Clarity And Accountability At Scale

SPEAKER_00 0:00

When you get into a growth stage company and really start to scale, one of the biggest things I've learned, uh, as this is my first company that's grown to this stage, is you win with clarity and process accountability. So as that feedback loop gets bigger, as you add more stores, more production capacity, more employees, you've really got to have a clear accountability structure on who's doing what. Roles can't be unclear. Uh, you've got to empower your leaders. And, you know, as the founder, one of the hardest things for me is like you can't be in every single decision.

Ben Larson 0:59

Hey everybody, welcome to episode 132 of High Spirits. I'm Ben Larson.

AnnaRae Grabstein 1:05

And I'm Anna Ray Grabstein.

Ben Larson 1:07

It's March 31st, 2026, and we've got a great show for you today, of course. Uh, we have Boston Dickerson on, the founder and CEO of Show Me Organics. We're gonna be talking about all things Missouri, Kentucky, and beyond. Uh, but before we get there, Anna Ray, how's the last week been? I'm I'm back in Berkeley. Happy about that. I was in Chicago last time we we talked.

AnnaRae Grabstein 1:31

Yeah, the week has been going really good. I've been super busy with work and also family stuff over the weekend. And um yesterday I had a funny experience. A friend told me, I don't know if you guys have heard, but Eddie Bauer is in bankruptcy, you know, legacy clothing brand we all grow up, grew up with. And there's an Eddie Bauer store in my town. So she was like, you know, it's 80% off. You should go. Um, the whole store is on sale. And I went down there and I picked up this shirt that I'm wearing, guys. Not really that exciting, except that it's a hemp shirt. And it is it is 80% hemp, 20% cotton. And I got it at this crazy closeout, 80% off. Um, and I thought, what a bummer, man. Eddie Bauer finally is like bringing forward some hemp clothing, and um, they're also going out of business.

Ben Larson 2:23

So I I remember when I was a kid, my my wealthy friend, I thought he was wealthy uh at the time, uh, his parents had a Ford Explorer, and it was the Eddie Bauer edition, and it was imprinted in the leather head season. I thought that was really fancy.

AnnaRae Grabstein 2:39

Um, but I mean it did get me thinking about these brands that we think are here to stay forever, and how nothing is really forever, and there is a constant evolution, and we're even seeing it in cannabis, and we'll talk about it a little bit today um with some of the interesting dynamics that are going on in Missouri is that some brands that have done well in other states don't do haven't done well in Missouri, and uh these these things that we think are are so valuable. Um, ultimately it's like the business still has to be healthy, and whatever was going on at Eddie Bauer, they just couldn't pull it off anymore. Um, I think that they're maybe gonna still exist online, but all stores in the US are closing.

Ben Larson 3:20

Wow. Interesting.

AnnaRae Grabstein 3:22

But yeah, anyway, how was your weekend?

Ben Larson 3:24

Not just cannabis, huh? Uh yeah, weekend was good. I was recovering uh again, like from my trip to Chicago, which was really great. Uh, it was the CSP Daily News. CSP Daily News is a is a publication in the convenience store sector. Uh they're tightly tied to the uh knacks, and and we talked about that a little bit on the show. But um, I got to close out the event on stage with a fireside chat with uh with Jigger Patel, uh JP, as he goes by. Um, and he is the chairman of political action for the National Association of Convenience Stores. And on stage, he was giving his express support for uh the hemp initiative this year and also directly to the Coalition of Adult Beverage Alternatives, of which I'm on the board, um, led by Diana Eberline. Um and you know, it was just one of those moments where I realized like we've really made some headway in building these bridges to other industries and to have them be leveraging the power of their PACs, their political political action committees, their their um, you know, their network of stores. They have over 150,000 doors across the US and thinking about how to engage the customer at the point of sale and creating tap to learn or advocate or send letters to legislators. And and I think it's so exciting that we are now being able to leverage beyond the the you know proverbial four walls of hemp and cannabis and like kind of breaking into the these larger um larger communities. And um, it makes me really hopeful for actually getting some traction, albeit at the same time, you know, we're kind of uh at the moment, there's there's not clarity on how we drive this forward this year because there hasn't been a bill that can really uh move forward yet, right? There's everything that's been put on the table has been kind of dead in the water. So um, yeah, kind of pumped after all that, trying to drive that momentum forward and making sure that we're putting words into action and and really leveraging those offers to to assist.

AnnaRae Grabstein 5:42

We have passed the 100-day mark on the announcement that Trump gave to begin the rescheduling. On December 18th, President Trump signed an executive order directing Attorney General Pam Bondi to move cannabis from Schedule I to Schedule III, in quote, the most expeditious manner. But as of today, um, about 102 days later, nothing has been finalized. And on Friday, Representative Steve Cohen uh from Tennessee sent a letter to the to Bondi and to the DEA administrator Terry Cole demanding a status update. Um, the DEA has yet to set a briefing schedule. Trump's executive order does not set a deadline, and legal experts say the agency will still need to resolve or cancel an earlier appeal from the Biden-era administrative process before fast-tracking a final rule. And meanwhile, the Office of Management and Budget um is scheduled to start reviewing some type of proposal, even though there is no current administrative law judge assigned to the to the process after the former one resigned. So this is really complicated. Ben, what do you think?

