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 Cory Azzalino, COO of Eaze to discuss:
- Why Eaze Pivoted to Plant touch operations
- Trends across markets
- Cannabis Delivery Pros & Cons
Eaze is an American company based in San Francisco, California that launched a medical cannabis delivery app of the same name in 2014. Eaze is a cannabis marketplace and company that provides safe, legal access via on-demand delivery to adults across California and Michigan. As California’s largest legal cannabis marketplace, we bring enjoyment and convenience to our customers, break down barriers to access, and cultivate community in everything we do. With nearly 8 million cannabis deliveries to date, we are committed to creating a more diverse and sustainable industry through our Momentum business accelerator, Social Equity Partners, and Eaze Compassion Programs.
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
The Dime is a top 50 Cannabis Podcast
Contact us directly at [email protected] Bryan Fields: @bryanfields24 Kellan Finney: @Kellan_Finney
[00:00:00]Bryan Fields: What’s up guys? Welcome back to that episode of the dime I’m Brian Fields. I’m with me as always is ke Finney. And this week we’ve got a very special guest Corey as Leno, COO of ease. Corey, thanks for taking the time. How you doing today?
[00:00:16]Cory Azzalino: Thanks for having me. I’m doing great. Excited for our conversation.
[00:00:19] As of Mike Kean, how are you doing?
[00:00:21]Kellan Finney: I’m doing really good, excited to talk to Corey, learn a little bit more about ease and, uh, kind of help, uh, educate the east coast with another west coast, uh, brand going east. You know, how are you Brian? I’m doing
[00:00:32]Bryan Fields: well. I’m glad we got that one in. Yes. Corey is on the west coast, but I think ease and Corey have east coast aspirations.
[00:00:38] So, uh, we can continue to say that there is opportunities here on the east coast. So Cory, for our listeners that are unfamiliar, can you give
[00:00:45]Cory Azzalino: a little background about. Yeah, sure. Um, a little bit about me, a little bit about, uh, ease I’ll, I’ll start with that, the company first. Um, so ease for those who don’t know was, uh, founded in 2014, um, really focused on delivery.[00:01:00]
[00:01:00] Um, I think that’s really what makes us unique. Um, so I think we are, uh, Probably the oldest delivery, uh, focused MSO, uh, for sure. Uh, we’ve done over a million, uh, deliveries in our history, uh, or, sorry, we’ve done over 9 million deliveries in our history to over 1 million customers. Um, we’ve delivered almost a billion dollars, uh, in cannabis since in section.
[00:01:19] Um, so started very, very early in the medical market. And have gone through some twists and turns as anybody who’s been in the business since, uh, 2014. Um, and where we, where we sit now is we are the number one retailer in California, um, in terms of just sales. Um, most of that volume, um, is through delivery.
[00:01:41] About 95% of that volume is through delivery. Uh, we have recently opened two storefronts in California. That’s a recent edition. Um, we also have a business in Colorado. That operates under the name green dragon, uh, which is 16 retail stores, uh, which probably makes us around the number three or number four, uh, retailer in [00:02:00] Colorado.
[00:02:01] Uh, and then we have a emerging business in both Florida, uh, and Michigan, uh, Michigan is a relatively small delivery, only business. Um, and the Detroit Metro area, uh, in Florida is where we. Investing very, very heavily. Uh, we currently have nine stores approved there. Uh, we expect to get up to over 25 by the end of the year.
[00:02:21] Um, and that will be retail only the start, but certainly delivery coming. Um, and we actually just had our production facility approved last week. Um, so now in the very near future, we’ll have kind of a full product suite and product offering in Florida that we’re, uh, super, super excited about trying to bring the kind of west coast, California and Colorado.
[00:02:41] Brands to the Florida market. Um, and myself, uh, I’ve been in the personally been in the canvas industry since 2017. Um, this is the second canvas company. I’ve been a part of the last company I was running was acquired by ease. Um, and that was really when ease was going from the legacy [00:03:00] business model, which was, um, as a.
[00:03:02] Third party marketplace. So operating more like a door dash where we’d partner with third party, licensed, um, retailers, um, and operate a marketplace to actually being the license holder, fully vertical plant touching business, which happened, uh, in early 2020. Um, and we are actually as of this week, uh, we will completely run 100% of our operations in California.
[00:03:24] We. Legacy partner in state house. Who’s been, uh, a great partner for, for many, many years under the urban leaf brand. Um, but we are now just winding down operations with them. Um, so we’ve kind of completed our transition and now it’s really about focus on focusing on the multi-state opportunity and really going big in the three markets of California, Colorado, Florida, uh, and then just expanding our presence in Michigan.
[00:03:47] I’m
[00:03:48]Bryan Fields: glad to share all that. And I wanna stay with kind of the early days for you in 2017, you know, Cannabis had have been very different right. From, from where we are currently today. And obviously we still have so long ago. So what were those early days like, did you have [00:04:00] hesitancy to kind of move into the cannabis space and take us through the thought
[00:04:03]Cory Azzalino: process then on, on what it was like?
[00:04:06] Yeah. So for me personally, um, my background is, uh, more in traditional, uh, accounting and finance, uh, very much kind of, uh, your, your traditional background. Um, I actually started my career as a CPA, so very boring accounting, uh, worked at a private equity firm, um, and then started an entrepreneurial, uh, journey, um, through tech.
[00:04:25] Um, and I had exited, um, uh, a company that I started. In 2017, it was kind of looking for the next opportunity. Um, and honestly kind of fell backwards into the industry. I think, um, anybody who’s been a part of the cannabis industry, whether that’s as consumer and user, um, or just studied it from, from business, um, side, you know, obviously knows that there’s a clear opportunity.
[00:04:45] It’s very, um, rare to have a market as big as cannabis with, um, that has, you know, had both the, the traditional market and, and now the, uh, new regulated market. um, and it’s weird to, [00:05:00] to operate in a business where you know, that the consumer demand is there. It’s, it’s already proven, but it’s just going through this regulatory shift.
[00:05:06] Um, so I was very excited by that. Um, and you know, it’s also interesting to look back on what you thought the business was gonna be, and specifically in California, um, where I’ve spent most of my time versus kind of where. It ended up. So back in 2017, um, the company I was, um, part of the founding team did two things.
[00:05:24] One was basically distribution and two was, uh, direct consumer kind of online e-commerce delivery. Um, so very similar to what ease does now, um, on the distribution side at the time, you know, we, we were expecting there to be three to 4,000, um, retailers, which would. Delivery or, sorry, I should say distribution a very, very critical linchpin, um, in the supply chain.
