In the cannabis space, the opportunities in grow and retail are increasing. In the second episode of an eight-part series on Massive Social Equity Opportunities in Massachusetts, Tony Frischknecht and Flavia Hungaro, a cannabis entrepreneur and the owner of the new company called Locomotion Cannabis, talk about the vast opportunities in grow and retail and whether one has to be an expert to build a cannabis business. At the end of the day, it’s all about numbers when you get into a higher level in this industry.
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Massive Social Equity Opportunities In Massachusetts Part 2 of 8 With Flavia Hungaro
As A Cannabis Owner, Is It Necessary To Be An Expert In Cannabis, Retail, And Growing?
Thank you for joining me and welcome back to the show. We’re going to be continuing our episode with Flavia Hungaro, a cannabis entrepreneur. This is the second episode in our eight-part series of Massive Social Equity Opportunities in Massachusetts. With no further ado, back to the show.
From what it sounds like to me is you have a lot of opportunities in grow and retail, and then you have a future for deliveries and cafes. I don’t know that we’ll go right into that because I don’t think it’s that relevant at this point. Let’s talk about these opportunities. Do you have any experience in the grow?
Yes, I was a registered caregiver. With that, I was able to learn because I had no background whatsoever in the industry. I learned how to grow, which was not an easy task but after a little while, I was able to manage and do a good job. That’s one of the things that also gave me the motivation to pursue licensing. In retail, if you think about it, it’s easy. You can have any retail shop and it’s not a big deal, but if you’re growing a plant and you don’t know what you’re doing, there was no way you can even think about having a business especially at a larger scale that you can succeed because it’s a lot of commitment. Sometimes, you might even have the knowledge but things happen, and you can put everything in a day so that they can be controlled.
Were you growing by yourself or were you working with somebody else?
I’ve had partners before because I didn’t know much about what I was doing but most of the time, I’m reading about it. I had friends who are also caregivers who gave me tips and helped me out. That was a big part of it.
Where are you growing in a residential home or in a warehouse?
It was a home.
Are you growing in the basement?
Yes, in the basement.
How many plants were you growing?
There are up to 24 plants and it has different stages. You have to follow the guidance of whatever city or state that you’re growing. They give you plant tags, so everything is labeled so in the future, you’re being compliant. I had a person who I used to caregive for and she had health issues. I was very happy to be able to help her. That was a lot of motivation for me because I knew that she needed help, and I was willing to do my best to put in a lot of work and find the right medicine for her. She went through a lot and she had bad experiences with previous caregivers as well, so I wanted to do my best.
Did you deliver the medicine to her?
How many patients did you have? Was it just that one?
I assume there’s tiered licensing for the grow, is that correct?
Yes. In Massachusetts, they changed the regulations some time ago. The maximum amount that you can grow is up to 100,000 square feet of canopy, which is a lot. There’s a reason why they did that because before, it was open and a company can come and take the whole market if they have the money and the expertise, and everybody else is screwed. They put a limit, so the market doesn’t go up so big and it’s balanced. They have different types of licensing and it starts with a micro-business where you can grow up to 5,000 square feet of canopy and it goes through years up to 100,000 square feet.
How much is this 5,000 micro-license? Is it expensive?
It’s around $5,000 if I’m not mistaken.
$5,000 when you have zero is still a lot. Tell me a little bit more. Do you have any retail background history?
No, I don’t. I have a Business degree from Boston University. I have hospitality industry experience. Before I even went to college, I started working in restaurants trying to making ends meet. That’s what I spent most of my time working in different hotels, restaurants, and a lot of my customer service background. Retail does require you to have some type of customer service background. That’s what I come into play.
Had you ever had any previous experience with cannabis even consumption? How was this for you growing up? Was it something that was in your life or was it around you?
I had no understanding of using cannabis. Back home, everybody also had stigma like, “You’re a bad person, you’re using drugs.” When I moved to the US even though I was already looking to get into the industry, I had no knowledge of using such a medicine. After that, I started learning more and having to understand what the differences are among different types of plants. I had to learn so I can do a good job.
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It’s important for you to know and understand if you use it, that gives you better knowledge. Ever since I started talking to several people in this industry, they have told me, “I’ve never used it, I’ve never done it in consumption but I know a lot about the industry itself. I am capable of making the right judgment or even to give you advice or not.” It’s all about numbers when you get into a higher level in this industry.