Ben Larson 6:59

I I think it's just par for the course with our our federal government, um, especially when it comes to the FDA and the DEA. It's like they don't want to see cannabis legalized. Like it's it's very clear. And I think this just pops up in every conversation, especially when we're talking about pathways for legalization, be it hemp or cannabis. Like there's this big push to try to minimize the the influence of of the FDA and certainly the DEA. Um, and that's why I think people propose the TTB as as the regulating, uh, the preferred regulating agency in this case, because at least we know they're they have effective economies running under under their purview. Um, I think this is gonna be the persistent struggle as we get through this, and that's why I don't get super excited about the prospect of even schedule three getting even closer to moving through, because the the rulemaking process is feels like it's just gonna take forever.

AnnaRae Grabstein 8:00

Yeah. Well, I think what I want operators to hear is that rescheduling is not your business plan. It might happen this year, but it also might not. So uh if relief arrives, it's a bonus, but it's not gonna be a lifeline here, guys. And um, the companies that are gonna win are the ones that are gonna figure out how to be profitable with 280. Uh so just focus on that, my friends. Um yeah.

Ben Larson 8:28

But yeah, it's uh all those all those tax bills uh eventually will will come due. So might as well start paying them down now.

AnnaRae Grabstein 8:37

Which the news of the day is MJ Biz Daily published an article saying that the MSOs together owe the IRS$1.6 billion um in unpaid 2ADE taxes. And it's more than 40 cannabis companies, but MSOs, including CuraLeaf, Truly, Verano, and Cresco, have withheld their 280E tax payments, betting that rescheduling would retroactively relieve their obligation. And the collective tab is now over$1.6 billion. And as part of a court case that's happening in New Mexico, the IRS um has already started to arguing that that 280e and rescheduling will not wipe out past due liabilities. So I don't know, man. Truly Vallone has 630 million in this uncertain tax position. And Verano is at over 300 million. Uh, I saw in the New York Times this morning that Palantir has been hired by the IRS to come in and to create AI agents to create more efficient audit and penalty processes inside the IRS. And so maybe it isn't just bureaucrats anymore. We're up against the robots, uh, which is pretty scary.

Ben Larson 10:05

Can Palantir focus first on making an AI to do my taxes and then like go help the government enforce them? Because that would be wonderful, uh, being that it's tax season.

AnnaRae Grabstein 10:17

It is, and it's a painful time for sure. So, yeah, this is this is pretty wild just watching all of these unpaid taxes build up. And there are businesses that are paying them, and then there's businesses that aren't. And it tends to be the small independent operators that I talk to that are all paying these taxes because they don't have complex tax strategy lawyers trying to get them out of them. And it just creates even further competitive divides in terms of the cost of operations when your competitor down the street is not paying their taxes, and you are. Feels very unfair.

Ben Larson 10:56

Yeah. Maybe our maybe our guest today can talk about that dynamic a little bit.

AnnaRae Grabstein 11:01

Oh, let's do it. Well, so our guest today is Boston Dickerson, the founder and CEO of Show Me Organics, one of Missouri's most recognized vertically integrated cannabis operators. Boston and his brother, both with roots and science, entered Missouri's cannabis market in 2018 and have built a company that spans six retail locations under the Blue Sage Dispensary Banner and a top-ranked wholesale brand portfolio, including brands Vivid, Missouri's Own Edibles, and uh Boyant Bob, and a cultivation operation that they acquired from holistic industries. Today, the company employs over 350 people and um has launched in Kentucky as well, one of the newest and most mysterious to me medical markets in the country. So we're really excited to talk with Boston today. He's raised a lot of capital to pull this off. He's creating all kinds of unique operational systems in order to scale. And uh, he's just the kind of operator that we love having on the show to show us and teach us about building something real and real markets in real time. So, Boston, thank you so much for joining High Spirits. Welcome.

Meet Boston Dickerson And Show Me

SPEAKER_00 12:14

Yeah, thank you guys very much for having me. Looking forward to a good conversation today. Awesome.

Ben Larson 12:20

Awesome. Well, show me organics. The the show me state is is Missouri. Uh, my my former business partner, Austin Stevenson, used to always talk about the show me state. Um let's start there. What's what's what's different about Missouri? Like, what's the mentality of Missouri? How is like how does show me show up in how you run a business or how the market runs itself?