[00:05:44] So we started a distribution company, um, and you know, it’s interesting to flash forward, uh, you know, almost four years now and you’re still stuck at 850 dispensaries. Um, you know, that is a very tough, tough piece of the, of the. Supply chain. Cause there’s just [00:06:00] not as many when there’s only 850 dispensaries and you’re slowly starting to see in California consolidation.
[00:06:07] Um, it’s just the market just didn’t develop quite like we expected. Um, you know, I think at the time people expected there to be commodification of cultivation. I think you’re starting to see that now, but early in the market, it was. You know, very, very volatile pricing where in the end of 2020, there was a huge drought.
[00:06:26] And then in 2021, so only like nine months later, there was a huge oversupply. So to see the whip sawing of the market, um, and a lot of really great. Operators who, who we became friends with over the years placed bets in 2020 that were the only bets you could make, which was okay. We, we are a brand, we have to go vertical because we can’t get our hands on a supply to then being in 2021 when they might have bought a farm or they might have gone vertical to, to have the, the pricing absolutely fall out out of the bottom of the market.
[00:06:57] Um, it’s been an interesting saw and I think you’ve seen. [00:07:00] Kind of the, you know, a lot of the maturing of a market in a very, very, very short period of time. So I’m hoping that as we start to see east coast markets flip direct, or just start to open up licensing, that we can apply some of those principles from the, you know, the very competitive markets of California and similarly in Colorado to, uh, the, the more protected markets on the east coast.
[00:07:23] Yeah. A lot of
[00:07:23]Kellan Finney: that volatility would kind of be disheartening to, um, a lot of people trying to build a business. So I’m curious, what, what kind of kept you in the, in the space after you guys were, uh, after dime was acquired by ease, what was kind of your motivating factor to kind of stay on and after another successful exit, you know, and you’re just hanging out in this really, really volatile industry.
[00:07:44] Like, were you just here to try to weather the storm? What was the thought process?
[00:07:48]Cory Azzalino: Yeah. I mean, I still always believed in the, um, eCommerce and delivery thesis within, within cannabis. Um, and so this was, um, you know, really kind of the bigger extension of [00:08:00] it. Um, ease, always had a very, very strong brand in California.
[00:08:03] Um, it was the brand that was kind of sys synonymous with, with cannabis delivery. Um, and so. You know, when I was looking that opportunity and looking at states like New York, New Jersey, which, um, you know, at the time we had a, a fairly large, uh, policy team, um, and they were really active in helping write the rules and regulations, um, of delivery.
[00:08:24] Um, because delivery is, you know, cannabis is really, really hard. Cannabis. Retail is really, really hard. And then you have to add, if you add delivery on top of that, you’re a cannabis retailer plus a last mile logistics company. And it’s just like, You know, on extra hard mode. Um, and so as we were looking at California, though, the model clearly works.
[00:08:42] There’s a really good product market fit between consumers. Cannabis has pretty much always been a delivery product. Um, but the business side is, is still really, really hard, right? Like you, you fight all the tough regulations. You have to have all the, the crazy nuances of running a cannabis business.
[00:08:56] Plus that, that fact that we have over a thousand drivers, [00:09:00] um, who are on the road, who are w two employee. Um, that we, you know, have to manage and keep safe and make sure that they’re, you know, happy. Um, and that’s just a really, really tricky thing to balance, but E’s got it right in a market that’s very, very big and it’s really, really hard.
[00:09:15] And so I really believe that, you know, as New Jersey, as New York, uh, were opening up as Colorado was opening up for delivery for the first time, that was one of the big. Reasons why we merged with green dragon is that Colorado also was opening up for delivery. Uh, and we’re excited by that prospect, Florida allows delivery and we’re excited by that prospect.
[00:09:32] Um, and so just thought that we could piece together a, a cohesive national story. Um, that is differentiated and that it focuses on delivery, which has a, you know, very high technical barrier. Um, we have a product and engineering team about 50 people. Um, so you’re, you’re kind of making all these hard things and putting ’em together.
[00:09:51] But, um, at the end of that, I think that that’s where we have a very unique opportunity because it is so hard, um, to be good at, at so many things. And I [00:10:00] wouldn’t say that we’re excellent at all those things. And in California, we don’t, we are not vertical. Uh, we do not grow. We do not manufacture. We do have some of our own.
[00:10:07] Private label brands. Um, but we do not, um, Uh, we do not currently, you know, produce or, or manufacture products here. Uh, and so I would say that going back in time, it was really like, okay, is, am I still excited by this opportunity? And what inning are we in? Um, you know, I think we’re, we’re still in a very, very early innings.
[00:10:26] Um, I think this market, like I said, develops incredibly fast. Anytime a state opens up, it basically gets. Early maturity in three or four years. I, I think we’ve got lots and lots of years to run as, you know, consumer adoption picks up and, and the stigma falls and the business normalizes in terms of consumer habits.
[00:10:44] Um, but it’s still just an incredibly interesting industry and, and incredibly complicated. Um, Kind of problem to keep solving over and over again. So it’s one I’m, I’m super excited about during COVID with the
[00:10:58]Bryan Fields: infrastructure [00:11:00] challenges and all the other lockdowns that are going on. Was that a big spike for your business?
[00:11:04] Did you have the resources needed? Did you see a big uptick in delivery and has that con kind of continued?
[00:11:11]Cory Azzalino: Um, so yeah, COVID naturally there was it, it was a bit of a two-sided coin one. Yes. We saw a huge influx of volume. Um, it also happened to coincide when we were making our. So prior to January, 2020, which is when ease acquired the, the, the assets of dime, um, we had never been plant touching, so we weren’t technically running our operations.
[00:11:33] We were running exclusively through third parties. Um, in January, 2020 was the first time where we took over operations. Um, at the time we had about a hundred employee. So through the course of 2020, um, we were really focused on acquiring licenses, um, and, um, transitioning from that partner partner network to our own first party, um, delivery network.
[00:11:56] Um, over the course of 2020, we scaled from a hundred employees to over a thousand. [00:12:00] Um, and that was a lot of transitioning of, of existing employee bases from third party. So it’s, it was a little bit smoother than it sounds. Um, but, um, that was just an incredibly difficult time to managing plus. Yes, we saw a massive, um, increase in volume.
[00:12:18] Um, but we also saw a massive increase in competition. So there was those kind of two things at play. There is that, yeah. As the biggest brand, we probably saw a bigger lift than, you know, probably our next five competitors combined. Um, but, um, you know, we were, we were well positioned and, and, you know, kind of taking advantage of, of that shift.
