Boris Shcharansky is the Chief Operating Officer of Papa & Barkley. He also serves as a board member of the Cannabis Distribution Association and is a founding board member of the California Hemp Council. Previously he founded the Iowa Hemp Association and Heartland Hemp Company in Iowa, where he helped families source quality CBD products for their children with epilepsy.
In this episode of the Hemp Revolution Podcast, Boris discusses how they developed the relationships with the farmers and growers, which has been a key recipe for the success of Papa & Barkley.
Boris also has some tips for you if you’re a new entrepreneur or an experienced entrepreneur trying to transition to the cannabis industry. Stay tuned and enjoy!
How amazing is it to meet the farmers growing your medicine, and how rewarding the processes for your employees when you can go to the farm, see where it’s grown, meet the people that grew it, see how it’s cut down, bring that all the way down to your processing facility, make it into a beautiful product and then bring that to the market yourself. – Boris Shcharansky
Some Topics We Discussed Include
3:31 – Boris’ talks about his background, how and why he entered the cannabis industry
15:20 – The relationships they have built with the farmers and how it contributed to their success.
24:50 – His theories about the future of hemp and cannabis
36:39 – What does it take to successfully build and scale a cannabis company with the current landscape of regulations in the United States
43:58 – Major challenges and solutions that they a business their size is experiencing
53:08 – How to connect with them
People Mentioned / Resources
Connect with Boris Shcharansky
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 sharing and telling the real story of the cannabis and hemp industry from the perspective and the eyes of the entrepreneurs and changemakers who are pushing this incredible industry forward.
As you know, it is our mission 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, the people that you love, conditions you may be suffering from or otherwise find out how you can be a part of the most incredible and largest opportunity to create massive change in your families and communities by joining the cannabis and hemp revolution.
I am super honored once again to be able to have our second-time guests with us today, and we’re going to be diving into some pretty cool stuff, as our guest today has been a part of creating some really cool projects across the United States.
Boris Shcharansky is the chief operating officer of Papa & Barkley, one of the most widely distributed brands across California. He also serves as a board member of the Cannabis Distribution Association and is a founding board member of the California Hemp Council, which I’m super excited to talk more about today. Previously, he founded the Iowa Hemp Association and Heartland Health Company in Iowa, where he helped families source quality CBD products for their children with epilepsy.
And as you know, I have a deep, deep spot in my heart for the medical refugees who have had to leave families, legacies, sometimes whole communities of people in order to move to a state. This type of medicine is made available to them and their families. And I’ve had the pleasure of working with many of the mothers and fathers and family members who have been a part of that transformation on behalf of their own children. So here to share more about the change that he’s creating as his role is to offer an operating officer at Papa and Barkley. Please help me welcome my good friend Boris Shcharansky, what’s going on, Boris?
Boris Shcharansky: Hey, Sonia, thank you so much for having me. I’m really blessed to be here and not I’m excited to answer some questions.
Sonia Gomez: Man, I’m super excited to have you back on. The last time we saw each other was at the Emerald Cup in Santa Rosa, which was amazing. You guys had an incredible show out there. We enjoyed your product. In particular, your dabs variation of dabs for the ten days that we were remaining in California. So thank you for that. And for those who are just listening to this interview and just getting to know you for the first time. Just get dirty and tell us a little bit about who you are, what your background is, and how you ended up in the cannabis and hemp industry.
Boris Shcharansky’s Background and Transition to the Cannabis Industry
Boris Shcharansky: Right. So I mean, the whole story is a long story. But to keep it short and sweet. I’ve always had a relationship with the plant. I always say that you know, ever since I was 18, I guess for many people that’s kind of late to come into it. Scientifically speaking, we probably shouldn’t be indulging too much in cannabis until 24. That’s when our brain stopped developing completely, and after that’s pretty much like it’s okay.
But I have been a friend of the plants I was 18 I never truly believed in the medical side of it. I always supported legalization. I was on medical campus was almost like a cover right for legalization until I had my own personal experience about ten years ago now, where I developed psoriatic arthritis. So I was a former state tennis champion in Iowa. And I remember like the moment that it really hit me, I was like 25 years old, and I couldn’t hold a racket. I went with my old doubles partner to play a game of tennis. I couldn’t spend two minutes on the court. My back hurt, my feet hurt. I was sleeping on the floor because mattresses would make my back hurt too much. I couldn’t pick up my daughter for a while when it was going on when she was born, because I was still dealing with it into 2013. And that just that really crushed me in a big way. Right. So be able to do something to not be able to do something physically.
I’d always smoke cannabis for the pain to help me fall asleep, but that inflammation is always there. Right so, I was always getting black market cannabis, probably Indicas high in THC, not really getting all the strains that I really liked. I learned early on that the smell of the terpenes of the plant in the black market will truly dictate what you should be buying right because it speaks to you in many ways, right?
I learned that on a trip to California, I got some Canna tonic just from a friend at a dispensary two days smoking this quarter ounce of two to one CBD THC cannabis. And I came in I showed my wife I was up on my tiptoes which I hadn’t done in years at that point. And she’s like, What the fuck is [00:05:45 unintelligible] what are you doing?
Sonia Gomez: Oh no, now we’re uncensored. How do you say what you want?
Boris Shcharansky: She’s like, what have you been doing? I’ve just been smoking this weed [00:05:54 inaudible] about it, and that led me down the rabbit hole. I picked up The Emperor Wears No Clothes. I picked up The Pot Book by Julie Holland. I started reading some books by Todd Mccormick because it is a great [00:06:06 unintelligible], Mel Frank, Ed Rosenthal, just reading all about this amazing plant and thinking holy cow, like wow. Right.