SPEAKER_00 12:46

Yeah, I think uh to start, you know, people from the Show Me State have a lot of pride in where we're from. We're we're known as a flyover state on the on the coasts. Um, and I believe that's what gave our cannabis market a good advantage and head start out in front of a lot of these other programs that you've seen develop across the country. So um I was born and raised uh here in Missouri, just south of Kansas City in a small town. Uh, my brother the same. We went to the University of Missouri, uh, both studied biochemistry, and I got into the entrepreneurship route, and Montana went the chemical engineer uh academia lab route. And in about 2018, we we married our skill sets together and kind of had a crazy idea to apply for some cannabis licenses, and um, that's what we did. And we were lucky enough to get our foot in the door with with initially two retail dispensary licenses in southwest Missouri. Um, and we've just kind of grown from there. So I think we employ a lot of of values that we were brought up on in the Show Me State and in scaling, um, doing good business and and making sure that we're really focused on the consumer first.

Ben Larson 14:04

Born and raised in in Missouri, uh, but both named after places not in Missouri.

Missouri’s Fast Shift To Price Pressure

SPEAKER_00 14:11

Yeah, that's right. So my dad's middle name is Montana. Montana is the firstborn, so he got my dad's middle name, and then they always love Boston uh as a name and uh uh the geography and places around it, so they decided to stick with the uh stick with the tradition and continue the geography names. So I love it.

AnnaRae Grabstein 14:33

Really fun. Well, so Missouri's market has been a market that other state onlookers have thought seemed very healthy. Um the market hit 1.5 billion in retail sales in 2025. Uh, and along with that, when you look at the average price per product and all the different form factors and the average revenue per door of retail stores, a lot of signs really point to it it being a healthy market for the operators inside of it. Although, you know, the story has been complicated. And I'm wondering if you can give us your perspective on how the market has developed, what's worked well about it, what's been challenging, and kind of the dynamics that are at play today.

Shelf Access And Consumer Pull

SPEAKER_00 15:22

Yeah, again, with with us being kind of a flyover state, I don't think a lot of a lot of the bigger players in the industry really looked at the Missouri market as something that was going to blossom into to what it has. Um, but originally there was a group of people, and our trade association here did a good job of of bringing key stakeholders together in the regulatory process to make sure that you know there was a limited number of licenses in the state, but still enough to have plenty of capacity and plenty of access to these patients. Um, and the the current market conditions, again, I think people catch up outside of the state uh six months to a year after what we're feeling in Missouri, just being boots on the ground. So now that dynamic has shifted. You know, early on there were limited licenses, high margins. We went wreck very fairly quickly. I think uh within two years of the first product uh being sold medically, we had already voted recreational cannabis in, which I believe was the fastest state to transition from medical to rec. Uh so that brought a lot of interesting things with it. You know, a lot of capital came into the state. A lot of people built out these crazy facilities with huge cultivation capacity and uh bought the equipment to be able to process all of that weight that was coming down. Uh and then pretty quickly uh supply outpaced demand, and I think that's still true to this day. You know, from my calculations, it's uh one and a half to two X supply to demand right now. So what that's really led to is the power shifting to these retailers. So the retailers have a lot of the power in the market, you know, not uh not outside, not to say that's unique to Missouri. That's happened in a lot of other markets. I think it just happened a little bit more quickly here as uh consolidation ramped up and retail buying power concentrated. Uh so now we are starting to face some of the the pricing pressure that a lot of these other markets have seen for years. And you know, you say all of these metrics, AOV and basket and those things, while they are up, supply and demand is still the the main driver of uh consumer packaged goods. So there is a lot of pricing pressure out there. If you don't have a brand that has really got in with the consumer base and built a loyal following on reliable quality products, it is tough for somebody new to break into the state right now.

AnnaRae Grabstein 18:11

I want to push on that a little harder, Ben, before you before you go. Yeah. Um so one thing that that you're talking about is is the complexity of non-vertical operators to compete and get on the retail shelf. And we uh have been following the case that is happening in Ohio, where the state's attorney general is suing a group of cannabis companies for what they're calling price fixing. And and in Missouri, I've been following is some pretty large operators and established brands, STISI, a big one, Miramed, have chosen to actually exit Missouri. And it seems that there is this real structural challenge in Missouri for non-vertical operators to get on shelf. And people talk about the reciprocity um deals that are basically these handshake deals between retailers to carry each other's products. Um, I'm wondering if you think that that is what's happening or if it's truly about consumer demand. Kind of what is the what is the complicated dynamic that people need to understand about why it's been so hard for these big brands to break in?

Building Missouri-First Brand Loyalty

SPEAKER_00 19:25

Yeah, I can't necessarily speak to uh other national brands and their ability or inability to get on shelves here, but we really don't look at the the reciprocity as dollars in versus dollars out. We look at how we can drive more revenue for your stores and let sell through really drive what what sells. I think we're at a a point where the Missouri market is matured, you know, while still growing, uh we're continuing to sell more units at a at lower prices. So these consumers have started really voting with their feet. And if you don't carry the brand that a certain consumer wants, say in the in the most competitive market in the state, which is Congressional District One or Two, the St. Louis area, those consumers have you know 60 options within a 25-mile uh diameter that they can go access those products. So it has turned into you've got to you've got to carry what the consumer wants. While there is some some pricing power with the bigger retailers in the state, uh again, we we don't get to make the rules to to how this stuff rolls out. I just try to learn the rules the best we can and and play by what we're given. So our biggest focus over the last four years, you know, we started from two retail stores and no cultivation, no manufacturing. So we built the vertical a bit backwards. And I think that has helped us, you know, scale efficiently and still make sure that we've got the right things that we're we're focused on up front. So yeah, the last three years and the next two years will be focused on expanding our retail footprint in Missouri to make sure that um we are able to stay above whatever dynamics do change in the market. If that's more licenses, if that's less licenses, if that's you know, hemp being accepted in uh convenience stores and gas stations around the state. Um I'm not banking on any regulations or lawsuits or anything to change my business model. My goal as the CEO is to try to build a sustainable platform business model within the regulatory environment that we currently live in. And I've kind of had tunnel vision on that, whether good or bad. Um, I think it's served us well in not thinking if or what if.

