Canna Connect Show
The Canna Connect Show introduces you to the people building Minnesota cannabis. Hosted by Canna Connect founder Stephen Eigenmann, each episode brings together growers, operators, entrepreneurs, advocates, professionals, and community members for real conversations about the work, challenges, ideas, and stories shaping Minnesota's emerging cannabis industry.
Canna Connect Show
The Do's and Don'ts of Starting a Cannabis Business in Minnesota | CannaCon Panel | Brought to you by Cure8
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What should you know before starting a cannabis business in Minnesota?
Recorded live at CannaCon Midwest 2026 in Saint Paul, this episode of The Canna Connect Show brings together four people with firsthand experience building, operating, and supporting cannabis businesses:
Jonathan Hunt, Leech Lake Cannabis Company
Jacob Affeldt, Frostbite Dispensary
Brytany Melville, Forte Ops
Munir Haque, Cure8
The conversation starts with one of the simplest and most important lessons for anyone entering Minnesota cannabis: vet the people you work with.
Minnesota may be a new adult-use market, but the regulated cannabis industry isn't new. The panel discusses why entrepreneurs should learn from operators in mature markets, ask vendors for references, understand exactly what they're buying, and avoid assuming every person selling services to the cannabis industry has actually done the work.
Jonathan Hunt brings the cultivation perspective from Leech Lake Cannabis Company, taking the conversation inside the realities of commercial cannabis production. He discusses seed-to-sale compliance, scaling cultivation, maintaining quality, genetics, Minnesota's developing supply, and the challenges that come with operating in a regulated market that is still taking shape.
Jacob Affeldt shares what he and his wife learned while building Frostbite Dispensary, including years of business planning, controlling buildout costs, understanding their local customer, navigating banking and payment processing, working with Minnesota's Office of Cannabis Management, and competing with the legacy market.
Brytany Melville brings the operational perspective, digging into the systems behind a successful dispensary. The conversation covers technology selection, marketing, employee training, SOPs, retention, margins, and why operators should think carefully before expanding simply for the sake of growth.
Munir Haque of Cure8 takes the conversation into cannabis technology, security, and infrastructure. He explains why IT, cybersecurity, cameras, access control, networking, electrical planning, and construction need to be considered together, especially before a facility is already built.
The final stretch looks beyond opening day.
What happens when prices fall? What happens as Minnesota's regulations evolve? How should operators protect their margins and employees? Will consolidation eventually reshape the market? And what could Minnesota cannabis look like five years from now?
This isn't a conversation about simply getting a cannabis license.
It's about building a business capable of surviving what comes next.
Recorded live at CannaCon Midwest 2026 in Saint Paul, Minnesota.
The Canna Connect Show shares conversations with the entrepreneurs, operators, cultivators, and professionals building Minnesota's cannabis industry.
Visit www.cannaconnectmn.com for more episodes, events, Community Spotlights, and opportunities to connect with Minnesota's cannabis community.
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Cure8 and Cannabis IT & Security
SPEAKER_06Hey Steven, do you do you know anything about watermelons? Um, some of them are seedless. Yeah, but that puts an end to actual gardening. And since we're gonna segue to gardening, and the guy that wears a watermelon shirt everywhere he goes, Munir Hok. Munir Hawk, yeah, of Curate.
SPEAKER_05Right. What's Curate all about? Curate is about connecting within the security and IT space, uh, helping with managed services as well as security and overall compliance when you're a dispensary as well as a cultivation facility. Curate can help with the security and IT within your business. Also, they're just really well connected. So if you need something or if you're looking to learn more, Curate's a great place to start.
The Do's & Don'ts of Starting a Cannabis Business
SPEAKER_04Welcome everybody. Today we are going to hear about the do's and don'ts of starting a cannabis in Minnesota, and you get to hear from the hear from the people who've actually done it. So starting here on the right, we have Jonathan Hunt of Leach Leech Lake Cannabis, and then we have Jacob Affelt, Frostbite Dispensary, we have Meneer Hawk, curate, and then finally, last but not least, Brittany Melville of Forte Ops. I
Advice for New Minnesota Cannabis Operators
SPEAKER_04think we all know the Minnesota adult use um rollout has been pretty rocky. So, what's the biggest piece of advice you have for new operators?
SPEAKER_03I'll go. New operators, can can you guys hear me? Yes, okay. Uh vet who you're dealing with. That would be my number one understanding is understand thoroughly who you are dealing with. There's a lot of people in the industry that are uh consultants. Uh can you hear that? No? Talk louder, better? There's a lot of consultants in the industry that um they went to work for a big MSO or they're doing whatever they were doing somewhere else, and they can give you a beautiful line of shit. Um and uh they'll sell you a dream that will never come true. So verify who you're dealing with, understand their background, uh, call and check, really dig into everybody you're dealing with, would be my first piece of advice. Um, everything else from there will kind of sort itself out.
