In 2010, Colorado was the Wild West of cannabis. A change in state regulations had led to an explosion in the number of medical cannabis dispensaries. One dispensary, Broadway Wellness, operated out of a piece of commercial real estate Lord owned. He had sold the baby products company that brought him to Denver in 1998 and was looking for something different, a new business challenge. “The business itself enthused me, and not for any other reason than it was something new. I had not had experience with the product at all and this was just new business. And new business is an exciting thing,” he said.
He bought the dispensary. It soon became clear to Lord that many in this industry, which was only just emerging from eight decades in the black market, were not ready for the burdens of running a business and coping with complex and ever-changing regulations.
“The original cannabis enthusiasts were just that. They were motivated by the cannabis but not necessarily concentrating on the business behind it and you have to be able to get both right,” he said.
“You have to be able to pay your taxes and you have to be able to maintain a business throughout the year,” Lord said. “For a lot of those early enthusiasts, this was all very new to them. Those enthusiasts were basically asked to come out of the closet one day and, within an extremely short period of time, become one the most (regulatory) compliant businesses in the country.”
Lord’s business sense told him the many mom-and-pop dispensaries would struggle with all the regulatory red tape. Vertical integration required dispensaries to grow most of what they sell. A large, single grow operation is much more efficient than scattered small ones.
The solution, he decided, was to grow. And grow. LivWell grew to four dispensaries in 2011, seven in 2012, to 10, to 15, with recreational sales beginning this year. Sometimes Lord bought struggling dispensaries. Other times he would find locations with ease of street access, good parking and a reasonable footprint, always on the Front Range, Colorado’s population center.
A 2.5-fold annual growth rate was something he had never before experienced in business.
With more revenue he could hire more specialized, trained employees. He has a department of 20 employees who do nothing but ensure regulatory compliance, leaving the growers to grow and the bud tenders to sell.
Of course, before they ever see a customer, bud tenders must attend “LivWell University,” where they talk and sell cannabis to fake customers in a mock-up dispensary storefront.
“The store experience, it’s becoming more and more necessary to have a very knowledgeable staff. In recreational, it’s a different customer. In medical, we have patients who are experienced with the product. In recreational today, we’ve got people walking in the door saying, ‘What’s this all about?’”
Customer service, the ability to talk intelligently about different types of cannabis, Lord believes, is more important than ever. The medical customer may be more discerning and older. The recreational customer may be newer or even need help picking out a pipe or cannabis delivery method. Employees are trained for both.
“The store experience, it’s becoming more and more necessary to have a very knowledgeable staff,” he said. “In recreational it’s a different customer. In medical we have patients who are experienced with the product. In recreational today we’ve got people walking in the door saying, ‘What’s this all about?’ Believe me we’re starting from scratch.”
Lord hires people with a lot of pride in their work, about half of whom have college degrees, and he in turn has a lot of pride in them. He talked wistfully about the young generation of cannabis enthusiasts working for him. “This is their industry and they are so keen to survive. That energy . . . they are so keen to make this actually happen. They themselves are protecting this industry from bad things,” he said. “It really has done my heart good.” And he is nowhere near done hiring. He has plans for three more dispensaries on the “immediate horizon” and would like to export the LivWell brand to other states as they legalize cannabis.
He declined to discuss his company’s financial information. “I never did this for the money. The challenge of this has been incredible. I’ve loved every bit of the challenge.”
So, he was asked, has he finally tried cannabis? “I’m a newbie. But yes I have tried the products.”