Ben Larson 21:55

It does make me wonder if the the pride element comes. comes into kind of the purchasing patterns. Like is there a more of a focus of the consumer on locally grown brands versus you know the Stizzies and others coming from the outside as like an 800 pound gorilla? Uh I I know we we see this in markets like Minnesota where you know there's a very mini grown kind of well that's an actual brand name but I I do think it's like a phrase there's like mini grown um you know products and and you go into restaurants and bars and you'll see not the obvious products being offered and it's because they're they're local, right? So kind of an interesting dynamic and also as we think about the future of like you know interstate commerce how it does always create this opportunity to have brands that go local and and deep and and have their rooted base there.

SPEAKER_00 22:48

Yeah that's an interesting point Ben and I I believe that's one of the things we identified early on um I brought a a chief marketing officer on in 2022 so really just after we'd we'd launched and had our SKU selection and hadn't really even built our brand portfolio out yet. That's one of the first things that he identified when he came on uh big shout out to Tony if uh if Tony's listening here but uh we noticed that consumers do gravitate towards Missouri uh products and they are very prideful in the state and the state's offering. So that's how we came up with the Missouri's own edible brand which is we use local flavors, uh fruits, um, organic things that go into to organic inputs that go into our product to make sure that we do have that bit of differentiation. And I don't think this is atypical in Missouri from other markets. You know it's not like Supreme or off white have their biggest revenue stores in Missouri. It's typically a coast thing. So I think it's similar for for the Stizzies and and some of these big brands is people aren't super people don't play into the hype a whole lot here and especially when you come with a a similar offering to what somebody in state is already making uh at a higher price point then it's it's really going to be hard to crack those loyal consumers.

AnnaRae Grabstein 24:21

Mm-hmm another dynamic in Missouri that we've got to talk about is hemp. Missouri also has a lot of hemp retailers and um they don't have the same regulatory oversight as your stores. The adult use market has been doing well in Missouri but the Missouri cannabis industry is um frustrated and pushing back and there is a house bill uh that was or is supposed to ban intoxicating products by November of this year. And I'm wondering if you can just talk a little bit about your perspective and the dynamic um in the state with intoxicating hemp yeah it's it's been an interesting one and and you know going back to my personal philosophical uh feeling on this matter is that hemp and cannabis shouldn't be fighting each other.

SPEAKER_00 25:24

I think we're part of the same industry and I truly believe that uh more access to to products you know whether it be in in a price chopper or local grocery store here or a convenience store can add a layer of convenience and um access for people who may not want to go and shop in a dispensary or people who are just getting into the product category. But if we're going to operate in the same sandbox, I believe we need to play by similar rules, especially when it comes to safety testing, consumer transparency, regulations to swallow for me is is regulators in Missouri, while I think they do a great job and I think we've got a well-run program here and good leadership at uh the DCR level you know they're scrutinizing everything about our operation down to like if you can have large MG versus lowercase mg on your packaging and they'll run recalls or not let you put that product into market if one little thing is off on your label or packaging meanwhile I've got a store right next to my dispensary who's selling untested unregulated unlicensed product that literally looks like Skittles and has every color of the rainbow on the label. So again while I while I don't think that we should be fighting each other I think there needs to be some sort of come to Jesus with with the hemp and cannabis industry.

EOS Tools For Growth-Stage Leadership

Ben Larson 27:03

Yeah I think that makes a lot of sense and there's a lot of people that are that are preaching that and any um pushback to that uh through the killing of bills or or you know suing against regulations it's um it's made the the landscape really challenging and so what we are facing is as Anna Ray pointed out are whether it's at the state level or the federal level the these potential bans which you know I I just think bans in general are don't work and to your point we need common sense regulation that that protects the consumer. But you know despite these headwinds despite someone being right next door to you you have been able to grow your business and quite rapidly you've gone from two employees up to three over 350 in in a pretty short amount of time so you know I'm as a CEO I I'm curious more around like what is that growth feel like you know what are the major inflection points how rapid was it like how did you keep your head on straight as you scaled uh well beyond what you could personally wrap your arms around yeah it's it's been eating sleeping and and breathing this for you know the last almost decade now to to get to where we are and I think that's one of the things that people don't really see is is all the the behind the scenes things that go into this.