SPEAKER_02Yeah, and I'd say on that same note, like ask ask for references, ask for people they've worked with, um, ask for licenses if you're if you're getting product from people. Um, don't just get excited because it's your first purchase, it's your first product of that category, or it's uh it's a good price point. Um, there's a lot of people in the industry that you just need to you need to be careful around uh and and have patience in that regard because rushing into things is is how you get burnt.
Learning From Mature Cannabis Markets
SPEAKER_00So uh just to add on that, I I I wouldn't shy away from going to other markets and asking for feedback and information and struggles and learnings. For example, California is a great one. I'm from Canada. We've been federally legal for eight years. I I tour operators all the time and bring them around to dispensaries, cultivation facilities. And every time we've done that, it's like a night and day change in their business plan and insight and completely helps, you know, shape the next couple of years of their entire planning uh and forecasting because you get like eight years of business experience from these operators that had to go through the struggles of not having any benchmarks in their markets. So uh take the time if you have if you have the time and flexibility to visit other markets and ask questions, get get in there because um there's a lot of operators that are willing to share information.
Vet Your Vendors and Ask for References
SPEAKER_01To echo what Jonathan and everyone else has been saying, like vetting your vendors is one of the most crucial points that you know I can't harp on enough. Um, and you know, these folks on stage, like I went to go visit Frostbite yesterday, and another dispensary came to thank Jacob. And Jacob and I were chatting because he he helped guide them because again, he's been through this. Um, and it's also really warm to see someone who has been through this and is not looking at others as competitors and is trying to help the state. So, you know, it was really beautiful to see. And I got to witness Jacob just talking about all the elements that you need and the things involved, and he's not telling you to use like my services or someone else's service or whatnot, he's guiding you on what it is you need. Um, so vetting your vendors and talking to the folks that have done this, and you'll we'll get into a lot of that today.
Minnesota Cannabis Industry Misconceptions
SPEAKER_04All right, one more open-ended question. So, what's the largest misconception the public still has about the legal cannabis industry in Minnesota?
SPEAKER_03Uh, that it's unique. There's nothing unique about it, there's nothing special about it. It's not um it's not going to be discovered here. It's already been discovered, it's already been practiced, it's already had its failures. Um remember that this has happened in 28 states for nearly 20 years. This is my 20th year in the medical cannabis space. Um, so you're not inventing the wheel, reinventing the wheel, you're not uh cutting new paths. So rely on existing information to save yourself a lot of dollars.
SPEAKER_02Uh I would say that's a really good point as well. When my wife and I were working to build out our pro forma, our business plan, and really understand what we needed uh for our business. Uh, it wasn't blindly, you know. The the there's tons of information out there from the people that came before us on customer account, expected sales, prices, everything to really build uh those things so you're not just guessing, right? Because guessing is how you get yourself into trouble in compliance uh form, as well as potentially bankrupting yourself because you don't know what to expect. Um, so that that's great advice.
Cannabis Technology and POS Systems
SPEAKER_06So, in my world in the digital space, there's a million different ways to launch a website, build a platform, take online payments, but you know, software as a service is tough. POS software in general, right? There's a lot of different ones out there, especially in the cannabis space. I don't know the right one. If you ask a lot of different dispensary owners, there probably isn't a right one. It's just what path do you want to go to that leads it down? What path have we gone down?
SPEAKER_05Are you referring to Dutchie, the modern cannabis commerce point of sale system? Newly integrated AI solutions. I mean, they have so many different ways that they can serve cannabis businesses, brands, wholesalers, etc. They're not just point of sale technology anymore. Right. Dutchie's been a great partner for us. They can definitely help you. They're in more stores in America than any other point of sale company. So they must be doing something. I hope so.
SPEAKER_06And if you're gonna look up our boy, look up Gus.
SPEAKER_05Yeah, Gus Savastos with Dutchy, based out of Ohio, served the Midwest market well. He's here often. He's been on the show before. We love working with Gus. We love working with the whole team at Dutchy. Check them out and let them know Canon Connect sent you. We'll include the link in the end of the description.
Jacob Affeldt and Frostbite Dispensary
SPEAKER_04All right, now we're gonna focus on our cannabis retailer, Jacob, with a few questions. All right, so I'm personally aware of what it took to get your doors open, but can you walk us through what it actually took to get your doors open? Timeline, cost, sorpresas, all those fun things.
SPEAKER_02Uh yeah, that's a large question. Um, so my wife and I worked on this for years, uh, prior to any application process, anything like that. Uh tons of sleepless nights of doing research on other markets, on going to other markets. We went to California and and toured tons of dispensaries, had lots of conversations. Um we redid our business plan a hundred times. We redid our layout of our facility more times than I can count. Um, but the the effort beyond that is there's a lot of sacrifice that goes into it as well. Um, family sacrifice, time sacrifice, um, and not just monetarily, right? My my wife has taken a huge burden uh to be able to do that, and you have to think about that. Like, how are you going to make your home whole before you can do all this? Um, I mean, monetarily, I think we did it more affordably than a lot of places. You don't need to spend a million dollars to build out a retail space. Um, because it will take you forever to crawl out from under that in terms of debt. Um, and then I mean, everything else, the compliance, all of it, lean on people uh that are experienced in this space that that have an understanding of it and have done it before. That's what we did. Um and yeah.
