Green Check Verified: Hey Seun! To start, we'd love to know what brought you to the cannabis industry?
Seun Adedeji: My name is Seun Adedeji and I'm the founder and CEO of Elev8 Cannabis. I was affected by the war on drugs at a young age. As I grew older and continued to advance my mind, I discovered that the cannabis industry was becoming legalized, and I wanted to find a way to get in. I was living in Washington state which had a lottery system at the time, and they were giving out a limited number of licenses, basically by luck or by favor. I was super young and scared of the potential, but I was also excited about the opportunity.
I was nervous about the costs and I did not understand the revenue potential. But it turns out that Washington State has an open data law where the state reports on the daily revenues for all dispensaries, and once I got access to this I got even more excited. I knew that if I could get my foot in the door I was going to crush it.
Then came another challenge; it cost about one million dollars to get into to this industry. I didn't have that - I was 21 years old and at the start of my journey. Outside of creating generational wealth for myself, I wanted to get into the cannabis industry to be a bridge to help others that look like me get into the industry. At the time, there was less than one percent of businesses in the cannabis industry were owned by African Americans. I am very passionate about giving back and creating more millionaires within our community.
When I started my journey, I was the 'COE,' the 'Chief of Everything.' I legitimately did everything. You need attorneys, you need a COO, you need a marketing person, you need a janitor - I did it all. I had turned to Oregon because it did not have a residency requirement, but the application took some time. The program has a real estate requirement, and I got rejected for two years in my pursuit for real estate that was compliant with the state and city regulations.
I finally found one, but unfortunately it was in a really bad location. The location was not high visibility, but I was paying an arm and a leg because I finally had an opportunity and I refused to let it go. I said, 'If I get my foot in the door I'm going to make it work.' I finally opened with only $50,000 and a dream. I did not have the ability to actually procure product when I initially started due to my lack of financing. I couldn't hire employees, and that's why I said earlier I was the Chief of Everything. I worked from 8am to 10pm for a whole year.
I didn't have capital, so I got creative. I emailed different cultivators and built trusting relationships in which they were willing to give me consignment. I was able to mark-up the product, start generating revenue and open our doors. Next came finding clientele. I went out and passed out flyers every single morning and I started getting clients. We paid for a high-tier position on Leafly which helped a lot.
Because there was no limitation on the amount of licenses they were giving out, the Oregon market became more and more saturated and the competition became fierce. I knew the market was not sustainable, so I started looking at limited-license states like Massachusetts or California. California was also over-saturated, so I focused my attention and profits in Massachusetts. I hired the number one attorney in Boston, Massachusetts, signed a million-dollar loan agreement, and we were able to win three licenses.
Then, I went to Illinois, my home state, to help draft their cannabis laws. One of the things we lobbied and advocated for was for minority inclusion by removing real estate as a criteria to apply. Out of the 50 states in the United States, there are 33 states with some type of cannabis legalization, and in each of those states you need real estate to get into the cannabis industry.
Numerous zoning requirements limit where you can open a dispensary, so options are limited and real estate becomes very expensive. I have friends who are big multi-state operators who are paying anywhere from $100,00 to $200,000 in the hopes of winning a license. And it's not even guaranteed; they're just leasing space so they can start their application. I wanted my home state to be different. We had the honor to speak with the senators and representatives that were crafting the law, so we lobbied for this as well as for a revolving loan that uses the money that's being generated from tax revenue from marijuana industry to go back to supporting minority owned businesses. We also held seminars to educate minorities that have been disproportionately affected by the war on drugs.
GCV: It came up on your website and it came through in this conversation so far, so I'm curious, what does the community mean to you and to Elev8? What role do they play for you?
Adedeji: I can give a perfect example. I got a call from a police officer at 3am that my store was broken into about two days ago - it was all over the news in Eugene, Oregon. They took the majority of our product and everything was broken. For context, Elev8 is the only African American owned dispensary in Eugene. They informed us it was two white gentlemen who had broken into our store, and during this time where it's been a race war, I chose to not feel the hatred. We focused more on actionable items that we could get done. Our company philosophy is 'Treat everyone like gold.'
