Reid Stewart is CEO of Canoo Holdings. Hence, he is a people-focused leader with a great vision and tenacity to push through challenges and overcome obstacles no matter what they might be. They’re particular skill and focus on business development and expansion, a drive to push the business to its ultimate goal of a public stock exchange listing within the next two years before investing read work in commercial real estate finance for our two private equity groups and has been responsible for loans over $25 million.
Also, he has been on the board of the ark millennial advisory committee of the North Buckhead Civic Association master plan review. He enjoys skiing, golf, sailing, rugby, and travel originally from New Zealand.
In this episode, Reid reveals his secrets to success by having unique and top-quality CBD products in this space. Learn more about Canoo Holdings and one of its top brands, Hempsi. Stay tuned!
I’m organically growing and building a business around ethics, which is tough sometimes to find in this industry environment. – Reid Stewart
Some Topics We Discussed Include
4:18 – Getting in the cannabis craze
18:03 – Targeting consumers
21:01 – Some hurdles encountered while managing in this space
23:10 – Words of wisdom
32:27 – Where to find them
People Mentioned / Resources
Connect with Reid Stewart
Connect with Sonia Gomez
Sonia Gomez: What’s up guys, Sonia Gomez coming to you from Denver, Colorado on another rock your socks episode of The Hemp Revolution podcast where we are talking about and sharing the real story of cannabis through the eyes of the entrepreneurs who are pushing it forward. As you know it is our money To empower you with the truth about cannabis and hemp so that you can make educated decisions about how you want to care for yourself and the people that you love.
If you are looking for products that you can depend on to deliver the results you’re looking for check us out at medicalsecrets.com. Our marketplace is chock full of products that I’ve personally vetted and approved. And if you’re a budding entrepreneur or established business owner in this space and want to share and tell your story, shoot me an email I’d love to get to know you better [email protected].
I’ll be excited to connect you guys once again I have harvested one of the top folks in our space and what I am finding out about success in cannabis and hemp is that it does not know anytime they say sometimes you have to invest 10,000 hours to be a part of or an expert in any one industry. However, I am finding that people with unique skill sets and certain levels of success from other industries are easily able to make the transition and bring it tremendous amount of value into this current industry of cannabis and hemp.
Our guest today, an international business owner and resident nowhere in the side of the U.S. Reid Stewart is CEO of Canoo Holdings. Hence, Reid is a people-focused leader with a great vision and tenacity to push through challenges and overcome obstacles no matter what they might be, but their particular skill and focus on business development and expansion, a drive to push the business to its ultimate goal of a public stock exchange listing within the next two years before investing read work in commercial real estate finance for our two private equity groups and has been responsible for loans in excess of $25 million.
Reid has been on the board of the ark millennial advisory committee that North Buckhead Civic Association master plan, review, and enjoys skiing, golf, sailing, rugby, and travel originally from New Zealand. Reid has been involved with an on an entrepreneurial track and has a record both in and out of the industry in 2010. He actually set up a USI and improve USA, which were founded to help capitalize on the global financial crisis and by buying up foreclosed land and houses across the U.S rebuilt that company from zero to over 50 staff and sold his ownership in the company back in 2013—and invested in a number of a real estate development projects including the purchase and sale of a real estate of real estate in excess of 60 million including the purchase and sale of a condo building.
Hundreds of development lots of a large ongoing mixed-use development. Still in the works. He has been in the cannabis and hemp space for about 18 months, and I can’t wait to share some of the success that he’s enjoyed during that time. Some words of wisdom that he might be able to share to those of you who are kick-starting in the game, put your hands together, and help me welcome my good friend Reid Stewart. How’s it going, Reid?
Reid Stewart: Hi, Sonia, how are you?
Getting in the Cannabis Craze
Sonia Gomez: I’m doing good. I’m super excited to have you on. I’ve done some pretty invasive research into who you are and what you’re up to. Sorry, not sorry. But I would love to hear directly from you a little bit about who you are, what your background is and how you ended up in the cannabis craze.