SPEAKER_04Great answer.
Competing With the Legacy Market
SPEAKER_04All right. How are you competing with the legacy market on price and product selection?
SPEAKER_02Uh competing with the legacy market. So on price, I'll be honest, the legacy market is beating us on price right now. Uh, we're we're fairly new in this state, and uh I am completely aware what everyone's going to their neighborhood plug and getting stuff for. Um in terms of quality and and difference of product, uh, we're very fortunate at our store. We're very, very well stocked. Um, so I feel confident in that in comparison. Um, but that will that will change. You know, prices will come down over time. Uh, this is an immature market in comparison to a lot of places in the country.
Understanding Your Customer
SPEAKER_04All right. What does your customer base look like? Is it what you expected?
SPEAKER_02Uh our customer base is actually exactly what we projected. We spent a lot of time figuring out the demographic of our city, the population size, uh, the type of customers that come into our store and make purchases. And um, that's something that I'd encourage anyone that wants to open a storefront to do. Understand not just what you think it is, but look at your city's demographic, look at your population and understand who you're going to be selling to. Um, because even though you have a vision in your head of who you might be selling to, that you're where you're moving into for your physical location could completely dictate something differently for you.
SPEAKER_04It's true.
Cannabis Banking and Payment Processing
SPEAKER_04All right. I think a lot of people's favorite subject. How are you navigating the banking and payment processing challenges that most retailers face?
SPEAKER_02Uh navigating banking has actually been pretty easy. We have a great partner that we work with here. Um they're they're here today if you want to chat with them. Uh, there's a lot of other banking partners here. Um, so that I we really haven't had an issue with. Payment processing in cannabis is a nightmare. Uh, I don't know how else to say that, uh, but there's downtime often you need to be able to adapt and and kind of switch between uh potential different providers after you vet them. Um, but obviously, still in cannabis cash is definitely king. So yeah.
SPEAKER_04How
Working With Minnesota's OCM
SPEAKER_04is your relationship with the Office of Cannabis Management so far?
SPEAKER_02Uh personally, great. Uh the Office of Cannabis Management has been uh partner and ally in this. Um, we were fortunate we had the first state sale of flour. Um, and you know, the OCM has been in multiple times. They've used our facility as an example of good uh for their inspectors and uh train some of their inspectors at our location. And I mean, I've I've helped fill in on different panels to try to try to help out in that regard. Um, if you view them as an ally rather than an adversary, uh your life will be a lot easier in this journey.
SPEAKER_04So awesome. Thank you for all of that, Jacob.
Cannabis Cultivation in Minnesota
SPEAKER_04Now we're gonna move on to our cultivator, Jonathan.
SPEAKER_06So there's a lot of conversations that happen in and around the cannabis space, both here on the CannaConnect show and in the canniverse. But there's really one person that comes to mind for me who's there all the time, and that's Corey Lake.
SPEAKER_05He's in the middle of it. World insurance is his world now, and and Cory Lake has made Minnesota cannabis his world, and it's starting to pay dividends. He's being seen as a thought leader and an advocate for the greater cannabis industry. He understands it, he takes a measured approach. He's never too up, too down. Um, and he's fantastic to work with. We work with Corey Lake, World Insurance, and Canisure, and we recommend you reach out to them if you have any insurance needs.
SPEAKER_06Yeah, look up Corey Lake. If you haven't met him yet, he's your guy.
Jonathan Hunt on Seed-to-Sale Compliance
SPEAKER_04All right, from seed to self shelf, what does your compliance burden actually look like?
SPEAKER_03Uh it looks like from seed to shelf, about 10 hours of one person's day every single day to manage and monitor every single movement of every part of the plant. So you're managing it from you're managing it from the seed all the way through your manufacturing into your harvest, and then one to get leaves your harvest, and it goes into your manufacturing or your processing, or and it gets broken down into 50 different pieces, and you got to track that all the way through, all the way down to a single joint that you can then recall back if you got a compliance pro issue is a massive amount. So that department is a huge lift. We usually on a big facility, we'll have four to eight people that manage that process all day long.
Scaling Cultivation Without Sacrificing Quality
SPEAKER_04Wow. All right. How are you managing the tension between scale and quality in a market that's still finding its pricing floor?
