune 500 company in a different non-regulated business, but we are a heavily regulated business in seven states that may as well be seven different countries. And you cannot have a layer of bureaucracy blocking. It slows everything down and it actually just cycles any innovation and any change. So that became very clear very quickly, and that was probably the first thing that you could actually see in terms of change at Ascend with our numbers in Q4 that we reported where we had significant improvement in our margins for everything and we were able to put into place $30 million worth of cost savings in a very short period of time.

With that area cleared and the ability to move quicker, it really came down to, okay, what do we need to do today and what do we need to do tomorrow? The first thing is we need to make the packaging because by the way, packaging, especially if you’re getting your supplies from China and now with tariffs, all the things you’d be dealing with is hard. You can’t just change packaging overnight. You have to get regulators to actually prove what it looks like, that they literally go down to the colors on the packaging in terms of approval, depending on the state, every state’s different. And so there actually is this whole approval process that you have to go through. So we did the first thing we did, the first layer we did was just what are we allowed to do with the easiest way to do it?

And so we took 350 skews and we just put colors in them it, we couldn’t get approvals for what we wanted to and we’re going to completely refresh these brands, but because we couldn’t have these gray bags of ozone, ozones are great product and it really stands for high quality, great value. But the problem is that they’re in these great bags that when you put it up next to other things, you literally, your eye just goes right over the first store I visited a CEO, that was the first thing I noticed. I noticed that you didn’t notice that I looked at the thing next to it and the thing on the other side, and this is our store and you have ozone, which is our core brand, and it just, it’s gray. It doesn’t pop. It’s black and white next to two color TVs. It’s never going to catch your eye. And what does that mean? What is that message that you’re telling the consumer you’re already downgrading, and by the way, they’re getting you this at a great price. So when you put it in a cheap package or package that doesn’t stand out at a cheap price, what is the message to the consumer? The message to the consumer is that this is a no frills product and that’s not what it is.

Jon Purow:

Yeah,

Sam Brill:

It might’ve been when we first started, but today the level of product that we’re putting out, no way.

Jon Purow:

No, it has to be synchronized. It all has to be synchronized

Sam Brill:

Complete, and it’s complete disservice to the hardworking people in our cultivation facilities. They are a really growing phenomenal product, and we shouldn’t be doing them that disservice by putting in something that lowers the perception of what it is. So what we were allowed to do, unfortunately because of the regulatory, we are allowed to put splashes of color to make it pop a little more. And that was easy and that you’re going to see in everything. Now we also switched to locally sourced bags. So we went from jars to bags. That was another issue was jars. They look nice, but they’re terrible for your weed. The second you open those jars, unless you get the special ones that have the seal and maybe 3% of jars actually are that way, it really degrades your products very quickly. Within a month, your terpenes are pretty much gone and then you start, the tric cones are burned off and it’s not the

Jon Purow:

Same. That’s why I discovered boda pax. I mean, not trying to do a product placement, but some of my favorite ACC Vermont are the things that help preserve the terpenes for that very reason.

Sam Brill:

But that’s exactly to the point. And I don’t know that the average, I think that the can ofs sours know the difference, know that

They know what to do when they buy it, and so you’re now pouring it out of a jar into something else to keep it preserved. But actually what we found was the bags, while they don’t look as cool, they actually preserve the product much longer than you would in a jar. And we want that you to get that experience from what it’s supposed to be. When it comes out of that cure room, we want it full of the TURPs and that full spectrum experience that you’re going to get. And that’s another way to hurt your brand, is to have a product that somebody opens and maybe that first smoke was good and then they go back a few weeks later and they’re like, I thought I liked this, but not really. It’s okay because it’s not the same product. So the other thing was we move to bags, it’s actually we’re able to do it here in the US and procure it locally.