Reid Stewart: Alright, so yeah, I think you kind of explained my background, just they’re kind of always been entrepreneurial type characters since I was pretty young and traveled for a number of years kind of got out and saw the world and then came over to America we’ll set up a business for the doctors, the financial crisis and I guess capitalized on that pretty well. And then, about 18 months ago, I was kind of what I was looking for and probably equity group and I kind of got, you know, I was getting pretty bored, good, good, loving, pretty easy sort of work and you know, but I was getting kind of bored and then a friend of mine called me up one of my business partners.
And he’s actually a sort of quite a large owner of the largest cannabis producer and Oregon. And they specialize in a really high end sort of cannabis product and now in Oregon and through California as well. And he said, Look hemp about to go legal and you know, why don’t you come down and you know, we’ll work on a business and take advantage of it and I sort of came in pretty friendly, right? We’ve raised a bunch of money off some investors in my side of the world came in, you know 18 months ago not really knowing anything about industry.
He luckily knew how to produce really so you’re making high end product and you know, came in not knowing anything and now 18 months later I’ve been through you know, I guess a big market crash when we were cavemen we were selling isolettes for $6,000 a kilo. Now I stopped producing it because we can buy it off these, you know, the largest sort of ethanol producers for $800 a kilo. You know, when we buy in bulk that is you know, we’ve seen dramatic price crashes with gone through a harvest. Setup up a an extraction lab. All the trouble– be licensed that come with that stuffing it you know, we’ve gone to market with wholesale products and now shifted out focused on being right through to the retail.
We've gone to market with wholesale products and now shifted out focused on being right through to the retail. - Reid Stewart Click To Tweet
Sonia Gomez: It sounds like you’ve had your hand in almost everything from soil to sale. That’s a pretty fast learning curve to be on [inaudible]
So interesting to hear you say that, and I know that you have your hands in multiple facets, both as a, you know, an owner and operator of a hemp company, but you’re also are you actively investing in cannabis and hemp brands?
Reid Stewart: That definitely is a good opportunity to build, anyone looking to start a CBD brand, you know, if they use the right product, they go through and make sure that all their production is CGMP. They estimate efficiency in the way they make so that they can go back and source where the hemp was grown and how it was, how the lifespan of the plant or and then also through the production process, you know, was managed. You know, I think there’s still good opportunity for people looking to start a brand you know that they brand it well and they sell it online and they have the right product, there’s still good opportunity.
Sonia Gomez: Yeah, and Hempsi is your consumer facing branch. Yes?
Reid Stewart: So Hempsi actually sort of seed to shelf wholesale brand. But yeah, it has consumer products as well. We’ve launched consumer products about six to eight weeks ago. We’ve literally just launched with three different schools. They’re live resin tinctures. So we call it hemp livelihoods first frozen live resin and extract where it’s, comes out for about 18 to 20% terpenes. And the oil when it comes out, 20 to 30 different terpenes like smells like a high end cannabis concentrate, you know? Yeah, there’s nothing really there is nothing like it. And it’s hard to produce, we have to hand harvest it, pick off all the families and we extract it frozen, so the throughput on our machines goes down 60-70% because you’re obviously extracting so much there’s so much frozen weight in there, right? But the end product is kind of like, equal the whole right so it’s just something that you know, those fresh frozen sort of terpenes and stuff like that are just impossible to replicate. You know, we tried to look at steaming terpenes but the smell and the feel and the taste is not as good but yeah–
Sonia Gomez: Right so that’s a different that I mean that’s a little bit different than what you guys have been doing and regardless of the of what you’re doing in the industry there’s each facet comes with its own set of challenges. What for you and launching him seeing these consumer brands, these consumer products, no matter their uniqueness, it’s still a noisy marketplace. How are you guys marketing? And how are you guys setting yourself apart right now? Besides your formulation, how are you guys getting your customers?