SPEAKER_03It's understanding what actually works versus what you wish would work. Um don't push rope uphill. So we've we've um we've refined our processes down basically to the most simple, simple exercise of any operation. When you're trying to teach this to people repeatedly, the industry has like almost 100% turnover every nine months. Your systems and processes really need to be tight. You need to be able to hand something off so that it can be uh easily understood and easily repeatable. Um, this industry has no repetition in it whatsoever, um, regardless of what people think. If you're not doing all parts of it, you're doing none of it. There's there's no room for any single piece to not work because it's a catastrophic domino effect of any part of it, specifically cultivation. Um, your lights go out, your environment changes, your air doesn't move, somebody doesn't water. Like you have to eliminate the ability for people to uh destroy what you've built, you know, at $450 a square foot, you know, a year of execution to get it built, you know, launch 100 people in that process. You know, if you go if you get shut down for six months, you know, that's two years worth of revenues and and a restart that people can't handle. So you just you got to be prepared for the worst. Um, you got to be prepared for regulation to have no idea what they're talking about, and and you have all responsibility to make sure it works. Um it's difficult. The cultivation is difficult. Again, please watch who you bring in. You know, your basement grower has no ability to handle anything that's larger than a basement. Your outdoor farmer does not know how to grow indoors, your indoor farmer does not know how to grow outdoors. Like these are these are learned skills. So, you know, make sure you're cautious with who you bring in.
SPEAKER_04Good
Minnesota Cultivation and Regulation
SPEAKER_04points. What's the hardest part of operating a license grow in Minnesota? Specifically climate, regulation, or something else?
SPEAKER_03Uh regulation. Um, for us it's regulation. For everybody else, it's going to be individual. For us, regulation is it. All of our processes are refined. Um, so the regulators are not refined. The regulators are the one loose piece in our in our operation that we have no control of and we have no understanding of what they understand. Um, so that's the most difficult.
Cannabis Supply and Product Quality
SPEAKER_04All right. Are you seeing any issues with supply and how should we be planning for it?
SPEAKER_03Yeah, there's a huge issue with supply. There's a huge issue with even um supply that is that's grown locally outside of the black market. Um people don't understand what they're doing yet. The quality of the product isn't there, everything is going through rad source or remediation. Um people are pushing out product that in the future will not be acceptable currently. So that's what I see is uh people jeopardizing their long-term value to the industry for short-term grab. Um I've been doing it for 20 years commercially, not on the black market, all in regulated markets. Um I don't I don't have a lot of patience for that any longer. It's it's been 10 states and it just it's old. Um, caution yourself to how you execute and how you go out to the public. The public is your ultimate long-term success story. Without them, you have nothing.
SPEAKER_04Solid
Cannabis Genetics and Consumer Demand
SPEAKER_04point. All right. Let's finish it up with some genetics. So, how do you source genetics and stay ahead on strain selection while staying compliant?
SPEAKER_03Compliance, uh, I can't answer that part, but um I can't answer on the genetics. Um, we're not as fickle as the industry. The the industry moves really, really fast. Um, if you really understand the plant genetics, you can go look at Phylos's universal map. Everything's within percentages of each other. So it's it's emotional. People are going based on who's smoking what, when, where, and how, and how cool it looks. Um, we definitely hold a much more solid, consistent um methodology. We try to keep a lineage going that's pretty consistent for our customer long term. Call it Coca-Cola. I don't know what else you want to call it. I, you know, the I would rather not sell disposable pens, but the market demands it. So you have to work with what works with the public.
SPEAKER_04Awesome. Thank you so much, Jonathan.
Brytany Melville and Cannabis Operations
SPEAKER_04Now we're gonna move on to Brittany from Forte.
What New Cannabis Operators Overlook
SPEAKER_04All right, first question. What areas would you say are often often overlooked for new operators?
SPEAKER_00There's a couple. I definitely would echo our first um suggestion of asking, you know, local other businesses and other operators for um just feedback and suggestions and what they've learned. Definitely there. Um and then I think really prioritizing time at the beginning to hire the right people. We all know like retail turnover is high. Dispensary retail turnover is the highest I've I've seen in my entire like 16 years in retail. Um so budgeting that in uh for training and just turnover cost, I think is is often overlooked at the beginning. Um and then probably the importance of having a really good marketing plan. Uh clearly at the beginning of a new market, it is challenging to really know and pre-plan for marketing initiatives. However, I am gonna get into that a little bit further in the next couple questions, but I definitely say at the start, um that is overlooked. Uh, and the final thing I would say is when building out your budget for open, um the last couple final checks often get um, you know, put to the side because more than often clients will go over budget with their operating cost to open. So then what happens is things get cut off at the end, training might get cut off, or any, you know, staff incentive programming might get cut off, or like a your training days of three days might go down to half a day. I really think front-loading your time with your people at the very beginning to make sure that they're, you know, well trained on compliance, but also how to sell cannabis and your internal processes is is super important at the beginning and and a lot of times overlooked, I would say.
SPEAKER_04Awesome.