It also allows us to be more nimble. It allows us to use working capital better so we don’t have so much inventory a lead time, getting it international. And it allows us to switch the packaging quicker as we make changes. So we didn’t know about tariffs, maybe that we just got lucky there, but it did allow us to make these changes to make just at least give it a splash of colors so we can pop when you walk into the store and we’re going to be redoing that brand entirely. So it really reflects what we have and kind of gives the lineage and the history that we have there and the awards that we’ve won that we don’t tout. And so I’m really excited that when we’ll get to launch that later in the year. But then on the flip side, we launched fin, which is new product that actually has a real ethos and it’s a brand and it’s focused on the minor cannabinoids and the packaging really reflects what’s in there. And that was the first time we did it from that CPG lens. And then just for four 20 we launched Highwire, which is our infused. And if you see that packaging, I think that’s complete. That will give you, that will demonstrate the next level that we’re going to in terms of having the right CPG mindset for the products that we make.

Jon Purow:

So one, I think just the overview that you’re giving conveys a very, very important point here, which is all that goes into a brand and trying to guarantee its success. And any weak link in the chain could end up really, really harming it. You hear people talk nonchalantly like, oh, I’m going to launch a brand, and they have no conception of all the little things that go into in ensuring that is continuously successful. So I think that your perspective on that was really valuable for that reason. So now I found both of the brands that you’re talking about launching and everything, very, very interesting for different reasons. So now tell us a little bit about how the metrics that you’ve seen for success with respect to F in in terms of how it’s sold by comparison to other products in your stores.

Sam Brill:

So it really came down to just when you interact with consumers, what are the questions that they ask, especially the curious people that

Jon Purow:

Effects, they want effects based stuff

Sam Brill:

And they don’t know how to articulate it. They don’t even know the difference between indica and sativa. They’re just like, I want to feel this way. I want

Jon Purow:

To feel

Sam Brill:

Revved up. I want to feel social, I want chill. Or actually the most popular one is sleep. That’s probably the number

Jon Purow:

One. Sleep and pain

Sam Brill:

And relieve. Yeah, pain. Exactly. So we took that to heart and we’re like, how do we meet the consumer wants? And what is the right form factor to do that? And I think that easiest, the consumers that were most asking for it were edible consumers. They were more the can of curious, and that’s usually that entry.

And then how do we make it very easy for them to understand what the effect is? And so we literally, sleep is very easy. You just say sleep. But then it was like, what is hang social, do it, chill. So those are the different effects that we have to make it really easy for consumers to understand what they’re getting. But to your point, relief actually, or pain was one of the ones that they asked for. So we are coming up with relief and we’re going to have a deep sleep. So we’ll have two different levels of sleep as well. And we have a couple more skews that we’re going to add to kind of meet that consumer demand where it’s at.

Jon Purow:

So can I ask, just since I love my minor cannabinoids, are we talking C-B-N-C-B-G?

Sam Brill:

Yes. And yes. For

Jon Purow:

THCV.

Sam Brill:

TACV is the do it.

Jon Purow:

Okay.

Sam Brill:

Yeah. So that gives you,

Jon Purow:

And it’s probably the three starters that you guys have or unless if you have any others, I could guess them. But I think those are the three starters I bet.

Sam Brill:

I think those are the most common. I mean we have a lot more obviously just to give you different types that we’re trying to really lean into, making sure that that experience really is, that it’s really reflected when you take that gum, we make sure that those things live up to what it says on the package. And this is very important for us to get it right. This is the first CPG mining brand that we’ve ever launched with understanding exactly what we’re trying to do, not just try to put weed in a

Jon Purow:

Bag. So now I think that we covered the can of curious and the way that they think about products, which is from effects based and how you’ve catered to that. Now let’s talk about the other brand that you put out there, high wired, if I got that right, which is more for the cannae, right? Because it’s infused. And what we see on the cannae segment of the market is this obsession with stronger and stronger. Because frankly, I think what it comes down to is for the connoisseurs, like me, I microdose weed for a DHD, my tolerance, even in microdosing, like a puff or two puffs that became six puffs before you know it. And so what I think that people find themselves is they almost need that stuff that’s stronger and stronger unless they’re doing, unless they’re really good in doing their tolerance breaks regularly. That’s why people are going towards stronger stuff is what I’m realizing personally. And so talk to me about how you’ve seen that performing so far and how you think it speaks to that demographic.