[00:12:39] And we’ve seen it through various waves. Um, but also every single brick and mortar retailer got into delivery business as well. Um, so it became a lot more, um, competitive kind of overnight. Um, and so I think, you know, also, you know, brands like Dutchie started to be able to provide software to actually.
[00:12:57] You know, do e-commerce better kind of [00:13:00] right, right around that time as well. Um, and so they were really able to empower a lot of, you know, kind of smaller brick and mortar retailers to, to kind of stay alive and stay afloat. Um, during that, that kind of complicated time. So code was definitely good for the delivery business.
[00:13:12] It was also a very complicated time in our, in our history. Um, we have seen some of that, you know, Naturally kind of fade. Um, but it’s also interesting just to see the California market specifically as in like, I think the fourth or fifth consecutive cor sequential decline. Um, so the entire market has kind of come off.
[00:13:31] Um, the COVID peak as people have gone back outside and, you know, kind of RET return to normal consumption habits. Um, and so that’s been a, just another challenge. So it’s a little bit hard to parse out if. Delivery or just the, the general market and pricing kind of coming down. Um, and you know, certainly the taxes in California remain super punitive and, and people as consumer wallet get hit with inflation.
[00:13:53] Definitely. I think turned back to the traditional market. Yeah. Operating
[00:13:56]Kellan Finney: in. California’s always been challenging. So has when you guys went out [00:14:00] and, uh, started acquiring licenses. Uh, throughout the supply chain, did you see kind of like a, a compounding optimization throughout the organization, um, as you guys kind of brought these other, um, aspects of the supply chain under one roof, did you kind of see the benefits throughout the entire process?
[00:14:20] Or was it kind of just like cumulative little bit by little bit.
[00:14:24]Cory Azzalino: Yeah, the way, the way I would describe my like almost three years here at ease is kind of really in three trenches. So in, in 2020, um, we were very, very focused on just really, really rapid expansion. Um, and, um, bringing all of those, uh, partners from third party.
[00:14:39] In-house right. Um, and by the end of the year, in, in 2020, we had about 95% of the network was kind of wholly owned and managed by ourselves in 2021. Our, our board really challenged us and said, Hey, if you’re just a single state California operator, You’re gonna be dead in the water. We have to have a multi-state story.
[00:14:57] We have to go big in, in multiple states. Um, [00:15:00] given the nature of delivery, um, first off for delivery, you basically have 15% worse economics than the retail store. Cuz you have to deliver the product and you do charge delivery fees, but that’s not offset by the cost of delivery. So given. anytime we go in a new state, we might be the number one retailer in California, but we obviously can’t ship product to Michigan.
[00:15:21] Um, and so we have to pick states where we can actually feel like we can expand and get to scale because then we have to take our uniqueness and say to brands, Hey, we’re a very unique channel. We email 450,000 people a day. Um, you know, with your brand, you have to give us a little bit better pricing because otherwise.
[00:15:40] You know, coupled with two 80 and everything else, we can’t survive as a business. Uh, we can’t be an effective marketing channel for you. Um, and so we had to be very focused when we went multi-state about getting businesses that were at scale and then ideally verticalized, because then you actually have enough margin to, to do the delivery.
[00:15:59] Um, and so [00:16:00] 2021 was okay. Get to multi-state. Um, and we found a great partner, um, in green dragon. Who had a market leading position? Not, not necessarily the leader, but in the top three or four in Colorado, Colorado was opening up for deliver. And they had a, um, relatively recently acquired, uh, license in Florida that was undeveloped, that they, they needed help with capital and they needed a partner for, um, to develop.
[00:16:22] Um, and so 20, 21, we were really focused on getting multi-state. We actually ended up closing the transaction in January of 2022. Um, and then this year has really been about. Focusing on the optimization of the business to, to get to circle back to your actual question, um, which was, you know, how do we make the business as efficient as possible?
[00:16:39] Because we acquired a bunch of stuff in 2020 and 2021. Uh, we did have a ton of layers of additional, uh, management, um, and with the changing capital markets and the focus of get the profitability at all costs. That’s really been what our 2022 has been about has been optimizing, making the organization much more efficient, [00:17:00] fully integrating the two businesses.
[00:17:01] So we don’t have two accounting or two legal or two finance staffs. Um, and so that’s what this year’s been about. Um, and then 20, 23 will really be a return to growth. Uh, as we’ll have our full Florida operation up and running, uh, it’ll be supported by our manufacturing and cultivation facility. Um, we can actually have a full suite of products and then as we get into 2024, It’s hopefully Florida’s flipping the wreck.
[00:17:23] Hopefully at that point in time, we’ll have, you know, delivery up and running in Florida. Um, and we can try and take the same market leading position that we have in California and, and do it in Florida. Um, when it’s flipping the wreck for, um, for delivery. So essentially delivery is the
[00:17:38]Kellan Finney: same in each market, but Colorado has its own laws.
[00:17:42] California has its own laws. So it’s managing each one of those teams, uh, pretty seamless or do they kind of have to have their own little specialized bucket to, to be managed in those different, um, markets.
[00:17:54]Cory Azzalino: It’s very, very similar. I mean, that’s the power of technology, right? It’s that the technology scales and I think what makes us unique in a [00:18:00] regulated market is that you have to do technology plus regulate plus regulations, um, which is what makes it really, really hard.
[00:18:05] Um, and it actually makes it hard for even, um, other software providers to have the time or attention or focus. To build that into their products. Um, so the piece that scales is definitely the technology. So we have 50, like I said, 50 people in our product engineering team to go to Michigan or Florida. We don’t have to add more people.
[00:18:24] We just, you know, continue to scale on, on what we built, um, operationally, um, one of the big pivots that we made. Um, and, uh, and that’s why we bought, started to buy retail stores in California is that we really realized that a standalone. Uh, delivery operation. So in California, we have a concept called non-store front licenses, which are basically like delivery only licenses.
[00:18:47] Um, While we had 14 of those and every single one was profitable on a four wall basis. Um, when you compare that to our two stores in California, uh, we have one in orange county and one in San Diego, the [00:19:00] stores plus delivery are very, very profitable. Cause you get to share the security guards, the licensing fees, uh, the overhead.
[00:19:07] Um, and so now we’re moving to a much more kind of omnichannel approach, um, where we have ease of the delivery brand. And we have kind of green dragon, uh, the retail brand, um, and we are specifically keeping them separate and distinct, um, because they, they do mean different things to, to different customers.