Building the Right Cannabis Tech Stack
SPEAKER_04All right. What tips would you suggest for new operators who are building their tech stack across retail, cultivation, and wholesale?
SPEAKER_00It's probably one of the most challenging processes at the very beginning because as you can see while you walk through the conference hall, you are inundated with a ton of people trying to sell you everything, and it is overwhelming. So, what I do suggest is do a couple demos, take notes, get the conversation recorded, take some time, come back and do a couple demos again in a couple months once you have an idea of actually what What questions you're going to ask. So, for example, for your point of sale, your e-commerce, or any marketing solution, when you sit through a couple demos, they're all going to blend into each other and really feel the same. So that's why I always suggest to new operators to take some time, come back and revisit with your account associate to ask those questions that are really going to be important to scaling your businesses because a lot of the different tech providers have different strengths. And once you do onboard that solution, um actually operating it is different than the demo. So, for example, some of the point of sale companies will have a lot of different integrations. And those integrations have their specific nuances with what works and what doesn't work. So really spending the time to optimize your tech stack and asking other people for their feedback, what they like about it, what they don't like about it is really important. And, you know, to be honest, there's no perfect solution in any part of this business. We're still at such early stages here. So there are going to be, you know, negative aspects to any type of provider or solution that you use, but it's it's really figuring out what's important to you and your business and taking the time to select your partners because it is a little bit of a challenge to transition off of that once you're already operational.
SPEAKER_04Great
Building a Cannabis Marketing Plan
SPEAKER_04answer. All right, let's get back to our marketing plan. So, how important is developing a marketing plan?
SPEAKER_00Great question. Um again, in a new market, it is a little bit challenging when you don't have supply because obviously you need product in order to market. However, what I do find is a lot of times people are a little bit confused as to what marketing actually is. There's so many different parts of marketing. There's your online marketing, your digital marketing, there's trade marketing, there's social media marketing, there's your in-store visual marketing. So really kind of pre-planning out by season is a good idea. And then taking a look at all of the holidays month over month. We all know what's coming up in July, I hope, as an important cannabis holiday. No? 710. Oil. So when you are taking a look at your marketing calendar and your community manager maybe in the store, whoever's in charge of that, and pre-planning at leaks four to eight weeks in advance, you're looking at all those types of, you know, different holidays and long weekends to make sure that you have an omni-channel consistent presence so that your online e-commerce menu maybe has the sale that's going on, your TV menus maybe have the same sale that's going on, your social media is also representing that, and your team is aware of what is going on so they can clearly and competently sell that. So having a marketing plan at least a couple of weeks in advance really helps on the operational side. So your team just isn't running around like chickens with their heads cut off because as they timed in, they found out, oh, all the concentrates are on sale today, and we're running an incentive for the most amount of sold gets this bonus gift card. So it really helps on the employmorale side when you have this pre-planned and executed in an organized way.
SOPs, Compliance and Employee Training
SPEAKER_04Great point. All right. Last question. How do you write SOPs that hold up to an OCM audit but are still practical for employees to follow?
SPEAKER_00So Jacob could probably speak to this, but your OCM final pounds of record SOPs and actually most other states are essentially just regurgitated confirmation that you're going to follow the regulations. To me, being like a retail operator of 17 years, that isn't what you give your team to train on actually how to execute. It is saying, yes, our back product won't be below six inches off the ground. It's not actually saying how you damage out. What are we using? Is it kitty litter? Is it a coffee grinding machine? It's, it's, it, it, it might not be in that specific detail. I mean, some operators might have included that on their final plans of record, but to getting as detailed as, okay, the associate manager and the general manager have the permission setting in the point of sale to be able to damage something out in metric. You don't really have to include that level of detail in your final plans of record. But when your team wants their, it's are working for their first day and they need to damage something out, if they don't know that exact process of who is actually able to do that in your store, you need to have that all decided before you open your doors. You can't just print out copies of your SOPs that you changed into paragraphs for your final plans of record and expect that your team that has never done this before is going to know how to do that. Or something as simple as, okay, what is your staff discount? Some stores might have 20% for cannabis, 30% for accessories. All of those items, you likely, I haven't seen anyone, really put those in your final pawns of record because they're not required by the OCM. However, they are required for your team to know how to operate their business and um to whatever your your business processes are. Does that does that kind of make sense?
SPEAKER_04Do you guys agree? All right, cool. All right, thank you, Brittany.
Munir Haque and Cure8
SPEAKER_04We're gonna move on to Mooneer, curate.
Planning Technology Before Your Buildout
SPEAKER_04So, Mooneer, first question. With tech hardware costs adding up quickly, how do you figure out what's truly necessary versus a nice to have?
