PP 74 | Personal Finance


There is a lot going on behind the scenes in an entrepreneur’s personal life as they build a thriving cannabis business. As a result, personal finance becomes this one, huge consideration in their business plan. For many, it is a delicate balancing act between being able to pay personal bills while taking care of the things that the business needs to grow. The failure to achieve this balance has been the undoing of many a business, and you simply don’t want yours to be one of them. Tony Frischknecht and Locomotion Cannabis owner, Flavia Hungaro tackle this topic in relation to Flavia’s attempt to build a her own business that takes advantage of the massive social equity opportunities in Massachusetts.

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Massive Social Equity Opportunities in Massachusetts Part 7 Of 8 With Flavia Hungaro

How Personal Finance Can Affect Your Business Plan

I’ve got my guest Flavia Hungaro, and we are continuing our eight-part series. This is going to be episode number seven, and we’re going to be covering personal finances along with business plans. I talk a lot about this in the book that I wrote, From Black Market to The Man: 10 Steps To Becoming A Multimillionaire In the Legal Cannabis Industry. Coming back from my several years of experience in cannabis, these are simple things that a lot of us don’t think about. Our personal finance is a huge one and it took me a long time to figure this out. Flavia, I appreciate you taking the time. She did some homework from our last episode and she was going to go through and break it down.

The simplest way to go about this is, what does it cost for me to live? At the end of the day, you have to eat, you have to have a roof over your head. If you have a family, you’ve got kids to take care of, husbands and wives to make sure that they’re taken care of. There’s a lot that’s going on behind the scenes as you’re building your thriving cannabis company. Flavia, when I asked you about personal finances, what were you thinking of yourself when I asked you that question? Could you do this for me?

I was thinking about monthly routine and everything that entails that, from grocery shopping and taking care of the kids in many ways plus personal bills. On top of that, to make sure that I can afford to continue with my projects. I have to think about expenses I have with the business itself. I try to combine everything. Things have changed. My expenses were not high, but because I’ve been taking on new projects, that changes a bit of everything that I have to account for.

You’re taking on a little more stress along with it. You want to make the right decisions. The reason why I had you do this little exercise is understanding where you are at and your family’s at as you move forward. If it changes $100 here, $100 there, it’s your budget. It’s understandable like, “I got to come up with an extra $100 here.” When you start adding thousands, that can add up quick and all of a sudden, you’re going into debt. It does happen. It’s happened to me too. How much time did you put into trying to figure out what your monthly bills are? Did it take you long?

It did not take me long because every month I have to come up with the money, so I have an idea how much I need. It takes more time to figure out how I’m going to come up with the money because I had some money back home and my dad had to send me. He also helped me with his own finances and that carried me through a bit longer. Also, my partner, who’s my mother-in-law. She is the main person helping us out. Besides that, I had some savings from my previous job, but that doesn’t last that long, especially now that we’re coming up with more projects. Sometimes I feel like I am taking too many projects all at the same time, but on the other hand, I also had a timeline in mind.

I’m thinking that I’m going to have the store open at least one of them by a certain date. I think we can do this until the end of 2020 and it would be okay. After that, hopefully with the store open, then we’ll be able to make things a bit easier. It’s going to be hard on us, but I’m hoping that by January 2021, things are going to look a little better. The only thing that I can do is to drop project or so, and make the most complete projects. That that would be the idea. I’ve been reaching out to friends and other family members to see if I can get financial help. For example, I’m meeting up with another person that might be able to help so hopefully, that’s going to be a plus.

What do you have to cover every month?

It’s about $30,000.

That’s not just your personal bills too?

No, this is including the business.

What are your personal bills?

PP 74 | Personal Finance

Personal Finance: A lot of guys out there will lend to own. They will give you too long of a runway and you can’t make the payments and suddenly you’re losing your business.


My personal bills would be about $5,000.

That’s reasonable. You’ve got $25,000, that’s what’s starting to happen with the business. Over the years, that bill has been consistent. It hasn’t changed.