And so that was around 2012. Denver just legalized. I was in Iowa spending 12 hours going back and forth there 12 hours and 12 hours back, and I was going around to dispensary’s picking up not cannabis I mean some THC but obviously but mostly I was going because I had a limit of like, seven grams whatever for our state. So I’d go there, and I would pick up seven grams or like northern lights that were that has CBD strain [00:06:45 unintelligible] are Harlequin, Cannatonic, a couple of other CBD strains. And like I got to know some of the people in these dispensaries. They’re like, man, there’s a hemp revolution happening too, and they got me in touch with some of the best hemp extractors. One of them continues to be one of my top sources for hemp CBD on my national product line for Papa & Barkley and for anything else I do. I mean, I’ve known him since then.
And when I discovered this whole plant extraction of cannabis, really understanding the difference between cannabis and hemp is really a legal distinction. If you’re growing it right, I started understanding sourcing, trichomes, how that produces quality oil, and how you can produce quality medicine without a lot of chemical additives without a lot of separation of the plant. And really just sticking to without lack of better words, grandma’s old recipe, right? There’s strong infusions. We’ve obviously tweaked infusions of a bit. We do it very well. [00:07:43 unintelligible] that have been around for millennia. We’re just using the legal market and the ability to scale and produce on a large level to be able to extract some amazing medicine out of the plant.
Think about the black market. We used to just tear products. Now, we get to use a fresh product, right so we can play with that now. So, my journey there just started and then like, as you can see, just as I talked about it, my journey with cannabis took me to start the Iowa Hemp Association. There was limited CBD only law in Iowa. And like you said, there’s a lot of medical refugees going to Colorado, right. But as soon as we passed that law, there were many moms that support that law; God bless them that had the ability and the funds to send their children or send someone to get CBD for them in Colorado and bring it back.
But I got raided by 40-50 families right away when this passed, that we’re rural Iowa, probably on Social Security, many of them. Many of them are not having jobs, on disability, with just tragic, sad situations. And it seemed like I was just in a place where I had found a way instead of buying flour all the time, I had already converted to buying extracts and infusions from Colorado, I was a black market provider of cannabis oil that didn’t get you high.
And so I was bringing it back, I remember even having a meeting with the opposite Drug Control Policy in Iowa. And I laid out all the oils for them with all the COA’s. And I said this is what I’m doing. And he’s just like his mouth open. He’s like, Dale Woolery, he’s like your incriminating yourself just by being here. Why are you showing this? I want you to know what I’m doing. You guys did not have an avenue in the law to allow us to import CBD. And so I’m doing this illegally, but once I’m here, I don’t even have a supplier certificate from you guys because the law doesn’t give me that, but there are families that need these medicines. I’m telling you so that if I ever do you get pulled over, I’m not saying you have to let me go, but you’re aware, and I’ve made you aware and not every shipment I’d send him my COAs right? I never got busted. I’m not saying that was because of him. But I think that led me into I learned CBD cannabis sourcing, cannabis quality. I started consulting around the nation on processing and such, and one thing led to another I met my partners here at Papa & Barkley, one of the founders at a conference, a medical cannabis conference in Israel.
The first iCan conferences. I went there just to see what was going on, what was new on the medical campus. One of the first medical cannabis conferences I met Raphael Mechoulam. I also met [unintelligible], who is one of the co-founders of this company, which originally was just supposed to be an investment fund. But Adam, my partner, had this amazing experience with his Papa, his father, who was Papa on the packaging, to support Dr. Adam’s father, and his father had scoliosis.
They brought me in as a consultant to evaluate other cannabis companies they want to invest in, but Adam had this passion, and he said, No, wait, I’m not gonna name names, but we were looking at some very prominent other wellness brands that are in the cannabis space. And we said, why would we invest in them? We created this amazing product. He literally got his fall off of hospice with this product, changing lives around him. And his passion fueled this creation of this brand. We just said you know, what, it’s 2016. we’re betting in November. We’re gonna legalize under Prop 64. Let’s get this product out there. So we got our bombs, we got our patches, we created somebody soaks in body oil. Those are our first offerings in 2016. Luckily, at the time, some of the major and [00:11:17 unintelligible] dispensaries took us on, and they had some trust in us, and we’ve developed strong relationships. And then we’ve been navigating this crazy world of legalization ever since. I feel like I’ve been in it for 30 years, but it’s only been like 10.
Sonia Gomez: Yeah. Well, one day is like one month in this industry, and one month is like a year.
Boris Shcharansky: Yeah.
Sonia Gomez: That’s such an incredible story in such a different one than what I got at The Emerald Cup. So this is a badass. I love hearing your story. Really super similar to mine in the sense that like, I was an avid surfer lifeguard in high school and after getting knocked off of my board and smacking the ocean floor like a ton of bricks. It triggered this whole like seizure type neuropathy syndrome in my body, where I’d literally go into full-body cramps and lose feeling in my fingers. I mean, I would go from having a normal conversation to like falling on the floor and convulsing out of nowhere.
And it wasn’t until I had spent way too much time and money with the traditional medical system being overmedicated, super depressed over 100 pounds gained over a three year period that I finally found a holistic neurologist out of Europe to advise me on how to use cannabis and hemp products and their derivatives to completely transform the way that I was feeling and functioning on a daily basis.
And within three months, I was off my medicines within six months off over the counters and within nine months had lost almost 100 pounds. So I can totally relate to that sort of personal connection with the plant and that intense drive and passion that it gives you to serve other people that you see who lives being transformed with it. It almost sounds cheesy because they say it so often we’re like [00:13:07 inaudible]
Boris Shcharansky: powerful than being able to help others. You know, I’m sorry to cut you off.