SPEAKER_01So, yes, uh tech hardware is a very heavy lift when you're building out your facility. Um, and a lot of times that's a purchase that you make like a month or weeks before you're, you know, at the last mile. So I always tell folks that are like Britney saying, take the demos of all the software companies you're gonna use. You have to decide on a POS, but take a step back and envision what your dream store is and how you want it to feel, right? So, do you want to be greeted with a giant TV or a screen that shows your branding and like something that makes like digitally welcomes you? So understand what it is you need, then put that all in a bucket. Start taking all your demos for the software companies you're gonna use, the POS companies, and see what their requirements are and how that adapts to what it is that you want to convey. And here's where, especially in Minnesota, where I push very hard, the security requirements are pretty heavy and they're a big heavy lift and they caught and it costs. So it is a smart thing to do to phase out your tech. So, for instance, say you're like, hey, I want seven POS stations, and you know, I've done this research, I'm on this corner, like I think the traffic's gonna be there. Well, it's very easy to run cable for seven POS stations and pay a couple extra hundred bucks to do that, and maybe buy three, and call your tech provider later and say, Hey, I'm ready, I'm generating revenue, the business is here, I need more, and then phase that out. So, so my I guess my point here is everyone's gonna try to sell you everything, and you need to start generating revenue. So phase it out, but future-proof your facility because the last thing you want is to have this revenue coming in, but you didn't run that cable, and your walls are this pretty blue that you have to now break to run cable. Don't want to do that.
Cybersecurity Risks in Cannabis
SPEAKER_04All good points. All right. What are the biggest cybersecurity risks specific to cannabis businesses that other industries don't face as acutely?
SPEAKER_01So the way I see it, and have always oh, so to give you a little bit of background, our company has been doing what we do in cybersecurity for 18 plus years on the traditional side, very HIPAA compliant universities, food manufacturer, a lot of IP. And we all have seen on the news, like, you know, this big box was hacked, all this data went, you know. Um, we've seen stores, uh retail stores in the traditional space, you know, the employees come in, all their POS is locked out because there's a big hack. And for six, seven years, I've been saying it's a matter of time before that bedroom hacker decides, hey, I want to go play in the cannabis space. And in the medical stores, you know, we're taking in a lot of data. I mean, in any store, we're scanning IDs, there's a lot of data and important information, whatever anyone wants to do with it. So the risk is really high. And the thing that scares me is a lot of states, a lot of folks don't take that seriously because, like I said, the costs start adding up pretty high and pretty fast. And so when someone says, I'm just gonna get a modem and the internet and I'm gonna put everything on Wi-Fi and make it work, that's scary because it's it leaves you vulnerable. Um, there are some big MSOs, uh, multi-state stores that have been hacked already. Doesn't really make the mainstream media, uh, but it put them in a really bad shape. So that tells me that, in my opinion, would a SMB be hacked over like a you know, a multi-state? Probably not now, but you don't want to put yourself in a vulnerable situation.
SPEAKER_04Good point. All right, how do Canada businesses balance regulatory compliance with the cost of security requirements?
SPEAKER_01Yeah, the cost is heavy. Um, and
Cameras, Access Control and Compliance
SPEAKER_01I think so. Okay, you you have to you can't go around regulations. You have to do uh what the regulations say as far as like so let's talk about security, like cameras. How much, how many cameras do you need, what uh what areas do you need to cover, at what resolution, at what storage, right? But here's where vetting your vendors to there are different software companies that offer the actual recording, you know, the platform, the MVR, the device, offer uh smart solutions to help you get an ROI through your business. There are different ways you can do this, and those costs are going to vary. Like someone can sell you a $180 dome camera that can, you know, record in like HD and you know, um, and whatnot, and do all the things versus an $800 camera. So you gotta balance your costs by it's it's hardware again. You're buying hardware, you know, your door access control, your alarms, like there's hardware involved, and there's a there's a monthly recurring cost recall, you know, that comes with that to keep you compliant. So you got to vet it out and and ask yourself like, you know, do they want to see the gray hairs on my beard? Or, you know, is is you know it looking all one color good enough?
SPEAKER_04Awesome.
Protecting Customer, POS and Seed-to-Sale Data
SPEAKER_04All right. How do you protect seed to sale tracking data, customer records, and POS systems all at once?
SPEAKER_01So the proper way to do it is you build a network, you get a firewall, you run all your security, your internet through there, you set the parameters um to block it. But the most important thing that a lot of people forget about, and this is what I've learned in working in other spaces, also working in Canada in a federally legal market, there's this thing called HIPAA compliance. And HIPAA actually offers a lot of good tools. Like, for instance, your person in the front that is checking IDs, they should never walk away from the computer without locking the screen, right? So there's an education component to this that um I feel we need to do a better job in teaching. Um, phishing, what is phishing? You know, like someone can may have hacked your email system and is learning how Britney talks to her accounting department who pays all these invoices and sends this invoice, and you didn't check that, oh, it says it's from Britney, but when you click on Britney, it has these weird numbers and stuff after it. So there is an education component to the actual build out. And when I say do things right, the right I would say and I stand by the right way to do is however secure you want to do it, but you have to start with building a secure network, and all the tech in your store will funnel through that and it'll it'll live on that.