Sam Brill:

Yeah. Highwire has been a tremendous hit. So you could go to a website, which is get highwire.com, so you can learn more about the product itself and what goes into it. But we’re putting high quality concentrates mixed in a proprietary with a high quality flour, and then we grind it together. It’s very smooth. You’re not going to have that sticky stuff. You’re not going to have little crystals falling out of it. This is going to smoke like a regular pre-roll, which is very important to us. Others have done it. They have similar products, but they don’t actually, there are a lot of quality issues with it. For us, it’s very important to get that right to make sure that you get that experience, not just the high. So we put these high quality concentrates to give you that high potency that people are looking for. And the potency levels were 49 to 55%.

Jon Purow:

Wow.

Sam Brill:

Yeah. So it really, you should be somebody that can handle that. Just a warning. I tried it last weekend.

Jon Purow:

I could be that somebody for you

Sam Brill:

And we would love to get some in your hands.

Jon Purow:

I’m kidding. I’m kidding.

Sam Brill:

Well come to Illinois, they’re happy to give you a try, but I got to test it last weekend. I could only tolerate one, literally one puff. And I do smoke. So for me, even for me, it was a little challenging for me. I would stick to that one puff and I’m good for the night. Did

Jon Purow:

I say that is refreshing to hear an MSO exec, CEO say talk about personally trying the products that’s new and different to me

Sam Brill:

Is that it’s surprising. I feel like if you’re selling it, you really probably should know what you’re selling,

Jon Purow:

Know what you sell, right? But I feel like that’s not necessarily, that’s a line between the pure pot people and some of the finance people by background who find themselves in the industry. So you’ve proved your bud bonafides to me. Good sir. Alright. Keep sampling away your own products. Keep getting high on your own supply for research purposes.

Sam Brill:

For research purposes. And I’ve tried a lot of other products too, so I kind of really have a good idea of the spectrum of what’s out there. I am very appreciative of high terpene levels. That’s what I gravitate to more than THC. Obviously everyone has their own preference, but that’s what really gets me excited.

Jon Purow:

They determine the effects of the cannabis. Delta nine is the same in every strain. What’s different? What’s the entourage effect? What actually affects you terpenes in those items? And so I think that there’s going to be an increasing focus on them. It’s nice that a lot of regulatory systems already have you testing for terpenes and saying which ones you’re dealing with. But I just think that the industry is going, especially the connoisseurs, but frankly the canna Curies two because they want effects based and the effects are in the terpenes. We’re all heading in that direction.

Sam Brill:

It’s not just getting high, but it’s the kind of high that you’re getting. And we’re seeing that’s where the innovation’s going. I’ll tip my hand a little, but we’re looking at that on the vape side too. And you can add these TURPs to the vapes where you can get really amazing experiences. And we’re working on those

Jon Purow:

Products, the strain specific vapes that a couple people make out there in the market using terpenes, which can be botanically derived, right, are really impressive. And actually make an impression on an experienced vape person like me, man, knee can. I came out of that with eight vapes. I carry them around. I joke it, I take all eight. I show my friends and I’m like, okay, I’m going to try them all at the same time. Sorry. I don’t know why I felt to share that with you. You’re on a need to know basis and you had to know that right this moment. So now getting back to some of the questions we were talking about, what would you say, if you had to boil it down, it would be advice that you would give to other leaders in the cannabis industry? We’re talking about stuff that you’ve taken from the past and here and now that you’re here, what is something that clicked in your head a little? Maybe it’s an epiphany moment or just something practical that you think is useful to the industry to pass on. We’re all in this together.

Sam Brill:

I think it’s like keep it simple, right? It’s like why does your company exist to serve the customer? So it’s like just putting the customer first, that customer first mindset, everything that you do should be, how does this serve the customer and be the heartbeat of everything that you decide. Every single decision, right? Every strategy, every product. It starts with that question. And I know that sounds like it’s, but it is the key to success, not that is what you’re serving. That’s who you’re making these products for. That is who your customer is when they come into the store. That needs to be the focus 100%. And it’s very easy to take your eye off that ball. So it’s that refocusing on the consumer and being a leader in those markets.

Jon Purow:

And look what I mean. It’s not just one consumer, right? You’re canning to different consumers and that’s why you have a stable of brands rather than a one size fits all brand. When it comes down to it, you’re meeting consumers at what the different consumer groups that are the biggest groups in terms of dividing up the demographics you’re meeting them at where their needs are, each of

Sam Brill:

Them. Correct. And they’re

Jon Purow:

Very

Sam Brill:

Exactly.