Reid Stewart: So we have a kind of like, we’ve got a I’ve hired a guy who’s an expert at building you know, b2b sales systems. Mm hmm. So we’ve just designed a sales system that you know relies on on a process and you know, mainly phone based we believe all i i’ve been led to believe that and when We’ve just learned so much thinking early success, the telephone sort of prospecting and having a bunch of salespeople calling through leads coin whether it’s and our first. Our first business to business, it’s, and so smoke shops and health food shops and you know as much big brand as we can get as well. So we’re launching a retail platform and then also at the same time, we’re launching, you know, an affiliate program and some sort of network marketing type plays where we try and recruit salespeople you know, on, on a sort of virtual basis to to sell the products within communities.
Sonia Gomez: Nice. Love it. That’s the first time I’ve heard in a long time besides the clients that I’ve recommended it to the use of the call floor Gods such an underutilized underutilized thing, I think
Reid Stewart: Yeah. It’s, you know, it’s a bit of management, you got to have the right architecture on there. I think before the SAS applications available today, in terms of building an infrastructure that can be scaled virtually that’s a really big, sort of big plus that you can scale a sales team, you know, virtually and people don’t have to work 10 hours a day. They can work fewer hours a day, and you can sort of monitor the entire sales force or from you know, if you set it up properly from a virtual terminal, you know,
Sonia Gomez: Yeah, totally love that. By the way. I’m all about you know, health and lifestyle. And sitting behind your desk all day doing something to your, you know, necklace or bleeding is not necessarily the picture of how so, I absolutely love building in that work life balance and giving people a chance to be really potent in a short period of time.
Some Hurdles Encountered while Managing in this Space
What for you have bet, you alluded to some of this stuff earlier, but again, you’re you’re running sort of a multifaceted business here. So what has been for you universally, one of the one or two of the biggest challenges that you have faced in growing and scaling? You talked a lot about the bottoming out of pricing. You talked about quality ethics in the industry. I heard you say what had been a couple of the other hurdles that you guys would have have to navigate your way through?
Reid Stewart: I think just how, how fast things are changing, and picking what opportunities to follow, right. So now, there’s a lot of things that come at you when you’re building a business that you know, I guess, it’s hard to pick the right opportunities. There’s so many opportunities, there’s so many products, so many different things. I think picking a line, making sure it’s a good line, but picking a line and staying rather than trying to do too many things and also, you know, having the ability to because the markets changing so fast to dynamic marketplace, you know, having the ability to sort of see what’s coming and then also you know that having the business sort of life enough to be able to prove it you know, simple times you know, we’ve had some failures definitely in terms of you know, we’re with chase roads that weren’t necessarily the roads we should have been chasing but just stick in there again. Pivot the business to–
Sonia Gomez: Child Yeah, we got the Coronavirus madness. It’s dumping snow outside. And so yeah, and we have all the kids at home.
Reid Stewart: Yeah, so just being out a pivot or you know, and then when you find what’s working, stick to it on trial on excel, you know one thing before you go on to the next.
Words of Wisdom
Sonia Gomez: Yeah, that’s really good advice I love. Yeah. Keeping the overhead low. I was just going to say, that’s a tough lesson I think a lot of entrepreneurs are learning right now. And I think as an industry, a lot of folks wanted to be the biggest and the best, right? And a lot of egos came into the business building strategies. Rather, not many folks chose to be conservative in their approach when getting into this space. And that reflects now what as you were mentioned, big players in the game going bankrupt.
We’re seeing huge reductions and major staff pivots in businesses of every size. And, you know, I think that one of the so in this part of the words of wisdom, one of the things that I will say is, you absolutely have to act conservatively as you can, your vision can be massive, but your overhead should not be neither should your expansion plan be too much too fast. Like, I think the biggest Achilles heel for businesses, you know, and determines whether or not they succeed or fail. And please let me know if you agree with this is if you try and expand too quickly. You don’t have the proper runway in your budget, and you don’t have the proper team. It comes down to team time and resources. Yeah, because things don’t match up. It’s pretty tough.