What Happens After a Cybersecurity Breach?
SPEAKER_04All right, let's talk about what happens when a cannabis operator gets breached. What's the regulatory exposure on top of the business risk?
SPEAKER_01I mean, it's it depends on the level of breach. I mean, a lot of you I mean you have to report it right away. You know, you have to report it to the OCM. Um, and there's an investigation that is filed and there's protocol that goes with that. So it it depends if there was customer data that was taken. If there were, you know, if you're transacting with cards somehow, where did that go? So it uh essentially becomes like a legal matter. Um, and there's a full investigation on how deep did the breach go? Um, was it just phish, you know, or was it did did a lot of actual data go with it? But there are so many measures that are supposed to be in place with data dumps and cycling to protect you from that or make it as minimal as possible when it happens.
Avoiding Expensive Buildout Mistakes
SPEAKER_04All right. Last question for you how can operators avoid increasing unnecessary expenses during the build-out phase.
SPEAKER_01So I highly recommend you have someone on your team call them a project manager, call them your shaman, call them whatever you want, but that is watching all the moving pieces. Because if you are the owner, I mean, if you're a superhero and you're also managing that, more power to you. But if you're like in it and you're answering all the emails, taking all the demos, doing all the stuff, and and somewhat just lightly touching on all the moving pieces, it's gonna be a very costly mistake. Um, I won't name names, but there is a very popular uh brand that on my side of the world, uh, there's a time-lapse video of the walls going up, the walls coming down. The wall's going up, the walls coming down during build-out because they kept forgetting about things like I gotta run cable, or I forgot to, you know, put electrical here, or you know, I didn't read the compliance rules, and we have to put more cameras here because people weren't talking to each other. And um that is that becomes a very big costly mistake, you know, and understanding, you know, I always encourage people like to draw out your dream and understand if if you have a location and you don't, if you haven't met an architect yet or someone that's gonna like do your floor plans, you can still sketch out your floor plans how you want it and start building off that because you can use that to communicate. But those plans, you need to start adding things like like I said, the camera, the tech, electrical. You know, another mistake I see is the millwork folks aren't talking to the IT folks or the POS company, so you get this beautiful marble, but there's no holes drilled in it. Um, or they didn't run like electrical at the bottom, or the the cash register area is floating, and now there's no way to get you have to get a pipe coming down from the city. So these are all things that need to be talked about in the beginning.
Coordinating IT, Electrical, Security and Construction
SPEAKER_01And um, I was talking to someone earlier, it might have been might have been you, Chris. Um I'm spoiled, and back in the day when um, you know, we we used to have all hands meetings and with everybody involved, and you kind of just threw everything out there because it was always the least quiet, the most quiet person in the in the meeting or the room that raised their hand and like offered some very valuable stuff that would have thrown all this in a in a loop. So um yeah.
SPEAKER_04All right, thank you, Munir. We're gonna bring it back to the group with a few closing questions, and I'll try to leave some time for questions as well. So back to the group. If you could change one thing about Minnesota cannabis regulation tomorrow, what would it be?
SPEAKER_02If I could change one thing with the regulation, it would be communication style. So many things are muddy and unclear. And as an operator, you're just trying to do it as compliantly as you can. And a lot of times in in our experience, the lack of communication can lead to costly mistakes. Um, I'm crazy about that. I chase them all down, but I I know that it's leading to errors for people.
SPEAKER_00Um, probably. And I mean, every state
Competing With the Gray Market
SPEAKER_00has its challenges with this. In Canada, we still have its challenges with this, but really being able to have a course of action for the gray market um and have a plan clearly. Right now, there's not a lot of product available for the rec market. So maybe people are going to the gray market because of availability and pricing. However, there's often so many different loopholes that the gray market is able to work around. Like I said, we've been eight years legal in Canada and we still have stores operational up there. Um, New York as well. They get shut down, pop back up, slap on the wrist. So I I think for uh regulated operators, it is challenging to compete with that and it does become defeating at some times when cops can't do anything, regulators can't do anything, you have to file like smoke smoke law breach or noise complaints to maybe get the stores to get visited by the cops. Um, so I guess to summarize, I would say some form of plan of action for the gray market would be would be helpful for every market in the US, I would, I think.
Minnesota's Cannabis Rules Will Continue to Change
SPEAKER_03I would just say for you guys, um, it's not gonna change, it's not gonna get better, it's gonna get more difficult. You are their testing ground, be prepared for it. Um I'm sorry to sound like a negative guy up here, but like I'm just trying to give you the reality of the way it actually operates. Um, you are guinea pigs, they're using you as guinea pigs to figure out their system. So keep that in the back of your mind that whatever they're giving you now is going to change. It is not the way it is permanently and forever. Colorado is still changing almost 20 years later.