Sonia Gomez: That’s okay.
Boris Shcharansky: There’s one thing for it to affect me. And there’s always a placebo effect. You’re like, wow, this is working, right? When I see like Harley Kirkpatrick and her mom Tammy, that was one of the first people that I met with. He’s now five and a half years seizure-free. She’s had a couple here and there, but she was having dozens a day. And just to see that, that I saw her quality of life improve, and we have this case over case, and I’m not saying they’re all successes, like 60% of the time I work 40% of the time and did nothing.
Sonia Gomez: Yes.
Boris Shcharansky: So just to be clear about that, but when it worked, it’s magical. There’s no the word my partner Adam always talks about what’s the definition of magic? It’s being able to heal people, to heal others with nothing but a plant, and there’s no other word, but magical for that. So, you can’t stress it enough.
Sonia Gomez: I know absolutely. People question all the time because we share, as a media company, we’re able to share these miracle stories we’re able to talk about things that other brands, as a brand, you cannot say, you cannot talk about the real transformations that you’re witnessing, but me as a media outlet, I can say whatever the fuck I want. And so I’ve been really enjoying talking about the countless transformations that people are experiencing on all sides of the spectrum.
I’d love to talk a little bit more about the relationship that you have built as a brand with the farmers and how that has been such an intricate part of your guys’ success. Unfortunately, and fortunately, we have seen very talented legacy farms and farmers take a total, incomplete plunge due to legalization and the restrictions and the financial outlay that you have to have in order to even compete in this marketplace. And many people who are the most skilled have really suffered at the hands of legalization until they’re meeting companies like yours who are developing relationships that are really high in integrity. Talk to me a little bit about how you’ve developed those relationships and how it’s mutually beneficial for both the grower and the brand.
Building Good Relationships with Farmers and How it Contributed to the Company’s Success
Boris Shcharansky: Sure. So one, I just want to say I think we’re not the only ones. There’s a lot of great buyers up in Humboldt and the Emerald triangle that are doing the right thing, right. [00:15:39 unintelligible]. There’s a lot of great big buyers out there that I think are just great. And I think that that feeling of community and togetherness that only the Emerald triangle has as a cannabis community. It’s a special place, and we’re very privileged and blessed to be a part of that, in terms of legacy growers. I’ve seen it myself. I have mixed feelings. On it, I’ll be completely honest. I don’t pull punches. I think that some may have– There’s different categories of them. Some have done well enough in the illicit on the traditional market, that they just don’t want to be in New York, right. And they’re actually taken care of. And I think I worry less about them. I think there’s their hurt is more nostalgic than it is actually active, hurting them in their paycheck today, I think [00:16:28 unintelligible] that have some legacy, I mean to me, 15 years legacy, but some of these guys have been 30 or 40 years, right. So 15 to 20 years, people are trying to make it, and then they broke in between two. One part is the kids of the legacy farmers. And then and then the progeny and then the other half is maybe some people that come up from Socolow or the Bay Area and have kind of inserted themselves there. And there is a little tension between those two groups. We don’t get in the middle of that, but it’s just being in this and seeing if you’re aware of them, and you’re aware of these tensions.
Sonia Gomez: You have to be.
Boris Shcharansky: You have to be. So, all that is community. That’s the cannabis community, and as different parts of the cannabis community working together and I think it’s a beautiful thing, if we focused on sort of the, what’s not working, I think it’s not great. But what is working, you know, I always bring up the example of like sunrise farms, Sunrise Mountain Farm, which is my friend Dave, and Laureli. They own that farm. They came up trimming here, and then they saved up their money. Laureli bought the farm; she met Dave, they’re now a union with beautiful children. And they literally with their hands scraped out this spot on the side of the mountain, as a regulated legal spot. They’ve worked through everything, and they bet two years’ worth of net income on regulatory growth and all these things. So when we see people like that, who are maybe not traditional legacy, they’re not 30 or 40-year farmers, but they are people that are trying to do it right, they’re treating the Earth right. They are treating the farms right. They’re not trying to nickel and dime anyone, end up producing an amazing flower.
One of the most amazing things of working with cannabis is that it’s truly a responsive plant. What you put in, and I’m not just talking about nutrients, I’m talking about your love and attention, your time and care, somehow that manifests itself into better Trichomes.
Sonia Gomez: Just like a woman.
Boris Shcharansky: Call me a wacko, but I truly see that with the cannabis, plant many other plants, but the cannabis plant, especially because of its healing and magical powers, right? So we find those people, and when we find them as we’ve scaled, we had the benefit of scaling quickly, right? And we’ve had the benefit of just doing well; people really accepted our products. And we’re really grateful. And as we scale quickly, we could have gone to a distributor, we did for a while and just got whatever they have for us and we’d go to their warehouse and pick out. But then we realized, hey, if we just have a truck and we go out to the farms, we can truly– how fun is it to go to a farm?
Sonia Gomez: It’s amazing.
Boris Shcharansky: How amazing is it to meet the farmers growing your medicine, and how rewarding the processes for your employees when you can go to the farm, see where it’s grown, meet the people that grew it, see how it’s cut down, bring that all the way down to your processing facility, make it into a beautiful product and then bring that to the market yourself. We see every single part of our sourcing pipeline.
