As with any business, opening and marketing a cannabis store involves a lot of struggles. In part five of a series of eight interviews with Flavia Hungaro, the owner of the new company called Locomotion Cannabis, Tony Frischknecht and Flavia talk about the challenges one may encounter when opening and marketing a dispensary. Tune in to this episode to find out what they are so you can make the necessary preparations with your own business.
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Massive Social Equity Opportunities In Massachusetts Part 5 of 8 With Flavia Hungaro
Struggles Of Opening And Marketing A Dispensary
In this episode, we are continuing in our eight-part series. This is episode five. We are speaking with Flavia Hungaro. We’re digging in very deep into struggles in opening her store and marketing cannabis to the masses. We look forward to sharing this all with you coming up in this episode.
I do agree with you. The main goal was to have Taunton open first and I thought that was going to happen because we’re way ahead on the local licensing. The last meeting, I got a vision in Taunton back in May 2020. I still don’t have a final hearing date. This is the only concern I have, “When are they going to schedule this? Am I going to have a twist 2021?” Now, we’ve open after the election.
That’s a fair point. You’re like, “I should start leaning towards Berkley because I’m not sure about Taunton.”
It seems to be more secure. For example, Taunton is going to have five stores and they gave up Host Community Agreements than the number of the maximum allowable retails they can have. To me, it’s like, “Why are they doing this?” Even though Taunton is a disproportionate area of impact and Cambridge is doing a lot to support Economic Empowerment. Taunton doesn’t seem to be carrying the same weight.
Is there any influence you can have on getting that scheduled sooner? Is there any way you can get pushed up?
All the companies are waiting for this moment. We’ve been asking when is it going to be. I had the original date for the licensing hearing for my company for September 29, 2020. They keep rescheduling. They gave me a new date and they’re requiring additional documentation for everyone. They want to make sure that everyone has enough funding. They asked for a bunch of documents. We all submit it hoping that we were all going to have the hearing. Again, they did not put anybody on the agenda. Now, we’re waiting. We have no date. My point is I know that Taunton would be the best bag to be open first and I’ll be more excited to open in Taunton because it’s a whole new thing. I already had my brand name and I have the concept of the store that I’m planning to do, which is two different concepts. The stores are so close to each other, there’s no point of having the same name and the same looks on the inside.
Do you mean Taunton is so close to Berkley?
Yes. I’m planning a sugar loaf in Taunton and arise in Berkley, just so I have a brand differentiation there.
If they’re so close, I’m trying to understand why you would open two stores.
We do have the market for it. Even though it’s close, we’re going to have different products.
I understand that. There have been several experiences that I’ve had in the past where I’ve seen people expand their operations very large. The ones that I’ve seen do very well have done one location and they get it so massive. They have many customers that they drive to that one location, whether it be marketing. They explode the store so much that they have to open up a new store. Is there a possibility that you could create an environment in one of these locations that you could draw people over to your store to stick to one type? I say that to get some more focus on this one because you say you’ve got two different concepts you’re going to be running but you’re one business. It’s like saying, “We’re McDonald’s but we’re going to cook these burgers here for these guys, and then we’re going to have a higher-end burger place over here.” Is that your model? Is that what you want to create? Is it two different brands?You can get marketing ideas by knowing your local community and joining association groups. Click To Tweet
I do plan to have two different brands. My intention wasn’t to have two stores near each other, but I was fortunate to find a location. At that point, I had two different options. When you’re starting everything, you don’t know what’s going to happen. It just happens that in both locations end up working out up to this point. I would like to diversify in different locations and that’s what I’m trying to do, but there is a market for it. For example, Taunton is going to have five stores, but are they all going to be open at the same time? No, they’re not. I don’t have to open both stores at the same time. If I have the capability, I would. I understand your point as well.
This is where we get into this excitement, “I could have two stores.” However, one amazing store over two okay stores is a big difference and that’s hard. It’s a battle. I’m not telling you to do either. I’m putting out these scenarios. If you had two stores and let’s say they were each bringing in $5,000 a day in sales, but you had one store that was bringing in $20,000 in sales. You’re looking at, “Why would I put all my effort into a store, I’m making $20,000 in this and I’ve got $5,000 over here?” It’s one of those things that you might have to take a look at. I look at this scenario and I see the value.
However, the other side is the time that it takes away from efforts in the big store where you can make money because you’ll have one of these stores that are going to be a clear differentiating of the other. You’ll be like, “Why did I even put my effort into this? If I had focused on this one, I could be twice as big like a superstore or somewhat.” Forgive me because I know we haven’t gone through the business plan, but I want to throw out those different options of this could be a possibility but it’s going to take my focus away from being successful. At the end of the day, what we want is to be successful. Now that you brought up the Taunton thing, you don’t know when the hearing is going to happen. One question I want to ask is, are you involved in any association groups locally in Boston at all or in Massachusetts? Are there any cannabis association groups that you belong to?
Not really. I get a lot of information from Social Equity Programs teachers and we all share information. There is an association for retail owners that I was invited to be part of. That’s one of them that I was planning to join but I haven’t got into anything yet.
