If you don’t know the store owner, you can’t ask what the numbers are. But you can watch out for telltale signs in management. Tony Frischknecht’s guest in this episode is Chet Melton of Canna Nutrients. Chet gives a simple formula to size up if a store is worth acquiring. When you walk in, how responsive are the staff? Check out their inventory. Are they holding on to something they shouldn’t? Join in the conversation to have a better eye for acquisitions.
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Danger Signs In Acquisitions: What To Watch Out For With Chet Melton
On this episode, I’ve got a special guest coming on. We’re going to be talking about some mergers, acquisitions and a lot of other cannabis stuff but also, what is happening so quickly right now. That’s the consolidation happening in our industry. That’s from your growers and your suppliers all the way up to the retailers. My next guest has tons of experience. He comes with decades of growing experience. He has also personally taught me invaluable growing tips back when I was a grower. He’s also full of a wealth of knowledge of the industry and what’s happening. He’s on the ground on a daily basis. He’s been working for a very large nutrient company over the last few years.
I have him on because the nutrient company has more than three decades of experience. They were way ahead of most of us. There’s a lot to be learned from those very pioneering guys and that’s why I brought this gentleman on. I’ve got Chet Melton with CANNA Nutrients. He’s a really close friend of mine. He’s following the tracks of daily things that are happening in cannabis because he sees it firsthand. Chet, welcome to the show. Thanks for being on.
Thank you so much for having me. This is always a pleasurable experience. I appreciate it.
You’re welcome. One of the things I want to get back to is the start of this whole thing, especially here out of Colorado in the green rush. We had the green rush coming in. We got to experience it on the front lines. Chet, what brought you to Colorado?
Metaphorically, it was a sound, it was a feeling. I was working retail in Texas. Every week, my regulars would be less and less. When it got to 70% of these people I didn’t see, I was like, “What’s going on?” Everybody’s going, “Don’t you know? We’re all moving to Colorado.” I was like, “I used to live there.” I visited and I was like, “You could feel this cultural suck.” Not suck in a bad way, but as in a vacuum. I got caught in the wave and moved up with a whole bunch of other people from other regions that were knowledgeable, but didn’t want to be illegal.
You were selling nutrients and different supplies in Texas, and you decided to move up here. Chet and I met in the hydroponic store together. It was one of the fastest-growing in Colorado at the time. Take us back a little bit on those first couple of months. I have some vivid memories of things that I saw that were blowing me away. You mentioned the vacuum that was happening. Once you got here and you’re working in the store, what did you see come in the door?
I saw customers from every region of the United States. I saw big ballers from Atlanta. I saw these guys who had done the underground scene in Los Angeles. People that were from Kansas, Maine and Florida. They had all decided to take their wares or their desires to be a part of a culture that now gave them a semi-safe canopy to participate in.
As that was happening, there was a flood of cash that was coming in as well.
A ridiculous flood of cash. It was the beginning of, you were like, “Why don’t we regulate this? Why can’t we get a banking system?” Because we all know from our past experiences and you’ve covered this in your book. Cash is where the evil lies. Cash is where the underground lies. If you can shed daylight and have numbers out that are posted on a ledger, then you can’t hide much. The underbelly of it, the cash cover is always there. We’re like, “We want to be legal, but yet you’re forcing us to use the currency of illegalness.”
I remember certain scenarios when you mentioned a few minutes ago about the big ballers coming in. How did those guys pay?If you make something a little more expensive than it should be, it becomes more attractive. Click To Tweet
They paid in cash. They have the $10,000 form that you have to fill out. I was always taught that you had to fill that out. That was always a point of contention. They wanted to fill it out. At the same time, you tell the federal government that you’re using $10,000 worth of cash. They want to know where it comes from. You’re like, “It’s coming from an industry that you don’t want to participate in.” Federally you’re saying, but the State of Colorado is saying, “This is an industry that’s viable are going lead to income and tax revenue.” It was that clash between people who were used to using cash and people who are used to having a legit business, which doesn’t always fit.
I remember scenarios where they were giving us a cash counting machine because that’s literally how much cash. It would take us sometimes hours when somebody would come in to purchase large orders. We’re talking six-figure orders in cash. Most of us were pretty comfortable with taking them in another room, however, these were our daily occurrences that I remember and I saw. It takes a lot of time to count the twenties.