And in cannabis. One thing I’ve seen is because of our delicate process. We use a solid in this process. So we were always hash, key thing rosin and oil infusions we do no extraction from co2 we do no distillation we do no ethanol, the only isopropyl that we have is to clean the tables right? So that’s what we always say that no butane anywhere, right? And not that I hate any of that. But we’ve made a commitment to clean solvent extraction and scaling that has been difficult, but the one thing that makes it easy is clean input product and we have small farms dedicated to that plot of land and dedicated making the best medicine possible. It’s not attacked every time, right like, and when you find those relationships, those are special. And it’s not about nickel and diming them on price. It’s about maintaining their quality of input product because we know the input product is king. If you have quality and propriety, everything else is great.
Sonia Gomez: I think that that’s probably one of the key differentiators. And I know from my experience, and I grew up in the Emerald triangle, my mom still has property out in Mendocino County. If you watch murder mountain, a lot of my like uncles and Auntie’s, and my mom’s friends that she was going to Heartwood College with out of Garberville are featured when they’re talking about the pioneers of the industry.
So, when I talk about legacy, that’s what I’m referring to, and then generationally, things get a little bit diluted, including culture but the community around it and how new business comes into the old world industry, I think is really important. And I admire quite a bit what you’re talking about, especially when it comes to pricing. Because if we can maintain the quality of cannabis, price is not really the determination.
Boris Shcharansky: No, not at all. I know the extraction rates, and I know how much things cost. Obviously, a $40 bag of trim is better than $120 bag of trim in terms of pricing tax, but at $120, you can still turn a profit if you are creating your own products, right. So we focused on efficiencies on having our own distribution on owning our own manufacturing, let the farmers do their magic. And we just have a really good transportation network between everything all the way from the farm. And we do find a mile delivery to our dispensaries and that way, quality control is able to be down pat, and that’s the most important thing.
And to your point, we pay more to small farms than we do this to large scale distributors. So we get more dollars per pound. The reason for that is we go through a quantitative and qualitative test that basically breaks down trichome size, potency, terpene content, yield, color, pure all those things, right. And once we get to what we like, it seems like the small farms who are trying to do it right to try to maintain that legacy of terroir that we have in the Emerald triangle. We want to support that, right? Because if we don’t, as one of the biggest buyers in the area, then what happens then warehouse farming becomes a thing. Then we have single mono-cropping, and that’s something we’re fighting against. We don’t want that. We love the variety that we are able to achieve in all the different flowers that we get, right. And we focus on ratios, not strains right now. But eventually, I’d like to focus on strains. We’re not focusing on strain-specific right now simply because we’re not scaled to that level yet. We know enough of it. But we will be And then once we get there that’s the next step I didn’t, but once we get there if we’ve only been buying one strain that’s performing well for 10000 Farms you know, then we’re kind of [00:23:16 unintelligible] in terms of getting really differentiated cannabis products.
Sonia Gomez: I really like how you brought the old school sort of respect that is very much a part of that industry and into the new age of the cannabis industry. And I think that most people can take note because I’ve been to a lot of dispensaries who don’t carry that same mentality. It’s very profit-driven, and not people are driven. And I think that there’s a lot of longevity that is built with the industry and also the integrity of a brand you can see consistently like no matter where I go in California, I if I see Papa & Barkley there, and this is important for those of you guys who are listening and considering your entry into the market or if you’re playing already a role with an existing brand, it’s really important to understand that the consistency and dependability of your product help you to have the stickability that you’re going to need to stay relevant in the industry. If you’re just going after the profits and you’re willing to compromise quality, you’re not going to be around for very long. So take note of that. I think it’s a really important thing.
Now, as a cannabis company, many many people have not drunk the CBD Kool-Aid, a lot of folks will call it diet weed. And so I’m really interested to hear your opinion of the I mean, incredibly rapidly growing CBD industry. I know that you guys also have a nationally distributed CBD brand, which I want to hear more about. But I’d love to hear, with the ups and downs of these hockey stick growth patterns that we’re seeing in the hemp industry and that we have seen over the last few years, I want to talk a little bit about where you see the future of hemp inside commingling or even separate from the cannabis industry and how you think these two worlds should or could coexist or collide?
Boris’ Theory About the Future of Hemp and Cannabis
Boris Shcharansky: Sure. So predicting the future is tough. So I don’t have a crystal ball. There’s a lot of schools of thought. I go after my truth, so I can share that. I mean, some of the schools of thought are cannabis will just become another API, right? They’ll just become another ingredient in the beauty industry and the food industry, and it’ll be just like Ginkgo Biloba or whatever, right?
Sonia Gomez: Yes
Boris Shcharansky: I feel like we manifest the future that the way that we think of it that you know, the future manifests itself the way that we work towards it right. And so, my future my hope my truth in the cannabis world is that across plant medicine, cannabis is one of the priestesses right if you want to look at it that way. It’s one of the top ones it is better is higher than Kava is higher than Valerian root. I don’t believe it’s going to become another API. I’m strongly against that. I don’t think that’s where it’s going in May. So I’m not saying I’m against that, but I don’t think that’s where it’s going. I think it’s a much more powerful API.
So the way I look at the hemp industry, and I’ll step back for a second, I want to reiterate what I said before. Hemp is a legal term. That’s it, and nowadays, it may have meant something in 1915 or 1850. But like it is a legal term right now, very specifically referring to cannabis. That’s any cannabis plant that’s under point—3 % THC. Traditionally hemp has been for fiber and seed, but we’ve seen the hemp CBD revolution, which really is just a CBD revolution. That’s all it’s, and that’s micro and macro. It’s a cannabis revolution part of the cannabis.