Kentucky’s Medical Market Reality Check

SPEAKER_00 28:29

I've been fortunate enough to to really meet some great people in this industry folks who've been wildly successful in other industries and the resounding theme when I talk to those guys and I consider a lot of them mentors and good friends is this is the hardest industry that they've ever operated in. And these are coming from from serial entrepreneurs who've ran multiple different businesses across multiple regulated industries and just figuring all of this out you know cannabis company right now is is like seven, eight businesses in one from you know having to set up an inventory management system to a logistics service, retail manufacturing um the list goes on and on real estate et cetera and when you when you add all of these regulations on top uh and people figuring out what these regulations mean and how they're gonna how they're gonna roll out practically it creates a very difficult environment. So I'd say number one is being there. You got to show up every single day you've got to keep up with the news you've got to keep up with the relationships in your market and really understand what's going on at the ground level so you can pivot if things don't go your way. I think back to scaling to start scaling you know you read all these books and have all these ideas about what leadership is and what what a scaling a company should look like but I think everybody has their own journey to scaling a company and we've made so many mistakes in building show me organics and um that's not to say that we could go back and build it again I kind of use the the analogy it's like a round of golf whether you hit a shot in the woods or you you missed a putt or you hit a good putt, like you got to show up and hit the next shot and play it where it lies. So I think scaling a company really starts with scaling your decision quality before the head count. So you know in the early stages when it was me and in Montana really doing everything from I was doing the sales and marketing and the pop-ups at the stores and running the retail team and Montana was making the products doing RD uh testing these products getting our packaging figured out getting the supply chain figured out and actually delivering them to the stores so early stages you're able to win with talent density and just a sheer hustle. That feedback loop was so close then you know we only had uh a dozen employees and we were driving most of the decisions in the company so that feedback loop was really close. So if something went wrong or a store got a wrong delivery, I'd call Montana, we'd fix it, we'd have an answer before the end of the day. When you get into a growth stage company and really start to scale one of the biggest things I've learned uh as this is my first uh company that's that's grown to this stage is you win with clarity and process accountability. So as that feedback loop gets bigger as you add more stores more production capacity more employees you've really got to have a clear accountability structure on who's doing what roles can't be unclear you've got to empower your leaders and you know as the founder one of the hardest things for me is like you can't be in every single decision. So we we found a couple of good tools in scaling uh the company we've uh worked with EOS to create a structure and kind of tailored that to our own personal uh leadership meeting but it only works if if your team is bought in and your leaders own the outcomes uh you got to have A players who can can run the lanes without you and again the hardest part of that is is letting people fail without stepping in too early and fixing things every single time otherwise you're gonna continue to run into those problems and continue to have to step in and fix. And that doesn't allow me to focus on our biggest growth initiatives to to get the company where ultimately we want to be harder yeah EOS is great. Kind of digging into the book uh traction again it was sitting up on the shelf and after we talked last week I was I was like oh I'm gonna go pull that thing off and and and dust it off and see see how we're performing on the accountability scale yeah yeah it's it's interesting and I just like anything it's it's not perfect you've got to make the framework perfect um so we've adapted it to our needs and made what I think is a pretty efficient EOS structure across all of our organizations and entities uh but granted it's still a work in progress like every day there's something new or or decisions that you're having to uh change or fix and you know I always use another analogy that is these these companies are like big ships uh especially in cannabis when you make a decision to turn you should be going that way for a long time because it takes six to nine months to turn it around.

AnnaRae Grabstein 34:02

Yeah amen you just set me up so hard for my perfect segue into talking about Kentucky it sounds like you uh turned the ship uh into Kentucky and I want to talk about it because this is a market that is very limited in its licensing it's brand new it's pretty constricted in terms of what's around uh allowed from a form factor perspective but I know that you are looking at this as a brand new market that you get to get in there as a first mover. This is the beginning I'm sure you have hopes and dreams of what this market will become is this going to be the next Missouri for Show Me Organics.

