Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
This week we are joined by Hillary Peckham, COO of Etain Health, to discuss:
- Cannabis in New York
- The Future of the Medical market
- Partnership with Riv Capital
About Hillary Peckham:Hillary Peckham is Chief Operations Officer of Etain, overseeing production, formulation and extraction, as well as dispensary operations and patient education. Recognized as one of New York State’s “30 Under 30” business talents in 2016, Hillary has managed the rapid roll-out of Etain’s successful manufacturing and dispensing operations throughout the state.
About Etain Health: Women-owned and quality-obsessed, Etain crafts medical cannabis products that make a difference.
#Cannabis #WomeninCannabis #NYCannabis
At Eighth Revolution (8th Rev), we provide services from capital to cannabinoid and everything in between in the cannabinoid industry.
8th Revolution Cannabinoid Playbook is an Industry-leading report covering the entire cannabis supply chain
Contact us directly at [email protected] Bryan Fields: @bryanfields24 Kellan Finney: @Kellan_Finney
[00:00:00]Bryan Fields: What’s up guys? Welcome back, Episode of The Dime. I’m Brian Fields. I’m with me, as always, is Ke Finn. This week we’ve got a very special guest, Hillary Peckham, c o o v team. Hell, Hillary. Thanks for taking the time. How you doing
[00:00:14]Hillary Peckham: today? I’m doing great. Thank you for having
[00:00:16]Bryan Fields: me. I’m excited to dive in. Ke, how are you
[00:00:18]Kellan Finney: doing?
[00:00:19] I’m doing really good, Brian. I’m excited to talk to Hillary, learn a little bit more about the New York Cannabis market. And how are you doing,
[00:00:27]Bryan Fields: Brian? I’m doing well. I’m excited to talk to Hillary and talk about New York. So, Hillary, just for the record, uh, your location please.
[00:00:36]Hillary Peckham: So, I, I, our, our offices are in Westchester County, but we have four dispensaries and retail locations throughout the state of New York.
[00:00:43] There it is, Kyle,
[00:00:44]Bryan Fields: and let the record state another New Yorker for us. . So Hillary, for our listeners that are un right, you can give a little background about your.
[00:00:52]Hillary Peckham: Yep. So I’m the Chief Operating Officer of Etan llc. I’m also one of the founders, so my mother, my sister and I, uh, [00:01:00] started entering the cannabis industry in 2014 when New York State first passed the Compassionate Care Act.
[00:01:07] And we started looking at what the opportunities were, and we were really compelled to enter the medical cannabis industry in New York because it’s our home, but also because we had firsthand experience of how. Palliative and end of life care can be mismanaged. And then for myself, how pain can be mismanaged and wanted to be able to provide a better quality of life to patients, especially local ones that are, um, in our communities.
[00:01:33] And so we were awarded and. A license, one of five licenses in the state in 2015. Um, and we’ve opened our stores about six months after that. And we’ve been, um, part of the medical cannabis industry here in New York for, um, you know, seven years. And we have a vertically integrated operation, um, which I oversee.
[00:01:55] So we cultivate, we manufacture, and we retail and distribute [00:02:00] all of our products throughout the. I love it.
[00:02:02]Bryan Fields: I’m excited to dive into all those specifics, but I guess I gotta stay with the first question. Earlier on, I read a, a story that said you had a little hesitation about joining up and kind of entering the space.
[00:02:11] Can you kind of share a little bit about that
[00:02:13]Hillary Peckham: story? Well, that’s twofold, right? Because, you know, not only was it entering the cannabis industry, which really was not something that was in my purview. Um, I had studied piano in college. My sister studied ceramics. Um, and I, this was not something that we really participated in.
[00:02:31] Like that. Um, and it was until I learned about all these anecdotal stories of people having sort of life changing outcomes from using cannabis that I got on board, but it’s also a family business, right? So that comes with its own challenges. So I was like, do I really wanna go into business with my mom?
[00:02:46] And I’m so glad that I did. Um, For all, all of the reasons, uh, beyond the family part, I really enjoy watching and working with my mom, but, uh, the opportunity to provide care and compassion to people in New [00:03:00] York has been sort of unparalleled for me. Was there
[00:03:03]Kellan Finney: like a, a single moment once you got the ball rolling that you were like, you know, all of my worries were for nothing.
[00:03:09] Was there like a moment that you could remember?
[00:03:12]Hillary Peckham: Um, you know, my mom and I had kinda spoken about doing this and she. Was a little non-com committal, but I could tell she really wanted to do it. And finally I said like, Listen, if if we’re gonna do. We’re gonna do this to win. And she said, Okay. And so then , we jumped in and it was really wonderful.
[00:03:34] After that, uh, we immediately met, uh, the organization, Women Grow, which had just launched its first, uh, meeting in New York, which we attended. And, uh, found this amazing group of women who really sort. Uh, took me in and my mom and helped us network and, and get the expertise we needed. So it was like immediately we found, uh, our group of people and we were able to continue as soon as we [00:04:00] were solidly committing
[00:04:03]Bryan Fields: Working with family definitely has this inner working some challenges, right? Distributions of responsibilities, kind of the, the, the relationship dynamic of you and your sister and your mom. Those are all challenges. So when the three of you are sitting around deciding you’re gonna do this, how, how does the first step work?