We opened our first dispensary in 2017 and the outpour of love that we received was tremendous. We had vendors and cultivators that we've worked with for three years send us care packages and products for free. We had people reaching out to us, we had our customers come out and give us flowers and share our story on social media and say, 'Hey, this is not how we all feel, and this is not what we represent.' The cannabis community is filled with a lot of loving people that really care about the industry. It filled my heart with joy to see the amount of love we were getting from the community.
GCV: Wow, I'm so sorry that happened. It's great to hear that the community was there to support you, and I'm sure they were simply returning all the love and support that you've outpoured to the community for the last three years. I'd love to hear more about Elev8 and the size of your operation today.
Adedeji: Our Eugene, Oregon location employs five employees currently, and we're growing. We have Athol, Massachusetts locations where we have ten employees and we're looking to bring on twenty more. We are estimating that we're going to have a total of 30 employees in each Athol store once we start ramping up. Each city that we're in is only giving out two licenses, and we own one out of two.
GCV: It sounds like the team is growing super quickly! Going from a 'COE' to a good team must be an exciting journey to be on.
Adedeji: It really is, and we're super excited. It's a humbling experience and I am excited to share our philosophy of 'Treat everyone like gold.' We live by and die by our eight core values which are Love, Inclusion, Authenticity, Growth, Hustle, Ownership, Generosity and Empathy. That's we're about.
GCV: I'm sure it has not been easy in a lot of ways; it's a tough industry to be a pioneer in. What has your experience been with finding a sustainable banking partner?
Adedeji: Well, I've got the perfect story. Outside of being in the cannabis industry I also own properties in Massachusetts. We were banking with US Bank, and all of a sudden they closed our account. They didn't even tell us the reason. The only reason I could think of was they found out I also own a cannabis company. They closed our account during COVID-19, one of the hardest times. We have payroll and we have bills to pay. They were sending out my check, but it took some time for the check to come in.
Just being associated with the cannabis industry, just having equity, could potentially lead to your personal accounts, or even accounts from your other businesses, being closed. Thankfully we were one of the first people in Massachusetts to get licenses and we were able to work with a great credit union here to set up our banking. In Oregon, we just re-opened and we're on a waitlist for six months just to get our bank account open. Now I'm just taking a huge risk doing everything in cash.
GCV: What is it like operating in cash?
Adedeji: There has to be a trust factor - we trust our employees and we trust our managers. I really wish there was more of a digital side of it where we can see everything that's going on. It leaves us blind outside of our POS telling us what we're making and camera footage. Having it in the bank just makes everything easier. You have a track-record, you have paperless, access to what you've paid. But now you have to make sure that you're keeping track of every receipt possible. It's just crazy.
We could be focusing on more important things outside of worrying about banking. There's just so many different pieces where it would be easier if we could have everything in one place. But for now we have to wait. We've paid the fees and sent in the proper documentation they requested.
GCV: What else should we know about being a cannabis entrepreneur?
Adedeji: It's very capital intensive. You need capital to really make it work, and you need a strong team to help you with your growth strategy to really succeed. I like to say, 'It's not about how much you make, it's about how much you can keep.' This industry is very highly regulated, and there's high taxation associated with this business. It's wise to get experienced CPAs and make sure you're filing your taxes correctly.
You have to show that you're doing everything right and by the books, because otherwise it can come back and bite you. If your exit strategy is to buy or sell, your investors, or whoever is going to buy your company, are not going to waste their time if they can't understand your books. You have to make sure your books are on point.
GCV: What has your experience been like with investors?
Adedeji: We raised $1M and worked with investors on debt loans with terms for a win-win situation. I think that they respect my hustle. It's all about relationships. Your reputation follows you, and people want to bet money on people they believe are going to win. Compared to what people would naturally spend to get into the cannabis industry, I am able to reduce the cost by using my experience and my foresight. To do the application sometimes people are paying $300,000, but because I have a robust amount of knowledge within the industry, I save a lot of the cost associated with the license application process.
July 16, 2020
About Elev8 Cannabis
Elev8 Cannabis is a national chain of cannabis dispensaries. We recognize that every individual’s path to wellness and happiness is different, and we take a personalized approach. We lead the industry in our commitment to service, inclusion, and social equity. Headquartered in Oregon, Elev8 is expanding rapidly with retail locations across the country.
Company Size: 4 locations
Location: Massachusetts, Oregon
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