Jon Purow:

So I know that this particular role is not a relatively recent development, but in your time in the industry or your time in this role right now, can you share an anecdote about one time where you kind of thought to yourself, F Yeah, we really nailed the landing on a hard one.

Sam Brill:

I don’t think I’ve had that F Yeah. Moment yet. I

Jon Purow:

Look forward. Sorry. Sorry. We hope you find it.

Sam Brill:

It’s early. It is been like six months or seven months or something

Jon Purow:

In cannabis. There’s so many of them to choose from. They probably just all blended together, Sam.

Sam Brill:

Yeah. Well look, I also don’t like celebrating touchdowns that you score in the first quarter. So we have had some successes so far. Q1 was a pretty good success, but to me it’s exactly that. It’s like you’re scoring a first touchdown in the first quarter. There’s a very long game. There’s a lot of time to go. You got to win the game and let’s not celebrate too hard on those scores. So I like to just try to keep that reality there, like stay levelheaded and not get ahead of myself with wins. But I can’t say we’ve had some really good moments. I don’t want to take that away. We’ve had a lot of successes with Q1 with these launches, and I see a lot of things in the pipeline that I’m excited about, but I’m not ready to do any victory laps yet.

Jon Purow:

Okay. I like it. The way to manage expectations there diplomatically. Sir, I tip my cap. I feel like you’ve done this before. Chosen your words wisely or leaned on chat GBT appropriately. So now you talked a little bit before about the astounding rapid growth of Ascend. So what do you think are some of the biggest factors in how Ascend was able to grow that quickly over that period of time?

Sam Brill:

I think the founders really picked good markets to be in. They made some good choices and really leaned into being leaders in those markets and carving out a leadership position for leverage off of, I think that’s really been the biggest driver. It is very easy that we could have been. And by the way, doing that without having Florida in our portfolio I think is quite the accomplishment because Florida is probably one of the best markets that we’re not in. But even without having that in the portfolio, it was really setting us up in the right places at the right time. They were right at the beginning of adult use flips in these core markets, whether it’s Illinois, New Jersey, they did a really good job of putting us in the right places to succeed. And I would say one other thing is locations, retail locations. I would say that it’s probably our biggest strength and the best moat that we have as a company is that we thought about this early on, it used to be, or at least a lot of others, they were like, let’s just get a store open in this market that’s about to flip.

It doesn’t matter where the location is because it’s a thing. Everyone’s going to find it. You could be at the end of an industrial zone, you could be in the middle of nowhere. People are going to drive and they’re going to come to you. And the foresight that our founders had was when this market matures, you need to be in a great location. Retail’s going to win based on where you are and you need to be on that main and Maine in a high thoroughfare area where there’s a lot of retail and a lot of parking, and they saw that early on and they placed our stores in these core, what I would call main and Maine locations, that I think as the competition becomes more fierce today. And we’re seeing that in a lot of our markets. There’s so many more stores opening and everyone’s trying to steal your customer, but being part of the consumer’s daily routine because you’re on that active highway right next to that highway that you’re going to and from work from or you’re in that shopping mall that they go and they shop regularly.

And by the way, having parking, I can’t emphasize that enough. There’s so many stores that look nice, but you can’t find anywhere to park. So it’s a pain in the ass to park somewhere and then walk to the store and then come back. And sometimes you’re driving around and you can’t find a parking spot. So maybe you go somewhere else. That is something we have in all of our stores. You’re going to find ample parking and be able to get in and out at your convenience. So you want to make it as easy. The more challenges you have as a consumer to get to a store, it’s just another excuse to go somewhere else. So being part of that and being on the way in a very active area with parking just makes it, you’re taking away the roadblocks from the consumer, not going to, and that’s where I see that we’re already winning just out of convenience.