Also, to make sure they’re legit. That was the other issue. Once there’s that underground element, everything can be forged, whether it’s knowledge or currency or equipment or things like that. That was always an issue.
We had a lot of people coming in from other states, as you mentioned, but what did we see new in the market that we hadn’t seen before?
I think that we saw things that were questionable, like the Biowave. This left a lot of room for the snake oils and the hucksters to come in and capitalize on. I’m not saying the Biowave was either positive or negative. I’m saying it was untested, unresearched and very expensive. There were other items that were like. They were like, “We’re going to capitalize on the lack of knowledge or the lack of industry culture.” There was a culture but it wasn’t an industrial culture. It wasn’t like, “You always use this in these set of greenhouses and you always use this.” I saw a lot of untested and unresearched products. It’s what we saw that came out right at the same time, coincidentally, wasn’t a cause and effect. It was the large hood, these ochos.
Which is a massive reflector that they were having that said it could spread a large light ray. Going back to the Biowave, I want to talk about it because this was a crazy contraption that was created. Give us the idea behind it is what was supposed to be.
It was a mechanical piece of equipment that was plugged in. It’s spun some geometric designs that would create this wave. This way was supposed to either disrupt insects, fungus, and pests. At the same time, and/or the research could go one way with that or the other way, which was, it would stimulate the stomata and growth production. It will give you this positive vibe getting redefined as a scientific thing. Our culture is based on hippies. A lot of them want this positive energy proof. You put out positive energy in there that’s like, “It’s just geometric design spinning around causing this hum.”
If you look back to the snake oil days, it was the cure-all for situations in your grow room. That’s what they claim anyway.
In many industries, if you make something a little more expensive than it actually should be, it becomes much more attractive.
How much was that thing? It was $8,000, I remember or something like that.
It’s $6,000 to $8,000.
It was completely absurd.
With no scientific research and studies which is the same with LEDs.
As you’re seeing the transition into the legal market, what has happened to the product industry as a whole in the supply shops? Are you seeing big changes in there? Because I know you’re in a lot of them and you’re talking to these owners all the time. What kind of changes are we seeing on the supply side?
One issue is the supply itself. There is a lack of all commodities and materials like the microchip, the power supplies and things like that. They have a smaller effect on the car industry or other utility industries. We’re seeing raw materials like cocoa or getting depression in the stock of the commodities of that market. We’re seeing new technology or more importantly, I would say the advancement of newer technology. The LED is making its huge leap and getting its stamp of approval. Its recognition of something that’s actually a viable product in this industry.
You’ve seen some really large leaps and bounds in LEDs at this point.
Yes, I have. It separates a little bit from my belief but I can’t argue with what the commercial market is demanding and using as a standard.
Why is that happening now?
I think, one is due to energy consumption, which is related to two things. A 1,000-watt HPS is relatively inefficient with its energy consumption. The ballots and the bulb are pretty productive but at the same time, if you compare a 1,000-watt HPS to the 600-watt HPS, you’re getting more energy consumption with less production as you get larger in the wattages. When you get away from something about 400, 360 to 420, which were the original wattages, as the industry grew and as people dictated to manufacturers what they wanted and not manufacturers dictating to consumers what they want, which is always a game in any industry. You got these larger wattages, which were less efficient.
I say the efficiency hump is at 600. After 600, it goes back to you are losing efficiency. They create a lot of heat once you get to these higher wattages. While the LED companies recognize and consumers recognize that if I could spend less energy kilowatts and at the same time, not as create as much heat, which would then require, the more heat, the more AC, the more temperature control, the more atmosphere control, which is also another kilowatt sucker. ACs don’t run without any energy. Fans which are essential even, but they’re less essential. They’re more of a stimulant as they are a vacuum have that HVAC solution. You get to use less energy, which helps your bottom line.
Why were the pioneers so set on the HPS? For those of you that are listening here, I know Chet is getting pretty technical, but we’re talking about different bulbs. These bulbs that we’re discussing, how far did they go back? We’re talking a few decades?