SPEAKER_04What
Advice for Anyone Entering Cannabis Today
SPEAKER_04advice would you give to someone thinking about entering the industry today?
SPEAKER_01Get a mentor. Honestly, like um, you know, which is why we wanted to invite our friends here. Um there's the truth. So, you know, so find the bridge between your dream and what it is you want to do and what it is these folks went through and are going through. That's that's the biggest, most helpful thing I can say.
SPEAKER_02I would say my best advice is cannabis isn't for the faint of heart. Like you need to have thick skin, you need to be able to adapt to change quickly. Um, I wake up every single day and I look for what changed. Um, and that that's my biggest advice. Don't jump into this as your first business, don't jump into this as thinking I'm gonna open it and they'll come and I'll get rich. That is not how this industry works, and just thinking that way is just gonna bring you pain.
SPEAKER_03So you already know what I'm gonna say.
Minnesota Cannabis Five Years From Now
SPEAKER_04All right, we're gonna close with a little future looking ahead. So, what does the Minnesota cannabis industry look like in five years? Who is still standing?
SPEAKER_03Uh almost everybody in the room won't be here. This won't exist in five years, and the market will be stabilized. You'll be looking at anywhere from eight to twelve hundred dollar pounds produced. Um you will have gone through hundreds of staff members, and the industry will still be learning how to regulate itself. That is the true way it is. So when you're hearing what these what everybody's saying up here, watch your money, watch your experience, watch your time, watch everybody. Everybody wants in your pocket, everybody you're talking to wants in your pocket. They want to sell you something. So just be cautious of who you get involved with. Really check people out. Look everybody's name up. When you get someone, do a search on them, reach out, find people. If you can't Verify somebody, they can't give you good information.
Consolidation and the Future of Cannabis Retail
SPEAKER_00I hit my hundredth dispensary that I opened at the top of this year. And I could confidently say every market follows this similar pattern. These conferences become more for the brands to sell to the retailers. So it becomes more consumption focused, brand focused, which is which is fun. There'll be a lot of consumer events as well. And consolidation happens at the end of the day, regardless of how it is structured to prohibit monopolization every single market. It will be like a couple groups standing at the end and consolidation will happen. So always kind of envision that in your future. Prep yourself to be sold if that is part of your vision. And be conservative with cost because there is ups and downs. Margins will drop significantly as well in the next probably even like six to eight months. So just being mindful of that.
Protect Your Margins as Prices Fall
SPEAKER_02I would say I completely agree that this market will be completely different in five years. My advice for that is protect your margin. That's what's going to keep your doors open. Don't get into pissing matches with people about I'm 50 cents cheaper, I want to be a dollar cheaper. That margin is what keeps you open. The good early times are what will protect you from price compression. You're not going to outrun price compression. It's going to happen. It's not a maybe. So protect yourself early against those times.
Invest in Your Employees
SPEAKER_01To add to Jacob, too, protect your people. If you're investing in them by hiring them, you want to continue to invest in them because they're going to learn your business probably as well as you know your business, if they're there every day or every other day, and they're going to learn your clientele. So if you're not protecting them and they're just going to leave and go to another dispensary, think about all the training you have to do again to bring up the new person, you know, to that level. Um and we've seen this happen in so many markets or stores growing really fast where that warm kind of welcoming, you know, someone walking in goes away because they just need like four more butt tenders and becomes really transactional. So just uh, you know, I'm a very people person. Um, we had this conversation yesterday about investing in your team. Um, so yeah.
SPEAKER_00I have one more.
Don't Expand Just Because You Can
SPEAKER_00Don't rush to expand unless you are 110% sure it is a good business move. It is okay to have one operation that is profitable. And um, you know, you run a you learn and you run a tight ship. Ego, I'm gonna be honest, gets the best of us in this industry, the biggest facility, the most amount of dispensaries, the best locations, the biggest leases. I I hear it all the time. I I promise you, actually, I'm gonna scrap everything. I said this is the best piece of advice. Do not expand unless you are 110% sure that that second location is going to be as profitable or more profitable than your first location because it is super easy to go from having, you know, a really successful business to bankrupting your entire business because the market is so volatile and things change like the drop of a dime. So, you know, the first year to two years, your your sales are going to be at a certain level. And then once competition comes in and everything starts plateauing, you'll probably decrease budget for 40% at least. Um, so that is my biggest piece of advice is drop your ego, leave it at the door. One solid location is really, really great in this industry. If you look at other markets, um, a lot of people can't say that and have have left um because of because of ego and wanting to expand.
SPEAKER_04All
Closing Thoughts
SPEAKER_04right, that wraps up our panel. But if you guys have any questions, we do have time for some questions. Or are our panelists just really awesome and gave you all the information that you needed? Well, then let's give them a round of applause for all that um awesome knowledge that they dropped on you.
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