Jon Purow:

Yeah, I think that, but it’s not just out of convenience. Convenience is the thing when it comes down to it, right? Because I always comment on the fact that our industry is the opposite of other industries in the sense that other industries, Amazon is winning by convenience, by comparison to retail stores. It was retail and then Amazon by convenience, aided by a little nudge from the pandemic. Convenience won out. They put everything in your hands within a day. Why should you ever venture out into the sunlight? Just stay inside your dark room. I’m in my fortress of solitude and order things to come to you. Now we’re the opposite, right? We were delivery to start in the legacy market, certainly for people who are in the city, cities purchasing and everything. Now we’re reverse. So now you need to think about how to make your retail location again as convenient as possible.

And you talk about something that sounds a unn like parking. But when dealing with the experienced parties who are buying and selling licenses or really trying to find the proper location, parking is one of the first things that they say. It’s not a secret to people in the know right that this is something that is so incredibly important for that convenience factor. You want your consumers to feel flow and you want nothing to interfere with that or else they might go. And that goes from waiting for a parking spot to waiting on a line when they’re inside the store. And it has to be your ethos to address that everywhere. So I find you’re singling out parking to be a really astute thing and a good thing to share with others in the industry who are getting into this starting out retail for the first time. So now I was going to say, what are some of the things that the industry has taught you? And you’re like, well, parking the importance of parking. But are there any other things that jump out at you that you’ve learned that for those new entrants into the industry, you want to pass it on to pay it forward? If you want me to reference a terrible movie with Kevin Spacey,

Sam Brill:

No, I think it goes more to, okay, you’ve taken away all these obstacles. You have parking, you have this great location, you’re on the way. It’s convenient. You’ve got the customer in the store. How do you make sure you complete that last mile? That in-store experience is make or break to whether or not they’re going to be a returning customer.

And that’s the other, you need that customer to come back. I think it’s like the fourth time and they’re loyal. So you got to get that fourth time. So you got to get them in again. You got to make sure that they had a great experience and you didn’t do anything that was abrasive or just off-putting in any way, whether it’s a long line. And by the way, Fridays, that’s probably the biggest day in cannabis everywhere. That’s the one consistent thing I can say from all markets. That’s the same is Fridays the top day of the week and you got to make sure that that line moves and you got to make sure that the consumer, you’re able to segment things within the store to make sure there aren’t any bottlenecks to that. And we have a process that’s a little different than others in terms of the way our store flows with kiosks and the fulfillments in the back of the house.

So when you get to the register, you’re products are waiting for you. So you’re not having the person at the register fulfilling the order, the order’s there when you get there. So you just really pay and it smooths out the turn. So if you really, we have a lot of pre-order customers, so you want to have a separate pre-order line. You don’t want them gumming up. The people that came into the store that are kind of figuring out what they want, they maybe want to browse the store, they want to see what the different products are. Maybe they want to ask some questions of the bud tender. They’re not quite sure. And you want to be able to cater to those people, but you also don’t want those people to become the bottleneck for the people that know what they want.

They want to just hit that kiosk and put in, I want this flour and this vape and I want to be out in six minutes. And we have that. So when you come in, you’re going to be routed without you even realizing to exactly whichever type of customer you are. If you’re pre-order, you’re going right to the pre-order line and you’re going to be taken there immediately and you want to talk to a bud tender, they’re going to assist you. And then if you just know what you want, but you didn’t place the order online, you’re going to go to the kiosk, you’re going to be able to find what you want and check out immediately. So we’ve set up, I think a really good mousetrap there. We have more work to do. I think from a technology perspective, there are some things that I see as low hanging fruit to improve e-comm, and then it’s just experience just to, I actually think our interactive page is probably better than most, but there’s so much more you can do where you can make it easier for people to find the deals that they want to find, that minor cannabinoid that they want by that cannabinoid, just being able to navigate things in an easy way and see what the deals of the day are, see what it is, which category, and be able to do subcategories and just see it on the page easier.

Again, it’s the same thing. You want it to be that smooth, enjoyable experience that we take for granted in other retail. It’s just here that we don’t really have those tools with AI that’s maybe serving up saying, oh, you like this flower? Did you try this, this, or this and that. It’s actually relevant to what you have, which we have things that serve that up and they have nothing to do with it. There’s no AI and there’s no real rhyme or reason, but we are getting those tools. And actually we just launched a test pilot in Morenci in Michigan, so I’m very excited so far. It’s actually been really good.