The original grow lights are warehouse or streetlights. It’s metal-halide or high-pressure sodium. Metal-halide usually has a more blue spectrum, which gives you a more vegetative growth. An HPS, high-pressure sodium has a more orange or red spectrum, which influences a flower or fruit growth. Blue is considered to be cool. HPS which is the red is going to be considered warm. It’s depending on your industrial use before greenhouse was warehouses and street safety, street lighting.
The reason that this culture didn’t want to change so much it’s an insular culture. The greenhouses evolved but they have that luxury of also having outdoor lights. They’re trying to supplement that outdoor light, give it a longer day so you can control your flower process or have a growth cycle in the winter, which would usually interfere with fruit and flower production. You influence that by adding hours to your day of light. This culture is pretty insular. It doesn’t believe the first thing it sees. That’s good because it usually gets tricked if it does.
We mentioned the snake oil products. How many hundreds of products have been thrown through the industry like that over the last many years?
I don’t know. There’s a lot. If you’ve seen enough, you get to that, which I think is a larger cultural thing, which is The Boy Who Cried Wolf. You see enough bad examples, “Where’s the wolf? I was called and I see no wolf.” One day when they’re like, “No, this is the wolf. This is the shit. This is the thing that works. Fuck it now.”
Let’s get to talking about it. You brought up the LEDs and they’re being adopted by these corporations that are growing. I think part of what we’re seeing too, is that adaption and these guys that are actually breaking down the data. They’re starting to understand efficiencies as you’ve mentioned before. These guys are also starting to consolidate and these mergers and acquisitions are happening. We’re seeing it, as I mentioned before from the ground up. We’re seeing it in the grow stores that you’re working at or seeing it. The big one was Aphria and Tilray that went through. That was supposed to be a combination of and by revenue, they said they’re supposed to be the largest cannabis company in the world. We’re also seeing shitty numbers in a lot of the Canadian markets. We’re seeing a big shift from the Canada to the US now because we are a large market. What are some of the hot ones that you’ve been coming across where you’re like, “This is really an interesting one.”
I think the biggest, which I think everybody who’s spent a week in this industry was the Trulieve purchase. That was a big one. That was the one you want to pay attention to. That’s the biggest one I know so far and I know Trulieve really well.
What is their standing there in the country? Where do they hold all their cards right now?If they can't buy the entity, they want to influence the market. Click To Tweet
In the East Coast. They’re a little bit in Maine. I think they’re in Massachusetts. Have you seen him over there in Denver and the Colorado Westside? They’re not in California.
No. They control basically the Florida market. That’s where they’ve started. For those of you out there that are not familiar with the Florida market, there is a very limited license. It’s less than fifteen across the entire state.
I think there were originally like 23, but the problem was with 11 of them were given to one entity. We talked about this previously. You’ve got these legislatures in Florida. They all live in or work out of Tallahassee, the capital. When they come together and decide to do something, it isn’t to benefit the general public. It’s to benefit them, their fraternity brothers, the people they have drinks with after they go to court or to legislate. It’s a good old boys club and that’s what constricted that Florida market. You’ve got to consider this consumer because there’s a large consumer base down there.
That’s one of the big footholds they have as they control that market. We’re seeing companies like Green Thumb, another big one, Cresco or Acreage.
Also, Columbia Care. I can’t play the stock market. The big one that was at first was when Hawthorne, a Scotts Miracle-Gro subsidiary had got into the game. My real quick personal story is, I bought a large amount of that stock after I heard some acquisition and I thought, “This thing’s going to jump.” It actually dropped. After about two quarters, I decided that I was done with that. A few years later, it quadrupled in value. Never listen to me when it comes to stock market advice. I can better tell you what’s going to come up on two-sided dice than I am going to tell you how the stock market plays out. I was right about the Scotts Miracle-Gro. I wasn’t patient.
That’s a big part of it. I did the same trade. I waited a bit longer. I think I gained 30% on my cash and then I pulled it out and I went to something else. It’s a matter of longevity and focus. I appreciate you sharing that story with us because not everybody likes to share their mediocre losses per se.
I can tell you that my favorite Bitcoin story. I see the relevance to this topic.
I’m sure you wish you had that Bitcoin back at this point.
