It’s All About High Times with MedMen
“There’s something to be said about having just the right amount of courage, initiative and ignorance.” MedMen’s Daniel Yi is trying to explain exactly how it is that two 20-somethings running a boutique marketing agency in LA “stumbled” upon the cannabis industry in 2009 – and then quickly built their business from one lone marijuana dispensary into a soon to be publicly traded company valued at a billion dollars.
At least part of MedMen’s success seems to be their decision early on to treat marijuana like a high-end consumer product, rather than as the Schedule 1 narcotic the US government currently classifies it as.
I think anybody with common sense will tell you that pot is not the same as heroin – even if the federal government schedules heroin and marijuana in the same category.
Glance too quickly at the MedMen website and you might think you’re shopping for a Rolex or a bottle of expensive perfume. Likewise, it’s impossible to walk into one of their retail locations and not think “Apple Store” as a herd of young employees wandering the open floor plan eagerly await your marijuana-related questions while iPads lining the symmetrical displays tell you more than you could have ever wondered about the various benefits and side effects of different types of cannabis.
This is definitely not the stoner-related imagery that we all grew up with.
According to Yi, “We were not trying to be a luxury brand, necessarily, but we wanted to create an environment where WE wanted to shop for marijuana products. This is the kind of place where I would want to shop. I want to feel like I’m in a very nice store – but it doesn’t necessarily have to be upscale. [MedMen co-founder] Andrew was a graphic designer… He has a very specific aesthetic sensibility that is reflected in our brand. But the cultural values and such sort of manifested themselves as Adam and Andrew built this company.”
Even as Yi insists that “we never do anything for optics,” it’s easy to see how elevation of the marijuana-buying experience from end to end helps to shape public perception around an industry that has a certain amount of negative stigma associated with it. To that end, their recent $2 million “Forget Stoner” ad campaign featuring everyone from a nurse to a police officer representing the new breed of cannabis user is clearly aimed at normalizing marijuana use amongst the masses.
We’re not going to apologize for who we are. We’re not going to apologize for our views.
“We can tell from the polls that Americans today in general are okay with pot. They don’t think it’s “The Devil’s Weed.” I think anybody with common sense will tell you that pot is not the same as heroin – even if the federal government schedules heroin and marijuana in the same category. People have done a lot of stupid things high, but nobody’s ever overdosed on pot.”
As states around the country loosen restrictions on marijuana use, MedMen and Yi have a very positive outlook on the future of cannabis laws. “Alcohol was illegal and then we did a constitutional amendment and it was legal and people forget that it took years [to make alcohol legal again]. There’s a process, there was discussion and debate. Policy change happens in phases. It evolves instead of waking up one day into a different world – it takes time.”
Yi points to another recent development as an encouraging sign that federal prohibition will soon be a thing of the past. “Last week John Boehner, former Speaker of the House, joined the board of a pot company, Acreage Holdings. And this is a guy who less than 10 years ago was an avowed prohibition guy. And he was asked by CNBC what changed his mind and he said the fact that public opinion had changed.” Yi is also quick to point out that NY Governor Andrew Cuomo has also recently come out in support of legalizing adult use of marijuana.
But perhaps the biggest driver of MedMen’s success revolves around the fact that they are able to navigate these murky legal waters and are constantly finding ways to transform industry challenges into opportunities – even when it means evolving their entire business model.
“Originally, when Adam and Andrew were looking to build upon their success as dispensary owners, they had to ask themselves, ‘because it’s federally illegal, what model is scalable and repeatable?’ In every state you’re going to need a license to operate, so a management company seemed like the best way to go because you can scale it up depending on how many contracts you have. We would basically manage a licensed cannabis operation on behalf of the licensed holder.”
Not only did transitioning into a management company allow MedMen to scale quickly based on market conditions, it also mitigated quite a bit of the risk that comes with owning a store whose legality is debatable.
And when California, the world’s eighth largest economy, decided to legalize adult use of marijuana, MedMen were perfectly positioned to take advantage of the landmark decision, transforming once again, this time into MedMen Enterprises – an actual corporation that owns assets and operates end to end from cultivation to retail operation.
“In the beginning there was a lot to figure out. How do you cultivate marijuana in an indoor setting, how do you do it in a greenhouse, what do the facilities have to look like, what manufacturing standards have to be used…”
In order to quickly gain the knowledge necessary, they looked for experts in similar industries, and they literally did begin to write a book. “They went about hiring people who are experts in what they do – be it agro-technicians, computer IT experts to create the business software for the company, etc. and they went about creating all the standards. Now fast-forward a few years later now that we’re a full blown holdings company where we actually own and manage the assets, and we’re using those very books that set the groundwork for the operations from cultivation all the way to retail.”
Interestingly enough, Yi himself had only tried marijuana a few times in college before he began working for MedMen and had a tough time telling his parents about his new job. That is, until his father was diagnosed with early stages of Alzheimer’s. “My dad stopped eating and my mom was in a panic – he was losing weight rapidly, so I gave my mom a little bottle of Papa & Barkley tincture that she puts in his OJ every morning and now he’s eating again.” He felt he had to come clean about his employer and was relieved to hear his mother’s primary reaction was, “You mean, you can get this for free?”
Clearly, it’s these types of experiences that have solidified MedMen’s resolve and transformed them into the industry behemoth that they are.
“We’re not going to apologize for who we are. We’re not going to apologize for our views, we’re not going to apologize for the fact that we are a company that is very much a business. Make no mistake, we are in this because of business opportunity but we also want to be a responsible business because we also at the end of the day really do believe in this idea that – to put it simply – that pot is okay.”