Jon Purow:

So wait, let’s focus in on this a little bit. So you’re saying now we’re getting to product recommendation categories, and you had a system in place that, I mean your words were no rhyme or reason or whatever, but I’m assuming it’s not like AI that has based on consumer preferences, your own internal data, there was something systematized to it. You guys have shifted that up and so now you’re really seeing the results of a really, really good product recommendation generator based out of AI technology

Sam Brill:

Specifically. Yes. And it’s the first, I think it’s the first. I’m told that it’s the first of the kind. I’m not going to opin to

Jon Purow:

It. No, we don’t need to necessarily make proclamations here or anything. No press releases out of the pod. But I, here’s the question that I have is the strength of an AI is dependent upon the data that it’s fed. So are you feeding it proprietary data in terms of your sales? And that’s what it’s basing its recommendations on. Is it something broader? Just curiosity?

Sam Brill:

Yeah, so it knows what all consumers that bought a certain product purchased. So you have relevancy to that specific S skew that you just stuck in your basket. And then if you took two skews in a basket, it can actually now triangulate based on those two s skews, how

Jon Purow:

Many other things

Sam Brill:

Or it can narrow that funnel to being somebody that took these two things. They only liked these four things. And so we’re only serve up those four things when maybe it was 20 beforehand. So actually by putting that next thing in your cart, it actually narrowed the focus to something more relevant and specific. And then the third piece is we don’t have this yet. It will be implemented in the next few months where our loyalty program can finally be part of the e-comm. I know how silly that sounds, that loyalty and e-comm are not together, that you don’t know your loyalty points until you come into our store, which is crazy. But it’s

Jon Purow:

Welcome to regulations.

Sam Brill:

I think it’s more industry specific and there were certain things that were innovated differently and the APIs between some of the typical loyalty programs don’t work with the POS and the eCom, which is online.

Jon Purow:

It’s a very interesting observation about the industry,

Sam Brill:

Which is to me this is meat and potatoes. Everyone does that. It’s just taking, can you imagine you’re on the Amazon page and your Amazon information is not on there for checkout, how pain in the butt that is, that’s kind of where we are. So the idea is to get this to be, it’s you. So when you’re doing this on e-comm, your loyalty is there, your purchase history is there and that’s

Jon Purow:

Cash your points

Sam Brill:

And you’re cashing your points and you appreciate your points. You know what points you have. I don’t have to remind you at checkout, how good is my loyalty program? If I’m reminding you about points, I’m probably just giving you a free discount that you didn’t even realize you had. And some people appreciate that and some people won’t care. But the idea is to have loyalty and points, points that you actually care about and tiers that you’re caring about because you want to get more points and more rewards and more free stuff and be loyal to our stores. So when that does get integrated with the e-comm platform in the next few months, it’s going to actually know who you are. So on top of what everyone else did, it’s going to know your purchase history and then you’re going to take that relevancy to a completely different level in terms of being the suggested ideas at checkout.

Jon Purow:

Got it.

Sam Brill:

So we’re going to a good place, we’re just not there yet and I’m excited what that impact could be for our customers and their experience going forward.

Jon Purow:

Okay, so here’s a question. How do I know that you downplay success, right? You don’t have your FEM moment yet because you just had so many that they blended together is the way I like to look at it. So now, what are some of the key internal metrics or milestones or things that you look for to help determine when things are on the right track or when they need improvement?

Sam Brill:

Is there a specific category that you’re looking

Jon Purow:

For? Edibles? No, I’m kidding. No, I just meant, and really in any perspective, and you could just say I reject the question. I never look at any metrics. I’m all by the gut. One particular former president, I feel who sold that as a selling point. I’m not getting political, I’m just commenting on that’s so if nothing jumps out at you, no

Sam Brill:

Problem. There’s a million. It’s all about KPIs. If you’re not measuring against KPIs, then how are you measuring success? How are you measuring timelines? How are you measuring implementations of things? It’s just that when you say, when I think about, I probably have a spreadsheet of a thousand KPIs that we’re keeping track of internally with each division about different deliverables because now everyone is held accountable to task with timelines on implementing things. So as an example, automation is a big deal for us. We are very manual right now because we were more focused I think on retail, which has always been our strength. And even though

Jon Purow:

You were more reactive than proactive because that’s what was required of you in the market to grow.