SPEAKER_00 34:43

Tell me about Kentucky Kentucky's a really interesting market. I think we share a lot of some similarities in Missouri to Kentucky uh one being what we just talked about. Those Kentuckians are prideful in their state uh they really like supporting uh local Kentucky businesses and making sure that you know their constituents are able to to have a fair shot at at markets. So in Kentucky we have a management company called Trilux uh KY Management and we've we've used that structure to uh partner with different business owners license owners and uh bring kind of our expertise from Missouri and our brands that we've built uh to Kentucky to try to put into the best practices uh for that state in particular so currently we have a uh 10,000 square foot cultivation uh canopy that we're we're operating uh that's in in Jessamine County in Nicholasville we were one of the first few cultivators to market don't quote me on exactly which number but I believe three or four um and we're not close to capacity right now is that patient count is you know hovering around 18 or 2000 currently uh but we really do believe that uh with the things that the regulators are putting in place you know they're trying to work with us to make the the process from getting your certification to a card a bit uh easier on patients as as you guys know a lot of a lot of folks who need this medical cannabis are are elderly patients who may not be as as well versed on um the Complia websites and you know going to get a notary and digitally uploading those documents. So I think there's definitely a few barriers that that we have to overcome and we're expecting to have to overcome but all in all it's a new market. I'm super excited for it. It brings me back to to five years ago when we were getting things off the ground here and I can't wait to see what the market looks like a year from today. I believe uh by the end of the year we'll be in a good spot with you know 40 to 50 thousand patients is is our goal and uh we'll have several dispensaries that we're operating uh in Kentucky and mostly in the rural areas but we've got a couple outside of Lexington. Do you think that the restrictions on form factors are going to keep people out of the dispensaries you know partially um it's similar to Ohio in in regulation you can't have uh oil over 70% uh delta 9 THC or any product over 70% delta 9 THC and flour I believe is that at 35% Delta 9 THC so um it is non-combustible although I don't think that stopped anybody in Ohio um but I believe that one of the things that is is hindering the patient count right now outside of the difficulties in in uploads and going from certification to uh to approved card is just variety out on the market. You know there's only one or two brands currently in Kentucky you've got you've got one product of of gummies we're just receiving FICO at some of the stores this week and then flour and there's one brand and uh and again supply and demand dictates pricing. So you know pricing and variety are a big big part of what is needed to normalize the Kentucky industry.

Ben Larson 38:38

Yeah this kind of reminds me of the conversation we're having last week Anne Ray uh just with these uh conservative states how they start highly restrictive and then progressively get better over time we've seen it in Texas with the recent legislation Georgia just passed uh their law that we talked about last week so opening up uh the market there and so this is that kind of first step for Kentucky so hopefully we we see a lot more than those that 18 to 20 thousand um I think it's also interesting you know we have some really key you know federal legislators that are out of Kentucky you know obviously Mitch McConnell Rand Paul um but James comer and to now have uh cannabis represented in their uh with their constituents um you know slowly progressing that that very difficult conversation in in DC um Boston I'm curious like working now across two states and and maybe more in the future um is this driving you to get involved in in the political conversations like in these states or um is your lens more of you know playing the ball as a lies you mentioned being a CEO and adapting um how do you see like the importance of of that aspect like changing the laws in Kentucky to be more open yeah I'm very very involved on that front and I think as uh as an in as you know potential industry leader in Kentucky uh it's it's up to us to make sure that these regulators understand the rules that they're putting forth and what that practically looks like downstream.

SPEAKER_00 40:24

Just like in Missouri there's a lot of things that start off one way, but once these guys see how it works out practically they understand why it doesn't make sense in the industry.

Capital Strategy And Vertical Integration

AnnaRae Grabstein 40:37

So like you mentioned earlier the conservative states with with legislation they don't like to change anything right away because the certain process was put forth to enact the legislation that the voters uh the voters voted on and they don't want to change anything too early uh more of a a scientific method approach change one thing at a time and see exactly what the the ramifications of that are so I do think we will get there but it is going to take a strong industry association just like any state and these operators getting together and making sure that we're able to effectively cordially communicate our problems to the regulators cordially I like that I want to talk about uh capital and your vision for what you're trying to build ultimately you started this as a family business but you've talked about how you're building scale and how you're looking at the market in order to launch in a new state and to expand at the rate that you have I'm sure that you've had to raise capital and I think that it would be really helpful to hear your story about how you embarked on raising capital and and how successful it's been what has been your approach and uh ultimately what what you're trying to build with this private MSO that um is is really kind of coming into its own in some of the markets and people are paying attention to yeah yeah you know the the old old adage mo money mo problems that is that is our core thesis in capital honestly is capital doesn't solve your problems it really amplifies them and I think early mistake a lot of founders make is is chasing the valuation instead of of of alignment and what you really need to to do is get your house in order before you go and raise capital.