Act conservatively as you can, your vision can be massive, but your overhead should not be neither should your expansion plan be too much too fast. - Sonia Gomez Click To Tweet
Reid Stewart: Cash Flow is king, and I think our board of directors you know to us some advice they gave me early on which is kind of somewhat listened to and I guess the market kind of drives you to listen to wise people sometimes but I think, leave of revenue you know don’t overbuild the company considering that you know, sales are just going to take off wait till the sales take off before you sort of expand capital and look at outsourcing as much of you know, the cash burden.
Yeah, it costs you a little bit more to outsource but if you can outsource and not have that sort of monthly drain if things don’t go as planned, which you know, in this industry, they just don’t like if I haven’t seen one thing go as planned yet. Then you’re not like leaving yourself in a hole where you have to either like fire a bunch of people, you know, you’re digging you’re using up all your cash. So, you know, like a sort of fulfillment process in a business model where you have outsourced, you know, maybe a bunch of the sort of, you know, machinery needs and the labor needs, you know, whether that’s using a white label manufacturer to sell your tinctures and even if you provide them oil, which we do, you know, and, and we mix everything, but we don’t bottle, and we don’t label, we send that to the CGMP compliant factory who does that for us, and they also, you know, drop-ship and fulfill our orders.
And that means like, yeah, you pay more per item. But you don’t have to go to the, fork out a bunch of money on equipment that you don’t know is working yet and you don’t have to carry over here staffing in office, etc. You can just pay someone else who’s you know, to take their burden and BNF you do get to a scale where you’re, you know, you’ve got enough volume to bring that in house, then you know, do it later. Don’t do it at the start. And you see that with a lot of these groups like you know, so the, I guess, these big outfits that are that have scaled really large, and maybe they thought prices would come down by 50%, but not you know, 75% you know.
Then you’ve got, like the industry so dynamic, you’ve got things like, you know, these guys out of there can extract 150,000 pounds a day using existing machinery. You’ve got groups like that, that have come into the marketplace that no one really foresaw. And they can take huge amounts of products to the crude oil or the winterized crude oil on a scale that, you know, is really hard to compete with, given especially that they paid off their machinery five years ago, you know, so it’s really not a big burden for them.
They do not have any extra overhead, whereas big groups. Sit up big you know say ethanol rigs doing you know say 50,000 pounds a day they’ve just bought warehouses they bought all their equipment they’ve taken on a huge amount of spin a huge amount of capital to get into a position where now you know thinking that be industry-leading where now they’re actually competing against guys that have been doing this for years you know, in different sectors.
Also, you know, think of high quality. I think, you know, with us we’ve seen our live resin oil Hempsi live oil, which is the basis of all our retail products and you know, the hottest selling item that we have, we’ve actually limited the bulk sale of it now in terms of the bulk, the raw oil because we only harvested a certain amount of frozen hemp and we don’t want to use it all up. We’d rather use it up in the higher margins that have retail products. You know, like having a really low a high-quality product is not so much of a commodity.
We've seen our live resin oil, Hempsi live oil, which is the basis of all our retail products. - Reid Stewart Click To Tweet
Sonia Gomez: Yeah, so super key. And all of this is those unique differentiators and making sure that you don’t become with so much effort to preserve the uniqueness. You really don’t want to become a me-too product–
Reid Stewart: Yeah, I think for what we have seen as like the efficacy of our product with our users is that people come back, like that you get the repeat buyer, repeat buyer, repeat buyer, because it’s something that no one else can really replicate in the industry, you know? So if you can get a product that’s high quality and it keeps the buyers coming back. Your cost of customer acquisition, obviously, if you know the lifespan of the customers longer is just, there’s always a temptation to go. Now let’s just make an isolated tincture, because I’m paying $8 from a white label company for 1000 milligrams rather than $18 or something there but the cost of that customer acquisition and the you know the efficacy of the product in the longer term it’s been a take the road of you know building something quality so you get a loyal client base and a you know a repeat business because the cost of customer acquisition is high and the longer you can stretch that out by repeat business the better
Sonia Gomez: I couldn’t agree more what’s next for you guys what is the next sort of milestone you guys want me to wait–
Reid Stewart: We’re currently actually scaling our sales we’ve launched with a limited due line for Hempsi that live resin product. You know, we believe the most sort of efficient way to deliver it as just a different strength punches at this point. We’ve got some gel caps, some plant based gel caps and development and actually a really good claim that some Payton Crane from the Harvard Medical School. University of Georgia, a Harvard Medical School educated pharmacist who developed a cruising that gets more legible and also been selling for quite some time without a CBD added, so we’re looking at doing this thing to the CBD to that but just finding you know, high quality products that are not widely available and kind of work.