Sam Brill:

Yeah. And I don’t think we ever took a step back and said, okay, we have these big fixed plus assets where we make this great weed, but have we ever tried to optimize those facilities? And part of that optimization is going to be that automation piece because everything right now is very manual and there are a lot of automation opportunities. I would say that we’re behind most of our peers of our size on automation. And that is a big piece that we’re bringing in. And we’ve added some things so far, but we have an automation timeline to help drive cost volume down over time to really optimize the output of those facilities. So those are like we have timelines for all those things and we have a phenomenal COO who is a stickler for making sure that everyone’s accountable.

Jon Purow:

They all need to be

Sam Brill:

A love. Yeah. Well no, I don’t know that we had that previously in that just there was a lot of flux. So I think we’re trying to be more organized about making sure people are focused on the right things, prioritizing the right things, and that’s the way you’re going to get your best execution. So I don’t mean to punt the question, it just they’re so

Jon Purow:

No, you’re too prepared. Like the most eager boy scout of all time. You’re like KPI got a thousand KPI, John, come on. And for the non acronym familiar, we are talking about key performance indicators. Just to be clear,

I always try to not throw out acronyms like that. Always explain. So now I want to ask you, considering your very unique position in the industry, what are some of the things that are catching your eye now? Maybe trends or product categories, just something that made you go, things that make you go right. I’m referencing another 30-year-old song. Yes, sorry. Because my brain, when I started really smoking weed, preserved my memory, one of those mosquitoes in Amber and Jurassic Park. So all of my references are 25 to 30 years old. So thank you for bearing with me. What makes you go?

Sam Brill:

I would say that just understanding the competitive landscape and how quickly it’s changing and how markets are maturing faster. I think that most people anticipated, and it goes with KPIs too, right? Because I’m always looking at velocity of transactions and average ticket price per gram by market. And it’s just interesting to see from market to market what that velocity is. And the interesting thing is people are buying more and more weed than ever before. So that’s great to hear, but at a cheaper and cheaper price. So even though they’re buying, let’s say 20% more weed, the revenue for that is actually lower. So on a net basis, because the price per gram has come down. So it’s great for the consumer, they’re getting more for less. But as a business, obviously you want to continue to grow and you need to be able to stay ahead of that cross curve so you can at least from a margin perspective, stay relevant. Otherwise you’re not going to be around very long. You’re not going to be able to keep up with that cost curve. And another point to why those KPIs for automation are so important.

Jon Purow:

Exactly

Sam Brill:

The only way we’re going to stay ahead of the curve on the cost side and meet competition and stay competitive on price for consumers. And I could speak to each, I mean every single market’s different. I think that the market has probably been the biggest, most aggressive, I think pricing market probably it’s Massachusetts now they’re catching up the

Jon Purow:

Michigan, we’re seeing this state by state, right? It is the same problem that we’re running into in terms of over cultivation race to the bottom of prices and retail with no organization to that. And so it just squeezes everything. And so we are forced to be an industry that lives on the margins. So that little cost savings with a specific type of automation ends up making a huge difference when we also are not exactly helped by our tax situation. And I don’t think that that’s actually going to change anytime soon.

Sam Brill:

Is it me or did John freeze?

Jon Purow:

Oh sorry, I did freeze. I was saying something amazingly relevant. So it’s lost to

Sam Brill:

History. You

Jon Purow:

Say,

Sam Brill:

You said the wifi guy in your intro, you’re talking about the wifi. God, so

Jon Purow:

I know I, I didn’t sacrifice anything to please the gods kind of forgot. Normally I kill an old electronic device, so I think that’s where I went wrong. But let’s all assume that whenever it cut off the middle of what I was saying was incredibly insightful and now it’s just lost to history and we’re just going to have to roll past it, right? Because this is all about you, sir. Alright, so now we talked about things that you noticed. You talked about Massachusetts in terms of what we’re seeing compression there. I like talking to execs such as yourself that have a multi-state viewpoint because I find it fascinating the things that work in one place and are standard in one state and aren’t standard, but would work really well if you just picked it up from one state and dropped into that state. And so one example that you and I had touched upon that I found interesting was the concept of deli style retail. So maybe as one last thing to touch about, talk to me a little bit about your experience with the different states and what you’ve seen and how you’ve implemented it.