[00:19:25] Um, green dragon comes out of coming out of Colorado, which had legacy, had the legacy of being mostly vertical. Um, and most. Retail op operations, most retail operations in Colorado, you know, sell a vast majority of private, private label product. Um, it’s, it’s not quite the same as Colorado and Florida’s obviously the, the other very extreme of everything you sell has to be.
[00:19:48] Produced and manufactured by yourself. Um, and so we, we are intentionally keeping the two brands separate because we still believe that delivery, you have to follow more of the Amazon endless aisle, you know, have a thousand products, [00:20:00] um, have the best, uh, available brands, uh, on there. Um, and then you follow the traditional retail strategy of, you know, mixing in your own private label to, to increase margins and.
[00:20:12]Kellan Finney: I was gonna say, can those retail stores be used as like mini warehouse hubs almost too to support the delivery. So then you’re not transporting product as far as far, almost like a middleman sta uh,
[00:20:22]Cory Azzalino: station, if you will. Yeah. Our ideal setup, um, is that we basically have a single inventory room where we pick and pack.
[00:20:28] And whether not, you are. Um, you can effectively think of it like a restaurant, right? Once a ticket is printed, uh, you pick and pack and whether or not thatt that ticket is printed handed directly to a customer or handed, uh, in batch to our, um, our delivery drivers. Absolutely. It’s all out of the same inventory room.
[00:20:45] So, you know, as a, uh, just as a case study and as a, um, as a delivery product, a lot of, you know, what peop investors get concerned about with delivery is can you make it profitable? And most [00:21:00] people associate DoorDash or Uber. Right. And you say, oh, well the unit economics, it’s really tough. You have to have a war chest.
[00:21:07] Um, my example, I always like to point to is we’re more like a Domino’s pizza, um, or we are, you know, setting up the supply chain. Uh, we have retail stores plus plus delivery. Domino’s pizzas is massively profitable. Um, you know, we can still do that. The, the unit economics are really good. Our average basket size in California is about 130 bucks, including taxes or a hundred bucks, um, uh, before taxes.
[00:21:29] Um, so we have enough of a basket size, uh, to make each delivery very, very profitable. We have, you know, 14 standalone delivery depots where we can say, Hey, this is really profitable, but our ideal model. Retail plus delivery. Um, because what you lack you pick up in delivery, you pick up the, the scale per store.
[00:21:51] So in California, the average store I think is like four and a half million in revenue. Our average dispensary does 11 and a half. Um, and it’s not because we have a bunch of retail. We only have two [00:22:00] retail stores. Uh it’s just because when you’re doing delivery, you can service a radius. That’s sometimes 50 miles.
[00:22:06] Um, because we also have the ice cream truck model here in California. Um, so that’s really, our, our focus is kind of pick, pick it up, but, um, to use Colorado as an example, the, the rules are still. Different, um, Aurora, um, is, you know, one, a city or a suburb of Denver where we’ve got two dispensaries, Aurora allows delivery.
[00:22:26] Denver is just turning it on. Um, and so until Denver really turns on and all of the other suburbs around. You know, we, we’ll probably kind of wait on the delivery opportunity in Colorado, so we can kind of launch with, with, you know, full force. Um, because once again, you need scale in, in delivery in order to make it profitable.
[00:22:44] If you’re doing 50 or 75 deliveries a day, it’s just really, really difficult when you spread that out over a 12 hour day to make that remotely profitable. Um, so you need to be doing 1.75 to two de two deliveries per driver hour. Um, in [00:23:00] order to actually make delivery profit. I wanna go back to the conversation
[00:23:04]Bryan Fields: where you said the board challenged you to kind of, to get wider scale.
[00:23:07] Did they say, Hey, we, where expectations is, you’re gonna spend X acquiring licenses over the next 12 months. Did they give you a timeframe? That’s not an easy conversation transactions like this take time, like you were saying, you wanna make sure there’s synergies and there’s optimization efforts. So, you know, from the moment they challenge you to kind of expand operations, how long does something like that take in order to acquire a business?
[00:23:27] And then what type of due diligence comes in, how do you make those decisions?
[00:23:33]Cory Azzalino: Yeah, it’s a great question. We’ve probably screened about 35 companies. Um, and so, um, ease because we have a very specific strategy, which is delivery first, right? That is our differentiator. We do believe that over a long enough time scale as a private.
[00:23:48] So, you know, once we’re able to kind of go public on a normal exchange, we do believe that having the, um, tech first angle will, um, be [00:24:00] rewarding for our investors. . Um, and so for us, it was really a matter of prioritizing what are the biggest states, uh, that allow delivery, um, and where, you know, as a standalone technology and delivery company in California, we were not profitable.
[00:24:15] Um, so we were looking for other profitable operations that complimented what we did not do in California. Um, and so as I said, before we in California, Only did delivery. We did not do any cultivation. We did not do any for manufacturing. And so when we were screening for partners, it was okay. We’re gonna have to add retail.
[00:24:34] Does somebody know retail? Um, does somebody, um, know manufacturing and cultivation? Um, and, um, we also expect prices to drop over time. So can they do that profitably in a more mature market? Um, and as we are screening those, you know, 35 plus companies. We really found that green dragon had the, the perfect mix of everything ease did not have.
[00:24:55] Um, and we know, you know, I will save, you know, as the COO of the company, I have a very [00:25:00] strong cultivation of production team. I have a very strong president of operations. Um, that is not my core skillset. Right. Like I. We’ll say that they are the experts. Uh, we set up the strategic framework. We, you know, we make sure that they’re hitting their KPIs, but like they, they know much more about cultivation production than I will ever know or pretend to know.
[00:25:17] Um, and so for us, that was what was important though, is how do we fill in the gaps? Um, and then how do we get into markets that are big and allow delivery? Um, and so as we were screening for partners, green dragging was just very, very rare and unique in that they had very profitable Colorado. Um, and massive expansion opportunity in Florida.
[00:25:35] Um, but because Colorado didn’t actually historically allow outside investment, um, Colorado’s been very, very challenged for people to make that jump. Um, and so it just happened to be a very, very good, uh, one plus one equals three opportunity for us. Um, So that was really the, you know, the high level framework.
[00:25:55] And then, you know, we were able to bring additional capital, um, to the table, um, which is [00:26:00] what made, um, the transaction really appealing from, uh, the green dragon standpoint. Um, and so kind of from the time that we first met them to signing a term sheet was probably about. Two months. Um, it took us about five months to get through the actual merger agreement.