When you quadruple your money, you never think about ten times. You’re like, “Fuck. I quadrupled.” What’s wrong with that? “You could have done ten times.” “I’m okay.” I was talking to somebody and as I said, do not take my recommendations when it comes to stocks. We’ve said that 2 or 3 times. The Columbia Care and the Acreage value, in my opinion, has potential. What it is? I don’t know. That’s when you see something and you’re like, “What?” A lot of the time, I’ll use sports betting. The thing I’ve learned in sports betting is when the majority of people think it goes one way, you should look at it the other way. You should conceive.
When a lot of people go, “It’s not really worth that much.” I go, “It may be worth more than you think.” Those two companies have some potential. Where this acquisition thing, that’s the one thing I wanted to talk to you about is whether it’s retail stores. I don’t like to use too many names, especially on my retail side. I don’t want to use the name of the company that dominates the retail business and its acquisition. I do business with them. I don’t want to talk bad about them. Also, I try to be careful because I don’t know everything.
Without dropping the name and I understand. Guys, this is his livelihood. He has to be very careful about how this works. We’re going to try to give you some insight here that you can do some exploration on your own and be able to dig that. Does that sound okay, Chet?
Yeah, that sounds great.
This is a sneak peek in but understanding the interior of these companies is a big part of it. When we’re seeing these acquisitions coming through, we’re talking about hundreds of millions of dollars and how many deals fall out of that along the way. Let’s say they come in and buy up ten stores in the state? How many of those stores are great that are in that state?
Here’s the deal is in any industry. You go to a market and you go, “I want to be a part of that market.” The leader in that market that’s a single entity or a smaller entity perceived by you that you can’t purchase because I don’t want to sell out. I don’t want to participate in you. I think I’m good enough to do this on my own. I’ve done it on my own. I’m going to win in this market, whether it’s Chicago or the United States, or the Western hemisphere. What happens to these larger corporations, the ones that went to capture the market? If they can’t buy the entity they want to influence the market, they will go around and buy the other entities of less value and squeeze. They’ll use their larger purchasing power to squeeze the entity that they once wanted out so that they still have the market.
Let’s walk through this scenario because I want to see if you can take me through this. Let’s say I’m a hands-on guy and a hands-on investor and I’m going to go check out some of these stores that are in my local area. What should I look for of warning signs like, “These guys are not going to make it or these guys have the potential to be huge? We see some movement happening.” Chet and I walk in the store, what are the few things that you see automatically like, “These guys have their shit together or these guys don’t.”
It used to be a clean appearance, but it no longer is that because due to the volume, some of these stores do not have a priority of arranging their inventory. They’re trying to get their inventory out and inventory in and out. I watched for, how many trucks are coming in. How many fourplex drivers. What size of the product they’re moving? Is that a pallet of 5 liters or is that a pallet of 20 liters? Are they using totes? A 1,000 liter or 200-liter drums? I want to see that volume in and out. I want to see the staff. I want to see how responsive the staff is to my appearance when I show up.
I want to see how responsive the staff is to who’s in charge, whether it’s the day shift manager or the owner. I want to see what’s going on there. I definitely want to see the size of the stock. I want to see how much inventory they’re holding on that they shouldn’t be holding on to. “They make that product still.” “No, we still have it.” “Why do you still have it? You’re losing inventory space.” Right now to me, “It’s how much business is going on? How well they’re managing it and what sort of inventory they have in stock.” You already know the market.
Say you don’t know the products very well. Could you say, “I see there’s a lot of dust on this one? It’s been sitting there forever.” Is that a telltale sign of that?
That is or you can see that they’ve got twenty products on the line but only three of them moved because those are the empty spots on the shelf. That’s one other relative sign.
Inventory control is a big one too, looking for that.
It does. I think this may be related back to the topic we were talking about. Things are changing. If they have a product that was popular a few years ago, but no longer is even bought and sold. Maybe not even be manufactured, then they haven’t figured out a way to fix their inventory issues like that. Holding onto something that no one wants is a problem and you have to fix it. That’s an issue that I always look for. It’s a pretty simple formula. How much is coming in? How much is going out and how well are they managing it? Because you can’t ask a store owner but I can because I have a different relationship with them. If I don’t know the store owner, if I’m trying to shop a store and try to figure out its value, I can’t ask them what their numbers are.Holding onto something that no one wants is a problem, and you have to fix it. Click To Tweet
You’re going to have to make an estimation as you go through the store.