[00:04:16] Is it we’re gonna separate responsibilities, we’re gonna have conversations, you know, take us through that
[00:04:20]Hillary Peckham: insight. So it’s actually, you know, uh, I’ll say worse as a joke, but worse than that. But , my husband works for us and my brother-in-law, my cousin and my, uh, my twin brother as well. So we have a lot of family, uh, in the company.
[00:04:37] So I think sort of quickly we realized. We would need to delegate and give people specific roles so that we weren’t up in each other’s business, which obviously happens anyway cuz we all are a close family. But my sister’s in charge of cultivation. My, uh, brother-in-law in charge of production and he’s an engineer.
[00:04:55] So all the manufacturing and automation that goes into our products, uh, [00:05:00] my. Husband is the cio, so he’s in charge of all the information and technology data, um, collection. I’m in charge of operations, uh, just cuz I’m very bossy. And then my mom is the CEO, . Um, and, uh, we all answered to her. Uh, and then, um, we’ve just created, you know, Structure.
[00:05:18] I think the value of having family is you have a group that’s extremely committed, and I think all of us were aligned in the goal of providing high quality products that we’re changing people’s lives like before anything else. And so we have been able to be very nimble and extremely lean because all of us are willing to take on more tasks than just the responsibility we.
[00:05:40] Would’ve been assigned. So my sister works on marketing and branding, so does my husband. Um, you know, different product development and things like that we do with my brother-in-law. So it’s, um, very dynamic, but I think a huge asset and part of the reason why Etan has been successful for so long in the cannabis industry.
[00:05:57]Kellan Finney: do you guys, uh, separate, uh, shop talk from [00:06:00] like personal talk when you’re having family dinner?
[00:06:02]Hillary Peckham: I don’t think you do. Yeah. . I think that’s the answer. Uh, so. You know, we have been pretty good. It got a little hard in, in Covid where I remember, you know, there was just a weekend where I was like, I don’t want anything to do with any of you , but, um, um, uh, of finding other things to do or like take family trips and, and, and find other, other things to talk about.
[00:06:25] Um, I have a one year old and my sister has, uh, a four year old, and so that’s been really fun. But otherwise, you know, it’s, it’s been very much just work oriented.
[00:06:34]Bryan Fields: Yeah, real hard line of separation between, uh, family and work when they’re pretty blurred. So, uh, speak, speaking on cannabis, was there something from a medical benefit that earlier on you guys connected with as a family that led you to wanting to be
[00:06:47]Hillary Peckham: involved here?
[00:06:48] So my grandmother was diagnosed with als and that is a terminal illness, and she was put on 2225 different medications and all of those have [00:07:00] interactions with each other that can be worse than the disease itself. And a doctor had actually recommended that we try to find cannabis and at that point there wasn’t a legal mechanism to do so.
[00:07:10] So we weren’t able to do that for my grandmother. But she had, um, well my mother, who was her caretaker at the time, Started researching and was, I like, I think this is a great opportunity. And then for me, I had had a hip surgery that failed and so I actually lost the use of my right leg for two years.
[00:07:28] And so I had to relearn how to walk. Um, and I personally saw how pain is mismanaged. So I was in college at the time and the only thing that I could be given was really Adderall and Percocet to try and get through my day, which is. Not providing me quality of life. And so I became very like anti pain medication.
[00:07:46] Um, and seeing the opportunities that this provided primarily, like long term pain patients for relief, um, just sleeping at night and those kind of things was something that really captured my attention. And so, um, we went into it [00:08:00] having had these personal experiences and then we have another family business.
[00:08:04] So literally all we. Talk about is family business is one or the other. And, uh, that has a lot of industrial property. And originally we thought it could be sort of an alignment through the, um, Through the two companies, but it was, uh, because of cannabis laws and banking and everything, we had to fully segregate them.
[00:08:24] But, uh, we thought we could use the underutilized property that we owned and we could, uh, operate a cannabis business. Um, it very quickly diverge from there, but, uh, with those synergies, that’s sort of how we, we set off on our path.
[00:08:41]Kellan Finney: So, I mean, you said that you originally, when you were speaking with the doctor, they, they told you to kind of go seek out cannabis, but there wasn’t any available. What was that search like? Once the doctor was like, Hey, there might be this plant that could help, and you’re like, Well, where do I get it?
[00:08:56]Hillary Peckham: So I think my mom asked my littlest [00:09:00] brother for help , and, um, I, it’s really not something that has been, uh, part of my family’s culture.
[00:09:07] So we were no help to my mother. Um, and, uh, we were kind of stuck. I think Connecticut had a medical program at that point that had just gotten up and running, but my grandmother was very concerned. The federal illegality and things like that. And, uh, eventually, like when the opportunity was like, we could do this for you, she, um, she declined because she wasn’t, uh, uh, willing to try something new, which I understood at that point.
[00:09:34] She was trying all sorts of different medications. Yeah.
[00:09:38]Bryan Fields: Was there doubt that you’d win the license?
[00:09:41]Hillary Peckham: So I think that, There was doubt from everybody else, but I was very sure that we were a good candidate throughout it, which now I’m looking back and I’m like, I was very, um, bullish on that. There were, as you should be.
[00:09:55] Yeah. Um, there were, I think 42 [00:10:00] applications. Uh, we were the only family owned and the only women owned. Applicant and we really tried to prioritize communities that we know, um, and to have a geographic diversity within our dispensary locations. I thought we had a really good team, um, and we weren’t able to execute once we got the license.