The way I see it is THC is still being chained back, right? They were chained back by the state laws still federally illegal still schedule one, can’t pop with anything right like oh are being held back, but somehow and I commend the hemp industry for that. This is why I hate tension. I hate the tension between marijuana for lack of a better term and hemp industries. We should be together building a cannabis industry. And so the way I see hemp CBD, national CBD I don’t want to call it hemp as the national market is the multi-state market is, you know, we’ve looked at it at least as an opportunity to stay true to ourselves as a cannabis company.
We are a cannabis company. We believe in the full spectrum. We believe in the use and the freedom to use all cannabinoids in the plant. And we stress that, for example, on our website, we say, you know, we had a great Instagram thing that said, Hey, what are you looking at? You’re looking at probably marketing products. Yes. Are you in California? Yes. Go to a dispensary? No. Are you outside of California? Yes. Does it have CBD? Yes. Then buy our product online.
So we’re always saying, our national product is a way to educate and expand our brand nationally because that’s what the hemp industry has given us. They’ve given us an opportunity as cannabis companies to own the narrative. Don’t let beauty– CBD is not a beauty ingredient. Don’t let the beauty industry come in and take over that. CBD has a lot of useful use, and most of them are ingestible, not topical, to be clear.
THC and CBD we find together we’re better topically than just a CBD only, but is also very, very effective. Now having said that, let’s define CBD only. Let’s define hemp CBD. What do we do? We take full hemp flower. And I mean, we went on a tour of 12 different farms across five different states from the western United States to the Eastern United States. We end up landing on a farm in Wisconsin and a farm in Vermont because they passed California testing standards.
We test everything in the national hemp market against California prop 64 standards. Sixty-three pesticides, all are mycotoxins—all the lead thing everything like that. Aside from Canada, it is the most rigorous cannabis testing protocol in the world. Right maybe aside from [00:29:08 unintelligible], Canada and California, right? It’s much, much, much more intense than anything in the vitamin industry. [00:29:15] So, not everybody is doing that. So when you see that CBD is not CBD, you have to make sure how is it tested? Is there a COA, and that so we’re staying true to our cannabis roots in California, our mersa roots, and my [00:29:27 unintelligible] roots under the regulated system here we test everything under those regulations.
The next point is we also do a full-plant infusion, right. So we take that hemp flour, and we do a whole plant infusion of coconut oil, or we take the drive of hemp flour, we keep it, and we press that into rosin that goes into our lotions. So everything is still very true to our processes here in California. Very true to our sourcing, where we have minimum cannabinoid content, which by the way and the hemp flower, it has to be 17 to 20% CBD on what we’re using, right.
It’s been useful with THCG, CBG, CBC, some CBN like all the cannabinoids are hitting in actual hemp. And if you compare our CBD capsules, our CBD tincture on national with our CBD 30 to one and a 30 to one tincture here in California, let’s say for a few cannabinoids, they’re pretty much the same COA, right? You could confuse them for each other. So it comes down to sourcing.
If you’re talking about a CBD isolate, or somebody just putting 50 milligrams of CBD into a 500-milliliter beauty jar, those are a novelty. So we have to talk about dosing. Topically it should be six to 12 milligrams per ml, or at least should be 15 to 50 milligrams per ml. Right. We have to talk about that in order for it to be a wellness thing, but CBD is helping the cannabis industry go national. But once we unleash the change from THC, it’s going to be one of the largest API’s, and it’s going to also I believe that companies that are able to straddle both lines are going to help them shape the overall cannabis industry thereafter. Is that a good enough answer? I’m sorry—kind of droned on there.
Sonia Gomez: Yeah, no, no, no, it’s a perfect answer. Actually, I think they agree with you in so many ways, and I think that there’s still– I interface a lot with the consumer. So I laugh when I hear like hemp cannabis, consumers just trying to still figure out what the hell the difference is between cannabis and hemp. I think for me personally that the differentiation of all of these things has just caused quite a bit of confusion that we now have to go and unravel. And I question consistently like, has it contributed to the positive image or are we creating more of a stigma that we have to.
Boris Shcharansky: No, no. I just want to be cool, we’re not crazy, but this fight is internal. Nobody out there that’s not involved in the industry and not like in this debate, unless they’re like a really read in a consumer who knows about this. They’ve been don’t care. They just see CBT or this, and I think they’re hearing that full-spectrum is better. But, you know, I think they’re just catching up. It’s kind of like we’re in the cold water ready to swim to the buoys everyone’s still knee-deep, like thinking they’re going to jump in like then we have to come back and help educate people, but I don’t think people on the outside are seeing the fight between CBD and marijuana or hemp and marijuana. I don’t think they’re seeing it as much as we are.
Sonia Gomez: Well, they’re not seeing the fight. But again, like 60% of my audience is the more mature like 50 plus audience and so they’re like– I’ll use this example. I was at the hot springs the other day, and they bust in. This like, group of elderly folks into the hot springs. And they’re like descending upon us with their walkers and their wheelchairs, and they’re getting into the water. And me and my husband were talking about, CBD and we’re talking about cannabis, and this new line and blah blah and about 10 of them flocked around us, and they were like, is that that marijuana? Oh no, I don’t use marijuana, I use CBD.