I’ve got a deliverable for you for when we talk next time. I want you to find somewhere in Massachusetts three local association groups. I want you to go to a meeting, whether it be live or Zoom, and see which one you like of the three. You don’t have to do three but your goal is to get three. I want you to visit these meetings and see what people are involved in there. Part of what I’ve seen missing in Taunton is you’re like, “We keep asking and they’re not giving us any availability for signing a date or getting something.”
What these association groups do is they have people that network with other people and know the local guys. You might find you come across somebody that knows the local government in Taunton and they’re like, “I can have you set up with Tom. I know Tom.” All of a sudden, you’ve got that connection on the inside. That’s what I see you’re missing in Taunton at least. It’s somewhere I get that local connection where somebody you can talk with directly. What they’ll do in those association groups is they’ll vouch for you, “We know about her, we know what she’s doing and we need help getting her through the process. Will you help her?”
I don’t know how much these association groups costs. You’re looking at anywhere from a couple of hundred dollars a month to potentially $1,000 a month. That’s why it’s worth visiting one of these free meetings to see what people you have there. See if you get any value out of it. That’s one of the deliverables I want you to do before we talk next time. I promise you, you’ll at least learn something going through the process. Are there any questions about these Berkley and Taunton that I can answer for you with that you would like some more information on or I could help you out with?
One of the things that I would like to hear from you when you first open your store are your experience and marketing strategies. I know it’s different from state-to-state. At least in Massachusetts, it’s very restrictive how you advertise cannabis. In the beginning, every week was a different store on the news like you open this store here and everybody knows about it. What other techniques do you have to share? That’s one of the things.
We were very restricted too. Most places are, it’s common. If they’ll allow us to have a billboard that was on the side of our building we could use. People were using social media on different scales before Facebook knocked a lot of that down so you couldn’t do that. This is a tricky one. I have a love-hate with it because you’re accounting, and how you write off your expenses don’t allow you for these because of 280E. That’s a whole different story. We can talk about that when you start getting up and running. There are some huge tax savings that we could discuss further. One of the things is knowing your local community, which sounds like you’re working on now.
The other thing that’s going to help you get ideas from is association groups of what other people are doing. I’m going to say example, Flavia and Tony are in the same association group. I’m 10 miles away and I’m like, “Why don’t we partner up and do an opening day part barbecue?” I’m not saying do this. I’m saying this as an example. All of a sudden, you’re splitting all your costs with the guy down the street and the following week, he’s opening up his place, you go support there, you drive people to his business, and then you guys are sharing. There’s not so much money that’s being sunk into advertising that you can’t write off anyway. It crushes you.
We spent money on advertising but it killed me every time because $10,000 is gone and I’ve got to pay taxes on $10,000. It crushed us. One thing that I would look into and they may not have it there, but this is the cheapest advertising that I’ve seen is on highways. You can adopt a highway. In Colorado, you can adopt a highway for $3,000 and you could put your marketing. I-70 is one of our main corridors that goes through the state. There are hundreds of thousands of people that drive by there a day. You pay that $3,000 and it was this nice placard on the side of the highway that people were driving by. If you’re one of the first to adopt those, you can buy the roll-up in your area. I don’t know if you’ve seen that or if anybody has done that in your area, but that’s one I always do.
I have seen the billboards but not adopting a highway. I don’t even know if that’s allowed. I don’t know how that goes.
I wouldn’t be surprised because it’s state-driven and they want the money too. Look into that. It’s $3,000 here and that one, you don’t have to continuously pay on it. It’s a one-time buy, which is perfect. You want those next year’s major highways where you are anyway. It’s a loophole that you can get around. What I would suggest you start doing is as you’re starting to build your store, I would create a business page for your dispensary. I would start to get local people understanding that there’s a new business in town.
Your store is a retail side. In Facebook or if not, you can do LinkedIn so people can start seeing. I have started working with social media a lot. For the cannabis business industry, it’s huge because there’s still a lot of opportunity in there and it’s relatively inexpensive like, “We take a picture or starting to put up the drywall. I can’t wait to help you guys out when we open up.” Simple stuff like that. Build up over the next several months and then you can do a grand opening. That’s a cheap way to do. I have somebody who helps me out on my social marketing efforts but you can find people online that do this.
There are several different ways to do it, but think about that because that’s a great way to do it. They allowed sign spinners for a while. They let us do it for a while and then they kicked us out, but we did it as long as we could because that’s the only thing we could do. We had somebody standing up by the highway off-ramp spinning a sign, “Come check us out, we’re right down the street.” That was a cheap way. You’ve got somebody that you’re paying $12 an hour. There’s more but I would stick with those three and work on those. That would be the best for marketing.
I hope you enjoyed this episode as we’ve continued to learn about Flavia and what she’s doing out in Massachusetts. It’s been getting interesting. I’m definitely picking up how she’s forming her business and getting a good idea, and what we can do to give her some advice to help her out. If you have any questions, please reach out to me at PlantProblem.com. Come join us next episode for part 6 in this 8-part series. Thanks a lot for reading and I’ll see you next time.