SPEAKER_00 42:40

Otherwise you can very easily get taken advantage of in these these types of markets and a lot of these investors who are willing to take these risky investments in in cannabis are well versed in other in other investments. So they know what a good deal looks like to them they know what a bad deal looks like for the founder. So I think it's very important to have your house in order and make sure that you know exactly where you're going to deploy that capital before you bring it in. The first uh round that we raised was pre-application in Missouri. It was a merit-based scoring application so you had to show your your sources of capitalization and uh where all that was from so we did a friends and family round just to get through that that initial application period and at least you know have the statements uh of those investors that we were able to show the state uh to show that we were we were qualified applicants we really from there tried to bootstrap as much as possible. When I say as much as possible I'm going back to like Montana driving the vans to these dispensaries to deliver the first orders and us in there helping with construction and making sure that we knew exactly every dollar that went out of the organization What the value it was generating. I think that going back to that early mistake a lot of founders make is, you know, you can go raise at a at a fairly high multiple or a fairly high valuation in an investment like this if you have a good business plan and a thesis. But if you don't really attribute those dollars to value and what you're going to get out of them, I think it's it's a lost cause to do so. So our philosophy has really been to be disciplined, you know, don't overbuild too early. As I mentioned, in Kentucky, we we have our 10,000 square foot uh cultivation right now, but we're only operating a couple of rooms, a couple of small rooms right now, and haven't even uh push play on on building out the phase two and three of that cultivation operation. So phase capital into uncertainty, and then you know, the structure, like I said, is is much more important than the headline valuation. Um so after we raised that initial seed round, that was enough to get our dispensaries, first two dispensaries off the ground and complete our first acquisition of a manufacturing lab in Missouri. We operated those for about six months before we really determined the need to get vertically integrated. We were ordering biomass from all of these different cultivators in the state, and that that inherently brings some risk into your process because you don't know how that material's been grown, uh, what type of care they took on those plants. So early on, we faced a couple of capital events that that put us in a really tough spot when you know you run$300,000 of material into a product that, you know, part part of it or all of it fails and has to be remediated, you have to really make a big pivot there. Thankfully, uh, we have good processes and procedures in the lab. And and my brother's background being in academia, we try to approach it with that scientific method of you know, never too much risk out there. But when we realized we needed to get vertically integrated, um, I was out raising capital and looking at about every cultivation in the state of Missouri. Uh license, built, uh, didn't matter. So we went to several of these different different cultivations that were open. You know, they they initially licensed 60 cultivators in Missouri. I'd say I went around to 30 of them to talk acquisitions and seeing if anybody was interested in a partnership. And you know, everybody wanted to go at it alone or had their own plan at that time. So I not only got a lot of no's on the acquisition side, but we really ran into a lot of no's on the capital raise side. You know, we had to raise a substantial amount of capital to complete the holistic acquisition in 2022. And I went to everybody I know, everybody my brother knows, everybody my brother's friends know, like every single person in our network, we went and tried to raise capital. And I probably got two to three hundred no's uh because it was it was too big of a project, or investors didn't really understand it. Um, thankfully, we did uh have some people from our initial investor group who saw the vision, they were willing to take the risk on us. And then I found a couple, a couple of guys outside of that investor stack who who really believed in what we were doing here. And I think that is one of the biggest lessons that I've learned in pitching that many people is you can have the perfect business plan, you can have everything teed up, but the the person giving you a check really has to believe in you and your leadership team as the founders if they are going to get that far in the process.

Ben Larson 48:12

It's interesting that you discovered that you needed to vertically integrate, and then you went and you know, purchased the Grow and did that. And then it sounds like going into Kentucky, that is now the foundation where you built the canopy. And then I presume that you will then you know vertically integrate and and create the similar model that you have in Missouri. Is that how you're looking at it as you go into these other markets? Uh, and if you want to, you know, uh inform us on any other thing that's on the horizon, but like, you know, is is that now the model where you go in and you build the grow and then kind of like work work downstream from that?

SPEAKER_00 48:53

Yeah, you know, I think it's like anything. You've got to the best way to learn is to do. And now that we've done in one state, not only do I have a little better know-how of how this process works, but investors have a bit more trust in in what we've done here and and being able to recreate that platform in another state, whether it be Kentucky or another market. So now that gives us the benefit of being able to have this capital teed up for expansion when it makes sense. So uh again, going back to having your pulse on the ground, I'm gonna be very, very close to the ground in Kentucky. And we've got a great team down there right now who's also uh really helping uh get those patient drives set up, inform us of of any pinch points in the market, and really be on the ground floor of knowing when we need to build out to capacity and expand. So yeah, that's that's a huge lift. And I think some of my constituents here in Missouri is really who I learned from, those people who got off the ground early, had good quality, reliable product from the start of medical, and just got better uh as patient count increased and eventually we went recreational.

AnnaRae Grabstein 50:12

So leaning in into this medical to adult real life experience that you've had in Missouri, and now that you're watching Kentucky, um, there's not that many medical-only markets left. There are some states that don't even have a medical program, but in terms of those early entrant markets, what states are you watching? And what states would you like to be a part of?

Texas Ambitions And Founder Origin Story

SPEAKER_00 50:40

Yeah, so always love a new market. Like I told you, it brings me back to the the startup days and being able to go down and and make a difference with just sheer hustle. So I think our team's really well built for that and and really our bread and butter. So we are looking actively at new markets. We try to go for limited license markets where we know uh there will be good, solid regulation, hopefully a chance of going adult use in the future. And the current one that we have um on the horizon is we applied for the third round of uh Texas uh TCUP licenses uh that should come out any day now. So we submitted back in September. Uh they awarded nine licenses in December from a previous application period. And then there are three more applications or licenses that will be awarded uh here in April. So very excited for the prospect of Texas and crossing our fingers there.

Ben Larson 51:43

Yeah, good luck with that. Thank you. Um, as we kind of get closer to the top of the hour, um, I can't help but think like you you just mentioned that being elated by kind of that that startup phase, uh, and you came out of biochemistry and jumped into building startups in in cannabis. And I I want to take take us back to that that moment of jumping in. Uh, and like what made you decide to leave biochemistry, which is a very you know specific focus, and to jump into something as crazy as building companies in in cannabis.