[00:10:19] So I, I knew that we would be able to. To do that. And so I didn’t have any doubts, but definitely there were a lot of people who, uh, especially I looked very young, so I looked like at that point I was, you know, forever ago I looked like I was 12. So a lot of people just really questioning, uh, why I was doing this or how we would, could possibly get a license, but it worked out.
[00:10:41]Kellan Finney: So the day you guys got the license, what was that? Walk us through those feelings. Was it like a celebration? Was it like, Hey, let’s get to work? How did that, uh, transpire?
[00:10:49]Hillary Peckham: So one of the people who definitely didn’t think we were gonna get a license was my dad . Um, and so I was actually at their house when uh, we were awarded the license and um, [00:11:00] we didn’t have corporate offices or anything cuz it was just me, my mom, my sister.
[00:11:04] Uh, and like two other people, and we would just work out of my, uh, parents’ house. And so that was our corporate address. And so all these news trucks, uh, rolled up, uh, thinking that, uh, their house was where we were gonna be growing, all of the cannabis. And we live in like a pretty affluent and conservative neighborhood in Westchester.
[00:11:27] Uh, so that was not the messaging that we had really wanted. . I also had been waiting for weeks for this, uh, announcement to come out. So was not particularly well groomed or shout
[00:11:43] out. We actually were hiding, like under the windows, um, uh, so the news trucks wouldn’t see us, and our neighbor came over and told us, told them that we weren’t home and sent them off. So that was sort of how , how we kicked off the morning and then, and then we had [00:12:00] a, a family dinner and celebration that evening.
[00:12:03]Bryan Fields: And then my understanding of you is you’re an action oriented person, so I’m sure everyone got a list of responsibilities needed to execute over the upcoming.
[00:12:11]Hillary Peckham: For that afternoon, we, we actually started construction on our manufacturing facility. That was a, We kicked it off. Yeah.
[00:12:20]Bryan Fields: So take us through like how that is, So you have some assumptions going in.
[00:12:23] You’re thinking one thing, you get the license and now you start. The thing is, what’s a challenge that you didn’t foresee happening that kind of took you along the way that looking back you’re like, ah, that definitely was a lot harder than I thought it going in.
[00:12:35]Hillary Peckham: So I, I think. The application was detailed, so detailed that you had to basically build a business before it existed, and that gave a lot of benefit because you knew exactly what to do.
[00:12:48] But it’s a whole different reality when you’re under a very tight timeline. So we were given by law 180 days to get fully operational, which meant growing all your plants. At that point, only [00:13:00] extracts were allowed. So you had to extract it. You had to create your products under standards that did not exist in the industry.
[00:13:07] So there were pharmaceutical standards, testing methods that were being created, like as you were getting up and running. And you also had to be working on your retail locations, which meant signing leases, um, renovating. All the security requirements up and running and, and getting those going. So it was a huge undertaking.
[00:13:25] Um, and the, the time was really the, the main hurdle. And there’s a huge difference between putting it on paper and then actually doing it. And so I think what we found, especially back then was a lot of people claimed they had expertise that was not, And so we just had to figure out how to do it on our own.
[00:13:44] And I don’t think that much has changed today in the industry, unfortunately. And so we, we had a lot of, um, sort of missteps figuring it out on our own or trusting people, um, especially back then when there weren’t references or anything like that. [00:14:00] Um, but we, we all figured it out. I, I definitely was like sleeping at our manufacturing facility , uh, overnight because we were only getting a few hours of sleep towards the end of the timeframe there.
[00:14:11] But it was, uh, you know, looking back on it, I look back on that time very fondly because it was, you know, a very core group of people. Um, that many of them are still with us today. It was very family oriented and we were all just figuring it out together as a team and then meeting that goal of getting operational was really wonderful to do together with them.
[00:14:31] Yeah, I
[00:14:31]Kellan Finney: mean, it’s the typical kind of startup story where you’re just working as hard as you can and putting as much time in as will allow and, uh, just, just to be successful or just have the opportunity. So what was, uh, kind of some of the conversations that happened internally when New York passed rec?
[00:14:49] Uh, sales or the ability for rec sales, did you guys, was it immediate, Hey, we’re definitely gonna go jump in the adult use market and kind of pit and like play in both realms, or what was that dialogue internally with [00:15:00] your family? So
[00:15:01]Hillary Peckham: I think that when we first got the license, we just intended to stay medical because that was really our focus.
[00:15:07] But many years passed between the program opened and adult use. And then, uh, there were many attempts at the adult use legislation before it actually passed. So we had a long time to kind of adapt what was gonna happen in New York. I think very quickly it was apparent to us that there’s no way to. Stay in business if you are only a medical provider, particularly in New York, where the medical program has sort of failed to thrive.
[00:15:35] So it’s too small to support the 10 companies that exist today, much less of it shrinks. When adult use comes online, it’s gonna get very difficult to support in the future. So very quickly we, we recognized we needed to get on board with this and how we were gonna adapt our business strategy to accommodate it.
[00:15:53] And so we. We’ve always been very supportive. And additionally, the way that I have always seen the Etan [00:16:00] brand is more of like a health and wellness product, um, than a pharmaceutical. And I think the family a agreed with me with that and that, uh, entering the adult use industry allows greater access to people who are using cannabis.