And for us now, we’re recruiting salespeople, virtual sales people that can work from home and sell the products to customers, whether it be friends and family or on a larger scale and we’ve actually implemented some stuff so, you know, people get paid automatically. So they you know, once a customer buys, obviously, against from Austin to point but they get paid. You know like so like Uber they we pay them the day it ships. So it’s kind of like using technology to scale a sales team that you know has been a fit for the people selling it because you know, maybe they want to sell 10 bottles and make you know, a couple of hundred bucks and they can get paid the next day you know. So yeah, that’s basically–
We're recruiting salespeople, virtual sales people that can work from home and sell the products to customers. -Reid Stewart Click To Tweet
Where to Find Them
Sonia Gomez: Awesome. Well, I love the work that you guys are doing. I personally am a stickler for quality, either pretty transformational story when it comes to that connects me to cannabis and hemp. And so quality is everything for me and really understanding where my product is coming from and what is inside of it. is super important to me, which is the why a lot of the reason why I wanted to have you guys on the show because I know you that you guys are doing something that’s pretty unique. And that you have have your hand in multiple areas of the industry and you guys are, you know, primarily self taught so through experience so I think those things really set you guys apart. Where can folks find you if they’re interested in testing and trying your product or if they are wanting to follow your journey at all?
Reid Stewart: So it’s hempsi.com is our web address. We’re also on Facebook and all those social media channels as well. And then you know if there’s any interest in and either becoming a sales agent or a customer, they can email [email protected] or [email protected].
Sonia Gomez: Perfect. l thank you again for your time with us here today. And for those of you guys who are tuning in, thanks so much for being a part of the hemp revolution. In community and the medical secrets family, we thrive on supporting you guys making sure that you have direct access to the top quality products that are available. So if you’re someone who’s looking for products that you can depend depend on to deliver the results that you’re looking for that are unique and tasty. Check us out at medical secrets.com for some easy to digest information and some of my top picks inside of our marketplace.
And also if you are a business owner or budding entrepreneur, I’d love to hear more about your story and what you’re up to in the industry shoot me an email [email protected], and I’ll be happy to help. As you know, it takes a team to make the world to make the world of cannabis and hemp expand and and reach more people. When you like and share content like this, you are quite literally helping us transform the way that we think about and talk about cannabis inside of our families and communities.
So I invite you now to like and share, make sure that you tag some people that you believe are going to get a benefit from listening to this episode. And I’ll be super excited to continue to celebrate the impact that we’re making globally. We’ve reached over 200 million people around the world with our content, and I need your help to continue to transform the way that we think about and talk about cannabis. I’m your hostess with the mostess, Sonia Gomez. Remember to be healthy, and be kind. We will see you guys at our next show.
James Brinkerhoff: Thanks for listening to this episode. We took notes on this episode for you along with all the links and resources mentioned in the episode. Get them free in the show notes page here at www.medicalsecrets.com. If you love this show and our content please subscribe to the show on Apple podcasts or wherever you listen to podcasts. And if you really want to help us get the message out there, please rate review and tell all Your friends with your help, we can continue to reach the world with our message. And until next time, we hope you join The Hemp Revolution. And we challenge you to dream big and love the life you live.
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