It’s consistent. As I was dealing with landlords and making commitments, I was fortunate to find people to work with me. For example, one location I only had to pay $3,000 for the whole year. After that, I did have to give a substantial deposit so the construction could start. If you think about it, what’s $3,000 for the first year? It’s nothing. For the other project in Berkley, the property owner is helping me that he’s allowed me to start paying the monthly rent after I open the business. The only thing that he asked for me to get to this point is he wanted to see my business plan and he wanted to see a traffic study done. He also has a business in the same plaza, which is a Dunkin’ Donuts. He wanted to make sure that my business plan wouldn’t interfere with his business plan. It’s more than fair. If you do a full traffic study, it is expensive but it was necessary. I can’t blame him for asking me for that. It’s a good thing that he did because that will be able to carry me through the process with the town, and I’ll be able to start construction.

It gives you a better idea of the traffic that’s going to be going by your story every day so you can build your projections a bit more accurately. That’s a great thing. How have you been paying your personal bills?

I had money saved back home that my dad sent to me and also from his own money. He helped me out with that. My mother-in-law has been helping us with that as well and I had savings from my job that I had. I worked as a waitress for over ten years. I was money savvy so I saved a lot of money and that was what helped me get to this point.

I wasn’t money savvy until I had to go through the process. I worked a second job until I could pay myself through the store. I did construction for a long time. I worked at a local hydroponic store. Even when we opened the store, I was working there for almost a year until I was able to break away. As new entrepreneurs read this, I want them to understand that there are a lot of different ways you can take to make sure that you cover your stuff. I was at the point where I had high bills because of different situations. I had to make some tough decisions on what I was going to pay and what I wasn’t going to pay.

I sat down and this is what forced me to do the personal finance stuff and go through it and say, “What is necessary? What is not?” Unfortunately, a lot of my credit card debt was not necessary. I had a home that I was doing growing my caregivership. Unfortunately, I had to stop paying the bills on that which became something that lingered over my head, but I had to do what I had to do to get to the growth. For some of you new guys out there, it’s going to be painful. I’m sure you felt some pain and anxiety on how to keep things going while you make sure you get your locations open or at least a plan in place.

It is the toughest time for me and my family because we are close to opening a store and at the same time, we’re struggling to get everything together so we can make those monthly payments at least for the next few months and be able to open one store.

$5,000 is relatively doable. You’re not too far out there. You always want to try to have a plan B if possible like if I have to drag this a couple more months. Is there something, an asset that you can part with? Is there something to get you over that finish line? I see people get to that point and they’re close. If they would’ve sold this vehicle or done anything to figure out how to make a quick buck because I know you hustle, but something to get you past that extra 30 to 60 days, that’s all the difference you need sometimes to be successful. Our society unfortunately doesn’t share that.

I haven’t noticed that. They don’t share that if success is money to you, if it’s to becoming a millionaire, these are the points where you have to sit down with your family or your husband and make these tough decisions sometimes. I want to let you and the readers know that this is normal to becoming successful. If you sit back and look at all those people around you that says they’re going to be successful and they’re going to do this. That’s the point when you see people step up. They say when the rubber hits the road. It changes you because what happens is once you are able to beat that little point, then all of a sudden, the next little hurdle is going to come up or the big hurdle is going to come up and you’re going to be like, “I know I can do this.” It’s that confidence in yourself personally that sometimes we feel that anxiety that builds on you. You’re like, “This uncomfortableness is getting me where I need to be.” I want you to thrive on that. When you feel that, that means you’re doing the right thing.

I’ve never asked to borrow money from friends. I didn’t have the need to do that ever. I’m grateful for that, but it gets to a point where you see that there’s no other option. In my situation, because I have this business going and I have people that I’ve met when I first moved to the US and we’re still friends. It’s not that they’re just lending you money. They know me, they know my character as well. That makes a difference. On top of that, I’ve been sharing with my friends my progress. They see that it’s not like, “I’m going to lend you money and never see this money back.” They see what I’m going through and they see that I’m almost there.

As a new business owner, you need to make some tough decisions when it comes to your personal finance. Click To Tweet

That also gives them some credibility to believe in what I’m doing. It’s not like I am in the beginning of the process either. I’m about to open a store. That also makes things different because once you’re looking for money and you’re looking for investors or hard money loan, the interest rates are incredibly high. Many times, I thought, “I think we found the right person to lend us the money.” We keep thinking about all the options they are offering us. Are they going to be the person who’s going to help you get to the point B? If you stop and think about the terms that they’re offering, are they trying to get you believe that they are doing that, and hoping that you’re not going to make to that point, and they’re going to take everything that you accomplished?