[00:16:15] Betterment of their lives. And I think that our products are really, um, complimentary to that kind of, uh, view of cannabis where, you know, maybe it’s a night’s sleep, maybe it’s a sore ankle, um, maybe it’s just ongoing knee pain or something like that. Our products have a purpose that bring, uh, a better quality of life.
[00:16:33] So adult, the adult use industry would just expand our reach through that. So we’ve always been very supportive of it.
[00:16:39]Bryan Fields: What would you like to see the medical program do
[00:16:41]Hillary Peckham: differently? So I, you know, unfortunately, I think it’s a little too late. Right. Um, I think that, uh, with adult use being so imminent, um, and they’re gonna, gonna open the program with so many more dispensaries for adult use than they’ve allowed in the medical program.
[00:16:59] I, I worry [00:17:00] about the viability in the future, like at all. Uh, and I think there’s some great qualities of the medical program in New York. The quality of products really is unparalleled and they’re very trustworthy. Um, but, uh, I, I don’t know that that will last, uh, into the future. Um, I’d like to see, you know, more product categories being allowed.
[00:17:18] We were never allowed food products and those kinds of, Things, uh, but we also were able to make adaptations to that. So we made a water soluble powder that you can cook with, so that allowed our patients to be able to make their own products through that. Um, but I, I’m not sure, you know, at this point, I think, uh, really bringing greater awareness to the fact that the medical program exists, that, uh, for people who are looking at this as, um, Uh, medical treatment, the program is exceptional.
[00:17:50] You get access to pharmacists and doctors who can help you and guide you holistically, both with traditional pharmaceutical medication and cannabis to give, uh, and [00:18:00] treat your whatever you’re sort of aing from. Um, but I’m not sure that there’s much to do at this point. I think what’s really gonna be imperative to making sure that the medical program lasts is allowing medical products to be sold out of all dispensaries, which includes the new ones coming online for adult use, um, and allowing the current operators early entry into the adult use program to make sure that, um, We have enough revenue to sustain both sort of segments of the business.
[00:18:34]Bryan Fields: I’m glad you brought up the powder. Uh, I am a medical patient and I am a frequent powder user, Froman l So I’m excited to ask you this question. What is the go to combination or food mechanism for the powder?
[00:18:48]Hillary Peckham: Oh, you know, it’s actually probably not what you think it is. It’s just tea . A lot of people really like to mix it in tea or coffee.
[00:18:54] So, um, my sister though, if you go and check out our Instagram, she has a lot of different baking recipes. [00:19:00] She’s an amazing cook. Um, I’m hopeless, so she does all of the content there, . So I, people have gotten extremely creative. She does like a whipped cream and things like that, that are really amazing. But it makes us so easily an illiquid that for most of our patients who are, um, over 40, over 50, uh, it’s very, very familiar to them to use it that way.
[00:19:23] Is it your favorite product? Uh, the powder, the lozenges are really, really tasty. So, um, the lozenges,
[00:19:32]Bryan Fields: the lozenger are tasty. Uh, I put the powder in my ice cream. Uh, I’d highly recommend that because it is delicious. My wife calls it my smiling ice cream because after it, I’m certainly smiling.
[00:19:42]Hillary Peckham: Excellent. Um, our, uh, we launched a new vaporizer, the Motif Pen, and that is our most popular product.
[00:19:49] I think. Uh, we really tried to hone in on the temperatures, um, and ease of use of the device, and so that’s really taken off and that’s our best seller
[00:19:57]Bryan Fields: by far. When New York Con [00:20:00] consumers are walking into a dispensary for the first time, is there certain products you think are a good fit for our first time or who’s kind of getting their feet wet versus more that are more experienced products?
[00:20:09] Do you have any recommendations for them?
[00:20:11]Hillary Peckham: So I think when we created sort of our whole scope, And family of products. We tried to keep in mind that there’s gonna be a range of ex experiences that patients have had when they walk in the in the door. So our products are highly potent. So if you were to buy a tincture, it’s dosed by a drop, not by like a huge milliliter or anything like that.
[00:20:31] So we’re a easily able to titrate our products sort of up and down. I would recommend something like a powder, um, or a tincture where you can easily dose. it As opposed to, say, a capsule where there’s just a fixed dose per capsule. Um, but what we are also able to target with our products is sort of fast and long term relief.
[00:20:52] So a vaporizer would give you very quick, rapid onset relief, and a capsule would give you a much more delayed onset, but a [00:21:00] longer lasting. Um, experience. And so, uh, what we do with the pharmacist and the doctors is we create a program that gives you the most opportunity to have success throughout your day, depending on also your experience.
[00:21:15] So the more you use cannabis, the more you’re going to be able to take a higher dose or need a higher dose.
[00:21:21]Kellan Finney: When you guys, uh, bring a new product to market, is it, uh, kind of like launch it in every store and see how it does, or do you guys use one retail location as kind of like your beta testing, uh, platform to see how those products do?
[00:21:33]Hillary Peckham: So we launch it in all of our stores. There’s a huge threshold for getting a new product to market. So we, um, We generally launch it everywhere. Right now what we are doing is launching a new strain cuz flowers allow. Um, so we’re launching a new strain every month. What is it? We also just launch, it’s this month strain.
[00:21:52] You know, uh, you caught me off guard here, . Um, but we’ve been doing one or two every month usually. Um, [00:22:00] uh, and we have four approved ratios of THC and cbd, which is how this is, is dosed. So we do sort of all of those and then we just launch pre-rolls. Um, and, uh, I think we’re gonna have a few new developments.