And so they started to talk back and forth, and every single one of them was confused about the difference of each, and so we spent some time educating and just talking about the differences and to help things become clear. And I see a lot through my thread the on the less educated consumer, that they are still unclear as to the difference and what they can expect as a result. However, I think brands like yours, and there’s a few others who do a really great job doing micro chasm education. That is helping sort of dilute that confusion right now, but it definitely does exist amongst the consumer, especially in states [inaudible]
Boris Shcharansky: Yeah, I will 100% agree with you. One of the things we’re doing– one of our initiatives, marketing initiatives is to there’s two things. One of the one plant initiatives, so they understand that cannabis and hemp are just cannabis and educated around that. And then the second initiative is owning the first conversation on cannabis. So we have to own that conversation to educate the folks that you’re talking about that to have this confusion. So, the part of it is yeah, I go out on speeches and our VAs are all trained with presentations to talk about what is hemp. What is cannabis? How do we source? What is the difference? What are you taking when you’re taking a 30 to one? Or what are you taking when you’re taking a CBD only? What’s an isolate or a distillate or a full plant? Yeah, you have to walk them through. I hear you, and that’s definitely a true statement. Education has been paramount for us. For four years that we’ve been in the market, we’ve been investing in education and distribution. Those are the two things we have to educate our consumers, educate our budtenders, and then be able to distribute our own product.
Sonia Gomez: I’m excited to come and check you guys out when I’m out in California. I’m getting ready to come out there for a few weeks, and I’m excited to go– first of all, I’m not a huge dab person, but when I find–
Boris Shcharansky: [00:35:05] vaporization
Sonia Gomez: vaporization, okay, so dabs, vaporization, however, you want to call it. I’m not huge on the concentrates thing. I’m kind of rootsy. I like my flower. However, when I tried your concentrates out of the Emerald Cup, I was like, where’s my Papa & Barkley? I was like; it was the best. I’m excited to come out and do it to help me pick my weed segment a couple of the different dispensaries that you guys are distributing through.
But I want to talk for a second because I think that there’s a common misconception that this is a fast cash-rich industry that anybody can jump in here and become immediately successful. And that there is like ways for just anybody to get in here and strike it rich.
On the flip side and somebody who’s been a part of this industry for ten years plus, my husband and I between the two of us have been a part of the soil to the sale process for almost 38 years now, a part of the legalization process. Owned and operated the first dispensary one of the first hundred dispensaries here in Colorado, I know for sure that you will break your back or lose your mind trying to build and start a cannabis company if you’re not fully aware or prepared to navigate through the regulatory landscape.
So I’d love to hear from you, what does it actually take, And let’s give a really clear picture to those people who are listening in. What does it actually take to successfully start to build, grow, and scale a cannabis company with the current landscape of regulation and the United States?
What Does It Take to Successfully Build and Scale a Cannabis Company With the Current Landscape of Regulations in the United States
Boris Shcharansky: Well, it’s not just regulation. The answer that question changes every six months.
Sonia Gomez: Yes, every three.
Boris Shcharansky: right? And case in point, if you’d asked me six months ago, I would say have a killer brand, killer product, and some distribution agreements and an ability to manufacture. And then, raise some money, right? Because that was what everybody was doing. That’s now not gonna work—the markets crash. So so for everybody’s understanding follow the cannabis industry is doing well, people over bet on it, we created a bubble out of it. And that was really led by Canadian investing. So Canadian public markets and cannabis took about 75 to 90% drop, and if anybody’s following the news and seeing what’s going on with MedMen, they’re one of the tales of sort of negativity here, right. So, I won’t speak to them, but a lot of this is, depending on raising money to grow, your business is not going to work anymore, right?
So I’m sorry, years ago when we started that did work. We raised money from friends and family based on an idea and a vision. And that’s sort of my second point. I’ve consulted a few people that call me, you know, friends or friends and want to get into cannabis and like, Well, you know, if I could just get a supply and then I can make the product and then I thought I go sell it. I’m like, no. Why do you want to do this, Right?
In anything you do is so much more important than the what? And then it can just be about flipping a profit. We’ve got 50% margin at 50% extra price at retail because of extra taxes between the cultivation and excise taxes in California, for example, with a traditional black market is still 67% of the market in California. Because of that, we still have illegal shops that you’re dealing with here.
So if you’re expecting to make any money, you’re not going to. You better come into it with a strong business plan, a strong ability to stick to a budget. If you really do want to jump into this industry right now, if you don’t have experience dealing with a budget, you’re not able to control your finances at home, for example, this is not a good industry to be in.
It is rough because it’s cash-driven. People need to be paid your suppliers need you paid your testing cost amount to I mean, at our level, we’re a large company we spent over a million dollars in testing last year. So testing will be, and that amounted to it’s more than a few percentage points on our total revenue numbers, right?
So, I would not recommend you come into this because you think it is just a green field for entrepreneurs or a greenfield to make a buck. It is a greenfield for entrepreneurs, but strong entrepreneurs, people that have run a business before people that have managed a supply chain before. Right now, even at our level, we’re converting into an ERP. We have 3500 different stock items between the things that we buy, the packaging, our different cannabis products, our different intermediates, all of that 3500 items that we need to be able to trace each and every one of them to each batch.
You might not be able to afford a $300,000 ERP system. But you better be able to track that for yourself in Google Sheets or Excel or something. And if you don’t have the ability to do that, don’t be getting into this because if you can’t track your– if you can’t pay your taxes here, and guarantee there’s no diversions to be able to show with documents that there has been no diversion of cannabis from your company, you’re going to be out of business in a few months.
Sonia Gomez: Yes.
Boris Shcharansky: So this is not for the faint of heart. When I say well, the Why is more important than the what? I’m not here to make money, right? Like I have a salary, and hopefully, my equity turns into something at some point. But I’m not here to make money. I’m here to our mission in Papa & Barkley is to sound cheesy and forgive me, but I truly believe as partners, we’re here to unlock the power cannabis to improve lives. That’s our mission at Papa & Barkley.
We are here to unlock the power of cannabis to improve lives. That's our mission at Papa & Barkley. - Boris Shcharansky Click To Tweet
Our ten-year goal is to be a global brand recognized as best in class in this industry. That’s what we’re here to do. And so that takes money that these budget cuts. That takes hiring people. That takes firing people. That takes sourcing. But all of that what comes only after you realize why do you want to get into cannabis? If the answer is I want to make money, get the hell out. No one’s making money.