What’s funny too is I know a lot of entities, whether the retailers or licensed producers. I’ll hear about deals that are potential. I was like, “That deal isn’t going to go through because the one side, I know their books aren’t as pretty as their facade.” That’s another thing too. When you hear, “These two are working on a deal.” You go, “Where did the deal go?” Six months later, “It fell through.” One of them couldn’t figure out what the other one’s books look like. They saw the books or they thought they saw the books. You’ll hear that a lot too.
If you’re looking at these retail operations, how many of them really have their books together? Is it 50% maybe?
It’s probably a percentage more than the charged sales tax.
Are there stores still not charging sales tax out there?
Yes. That’s about as far as I could go on that side. I’m sure they pay some sales tax but you’re supposed to charge the customer and keep a record of that. Imagine if you walked into a store and you spent $8,000 and the guy said, “I’m not going to charge you the extra $8.25 or $9 and an $8 for this.” Think about that. That’s almost 10%. That’s $800.
We had the mentality in Colorado because I was a store owner of a dispensary. We had people being like, “You’re going to charge me tax on my $8,000? It’s $25, and I got to pay tax?” This is going back to the mentality of the pioneers of this. They believed they didn’t want to pay tax on anything.
That’s why a lot of people got into it because they didn’t believe in the government and how it attacks. They were going to trade in commodities that weren’t taxed. It still happens. You look at the California markets, you look at any other over-regulated market and the taxes on it are sometimes 100%, which then breeds, “I no longer use the black market. I use traditional market when it comes to the reference of cannabis bought and sold.”
Legacy has been a new one that I’ve been hearing in the last few months.
It’s Traditional or Legacy. I like that.
I’ve been hearing that a lot more often.
That’ll foster, breed and grow if you don’t have to pay taxes. That’s why a store that doesn’t charge sales tax to their customer is probably going to stay in business longer than you perceive because it’s going to get a customer base that goes, “I don’t want to pay 100% tax on the product or I can buy it from him, what I would perceive as an equal quality for less.”
However, that would show up in your books. If somebody is going to purchase, your margins are less because you’re probably paying some of those taxes out. You might be good in the short-term but in the long-term, if you’re trying to do an acquisition, you’re going to have purchasers look at you like you’re an idiot.
That’s the point I was trying to make when you hear about deals going down and they’re like, “Let’s look at the books.” I was like, “It’d not going to turn out well.” They’re like, “What happened to that deal?” “We decided it wasn’t in our best interest.” I could’ve told you that one. That happens not so much on sales tax but on a larger scale. When people don’t know how to manage payroll or any liability situations with HR and they look at the books or when entities are given more than 30-day terms. It starts to get a little sticky when someone deals with somebody else and they’ve given them 90-day terms. You’re like, “Why do you need a 90-day term? What’s the point of that?” You don’t have short up enough liquid assets to deal in every 30 days like the rest of us. Be the best that you can be.
I’ve worked with some owners that they’d manage their cash in all different ways, for whatever reason. Depending on your location, your area, I wanted to ask you, as you’re going through a bunch of different states, I know you’ve focused on a few of them. We talked about them last time too. Where do you see the best opportunity in the states right now for whether you want to become a grower or you want to open a dispensary? Do you still see some opportunity for the little guy out there? That’s not an easy question. I know.
No, I would say that in states like California. This is going to be hard for me to say, the opportunity for little guys still lives, maybe in states like California, that have programs that want either ethnic or female-owned. It’s still want to get to help the little guy and the perceived person that was oppressed, whether it’s a woman or a minority to give them an opportunity. I think that the system and the bigger dollars have figured out how to rig that. There’s not a lot of opportunities. They’re like, “You want a female minority owner?” “We’ll just get one of our staff or one of our board members to start that business, get that program. You’ve manipulated the system.”
I think what you’re referring to a lot is the social equity programs that are starting to pop up.
I don’t have any issue or topic to discuss but it was one of the few ways that I see a smaller participant get an opportunity.
I’ve seen it personally with some people that I’ve talked with that are working in states like Massachusetts. They’re putting it together. They’ve had a couple of years of a good start. It’s sad. It’s capitalism in a way. I know a lot of these people.