[00:22:14] We’re looking into gummies and those kind of things over the next year, uh, for launching. But our, our markets in each of the dispensary locations are very different. Um, and it’s hard to predict how they’ll react. So we kind of just, uh, launch in all four stores and then see where we need to allocate more product moving forward, where things are more popular.
[00:22:35]Bryan Fields: wanna turn to the inner workings of the, the business for a vertical integrated company is extremely challenging. You’re managing some words up to six different businesses simultaneously. So how does, like something like that go on and can you take us kind of the inner workings on some of the challenges of, of overseeing an opportunity like that?
[00:22:53]Hillary Peckham: So I think right now the, the biggest challenge is the changes that are upcoming and, and the, and the unknown. Um, [00:23:00] but really the, the main focus is on regulatory compliance. And so that really dictates every, everything that we do. And so you have to make sure that not only are you following. the State regulation, but you’ve got like OSHA workplace safety recommendations.
[00:23:15] You’ve got the federal CGMP regulations for how to handle food products and pharmaceuticals. And so those really are, um, sort of the main core foundation of how, how we, um, How we function and it’s with sort of the mindset of compliance. Uh, but you have to learn everything. And, and then, um, now we’re getting big enough , uh, that it’s nice to have people who can just specialize in certain areas.
[00:23:39] Uh, but you’re gonna have to be able to oversee everything through, through to, to sail. Um, each segment of the business very much is its own. Sort of unit, uh, and requires a different mastery of expertise. And so that’s where it came in handy that we had those expertise sort of within my family, . Um, uh, [00:24:00] but uh, if you don’t have a compliance mindset, particularly in New York, but in the cannabis industry, I just don’t think you’ll be successful.
[00:24:09]Kellan Finney: Is there one section of the supply chain that is a little more, causes more headaches from a compliance perspective than other
[00:24:16]Hillary Peckham: section? I, I, No, I don’t, I don’t think so. They, they’re
[00:24:22]Kellan Finney: all equally headaches, ,
[00:24:25]Hillary Peckham: uh, they’re, they, they’re all very different. So they all present different challenges. Um, sort of at, at retail, you have no idea what you’re gonna get, like the people that walk in, in the store.
[00:24:34] Yeah. Um, we currently grow outta greenhouses so that. That changes, that environment changes seasonally, so you’re always facing sort of a different climate, which is gonna impact your plants a little differently. Um, and then, uh, production is very steady, uh, but we’re looking at adding new products and how to scale things up and so that’s sort of an efficiency jigsaw puzzle to put together.
[00:24:59]Bryan Fields: So, [00:25:00]
[00:25:01]Kellan Finney: I was gonna say it’s gotta be, uh, pretty simple with being vertically integrated. Not simple, maybe that’s the wrong word, but being vertically integrated provides the opportunity to optimize the flow of material, right. Instead of like having to manifest stuff within the, the track and trace software, you’re able to kind of just keep it all in house.
[00:25:20] Is that
[00:25:20]Hillary Peckham: Yeah, absolutely. And I think we’re able to stay very lean because particularly up in our, our facility, we’re able to. Our talent in multiple areas. So we can train them in all different product buildings also, like they, they assist in cultivation or we swap a lot of people. So we’re able to, um, utilize.
[00:25:41] The employees that we do have in a way that’s highly efficient. And then, um, having your own retail and being able to manage that too. We’re able to know exactly the order quantities that we need to build and, um, and manage the all in house. So there are definitely efficiencies that you see [00:26:00] in a vertically integrated company because the medical market’s so small.
[00:26:03] Um, you know, we’re not realizing the full capacity of that. It really comes at scale, but it definitely is an opportu.
[00:26:10]Kellan Finney: And it helps that you guys, your family and you’re sitting there talking, so reviews from consumers will make their way all the way back to the grower. And so there’s that whole kind of inner working dynamic from like a perfecting all these products and reviews and all that stuff feeding back into the,
[00:26:27]Hillary Peckham: into the system.
[00:26:28] Yeah. We take it very personally, but it’s also very direct to the people who are building all the products, so we know exactly what people are saying and how we should adapt.
[00:26:38]Bryan Fields: That’s always strong and I forget consumer feedback on what is working and more importantly, what needs to change. Because those reviews are really critical in helping you, you know, navigate that path forward, Especially the unknown west, but in
[00:26:48]Hillary Peckham: cannabis, absolutely.
[00:26:50] And so we’re able to take, you know, feedback that we get at the store and then directly use that in our manufacturing and cultivation processes and make changes to make sure that it’s what the [00:27:00] customer wants. And so, uh, that’s something that I think is really unique, um, and something we take very serious.
[00:27:06] Sometimes it’s just hard
[00:27:07]Kellan Finney: to hear from your
[00:27:07]Hillary Peckham: sibling. Well, if it’s from your sibling, pressure is taken very seriously.
[00:27:15]Bryan Fields: mom’s got a favorite daughter. Is that, is that what your angle right now?
[00:27:20]Hillary Peckham: Never.
[00:27:21]Bryan Fields: Oh. So let’s, let’s continue on the, the partnership with RIV Capital. Take us through that conversation. You know, how, when did that start and how long does something like that start from like a early conversation to, you know, signing p.