I talked to a lot of people that are in the same boat. I didn’t even try it until I was in my late twenties. I became a caregiver such as yourself. I want to get a little more granular in the grow and the retail because from what you said when we were talking, you didn’t know what direction to go. You were confused there. To make this simple, I’m sure you’ve done this with many things in your life, but the pros and cons of what makes sense for you because we have a tendency, as entrepreneurs, to run towards, “How am I going to get my investment back sooner so that I can invest in something else?”
We ended up chasing what we think is going to pay off quicker because the simple fact of the matter is you have bills to pay and you have an expansion that happened, so your mind starts running that. However, taking it and looking at it from a little bit different angle. Once I’ve started using this, I’ve noticed that it’s allowed me to not only enjoy more of what I do, but to get ahead of the next guy because I’m not chasing things. I’m looking forward towards the opportunity that I know where it’s going to be.
There were a couple of things you pointed out to me and you said, “I got the ability to grow, however, they are expensive to start to grow.” They are. You can easily put $1 million in to grow and still need more money. One of the things you had said too on the retail side is you had a couple of locations that there were some uniqueness to them. Let’s go over those locations and talk about the opportunity on the retail side where you have those. What are the locations where you’re looking at putting your retail?
For retail, I have one in the city or town in Massachusetts, and the other one is in Berkley, which is not that far from Taunton. When you’re looking for retail opportunities, you think that you want a location that is further apart so you have a different market share. It happened to be the right opportunity for me to find something that was nearby. In Berkley, for example, the town was very friendly. They wanted to work with the Social Equity participant. They saw the value in there which some towns and cities don’t see that. The only issue was to find a property, which the real estate there was none. It was the one split in one space that was available. That’s the one I was fortunate enough to make an agreement with the owner. Even though it was one of the easiest for me to deal with on a local level, I’m still in the process. It started a long time ago. I thought it was going to be open in 2019 and it’s still happening, but we’re almost there.
You have an agreement with the owner on a retail location, how big is the town?
Berkley is a small town. They have around 6,000 people there. Even though it doesn’t seem like there will be a lot of costumers because you think about the size of the population, it’s right off the highway. We are also located in a Dunkin Donuts Plaza. There will be a lot of people that go to Dunkin’s that we’ll be able to get the clientele. Besides that, it’s close enough to Taunton, which is a big city and that’s where my second location is. Also Fall River, which they have a store there that’s doing incredibly well. They’re making somewhere around $3 million a week. I’m hoping to get some of those costumers stopping at my location before they get there. It’s too far for them.
In Fall River, the line sometimes is huge because for now, there are only around 70 retail stores open in Massachusetts. The line in the beginning was crazy. All the cities and towns, they were concerned about traffic and the negative impacts of it. The number of stores is increasing now, so it’s not going to be those huge lines anymore. Some of the cities and towns have 1 or 2 stores only open. It’s large enough population in that region, then it gives us a bigger advantage of a bigger market. In Taunton, they’re going to have up to five retail stores. That’s where I have one of my locations. For Berkley, they have another company who got the agreement way before me. However, they haven’t gone forward with the project. Even though I came after them, I might be the first one to open in Berkley.
How many are allowed in Berkley?
Berkley does not have a maximum amount of stores but as I said, the real estate is very restricted. It will be most likely 2, maybe 3 if they find a location, but I don’t think it’s going to be any more than that.
You said the lines in Fall River are very long. How big is the population in Fall River?
I’ll have to check on that.
You can estimate it. If we had a good idea, that’s fine. Are all these cities within a linear area of each other?
The ones that I’m talking about, they’re all near each other.
Which one’s the biggest town?
The biggest is Fall River. It’s about 90,000.
Do they have a limit on retail locations there?
As a comparison, Taunton has around 60,000 people.
Locally, are they friendly in Fall River with cannabis?
You’ve got restricted real estate in Berkley. How’s Fall River with real estate?
By the time I figure things out around Taunton and Berkley, I was already too late to find anything in Fall River. I don’t think I even got to that point.
Out of the three, where’s most of your focus been, in Berkley?
Sorry, I’m going to have to cut this off. I hope you’ve enjoyed the second episode in this series. In the next episode, please come join us as we find out more of how Flavia is focusing her efforts in her business. I look forward to sharing that with you. If you have any questions for me, please check out PlantProblem.com and you can leave any questions you have there for me, and also all over social media, you can check me out there too. Thanks for reading. I’ll see you next time.