SPEAKER_00 52:21

Yeah, yeah. So I'll take it back a couple of years prior when I realized biochemistry wasn't really the path I wanted to go. Um, I've always had a passion for cannabis. I've seen how it can help you know my friends, family, and communities, uh communities around us. So that's it's been a passion of mine since I realized I'd been lied to when I was about 18 years old and tried cannabis for the first time. Um, so my sophomore year at Mizzou, I went uh on a great study abroad trip. I was fortunate enough to be able to go to China for about five months, did an internship and a study abroad program there, and and had a really good mentor from uh the MBA program at Mizzou. His name was Bill Griffin. And I was going through my my life uh problems with him basically and told him I didn't see a fit in biochemistry. And he sat me down and told me, Boston, hold on for a second, get your technical degree. And if you still want to go the entrepreneurship route, you can go back and get your MBA. And that's what I ended up doing. So, about my sophomore junior year, I started getting involved into startups and entrepreneurship, worked for a couple of really cool startups. Uh, one that was a behind-the-eye glaucoma implant uh called Sclera. Um, worked with a couple of doctors and uh research teams at the University of Missouri to uh go through drug trials and get that uh medical device to market. Uh, funny enough, there was a bit of crossover between cannabis and glaucoma, obviously reducing the pressure uh from that. Um, so that got me thinking a bit about the business side. And then I was involved in a couple more startups uh beyond that, um, a logistics startup and uh a couple of uh restaurant uh payment processor startups and really just opened my eyes into uh what it's like to lead a team and and try to build something from the ground up, and I fell in love with it. So my brother worked at MD Anderson uh for a while in Houston, and he was doing cancer research. So when I uh I had the uh idea to apply, I actually got it brought to me uh through my my parents, and it's it's a complete family business. So my mom's a pharmacist. That's why my brother and I went into biochemistry and thought we wanted to go that direction. Um, but funny enough, my dad's friend actually brought this this process to us because he knew a consultant that was working on it in Missouri. And they brought it to me and I took off with it. Like that was all I was gonna do. I uh had a sidebar with Montana, and you know, he had a good thing going at the time, and uh, we weren't either one real sure about the direction, but we knew we wanted to try it. So in 2018, we went to our first MJ BizCon and met some of the folks in the industry. Shortly before that, actually, we moved uh Montana out to Denver to get uh experience in the extraction side of things. We always knew we wanted to build a brand, just didn't really know how we were gonna get into the industry. We didn't know anybody at the time. So he started as a lab tech at M Hardine uh in uh Denver or right outside of Denver in Golden and worked his way up to one of their head extraction technicians fairly quickly. Uh, worked out there for about two years while we were waiting on the application from Missouri. Um, so when we didn't get our our license approved for manufacturing, we were crushed. Uh but that didn't stop us. We continued to pivot, went and acquired a manufacturing lab, and we're one of the first uh brands and manufactured products to market in Missouri. And one last thing on that, uh a big shout out to to Montana, my brother. He's one of the first and and few people who I believe in the cannabis industry really marries the culture and what cannabis has always been about for decades to the academia and science that really needs to uh marry these two to make us a legitimate industry in the eyes of of all these other constituents. Um so really happy with kind of how the how the uh chips fell, I guess, but never dreamed that I would be you know fortunate enough to be able to be in the cannabis industry waking up and doing this every day.

Ben Larson 57:09

That's amazing. I love that.

Final Shout Outs And Listener Request

AnnaRae Grabstein 57:11

I have goosebumps. Um, you can't see them, but uh it is so fun to just get to hear people's stories and so appreciative of how much you've shared with us. And I want to meet Montana now, so you'll have to introduce us to him. Um, it is the end of the hour, so it's time for our last call. So, Boston Dickerson, what's your final message to leave our listeners with? Advice, call to action, or a closing thought? Mike is yours.

SPEAKER_00 57:38

Yep, closing thought. I just want to give give one last shout out to the whole team at Xiaomi Organics. Uh, none of what we're doing would be possible without the buy-in of everybody from our leadership team down to the associates that take so much care in producing some of the best products in in the Midwest. So big shout out to those guys, and we're just getting started.

Ben Larson 58:02

Awesome. Well, shout out to you, Boston Dickerson, CEO of Show Me Organics. Thank you so much for spending the last hour with us. It was it was really great chatting with you.

SPEAKER_00 58:13

Yeah, really enjoyed it, guys. Thanks a lot for having me.

Ben Larson 58:17

All right, what do you think, everyone? Uh, show me the money. Uh, go out and get some products if if you're in Missouri or Kentucky now, I guess. Um, and we'll be watching Boston and Montana and see how they continue to grow this business. Let us know what you think. If you've enjoyed this episode, please like, subscribe, share, do all the things, leave us a review on Apple Podcasts or wherever you listen to your podcasts. Thank you to our teams at Virtosa and Wolfmeyer. Without you guys, we couldn't be doing this. And of course, our producer, Eric Rossetti. As always, folks, stay curious, stay informed, and keep your spirits high. Until next time, that's the show.