[00:27:34]Hillary Peckham: I think a, a big misconception is how much work goes into a deal like that. Um, I definitely didn’t know, and especially being a small scale, um, a very lean operator, the amount of bandwidth to to do that was, um, really intense for us. It also kind of dovetailed, I literally had my, my daughter as we kicked it off, but we, uh, saw the, um, adult use industry, uh, [00:28:00] coming.
[00:28:00] They had just. The M Mrta, uh, and we knew that in order to leverage the full capacity of our license and the opportunity that this license provided, we needed to find a partner. Additionally, New York is discussing a very high entry fee for our category of license into the adult use industry, um, and we couldn’t do both that huge fee and scale our business appropriately.
[00:28:26] Appropriately. So we knew we needed to take on, um, a capital partner. Um, debt is very expensive in the cannabis industry, so that wasn’t something that we were inclined towards. Uh, so we kicked off the process. Um, We started sort of looking at a financial advisory firm in a bank, um, around June of last year.
[00:28:49] We kicked off the process in, in September, October, um, and then we signed, uh, April 1st basically. Um, and so we went through multiple rounds of [00:29:00] trying to find the right part. Um, and we landed on RIV Capital and part of the opportunity there is they’re a very young company as well, and this is their first foray into a plant touching business and direct operations.
[00:29:15] And so we’re able to really, uh, use this as a partnership to expand the EAN brand. And hopefully get that to expand nationally together. And so for us, where we really, really care about the brand, the products, and the quality, uh, to be able to continue on past this deal and continue to sort of see our vision come to life, uh, was a huge opportunity and something that we’ve really valued that
[00:29:40]Bryan Fields: has to be a layered conversation of challenges and, and personal perspectives.
[00:29:44] So what made you feel comfortable saying that? These are the ones we, we wanna partner.
[00:29:51]Hillary Peckham: So I think that they really valued the Etan brand, what it stood for. I think they see a long term opportunity for it, sort of in their house of brands that I think [00:30:00] is the vision. And uh, you know, it just took a, a lot of time and a lot of conversations with, with each other to get there.
[00:30:07] Um, and it definitely was complicated, um, and a very long deal process. But it was one where, um, We knew this was the partner, uh, we knew we needed a partner, um, and that this would give us the biggest opportunity to continue forward with the, the what we had already built. And to expand on that,
[00:30:26]Bryan Fields: before that you started looking for partners.
[00:30:28] Were there other people who had approached you for a similar partnership prior, before you had started processing the the need for taking on additional
[00:30:36]Hillary Peckham: capital? So people offered to buy us out, you know, the day we got the license, , and we always said no, and we really were not looking to sell. Uh, it really became a function of necessity knowing that New York was discussing up to a 20 million licensing fee, uh, just to get into the adult use industry.[00:31:00]
[00:31:00] I. And you know, that number, I think they’ve, they’ve walked away from it, but it’s taken, you know, almost two years for them to walk away from that number. So it, it really wasn’t something we needed to do until we had those kind of details and, um, So, uh, we really turned everybody away. Up until the point we were like, Okay, if we’re gonna do this, we’ll control it and have our own narrative to it.
[00:31:26]Bryan Fields: The 20 million is, is pretty steep when you’re looking at it. It’s uh, it’s a pretty bold number to be putting out there.
[00:31:32]Hillary Peckham: Yeah, it is very bold. . So, um, and it’s, and it’s one that, you know, especially in New York, we were the only women. Only the. Family owned, only small business. Um, we had up until recently, you know, 50 employees.
[00:31:46] Uh, whereas most of the other companies in New York are, um, all but, uh, pharma cans I think is still private, but the rest are, uh, public companies with a lot of capital, um, inability to fundraise very quickly, [00:32:00] which is just not an option, option if you’re, you’re private and family owned. And so, uh, it really would’ve just kicked us out of the industry altogether.
[00:32:08] Um, and then, As I mentioned, we just didn’t see long term viability as being a standalone medical operator, so we just sort of saw the writing on the wall that it would wind up with us going outta business, and so we needed to be proactive in our next steps.
[00:32:23]Bryan Fields: Yeah, it’s a smart pivot and for them to just assume, right, like capital is so easy to come by, especially here in cannabis.
[00:32:28] Like, uh, it’s a bold, it’s a bold number for sure, and one that we could probably have additional conversations for at a later point and see, you know, how was that the right number? Was there a different approach that they should have
[00:32:37]Hillary Peckham: taken? Yeah, so the, I mean, right now it’s still speculative, which, which did cause a little bit of heartache for us because we don’t know what that number is.
[00:32:46] Um, but it was up to 20 million. And so we knew that, uh, at a minimum it was probably gonna be something in the millions. Uh, and that would be taking away directly from our ability to also scale the business. And if we’re not able to, [00:33:00] Have product to sell in the adult youth industry either cuz we couldn’t afford the licensing fee or the equipment and, and employees to be able to build it.
[00:33:07] That wasn’t gonna put us in a position of strength. So, uh, we knew we couldn’t, uh, stay as is. They
[00:33:14]Kellan Finney: also don’t need to make it a limited license state if they’re gonna put the price tag at 20 million personally.
[00:33:20]Bryan Fields: That’s
[00:33:20]Hillary Peckham: interesting. You know, never, I never thought of it that way, but, you know, ,
[00:33:25]Kellan Finney: right? It’s like, it’s if, if, if the price of the ticket’s so expensive, then it’s gonna automatically eliminate a lot of people looking to buy a ticket, right?