[00:26:16] And then it took us another seven months, uh, to actually close the transaction. So, um, as you guys know in cannabis, M and a, um, you also have to go through layers of regulatory approval. Um, Colorado specifically is very, very, uh, complicated in that you have to get every local municipality to approve. And so for us with 16 stores that are across 10 different municipalities, you have to get 10 different cities to approve.
[00:26:42] And that includes wonderful mountain towns like Aspen and Telluride, um, which this just isn’t very high on there, um, on their priority list. So it just took a little while to get approval. Uh, the state of Florida was actually much faster cause it’s just a single top level state approval. So that happened about 60.[00:27:00]
[00:27:00] Yeah, it
[00:27:00]Bryan Fields: turns out right. They’re like, that’s great, Corey, but we’ll get to it when we get to it. So you guys can just be real patient with that. So continuing on that path, is there data trends that your team has that kind of apply from a state to state standpoint? Is there something like you’ve noticed that certain brands move really well from a delivery standpoint in California and you’re thinking the demographics or the psychographics might be similar in Colorado.
[00:27:19] So it makes synergies, can you kinda expand on that a little.
[00:27:23]Cory Azzalino: I mean, I would, I would first, I would say it it’s most clear in specific categories. Um, so probably the only brands that we carry mostly consistently, um, are edibles. Um, and that’s generally speaking wild. Yeah. Kiva. Um, and wa I would say are like the three that we kind of carry across markets.
[00:27:45] Um, there’s not really a lot of flower. Um, and pre-rolls. Um, you know, brands that, that, you know, cross state lines, we do carry wonder bread in California and Michigan. Um, Colorado is very, very, like I said, very, [00:28:00] very, uh, house flower focused. Um, so it’s, it’s just a very different market. Um, so I would say you definitely see, uh, Similar edibles brands winning in, in different markets.
[00:28:11] Um, from a format perspective, I think California is probably on the leading edge. Um, one of the things that’s very, um, useful as an eCommerce company, we have tons of first party data. Uh, we saw that the shift away from eighths. To bulk formats, uh, very, very early. Um, and a lot of our private label products are focused on more bulk for formats.
[00:28:32] So, you know, uh, quarters and, and Hals and, and full ounces. Um, so that’s something that we are leaning into in, in Florida specifically. Uh, we have a $99 ounce. In Florida, um, which is actually in an indoor ounce. So, you know, you hear a lot about price compression in Florida. Um, price compression is happening.
[00:28:53] Price compression will continue to happen in California and Colorado. We have $10 rates. um, so, [00:29:00] you know, we are setting up our cost structure to be able to sell $10, eight profitably. Um, and so I would say that what we’ve noticed is like, definitely those larger formats are becoming more and more in Vogue across markets.
[00:29:11] You’ll definitely see that in east coast markets, as they develop, um, ultimately especially on delivery because we have that focus on. Getting higher basket sizes. Uh, we kind of saw that trend earlier, right? You’re getting giving back more value to consumers by going to larger formats. Um, and you know, ultimately for us, we’re getting the right kind of unit economics to, to actually be able to deliver profitably.
[00:29:36] Um, also drink category, like we saw very early, um, shifts in the dream category, uh, including, you know, actually. So can obviously can in California sells incredibly well. They’ve done an amazing job in the brand with a low dose kind of two milligram format. Uh, we’ve actually seen the opposite work very well.
[00:29:54] And, and historically you had the a hundred milligrams now we’ve seen the 10 milligram form format work really, really well [00:30:00] also, but drinks is still a small category. Um, vapes. And a half gram to gram transition. Uh, we saw that very early. We almost sell practically no half gram vapes, um, anymore. It’s all full gram vapes.
[00:30:13] So I think that you could take those. And a lot of, it’s just kind of getting to where the pocket’s gonna go. So when we’re thinking about our Florida strategy, it’s like, Hey, this is what our, uh, mature rec market is gonna look like. How do we set up our business to make sure that when that happens, we are, we can be very profitable, um, and meet the consumer, uh, needs.
[00:30:31] Um, and we kind of know what they’re gonna. Like the flour quality and everything might be a little bit different by state, but we know what they’re ultimately gonna want, which is cheap weed and lots of it. Um, so that’s where we’ve kind of really focused our efforts, but yeah, I think that’s the advantage of going from competitive market to, uh, more protected market is that you kind of know.
[00:30:53] Uh, after the knife fight, plays out, you know, what, what the consumers want and where do, where do you have to [00:31:00] set up your business to get the actual economics of the end product there? Um, which is what we focused a lot.
[00:31:06]Bryan Fields: I think that’s what makes, at least in my opinion, your team’s such a strong partner going to these other markets and saying, we’ve got this data.
[00:31:13] We understand consumer behavior, and we can provide recommendations so that instead of having to follow trends that happen in two months, we can tell you now the expectations people are gonna want more flour at different, at different price points. And this is what we can show you. You know, once they, they recognize that that value add comes on, I think, you know, partnering again and maybe lowering their price is, is probably a challenging conversation.
[00:31:34] But I think
[00:31:34]Cory Azzalino: that’s a,
[00:31:35]Bryan Fields: a good one to start with saying, this is our value proposition for, you know, pushing the relationship forward. Yeah.
[00:31:40]Kellan Finney: And I mean, lowering their price too is just probably integrating that same technology into their cogs and it would cost them a ton of money to, to invest it, to try to generate that kind of information.
[00:31:50] You know what I mean? So just, Hey, this is what we pay from a college perspective. Well, you’re priced that much and everyone’s happy.
[00:31:57]Cory Azzalino: So, so Corey, when, sorry, continue. [00:32:00] I was just saying, I mean, when you go kind of the other way, and, and you kind of build up from the cost to cultivate, you know, through it’s relatively similar, similar across markets, right?
[00:32:09] Like obviously if you have the ability to do outdoor, you know, you might produce a, you know, 50, 50, a hundred bucks a pound, you could do greenhouse. It might be two 50 to 500. And if your indoors 500 to a thousand, right? And those costs are relatively similar across markets, you know, you can be on the high end or the low end, but, you know, ultimately if you’re producing for 1500, $1,600 a pound, you’re just not gonna stay competitive.
[00:32:32] Um, and so I think that, you know, we can really work backwards. And say like, Hey, this is where the price is gonna get. Um, hopefully it, you know, it’s not quite as extreme as like an Oregon, uh, the price compression. I, I think hopefully we see a little bit more of, you know, California is kind of trying to hold onto that, you know, 20 ish dollar price point for, um, you know, for, you know, a hundred milligrams of edibles or for, uh, a preroll pack or for an eighth, we’re trying to hold.