Here’s the one thing that I’ve learned, this analogy that I was taught a long time ago that I used for small business retailers that actually goes even more to the point of conglomerates purchasing each other. There are two reasons to start a company. If you’re a single person or a small group of investors. The first reason is the batteries which are, “I started this company so I wouldn’t have a boss. I started this company so that I can set my own.” All these captures of not having a boss, your schedule, you’re in charge and you don’t have to answer to anybody or, “I started this company to sell it.” The first one is, “I started this company because I wanted to be my boss. I had this concept that nobody else did but I didn’t look forward enough to realize that by starting the concept, I’m creating a commodity to be bought and sold.”
If you start a company knowing that at the end of it, you’re going to sell it because that’s what you’re doing. This is what a lot of people who make money, see a void and they start it not because they think that it’s a good idea, but because they think it’s a good commodity to create, to be sold. That’s one thing that you have to try to figure out is like, “Are they doing this because it’s a good idea, or are they doing this because they want to sell it?” I think it’s better to figure out if they want to sell it because they’re going to work harder to make it an attractive product that’s going to be worth something.
I want to talk about that because you make an excellent point. I’m speaking to a lot of people out there. A lot of readers are either in business or they’re looking to start one. For you that are reading, this is extremely valuable. Because of that definition that Chet put out there, of being able to create something to sell it, there’s an actual mind shift that happens, when you do that. You think about everything a bit differently than you would have, “At least, I just worked for myself.”
“I’m doing this because it’s a good idea,” but who cares if it’s a good idea? Is it a marketable product? Once your product is marketable that you’re trying to create, are you marketable? Because now you’re a creator in a commodity that wants to be bought and sold. “This guy, he came up with a great idea. Let’s get ahold of that company.” If you went, “It’s my deal. I made this to sell it.” You’re going to have more success that way. It’s what happens. I think even Elon Musk, you could probably ask him, “Are you doing this because you want other people to participate economically?” That’s one of the things. The other thing I want to touch on is the growth aspect. People have to be careful because this is one of the things that I wanted to talk about while I had time with you. I know you have more of a business-oriented fiscal covering and a culture covering in this show which I think is a void that a lot of people should participate in is growth through acquisition or legitimate growth.
Is it organic growth?This industry is dominated by growth of acquisition. Click To Tweet
Yes, thank you. This industry is dominated by the growth of acquisition, which creates a bubble. When your shareholders are like, “They’re more valuable.” Because they bought something, if I have a gold coin and then I buy another gold coin, whether I could afford it or not, I’ve grown. Maybe I could afford that second gold coin. Now, I’m heavily leveraged or I’m underwater or I can’t manage these two gold coins. I don’t have the resources to do that or whatever widgets you want to talk about.
It’s the land grab mentality.
That’s how these retailers in my industry are growing through acquisition, not organic growth. I see a lot of that in the cannabis LPs. Those facilities and these larger corporations are like, “They’re growing. Their stocks have more value.” That’s an inflated bubble that’s going to pop.
Besides the bubble pop, what are the more than the obvious reasons why this would work well? What’s the positive to do in a land grab like that?
If you make yourself perceived by others as more valuable, they will want to participate. They will invest. They will help reinforce or backfill that bubble so that it doesn’t collapse because they’re like, “Those guys are good. I want to be a participant in that. I want to buy some stock of that.” That’s the positive. You get enough growth to legitimize other investors to support that acquisition. Because I see it a lot of times where I was like, “The company that bought that company didn’t quite perceive how overvalued that company was but the investors don’t either.” “We just purchased this.” I was like, “I was about to go out of business.” Those guys who sold it got out in time. What are the people who bought going to do? It was losing money because it was being more poorly managed or it was a bad concept, to begin with. Now, how the guys who acquired it going to fix that or are they going to say they acquired it?
Let’s go to the organic side. What lessons are learned going through building your company from the ground up?
It’s not easy, failure leads to success and following the latest trend is not always the best thing. If you believe in yourself and you believe in your concept, then you should stick with it and try not to get too heavily influenced by those that do not have the energy or the resources or the willingness to do what you’re doing but do have the mouth to say what they believe in. That is one of the most important thing is when someone goes, “This is not a good idea. You need to do it this way.” It’s like, “Why don’t you start a company and do it that way?” The belief in yourself, to have that vitriol and courage to believe in yourself is really one of the things. If you don’t and you think, “I’m just doing this to do this.” Your percentage of success is going to be low.