[00:33:34]Hillary Peckham: Yep. And, and that was something that I, you know, I, I was pretty vocal about and yeah. Um, is, Is, uh, par, particularly if you’re looking for, uh, diversity at every level of the industry. Um, fees like that will limit who has access to, uh, being a business owner, um, at a vertical level. So what,
[00:33:54]Kellan Finney: you guys are a family owned business, right?
[00:33:56] And this topic, right, of raising capital. How did the family. [00:34:00] Kind of come to the conclusion to work with Rib, to go out and raise the capital. Was it y’all sat down at dinner and had a vote? Or how did that whole
[00:34:08]Hillary Peckham: kind of t Yout have, you know, workday and normal business hours like this? No. You know, um, it’s not all meals.
[00:34:17] Um, but we, uh, I mean it was very much. In a unified way. So, uh, we all were part of the process, uh, involved in, in the next steps, like what our priorities were, and everybody had a voice at the table as we, as we moved along.
[00:34:35]Bryan Fields: What is one factor statistic operating in the cannabis industry that would shock others to know?
[00:34:42]Hillary Peckham: I I think the dirty secret of the cannabis industry is no one’s making money. I, I think everyone thinks that there is so much money to be made, but when you factor in particularly 280E Just about nobody is making money in the cannabis industry. And so I think [00:35:00] people need to be very wary before they enter or they take on loans or leverage themselves in any way, um, for what the financials actually look like.
[00:35:09] And so I, I worry, uh, that people get caught up thinking it’s gonna be a great business. Um, and right now it is still very, very tough. And so, um, Uh, no one usually people outside the can industry never believe that. And then you get in it and, and everyone’s in the same boat. ,
[00:35:30]Bryan Fields: Yeah. Many, especially here in New York, just anticipate the New York market is just absolutely thriving and that the cannabis attorney as a whole is thriving.
[00:35:37] They see numbers on the media and just naturally assume, oh, everyone is just printing money. And couldn’t be really farther from the.
[00:35:45]Hillary Peckham: Yeah. And, and I worry particularly, um, you know, there’s a lot of promotion for the industry, but I think there’s a lot of unknowns. How many licenses, how many dispensaries there’s gonna be, what the viability of those are, like what the end goal is.
[00:35:57] Those, those kind of things haven’t really been, [00:36:00] uh, Put out there. And I think that, uh, without those kind of metrics, it’s gonna be hard to know if you had a dispensary license, if that’s really viable. And those are the hardest businesses to operate. So, um, and, and make any money with. And so I, I, I worry about people getting caught up in, in sort of the green rush here.
[00:36:21] Um, just like every other state, there being some pretty poor outcomes very quickly once people get their first two a e bill. So, do
[00:36:32]Bryan Fields: you have any feelings on the gray market in New York? What does that mean? The, let’s say the unlicensed dispensaries where the, the storefronts that are operating and presume themselves as like a, a regular storefront, but or not a licensed entity?
[00:36:48]Hillary Peckham: Well, I think the OCMs been pretty clear. People operating right now without a license are doing so illegally and it can limit their access into the adult use [00:37:00] industry. For us, it is frustrating because we have been a legal entity regulated, um, intensely for seven, eight years now. Um, and, uh, there’s a.
[00:37:15] Variety that’s available at those stores than what we’re able to produce in the medical setting. Um, and there’s a lot more of those stores open right now than there are medical stores, . Uh, so I think that as, as, uh, someone in, in the industry and being subjected to a completely different set of rules, it’s frustrating to watch.
[00:37:36] So I’m hoping that eventually there’s some enforcement procedure to.
[00:37:53] Industry and start selling before it’s, um, before it’s open. I mean,
[00:37:57]Bryan Fields: it’s a
[00:37:58]Kellan Finney: good sign that there is clearly [00:38:00] large demand,
[00:38:00]Hillary Peckham: right? I don’t think anyone ever questions.
[00:38:04]Kellan Finney: I was just trying to sugar cut it cause it is. Um, yeah. Yeah. It’s a really negative situation for someone that’s operating under the way you’re supposed to do it.
[00:38:12] And you see all these other entities just kind of cutting corners. No taxes, no license fees. They
[00:38:18]Bryan Fields: probably aren’t worried about
[00:38:19]Hillary Peckham: two aed. No, I’m sure they’re not. We’re having a great day and I, and I think that, Um, right now we’re waiting on regulations and what our next steps are. Also, without knowing our next steps as a business, it’s very hard to understand where we’re gonna go, um, and how, how we could eventually compete with these entities.
[00:38:39]Bryan Fields: When you started your journey in the cannabis space, what did you get? Right? And most importantly, what did you get wrong?
[00:38:47]Hillary Peckham: I think we’ve changed just about everything from where we started and where we are now. So I I think that, um, being very nimble is what we got. Right. And then, uh, I don’t see an issue with sort of getting [00:39:00] everything wrong as long as you’re willing to change it. So , I think we got everything wrong, but we’ve been able to adapt to make sure that we are, um, uh, making those changes very quickly and as the market demands them.