[00:32:58] Um, and we’re hoping that you [00:33:00] don’t see it, you know, kind of creeped down to, you know, the, the 10 or sub $10 level, just cuz ultimately it’s, this is a business. We, we do need the business to, to run and, and work and be able to pay for all the fixed costs that, you know, if we’re slightly less regulated might be a little bit lower.
[00:33:14] Um, but yeah, it’s definitely interesting to see. During the transition to
[00:33:18]Bryan Fields: a, a plant touching company. What was one of the hardest parts that kind of surprised your team? Something that going in, you thought it wasn’t getting me an issue. And then when actually got started, you were like, this is
[00:33:28]Cory Azzalino: an absolute nightmare.
[00:33:31] I think where we’ve taken the most lumps is actually in spinning up our private label business. Um, and I think because we got caught in the whip sign of, um, of the market as well. Um, so I think that’s probably where we’ve taken the most lumps. Um, on the delivery side, we were set up in a way where we’re pseudo consultants on the, on the operation side.
[00:33:52] And because we’re a technology company, we always had a, a boatload of data. Um, so I would say the operational piece, [00:34:00] although it was a very challenging transition, as you can imagine, trying to, from a corporate perspective, trying to scale from a hundred to a thousand people and, you know, and basically nine months.
[00:34:08] So that was really challenging, but we had the formula, um, I think where we’ve definitely made, um, some wrong investments or, or gotten a little bit upside down. Was on some early private label bets that we made. Um, and that’s because of when we made them, like I said, in, in 2020, in the California market, there was a real, uh, supply shortage.
[00:34:27] Um, and so we elected not to go out and buy a grow or do do things. So I’d say the, the size of our bets were, were a lot smaller. Um, but certainly got upside down with, you know, some contracts with. Um, with cultivators. Um, and I think that that’s has been the hardest thing, which is like, it’s really hard to be a delivery company and a brand company and a producer.
[00:34:49] Um, it’s just really hard to be excellent in multiple parts of the supply chain, which is like I said, why when we went to go. Acquire a business. We said all, we better get somebody who actually has these skill sets and have built this over [00:35:00] the last 10 years. Um, because we’re not gonna build that in nine months.
[00:35:03] Like it’s just way too hard. Um, it’s an entirely different skill set and being a, you know, a manufacturer or being a cultivator. So, um, I would say that the, yeah, the hardest piece was probably more on actually being a cannabis company, which is producing products than, um, just the purely delivery and retail side, because we were pseudo acting as that already for, you know, the initial six years of the company.
[00:35:27] So. Again, it turns
[00:35:29]Bryan Fields: out that each state operates a little differently. So some of those, those aspects that you you’ve learned in
[00:35:33]Cory Azzalino: California, don’t apply to certain states. We just make it another
[00:35:36]Bryan Fields: layer of challenges and then the fun complexity of cannabis. So going forward, what’s the future roadmap look like for ease?
[00:35:42] Is it, is it continued expansion in new states? Can
[00:35:44]Cory Azzalino: you take us through that process? Yeah, I think right now, um, our focus is, is in our existing markets. Um, you know, we were and remain excited for New Jersey, New York as opportunity sets. Um, but because [00:36:00] of the state of the capital market, some of the assumption that there’s basically no capital coming as market, um, until we see some sort of federal, um, catalyst, uh, You know, hopefully now that the tumor’s introduced as bill, we can, uh, get that kind of back out the way and, and maybe get some, uh, smaller wins.
[00:36:17] Um, but until that happens, we basically have to get the profitability. Um, we are, uh, not yet a profitable company. Um, so we have to get the profitability. Um, and the only way to do that is by getting bigger in our three core markets, uh, Florida is really the, the. Main driver. We we’ve invested a lot of, um, CapEx in our, our production facility.
[00:36:35] Um, but until we, um, get to profitability, there’s not. Um, any reason to go in a new state, cuz every time you go in a new state, um, delivery is very fairly capital light to set up, but then you do have, you know, recurring investments in marketing, um, that make it, you know, unprofitable for, you know, probably the first 12, 18 months of any market.
[00:36:56] Um, and so in any, in order to scale it up, You really have to have [00:37:00] kind of available cash and cash flow to do that. Um, so I think we will be a bit more patient. And so, you know, we’re excited for New York, New Jersey to turn on, but it’s gonna be very, very messy at the beginning. Um, obviously Jersey’s, you know, off to, I think a good start.
[00:37:13] There’s just no retail locations yet. So, um, you know, the, if you were there and you, you had a medical license, uh you’re, you know, obviously doing very, very well. Um, that’s the benefit of being in markets early. Um, but I. Delivery is a different nut to crack. Um, and so we don’t think that the opportunity set evaporates overnight, right?
[00:37:32] Like looking at DoorDash and at Uber eats, it’s not like food delivery wasn’t around for, you know, hundreds hundred plus years. Um, and you know, they were still able to take massive market share very quickly, uh, because ultimately consumers really appreciate the value proposition. So for us, I think it’s, uh, focusing on getting profitable in 2022 and early 20, 23.
[00:37:54] Um, Once we’re once we’re profitable, then we’ll look at, you know, New York, New Jersey, um, [00:38:00] either through partnership or trying to, you know, win licenses and, um, set up our footprint.
[00:38:04]Kellan Finney: I mean, uh, I bet dominoes is profitable and they’re just selling pizzas. Can you imagine if they got to, to deliver pizzas with $130 basket size, right.
[00:38:14]Cory Azzalino: exactly. Yeah. I mean, that’s the great thing you see that the basket size is there and ultimately it’s like 2.7, three items per cart. So it’s not like, you know, it’s not a massive amount per cart to get there. Um, unfortunately the, the, the, the taxes, you know, are crazy in California, um, office, someone should do something about that.
[00:38:32] I know it’s, it’s a small, it’s a small win, the cultivation tax being removed. Um, but it, it’s also just, it’s not just like the known taxes, it’s all the re all the regulatory tax burden that, that goes along with it. Um, and you know, the fact that we basically tax in every single service that we have to use as a company, um, you know, by paying higher rates as well.
[00:38:52] So, There’s uh, there’s lots of hidden taxes in there. Thank goodness. Two a
[00:38:55] is
[00:38:55]Kellan Finney: isn’t out there, you know, right off all those expenses [00:39:00]
[00:39:00]Cory Azzalino: even versus a delivery company. So Def by a thousand cuts, right? It is indeed. What is
[00:39:07]Bryan Fields: one factor statistic operating in the cannabis industry that most wouldn’t
[00:39:11]Cory Azzalino: know?