I think to understand that courage and where that lies is extremely important. Because as we’re entrepreneurs out there forging through this crazy industry. Even though there’s a lot of people that are somehow connected, there are so few of us that are truly connected in a positive way. There are a lot of lonely nights and a lot of lonely days.
This is to your story, a lot of being screwed over by the people that you brought to the entity or that you thought were going to be a help.
Looking out for those red flags of business 100%. I’m glad you brought that up. Figuring out who you hit your carriage is a big deal, especially if you’re building organically. There are going to be opportunities that come up where you guys are going to collaboratively put your nickels together and say, “This is what we got.” If they say, “I had ten nickels and now I have five.” When the deal comes up, that’s a red flag.
That’s one of the many downfalls or things to look out for when you’re trying to grow organically.
I emphasize that courage side. It can be the difference of success, is not being able to have that courage.
I want to say vitriol or vindication. I hate to use the word vindication, but there were many times when I was told, “You’re doing the wrong thing.” I said, “That’s impossible,” because it feels like this is the only thing. It’s like going to Colorado or other situations. Whether it was before there was a completely legitimate market when you’re like, “This is terrible.” Are you going to grow plants in your house against the law? I’m like, well. That’s how it started for me and I moved on. I see it with even investors who are like, “This is a great idea.” The other people like, “We don’t want to get involved in that.” I was like, “If you were just by yourself right now and you decided to invest in that, you would kill it.” That happens in that situation too.
You got to trust yourself.
Believe in yourself.
Believe, trust, courage. Chet, these are all amazing things for entrepreneurs.
There is one other thing too. I was talking to my son about this. I’m not a Scientologist. I think it’s a ridiculous religion, but all religions have some positives in them. You can look at the positives of Christianity and how you should treat others and stuff like that. Each religion has its universal truth. The one with Scientology that I keep using is, “You have to surround yourself with positive people. Therefore, you’ll more likely to get positive results. You surround yourself with negative people, the likelihood is greater that you’ll get negative results.” If you’re by yourself, it’s pretty easy to be positive. If you start amassing a group, an investment group, a collaboration, a work team, and you realize that they’re not all positive, then you may not get all positive results. It sounds a little hokey, a little metaphysical, but the more you’re surrounded by positiveness, the more positive results could probably be.
I’ve lived by that for the last few years. That is something I probably think about on a daily basis. Going through the lockdown period we had and stuff, it’s been challenging. You’ve got a lot of negativity that’s surrounding our world. That goes into your little bubble and sits there. Depending on what you’re listening to or what you’re watching, these are all things that come with surrounding yourself with positive people and the right people. It’s easier said than done because some people sneak in. You got to be aware at the time and go in with your open eyes and understand that people are going to make mistakes. You have to pick certain things that happen, and I like to hear this. My uncle refers to them as data points. He says, “That’s a data point. I’ll just keep that on the log and we’ll see what else comes up.” Once you get a few data points together and you can connect the dots, you can understand what type of person you’re dealing with pretty quickly.
I like that because then you could plot a trajectory. I think that’s good.
Chet, it’s always great to catch up with you. If you guys have any questions about nutrients or CANNA, he works in several states. He’s he knows all the guys that work throughout the US. He’s been working in it for a long time with not only nutrients but with CANNA directly. They’re honest. There’s no bullshit. They have products they sell. I don’t bring him on to give this commercial. He sells a great product. If you’re looking at any type of growing situation, those guys are super helpful over there. They’re all extremely knowledgeable. Chet, you guys all have a lot of growing back.
Surround yourself with positive people.
With that said, thanks so much for reading. I hope to see you back on the show next episode. Chet, thank you so much. It’s been awesome catching up with you. I look forward to talking about this here once we get into legalization and when that happens soon.
Thanks so much.
- Chet Melton – Previous episode
- CANNA Nutrients
About Chet Melton
Chet has been a leader in the growing industry for several decades.
As the district manager for Canna Nuetrienst of North America, his insight is unmatched. Chet says to become a successful grower it takes more than a green thumb. It takes guts!
He has made it his goal to help whoever is interested in listening.
In this everchanging market, the ride can be quick if you’re not prepared for the long road ahead.
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