Sam Brill:

Sure. Well, deli style we have in Massachusetts and Michigan, it’s not allowed in all states. So in fact, most states I would say it’s not allowed. But for the connoisseur, it is something that’s extremely attractive because most consumers these days are used to getting their weed in a jar and you don’t really get to see it until you go home. This allows you to go to the counter and like a deli, you can actually see all of the buds right in front of you and you can fill up, whether it’s an eighth, an ounce, you can actually walk out with a full ounce if you want. You can choose the buzz you want and the bud tenders going to scoop stuff out. You can be like, oh, there’s way too much

Want, or I only want, I don’t want a bs. You can be very specific about where you’re sticking into your bag or jar. So you go home with exactly what you want and you can actually smell it and see it and feel it. And that’s not something, that’s not an experience you can get anywhere, everywhere really. It is really unique. And so we have one in Massachusetts, Massachusetts, it’s not as common. Some places have it. We have it in our Newton store. It’s been a huge hit. People love coming in there and seeing it and smelling it. It’s a different experience. And a lot of the stores in other states, like my state, which is New Jersey, you come in, you can’t, you certainly can’t smell the product, but when you come in there, you just get that full experience and it’s super exciting. In Michigan, it’s much more common. It is really available almost everywhere. And it’s something that we’ve turned on. So in our Detroit store for example, we did that. It’s actually the only way you’re going to stay competitive.

Jon Purow:

It’s applying lessons from one place going to another. Now since we’re so tight on time, and this is such a tradition, I have to ask you to play Toker dus or Smoker dus since I can never determine which one I like more the Toker dama. We won the vote you’re putting on your wizard hat, that’s stylized like a joint right now. Give me any prediction that you see macro, micro level in the industry going forward. Anything that pops into the brain.

Sam Brill:

I hate making predictions I feel

Jon Purow:

Like, and don’t fine then we could kill the tradition right here. It dies with you, Sam. I don’t,

Sam Brill:

I mean it seems like if I would make a prediction, look, there’s a category outside of the cannabis industry that seems to be gaining a lot of steam in hemp derived beverage in particular. And we’re finding that to be a very interesting category that’s growing at a rapid pace. Look, we think that the hemp industry should be regulated and tested and for safety concerns and health concerns just like our industry. But ultimately I do think that beverage is probably here to stay. And it’s actually a very interesting, almost a little bit of conflicted thing for us in that we don’t sell a lot of beverage in our stores.

Jon Purow:

State licensed, it’s much more difficult. But as a hedge, right? Enterprise D nine seems like a pretty important hedge for people who have invested so much in the state license

Sam Brill:

Industries. And it would be nice to actually be able to carry those products in our stores too. And even though it’s not allowed, but more so actually maybe even if it’s not in our store, the one interesting tidbit that I found from that area was that a lot of the consumers for hemp beverage are that can curious, but they’re early stage curious

Where they’re not ready to go into a dispensary yet. And that’s intimidating to them. That’s maybe a bridge too far. So the interesting thing that we found statistically is that people that are at that level that try these beverages for the first time, it actually helps kind of break down that wall. And what we find is that as they, I guess warm up to the idea that this is not such a bad thing, and actually it’s pretty enjoyable, we find that a certain percentage of those customers actually end up coming to our dispensaries. So we see that as a really

Jon Purow:

Interesting, and that’s how I think that they could blend together in the two worlds

Sam Brill:

To what we do because it’s not a big part of our revenue today. So I’m not sure it’s taking that much away, but if that’s bringing more customers into my store, I think that that’s something I could probably live with. But I

Jon Purow:

Do think

Sam Brill:

Health and safety perspective, we need to make sure that there’s some regulatory oversight on it.

Jon Purow:

It needs to be, have the amount of THC on the hemp side, right as say five milligrams or less, or 10 milligrams or less, test it similar to state licensed and then they go hand in hand. So look, I cannot thank you enough for a really, really fascinating conversation. Sam, once again, thank you for taking the time. I.