As Colorado's cannabis industry opens up to more investment opportunities and public funding through a new law that takes effect November 1, expect powerful players to enter the fray. A private company is already beating some of those public corporations to the punch, however, purchasing five well-known dispensaries in the metro area this year alone.
Lova, a new dispensary brand, now owns both of MMJ America's dispensaries in Denver as well as Groundswell Cannabis Boutique, Northern Lights Cannabis Co. in Edgewater and Boulder's Trill Alternatives (MMJ America in Boulder and Northern Lights in Denver will remain unaffected by the deal). Founded by Matthew Shifrin and Amanda Fox, Lova is funded by Australian billionaire Brett Blundy. We sat down with Shifrin and Fox, a University of Denver alum, to learn more about their plans for their new dispensaries.
Westword: How'd you two find yourselves buying five dispensaries?
Matt Shifrin: I used to essentially sling condoms, sex toys and lubricants for the Jarden Corporation, which was a Fortune 500 conglomerate. I eventually got into craft spirits, and saw how their hearts and souls would be ripped apart any time a big player bought the business. I thought there was a better way to scale these small tequila and whiskey brands, so I led a group that acquired craft distilleries five or six years ago. We eventually bought a few, including Breckenridge Distillery, which eventually went from being a hand-bottled operation to the ninth-largest premium whiskey brand. About a year and a half ago, Amanda and I essentially saw the same thing going on in cannabis.
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Amanda was getting her MBA and did a whole course on cannabis. Meanwhile, one of our dear friends was the head of cultivation of two massive facilities. He came to us about helping him start on his own, and that's when we realized there was so much opportunity here. There are a lot of people who did a good job of building these businesses from scratch in a hyper-competitive, regulatory-ridden environment, but there's opportunity to take that a step further. We sought to raise a sizable funding round to acquire cultivation, retail operations and brands in Colorado to bring a new shopping experience to legacy consumers — connoisseurs and aficionados — and third-wave consumers like senior citizens and yoga moms.
Amanda Fox: I was getting my MBA at night at DU, and they make you take an entrepreneurship class. Instead, I did an independent study on cannabis and worked with professor Paul Seaborn and his cannabis business class. Being with him was very helpful, and I'm bummed he and his class are no longer there. One of our interns this summer was from his class, and we've interviewed several of his students for jobs.
Anyway, it was amazing, and I knew we needed to get in [cannabis]. Next thing you know, we hit the road for funding.
Was the funding public or private?
Matt: Private. It's just one person: Brett Blundy.
I was on the road for six months, back and forth to New York, and we were spending every dollar we had on airfare and everything else. I gave the investor presentation, like, 232 times. I ended up meeting Brett through a mutual friend, and found out he was a retail savant. He started out kind of like Richard Branson, with one record store, and built it into about 300 stores. He left the music industry and essentially did the same thing with women's apparel and footwear in Australia and Asia, as well as furniture and a fast-fashion business called Lovisa.
The guy is an awesome mentor. His mission, like ours, is taking this Lova retail experience and bringing it to as many customers [as we can] as fast as we can. The goal is not to become this huge company, but there's a reason there is a Starbucks on every corner. We inked the deal with Brett last September and started getting our first businesses in January.
So what happens to the five dispensaries that are now under Lova's leadership?
Matt: It'll be a phased roll-out. We don't want customers to think they're going to lose the experiences they're used to. Just adding to it.
Amanda: I was working the host stand at Groundswell last night, and a regular came in. She buys a joint every day on her way home from work. We had changed up the flower, and she came in after and wanted to talk to our budtenders about the new quality. It was refreshing, because we're not trying to change the culture, but we are trying to change the quality and knowledge. Every Tuesday, we take the staff around to learn more about quality and product education. We call them Trip Tuesdays.
How do you balance the individual culture of a store or brand while still making savvy business moves?
Amanda: If it were easy, then everyone would be doing it. We try to translate that we're here to support our stores. The mothership is here to oversee and make sure we're servants to the people who are on their feet eight hours a day selling what we want. We spent so much time on our own culture — growing plants, people and community — and how that would resonate, because our staff got into the industry for the same reasons.
Matt: A lot of people think that when people like us buy a place like Groundswell, we'll suddenly start cutting costs or increasing prices, or stuff that makes things harder for the staff or affects customer experience. But it's the opposite. We're coming in with fresh capital and eyes to give our staff more tools that they need to do their jobs. Most of the great retail staff we've picked up now makes up much of our overall company. The former general manager of Northern Lights Edgewater is our retail operations manager now. The former inventory manager for Groundswell is now our marketing coordinator, and that list goes on of people who move up the ranks here.
If you're a big public company that comes in during this wave in November, you're going to see something different. They have a much larger organization that comes from outside Colorado, that will put their ways of doing things onto the local business. Our seed is growing inside of Colorado and then outward.
When will we start seeing Lova signs and storefronts at your stores?
Amanda: No later than November. We hope all of them will be Lovas by then, but it depends on some of the city rules. We want Wednesdays to be our customer appreciation days every week, starting by the end of September.
Matt: We don't want to change the sign and paint immediately and shock our customers. We want to have that conversation with them and tell them to not be afraid. Our teammates and products will still be the same — we just might have a little more.
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Did the upcoming influx of public funding and more big-money investors affect how fast you wanted to roll out Lova?
Matt: The reason we partnered with Brett is that we want to be around for the next thirty years. I don't know if it'll be us two at the helm — hopefully we'll be on a beach somewhere by then — but we don't have any intent to sell or go public for the very long foreseeable future. Maybe in five years and we're wanting to expand more, we might have that talk. But for now, our head is down as we work with all the opportunity in Colorado.
We actually see the new law as a huge opportunity for us, because a lot of these other groups coming in from the outside will likely miss the mark with our Colorado customer.
Amanda: Competition is great. People who are scared of it aren't focused or excited about what they're doing. Cannabis needs that.