[00:39:14]Bryan Fields: 20 years from now, we will look back and say, That was barbaric. I can’t believe we did that in the cannabis industry. What
[00:39:20]Hillary Peckham: is that? Oh, lord. Well, I think that, uh, currently the, the regulations that we operate under are, uh, Ha have not made much progress from seven, eight years ago. Um, when our primary regulator was the Bureau of Narcotics Enforcement in, in New York State, um, and very much still treated as though we are sort of drug traffickers.
[00:39:50] Um, like it was in that, in mind that we are are dealing elit substance. And so if you look at the regulations that we have today, um, and [00:40:00] how sort of little. Moved on them over time. Um, I think it will be kind of silly once, especially once adult use opens, but we get 20 years out from now and we see, uh, all the opportunity that we have if you had expanded regulations.
[00:40:17] I, I also think people misplaced fear. Um, and uh, you know, you have all these illicit shops and things like that and there, uh, you’re not seeing. The direct link of cannabis to any of the, the concerns that people have in the communities of, you know, uh, intoxicated driving, um, child. Uh, adolescent access, those kind of things like, uh, be a huge concern right now.
[00:40:48] And so I think, you know, placing that on a regulated entity is, is very misplaced and just shows like a lack of education that I hope comes over time and, and helps adapt people’s opinions of cannabis. [00:41:00]
[00:41:01]Bryan Fields: Where we do predictions, we ask all of our guests, If you could sum up your experience in a main takeaway or lesson, learn to pass onto the next generation, what would it.
[00:41:10]Hillary Peckham: Oh my gosh. I think the main thing I’ve learned is how to, uh, Learn and promote others , uh, in a way and using that to, um, sort of better myself. And so I think that the biggest opportunities that I’ve seen and and growth is when I’ve allowed other people to do things, uh, and sort of given up control and really tried to.
[00:41:41] Just around myself with good people that I trust and make sure it’s people you trust, I think would be really important. But, uh, we’ve been able to accomplish so more, uh, so much more, uh, by allowing more people to kind of thrive and give them opportunities within this [00:42:00] company. Um, and that’s been both very rewarding and, and helpful for me to grow and learn as an employer and a business
[00:42:08]Bryan Fields: owner.
[00:42:10] All right. Prediction time. Hillary, it’s 2024. What is the biggest challenge over the last two years that new operators were not preparing for?
[00:42:25]Hillary Peckham: Wow. These are, These are fun questions.
[00:42:50]Bryan Fields: Uh,[00:43:00]
[00:43:03] Hey, Brian.
[00:43:05]Kellan Finney: Oh, we’re back. Oh, we’re recording again.
[00:43:07]Bryan Fields: There we go. Sorry about that . No problem. Uh, would you like me to ask again and then we can slice them together? We’re good
[00:43:15]Kellan Finney: at quit recording when you pieced out and I was kind of talking too cause you were frozen. So sick. Sick, real. If you wanna just transition the question over then to you.
[00:43:25] And then Hillary was, I was like in the middle of it when you pieced out.
[00:43:28]Bryan Fields: So yeah, they’re doing some work in my house. They pulled the internet out. That’s sick. Uh, just , just your, just your classic, uh, variable. Kelly. Your answer. .
[00:43:39]Kellan Finney: Uh, I completely agree with Hillary. She kinda, she took the, took the thunder, but she’s completely right.
[00:43:45] I mean, you look at Michigan for instance. Uh, everyone built these businesses based on like current market. Values for certain product skews, right? And they have it in their spreadsheet and they went and raised money off of that. And like everything’s [00:44:00] predicated on that price point typically. And then they get into it 6, 8, 12 months and all of a sudden the price point drops significant over that time period.
[00:44:11] Like you don’t see this in any other industry in terms of the amount of price compression that occurs, Right. And how quickly it occurs too. I think it takes a lot of business owners. Just
[00:44:21]Bryan Fields: by ,
[00:44:24]Kellan Finney: Right? Just, I mean, you’re watching products drop 90%. Yeah. Or something ridiculous from a whole wholesale perspective.
[00:44:30] So I think that’s the biggest kind of, uh, blindside situation that happens to a lot of new. New entries into the market space market. What do you think, Brian? I think
[00:44:40]Bryan Fields: what Hillary said about being nimble and flexible is, is so critical. I, I, I just don’t think people recognize that this is not your standard business.
[00:44:48] While things are as stable, you need to be flexible. You need to be nimble and you to be prepared for things to be harder than ever before. And even for someone like us who isn’t plant touching, has no experience in those, those fields still [00:45:00] get smashed with obstacles over and over again that are just.
[00:45:03] We can all agree silly, but is is just the challenges that face the industry and it’s just part of the experience of the, the learning curve. And you know, at the end of the day, I think a lot of people who are gonna get in, interested in making a ton of money are gonna be, you know, hit with some different resistance and think it’s gonna be harder than they ever thought.
[00:45:23] So. So Hillary, for our listeners, they want to get in touch. They wanna buy eighteen’s product. Where can they find.
[00:45:29]Hillary Peckham: You can find us all over. So we have an Instagram page, Twitter, um, our website is just www.etanhealth.com. Um, or you can email [email protected] Any questions we have, Facebook, everything, uh, so that we’re pretty easy to find, um, and we love hearing from everybody.
[00:45:48] So, uh, please reach out. Everyone go by
[00:45:51]Bryan Fields: the powder in New York. Yeah. , thanks so much for your time. This was fun. Really.
[00:45:56]Hillary Peckham: Thank you. Thank you.