Sonia Gomez: Yes
Boris Shcharansky: One company is maybe the testing labs and a few sourcing companies like I think, you know, some CVD sourcing companies that make money. But there’s very few brands and products that are making money right now. Everyone’s losing money, and this year is going to be the year of consolidation, just so everybody knows. This year, we’re in a good position because we were able to raise money last year, but we didn’t raise as much as we wanted to, and we still have to be very fiscally responsible going into this year.
We are in a better position than others. But I can tell you. I know brands and industries that have weeks if not months, if not weeks left in cash, right. You’re gonna start seeing some things happening that will surprise people, and MadMen is not the first one. Right like there, there’s a lot that’s going on right now. And so if you’re entering it with this hopes and dreams and making money right now, no, but if you’re entering in your smart entrepreneur, right now’s the time to watch these startup companies watch these brands and see as they consulted there’s going to be indeed is going to be blowing up you know what I mean?
The job market for it will be blowing up. And if you’re following cannabis, once you’re in it, once you understand the sourcing requirements, the processing the regulatory requirements, once you can speak that language, well, then you can start thinking about doing something different. This is not like diving into any other industry. It comes with entirely its own set of rules and regulations and principles, and culture. Most importantly, yeah, there’s a culture here that they can sniff you out if you’re not real, you know.
Sonia Gomez: Hell, yes.
Boris Shcharansky: They know you’re full of shit within a minute, right?
Sonia Gomez: I say that that’s still like one of the most true parts of the industry is that, like, back in the day, you had to know a guy who knew a guy in order to get your bag like it’s still that relationship business, whether or not people acknowledge it, it’s still that and the ones who are inside, know it. So I absolutely love that.
Okay, two questions I have final. Number one, you outline this pretty well, but I wanted to have more specifics because we are serving companies of all different sizes. I think everyone is feeling the burn that this is a time for consolidation. They’re getting ready for that because they want to be acquired. And at the same time, we have tons of folks who are listening in who want to understand how to apply their current skill sets so that they can participate in a job capacity but bring their unique skill sets to help build and grow these brands. So one question I have for you is, what are some of the key challenges that you guys are experiencing at a business at your size? And what kind of skill sets would help solve those challenges for you?
Major Challenges and Solutions That They a Business Their Size Is Experiencing
Boris Shcharansky: Um, the project management? Right. So, cross-departmental project management is something that you got to find the right people that can– an ERP implementation is a perfect example, right? New packaging is another perfect example. So, ERP implementation involves every single functional group that touches our system, which means our production team or distribution team, our sales team, and our finance team and our sourcing team between cannabis and non-cannabis.
All of them need to work together through a project manager to incorporate a system that’s going to combine all of our different facilities from NorCal to SoCal, to Central California, and all of our inventory systems. You need people that are able to be likable, be very organized, have a history of project management, and be able to implement things like that.
Another great example is new product development. It used to be that cannabis companies would just come out with their branded products. But really, if you’re a CPG, if your consumer goods company, you need to be iterating products, you need to have a product development roadmap, you need to know what you’re making an 18 to 24 months and having someone that can manage that type of process cross-functional people that hey, production, you R&D, you guys need to get us the five samples of these gummies or whatever, by next week if we’re going to make our packaging deadline because marketing needs the all the graphics done by March 15. Because if we’re not going to do that, that we’re not going to hit our July launch date, right.
And the thing about the current time of consolidation why are we doing is just can’t because companies have been overspending. Spending now is going to be focused on efficiencies and processes. So project management is key, being able to go in there and be able to say, Hey, I can manage multiple groups. I’m not their boss. You might be managing the CFO, the CFO, the comptroller, a marketing manager, logistics coordinator. You might be managing a group. It’s like, it’s true teamwork, right? But that’s like such a that’s what they teach a business school, right? That’s exactly what you do. You’re broken off into teams. You got to solve problems together. That skill, so crucial right now.
Sonia Gomez: So crucial.
Boris Shcharansky: Cannabis sourcing. Yes, yes. I mean, that’s just for the OGs on the line. If you have that ability, you have the ability to create relationships, and you have some established relationships in the industry. You probably already know it, but you’re a pretty valuable person.
Anybody on quality control, right? So quality control and metric, right? So I mean, it’s not so much metric. It’s more like getting ready for GMP, passive. So hazard analysis, [00:46:55 unintelligible] Control Points, things like that OSHA type stuff, those types of positions are going to become available.
And finally, you know what some of the bigger brands, if you have a lot of experience and you have a business background, C level and Senior VP level positions executive-level positions will be opening up, right? Not here. Don’t come after my job. In other places as there’s consolidation as teams are wiped out as owners are bought out, things are going to happen right, and so I always tell people to subscribe to all the alerts on LinkedIn and Indeed and Monster and wherever else you look for cannabis jobs because they will start coming in over the next six months. Is that a good enough answer? I thought–
Sonia Gomez: That was the money shot right there and loved the answer. It was so good. And you combined the final thing that I was going to ask you, which are what are some words of wisdom, but you wove it right in there and in the way that you were answering the last question. I think one of the things that I would piggyback and add on to that is for those of you guys who are listening in and considering get in as I cannot emphasize this enough, teamwork makes the dream work and really understanding your unique skill sets and how you can apply them to an existing team to improve the effectiveness and efficiency.