[00:39:15] Oh,
[00:39:22] Honestly, I think, um, I think investors have felt the pain over the last, uh, you know, 15 months. Um, it’s been challenging for all of us. Uh, but I think most people assume that like, cannabis is just an easy business. Um, yeah. Product sells itself. Um, and the nuance regulations by city by state, um, just make it so incredibly complicated that you, you really do have to.
[00:39:48] Just an outstanding team, um, who is, you know, focused on staying compliant, um, and, and running really, really lean operations in order to, to have any chance at, at being profitable and [00:40:00] successful. Um, and, and what the term we use is we, we’re trying to go from investor funded to self-funded. Um, and that’s a really, really hard thing.
[00:40:07] It’s not necessarily about making huge profits. It’s about just, can we make this business sustainable for the long term? Um, because a lot of, unfortunately, a lot of businesses in California, a lot of businesses and, you know, a lot of markets are, are gonna fail. Um, as you know, the tax burden is just too high as the cost that the operates too high.
[00:40:24] But I think people think that it’s in, uh, a relatively easy industry and that could not be farther from the truth. Um, as anybody operating, it knows, um, it’s a, uh, business on, you know, really on steroids of how difficult it is to, to operate. Um, and so. I think that that’s just something that, that, you know, isn’t necessarily intuitive until you live it every day.
[00:40:46] Um, and the fact that every market is so, so different, um, and, um, being able to get your arms around the differences by, by market is, is what makes it both fun. Uh, but also a challenge every day, since [00:41:00] you’ve been in the Canita industry, what has been the biggest misconception.
[00:41:15] Uh, for that, for the biggest misconception I would, I would still say like, just, even in my own personal life talking people going through it, um, Is still just kind of social stigmas. Um, you know, people still have in their kind of mental model, like, you know, cannabis associates with laziness or, you know, any number of things.
[00:41:34] I mean, for me, um, you know, I’m a daily user. Um, I use, um, I’m, I’m primarily for sleep. I have a two and a half year old daughter. I have a dog, I have a wife, all who are very active at night. Um, and so for me, I needed to be, you know, up and active at, you know, six 30 in the morning taking care of, uh, my daughter before, before the full work day.
[00:41:56] And so I think that it’s still the, the social stigma that comes with, uh, cannabis. And I [00:42:00] think that’s what I’m just really excited about. Um, you know, as that’s the opportunity, right? I think that where I’m saying, when I’m saying California’s a mature market, it’s, uh, you know, it’s mature in the sense of, you know, we’re still in the very early innings and we’ve probably got another, you know, 50 to a hundred years of growth ahead of us.
[00:42:16] Um, but you have to start. Get cannabis in kind of everyday people’s lives. Um, and, and so they can really see the, the benefit of it. So I still think the biggest misconceptions just on, uh, usage, um, and, uh, whether or not it’s, uh, value added to people’s everyday lives or, um, a detractors. And I I’m very much in need.
[00:42:37] Uh, it’s very much a health and wellness product. Um, and I think that people will continue to real realize multiple uses for, um, any number of either medical or recreational purposes. Before
[00:42:49]Bryan Fields: we do predictions, we ask all of our guests, if you could sum up your experience in a main takeaway or lesson learned to pass onto the next generation, what would it be?[00:43:00]
[00:43:08]Cory Azzalino: I would say, just, you gotta fo as I think it’s more of on the, on the company side, um, as a company, you really have to just focus, focus, focus, I think where we’ve, when we’ve struggled. It’s cuz we we’re trying to do too many things at once. Um, you know, for us, I think as the more we just focus on just being, uh, a delivery company in California or a retail business in Colorado, um, and, and having, you know, teams directly focused on it.
[00:43:32] That’s where we’ve seen success. That’s when we were trying to do too many things at once. Um, you know, we see those things get done at, you know, 50%, uh, success rates and, and that’s where we’ve had challenges. So you really gotta say like, all right, this is what we’re doing for this year. We’re going be excellent at that.
[00:43:46] And then we can reevaluate, you know, new markets and new states, cuz those are, you know, uh, just gonna be a challenge at.
[00:43:54]Bryan Fields: Well said, all right, prediction time, Corey it’s 2027. [00:44:00] What will be the largest medium for consumers to get their cannabis retail consumption, lounges, or deliver?
[00:44:08]Cory Azzalino: I wanna say delivery obviously. Um, I think by, by share wall, it’s still gonna be retail. Um, I, you know, you look at it at, even in California where we’re the largest delivery, you know, delivery’s less than 20% of the market. Um, and I think it’s gonna stay like that, uh, in every market. Um, there’s just too many local barriers, local restrictions to make delivery the, the, by far, the largest share.
[00:44:33] Um, however, I, I hope that we. The biggest delivery player in every market. Um, but yeah, it’s still gonna be a retail. I, I consumption lounges are. Is an interesting concept. Um, for one, like when I’m, you know, recreationally consuming, um, I do, I actually really do like the 10 milligram drinks. Um, I, I really don’t drink a lot of alcohol anymore, so I I’ve kind of replaced that as a, uh, as a consumer.
[00:44:57] So I definitely believe in the format. I just don’t know [00:45:00] that as a business model on its own, a consumption lounge is gonna be a, you know, a, a huge part of the industry. Um, I think it’ll be an. A niche and, and work. Maybe you have a consumption lounge or two that work in, in every city. I think new York’s, you know, it’ll probably work cause they already, the kind of speakeasy concept already works and people just don’t wanna spend as much time in their apartments.
[00:45:23] Um, but most other cities, I, I don’t see consumption, lounges working particularly well in LA. Um, I think there will, like I said, be a couple successful ones, but a very small share of overall. Um, retail sales. It’s
[00:45:38]Bryan Fields: funny that you said that you enjoy the beverage because according to Twitter, there’s about eight and a half people total in the United States that consume cannabis beverages.
[00:45:44] So I’m
[00:45:45]Cory Azzalino: glad that, yeah, there’s not many of ’em, but actually them in this chat we sell, I mean, we sell a lot proportionally. Um, we, I mean, we carry and sell a lot of can, a lot of wonder. A lot of KSN. Um, so we do sell a lot of [00:46:00] beverages, but it’s still a very, very small percentage of the small share. It’s also like early in and early, in some ways it probably works better as delivery almost than, than in retail.
[00:46:10] Um, I don’t, I don’t know that people in retail they’re like kidding
[00:46:13]Kellan Finney: too. Usually, you know, they’re like stashed back in the corner in a fridge. It wasn’t like the. It’s not like you walk into like a gas station. There’s just like walls of refrigerator. Like the it’s a tiny fridge. It’s like jammed in the corner.