Unfortunately, a lot of people learn that the hard way because they don’t know any different. You at least have some good people to bounce these contracts and these deals off because that’s what it takes. There are a lot of guys out there that will lend to own. They’ll lend you all this money, but in the end, they’re going to own your business because they give you too long of a runway and you can’t make the payments and all of a sudden, you lose your company. They’re called loan-to-own, that’s what it is. It’s a sneaky tactic but it is business. I want you to know that this is a part of business. You may not like it. I may not like it. However, it doesn’t mean that it can’t affect you or hurt your business.

Being aware of things like that is huge. I’m glad you have a sense of you where you’re like, “I know this is possible and I know I can lose this.” The flip side of that is when you started talking about paying high interest. In this business, because we don’t have banking, it happens to us. I’ve been in companies where we’ve borrowed $1 million and we had to payback 25% in a year. That’s a significant amount of money, but when we weigh the options of not having that money to stunt our growth, you can’t look at this like a home loan, “I didn’t get the best interest rate ever.” Where’s that going to put my company in the next twelve months if I make this happen? It’s significant so much so that, “Maybe that first $1 million costs me $250,000, but now I’ve got $1 million of my own dollars that I don’t have to borrow anymore.” Sometimes you have to make those decisions

That speeds up the process. Now, I realized this. I wish I had a better understanding maybe a year ago.

It’s all a part of the process. You’re learning it and hopefully, us discussing this, people will be able to be like, “That makes sense. When I’m out there looking, I want to be aware of these things,” because it is a big mistake. We talked to a couple of episodes back about how you regreted a lease that you signed on a commercial property because it was not favorable to you in the end, but these are mistakes that we make. It hasn’t stopped you from growing so that’s good. Talking about personal finance, you’ve got a good idea of how you’re going to cover it and when you’re going to cover it. Keeping those in mind all the time is huge. You’ve got your business expenses of what you’re going to start building. It’s good that you have a partner. A lot of times, we take on a financial partner in these situations. Your partner is getting your knowledge and your drive of going out there to put these deals together. It’s a lot of what you’re doing. Do you have any questions for me with regard to personal finance since we’ve gone through all this?

Personal finances, it depends on each person’s goals and also being how realistic you can be, that’s where you’ve got to know how to draw the line that’s where we are. On the other hand, you see the opportunities. I know that I have more things on my plate than somebody else would have on my shoes, but I also see that not everything that I have planned is going to happen. I’m being over realistic and going with more projects that I should have been. From your perspective or even your experience when you first started, did you decide to do the same thing or go on the same road? Did you have more projects in your hand because you didn’t know what was going to happen or were you more cautious?

We had a bit of a different dynamic because we had four of us. We were all working in the business. We had two partners in the dispensary and we had two partners in the grow. I was one of the partners in the grow. Everybody had their own opinion on these different opportunities that we wanted to take. We all took different risks in different areas, which was a lot of our success because not one person could get us too far in a bad direction without the other partner pulling back. That was helpful. We came to the understanding that if we can get our grow, because that’s what we first started with. The way our situation was we went to wholesale and we partnered up with some other people that lost their grow.

We were going to do a wholesale grow all four of us together, but when the regulations came out for medical in 2010, it required us to sell the majority of our product through our store. We couldn’t do a wholesale model. We then had to adapt and say, “What do we do?” At that point, it was like, “We’ve got to figure out and find a store.” We found a location. We had to get our grow up and running to a point where we could produce enough product to pay all the bills. Being that it grows expensive, what we had in our past discussion, I probably would have stayed away from that in the beginning. I didn’t start out that way so it was different.

This all depends on your situation. What we were happy with at the time was, “Let’s get a thriving grow going and get our store doors open.” At that point, then we can re-assess because we have a system flowing, we’ve got money coming in, we can then go to the next opportunity. We took on another store by accident about a year later. Since nobody had done this before, we were concerned that we weren’t going to be able to grow enough or to sell enough product that we grew, we thought we would say, “We’re not going to be able to sell it all through one store.” What we did is we partnered up with another dispensary that was at downtown Denver. We negotiated and say, “How about we negotiate a price with you? You’re buying many pounds per month.” That was something we didn’t have to worry about, making sure it happens to our store. We were moving a few parts like that. However, we weren’t taking large investments to open another store. I was looking at some of the numbers on your business plan. You’re looking at one of them that is opening, it’s going to cost close to $500,000. The other store at Berkley was closer to $700,000, is that correct?