At the end of the day, the ability to run or participate at a high level with a business is your ability to make a decision with confidence and competence. And then, and have your team working with you in a fluid manner because at the end of the day, a business’s job is to bring the most amount of value into the marketplace with the most amount of leverage, and you can’t do that on your own. So teamwork makes the dream work.
And a really great resource for you guys who are tuning in is Roger Hamilton’s Millionaire Master Plan and the wealth dynamics. It’s a profiling test that has taken 5000 years of the teaching and paired it with modern-day capitalism to help you understand who you are, and how you should be operating within a team.
For instance, I’m like an Oprah Beyonce, Ellen DeGeneres, who has built my career through my relationships and my network and telling the story of this particular industry. Whereas somebody like Warren Buffett makes all of his money, specifically based off of timing and making sure that the decision he makes is at the right time for the right event. There’s people like Jeff Bezos, who is totally and completely focused on systems and then Richard Branson, who is creative.
So understanding what role you are in your highest genius or highest point of power is going to help you to understand how you can pair yourself with a brand. Or if you have the gumption and the funding, how you can start one of your own, and starting to build your team, do not go at this alone. It’s all about who you have around you and who you know, that’s going to help you grow quickly and effectively. That’s what I gotta say about that.
Boris Shcharansky: Can I piggyback on that for a second?
Sonia Gomez: Please do jump in.
Boris Shcharansky: Team are so important. Trusting your teams is, I mean, right there with it, right? If you have a good hiring process, hire slowly, the fire quickly, have a good hiring process. And if you trust the people that you hire, trust them to do the things that you’re scared to let go. Always. And to piggyback on the other thing you said, absolutely, like, don’t always think that you have to come in and be the boss or start your own company in this industry, especially in this year, there’s a lot of money to be made, potentially in value.
If you believe in the industry, and you believe in cannabis, then taking a deal that instead of negotiating for higher pay, because a lot of companies might not be able to do that, negotiate for some equity, negotiate to get some equity that’s in the hundreds of thousands of value right now, or in the 10s of thousands, which will has the potential to go five to 15 x increase over the next few years, right.
So if you do the math here, But always keep yourself open to you don’t necessarily have to be the CEO or the CEO or the VP or but if you can put yourself in a very valuable position like one of these project manager positions and say, I’m here to stay, I want to do this thing I don’t want to go anywhere but here but I want a good package and that package has to include equity and make my bonus structure include equity as well. That is a way to build wealth in this industry if you truly believe [00:51:57 inaudible], and if you have a brand that you really believe in and you’re going after, so that would be my advice when you’re seeking something. You don’t always look to be the man. Look to be like the pinch hitter that they need, right? Like, fill the position that no one else has done.
Sonia Gomez: Absolutely. Some of the things that I’m noticing are really super high value right now are your ability to tell stories, content marketing, and marketing in general, that’s always a major, major way to if you have the ability to capture and connect and convert an audience through content.
Boris Shcharansky: To our budget
Sonia Gomez: Yes. Then you are hyper valuable compliance and legal major, major anything in accounting and keeping books major, major and then again team and project managing so incredible and by the way, those of you who have trades abilities like HVAC and construction and all types of stuff like that, man, you guys are necessary in this place right now get some unique skill sets and understand the licensing regulations in your state because guess what it is going legal and if you know how to build out a beautiful, cost-effective facility that can help people produce manufacture, package, ship, whatever, you’re going to be a highly sought after talent. Let me tell you.
That’s what I got for you right now, Boris. I’m super excited to be developing the relationship with you guys and Papa & Barkley, and watching your guys’ journey can’t wait to come out to California. I’m super excited to do a ride-along with you guys because I know you do a ton of senior education. So I’m super excited to do that. Can you please tell our audience where they can find you if they want to find out more about you guys, what you do, how they can participate, or even purchase products?
How to Connect with Them
Boris Shcharansky: Yeah, well, if you want to follow me, you can follow me on Instagram. My name is really difficult, but it’s probably on the podcast, but it’s @bshcharansky. Papa & Barkley is an Instagram @papabarkley. We’re also on the website papaandbarkley.com. We have all of our products out there. All of our educational materials are on our website, that’s the best place to go. We have something called the Cannabis Compendium. So just learning about medical cannabis and terpenes and cannabinoids and need states. It is literally a compendium for that, so I would encourage you to go there. Yeah, following us on Instagram and going to our website are the two best ways to stay in touch with Papa & Barkley
Sonia Gomez: Amazing Well, all of the social handles and websites mentioned in today’s show will be listed around this episode. So make sure that you check them out, read through the blog, the show notes, the highlights and the mentionable, and check out the tweetable so that you can stay up to date with what’s happening with Papa & Barkley. Also make sure that you follow me on my adventure through California when I am cruising and perusing the motherland of cannabis, my hometown throughout the Bay Area
And I think I’m gonna float all the way down into SoCal to check out one of this senior education they have. I’m super excited about that. So you guys make sure that you follow me and help me pick my weed. As you know, it is our mission to empower you and educate you with the real information when it comes to cannabis and hemp. We want to make sure that you guys are making informed decisions about how you care for yourself, the people that you love, conditions you may be suffering from, or otherwise how you’re making your decisions to join this incredible and challenging but very exciting industry.
If you are a new business owner or an established business looking for resources or relationships to transform the way that you guys are doing business breaking through some glass ceilings and brick walls, check us out at theemeraldcircle.com and if you’re someone looking for products that you can depend on, check us out at medicalsecrets.com for our favorite picks. I’m your hostess with the mostess, Sonia Gomez,, and this is The Hemp Revolution. We’ll see you at our next show, guys. Thanks, Boris.
Boris Shcharansky: Thank you so much.
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