[00:46:26] You know what I mean? So it’s like hard to see, um, drinks are tough. Right? I just, I don’t drink that many drinks because it’s not, that’s not how I was. Like, I grew up consuming cannabis either. I think that like, once you see like gen Z mature more, I think that’s when you’ll see drinks kind of take off, but like my generation, we all grew up like buying cannabis from our.
[00:46:46] Drug dealer and smoking it. You know what I mean? There was no edibles, like maybe you could get your hands on some butter or something, but.
[00:46:54]Cory Azzalino: What’s your guess?
[00:46:56]Bryan Fields: What’s my guess.
[00:46:56]Kellan Finney: I honestly Googled, I was wondering if liquor stores [00:47:00] or bars do more revenue turns out it’s not an easy Google. Uh . Cause I was trying to do a comparison, but, um, I’m with Corey.
[00:47:09] I honestly think that the majority of people like to consume cannabis in the comfort of their house. It’s more of like a relaxing situation, right? As much as people want to try to come up with the next social cannabis beverage, I just think inherently cannabis is, um, a substance that you typically consume to just relax on your own.
[00:47:31] And so I think that the majority of consumers will get their cannabis from delivery. What do you think Brian?
[00:47:38]Bryan Fields: I was gonna say delivery. Also. I think that as the industry matures, I think the stigma unfortunately, will stick around. And I think there’s a lot of people who will never feel as comfortable enough to go into a dispensary consistently.
[00:47:50] And I think it’s easier for them from their phone buy a couple products, very seamless transaction. No one can spot them there. I, I think unfortunately with that social dynamic aspect, I think [00:48:00] people still feel weird about that. So if they can get aspects delivered to their, at home, through their phone, it’s an easy temp plus like for me, Delivery’s awesome.
[00:48:08] Right? Like I know, right. Uber eats, like all those things are so such a natural thing. And like, it kind of stinks now that I have to go to a dispensary and show my medical card, but I get all the situations and, um, they have delivery, but it’s just a little more restrictive and a little more challenging, even go through the steps to get it done.
[00:48:24] I mean, I’ll pay for my
[00:48:25]Kellan Finney: delivery for the pizza, or like my cookies from DoorDash, right? Like, and that’s only 20, $30 worth of, of stuff. Like, of course I’m from like an investment perspective, it makes so much sense investing that money from a delivery. If the basket size is so much larger, you know?
[00:48:40]Cory Azzalino: Yeah.
[00:48:41] The real challenges of what makes this business harder is things like marketing. We cannot advertise any normal channels. So we can’t advertise on Facebook. We can’t advertise on Instagram. Um, that’s like one of the major things we can’t take credit card. Um, so you don’t have the normal consumer lock in of like, Hey, I have my favorite delivery [00:49:00] platform.
[00:49:00] And that’s what I do. Like when you think about what made Uber successful, a lot of it was just seamless payments. Yeah. Right. Ease. It was like easy ease. It was easy . Yeah. Yeah. And that, that is one of the things that people do not realize that, um, you know, a lot of the building blocks of, you know, just basic eCommerce direct consumer.
[00:49:20] Is not available to us. Um, and so coupled with everything else that makes deliverying cannabis hard, um, the fact that we can’t even actually reach consumers, um, as easily or cheaply as we would, um, like to, um, is just another compounding factor of, you know, why this business is a challenge, but. Also is why we should remain optimistic that when the, when the time does come, that there’s a whole nother acceler in for delivery.
[00:49:45] Cuz I agree with you at the end of the day, people love delivery, super simple. The, the cannabis is a great product to deliver. It’s small, you know, drinks of the bulk get thing was we, we deliver. But everything else is, you know, small and fits in a nice bag that can be [00:50:00] handed to you. Just like your food.
[00:50:01] Yeah. When
[00:50:02]Bryan Fields: I have conversations with people like around here about that, they just go, why can’t I have that? Or why can’t I get that? I was like, it’s just not available. It’s not allow. And they’re like, well, that’s stupid. And it’s like, yeah, we can all agree that it’s stupid. But like, just not how it works.
[00:50:13] And it’s like, until we can get there, like companies like yourself are gonna have to play more challenging games from a marketing standpoint, I can even imagine the type of loopholes to try to jump through in order to build that brand awareness
[00:50:23]Cory Azzalino: and credibility. Yeah. I mean, even you guys asked earlier about COVID, um, and you know, you would think that COVID would make, um, you know, the ability to explain delivery in every market and why it’s needed, you know, real simple, but it it’s not right, Illinois, Illinois, explicitly prohibits delivery.
[00:50:41] Massachusetts allows delivery. Um, but you have to have two drivers in the car and body cams. And when you’re talking about, you know, $15 minimum wage, um, you know, that’s at least $30 of just, you know, baseline labor costs, not including benefits, not including everything else. To deliver product. And it’s just that the economics don’t work at that [00:51:00] point in time.
[00:51:00] You don’t see your pizza delivery guy having, you know, a sidekick, which would be weird if you did right. it would be weird. Um, yeah, they’re going the other way. They’re going with the automated delivery, right. With the robot. So, um, that, that’s just one of the weird things about cannabis, even where there is, uh, even where it is allowed, it’s still boxed into, to weird regulations.
[00:51:20] So the regulations really have to align. um, you know, the, it actually being available to market. So, um, even if we’re a little bit late to a market, like, you know, New York or, or New Jersey, um, we still think the opportunities that will be there, we just gotta, um, you know, get to a point where we can fund the investment to, to be the largest, uh, uh, player in, in those specific markets.
[00:51:40] But right now it’s focused on our, our three really core markets of California, Colorado, and. So Cory for
[00:51:46]Bryan Fields: our listeners, they wanna learn more and they wanna get deliveries from ease. Where can they
[00:51:49]Cory Azzalino: find you? ease.com E a Z e.com. Um, we’re also available in the app store. Um, unfortunately, uh, only doing delivery in California at this [00:52:00] moment in time.
[00:52:00] Uh, but you can also shop at our retail stores, uh, green dragon, uh, green dragon.com. In Colorado and Florida. Um, and if you are in the Florida medical market, um, definitely come by and check out our, our stores. Um, they are now open for business. Like I said, we’ve opened nine stores this year and expect that 25 by the end of the year.
[00:52:19] Awesome. Grand, thanks so much for
[00:52:20]Bryan Fields: taking the time. Corey. This was fun.
[00:52:22]Cory Azzalino: Thanks, Brian. Thanks coming. Appreciate you.