Yes. That was the original business plan but things change.

That’s another thing I want to say is that they’re going to change. Business plan relatively point you in the right direction, but sometimes you end over here.

PP 74 | Personal Finance

Personal Finance: Always be diligent about keeping track of where your business is at on a monthly basis so that you can predict what’s to come.


For Berkley, the business plan I created in the summer 2019, that’s what I had to present to the owner. Since then, I’ve met those contractors that are willing to help me out. I’m hoping that’s still going to work out for Berkley and that’s going to reduce my costs a lot. Besides that, I was looking at somebody on LinkedIn. They have pictures that they posted from recent projects that they finished. The looks is basic that I’m like, “It can’t be too expensive.” On the other hand, I was talking to a different person who is offering to work with me on the cultivation project. When I told this person my numbers for my retails, even the $500,000, $700,000, he thinks it’s not enough money.

He says it should be close to $1 million and I’m like, “I don’t think so.” I don’t know if I am doing something wrong or if the prices were high before. Now, the more companies are starting, the more this type of construction. The numbers are going down because there’s more competition out there for this companies as well. This is another thing that I got into. Am I doing a less expensive projection? Am I doing a bad job, thinking that I’m going to be able to afford, or my quotes are not perfect or close to perfect?

What I would suggest you do to make sure you’re not overextending yourself in one project or another is go over a monthly basis on, “Where are we at?” The main reason why I wanted you to go through these processes is to start getting in that mindset. We want to start getting to a point where you’re thinking 6 to 12 months down the road at the least. What can happen that’s unexpected, and I’ve seen it hit numbers of numbers of business owners as they go forward, is dealing with the city and the fire department. What can happen is since they’re trying to figure this all out the same time, those can push your deadlines back. It can be months.

If you were thinking, “I’m opening January 2021.” All of a sudden, COVID has slowed everything down. There’s COVID going through the office of all the building inspectors and they’ve got one guy. That’s something that you have no control over. The city is like, “We can hire somebody, but we can’t hire them fast enough.” All of a sudden, you’re at the mercy of getting your certificate of occupancy for your place and you’re burning cash. You’re burning $25,000 a month. If you don’t expect that stuff in advance, soon you’re four months down the road and you’re like, “I’ve got $100,000 that I’ve got and I’m not ready for that.”

What can happen is if you’ve got two stores in that scenario, that’s going to put you out of business before you even open. I’m sure you’re aware of this. You have to assess these projects. You have to be diligent on, “I’ve got to sit down and make sure I go through these numbers this month so that I can see my six month is going to happen.” What’s that going to do is, “Here’s my goal. I’m shooting for it. I may not hit it, but what do I do in between?” That’s the key to this, and having clear communication with your business owner that has the funding so that they are on the same page. They can get to a point where they’re like, “I’ve had it. I’m not doing this anymore,” then you’re screwed.

It’s not that you’re over with, but as your partner/mother-in-law sees you going through these motions, she knows how serious you’re taking this. I’m sure she’s in business because of that already. However, it builds that stability between your business partner relationship. As you grow and get bigger, these things will be magnified. I don’t want to go too far into the business plan side or to the business partner side, but that’s the progression that starts happening. If you know that in advance, you can plan for it. You’re doing the right thing, but you have to make sure you’re diligent about keeping track of on a monthly basis on where you’re at if you do need to pull off, let’s say the Berkley project.

Last time we spoke, I had doubts which one or if it should go both at the same time or if I should go with one, but things happened that changed. It wasn’t on my end, it was on the city. They canceled my meetings, not just mine but everybody else’s meetings scheduled. One of the companies is suing and it’s interesting.

It’s another hurdle that you have to jump.

Because of that, the court issued an injunction that stopped. I don’t understand it. I’m trying to learn more about everything that’s going on because they stopped everybody’s licensing meetings. I don’t understand why they would have to do that if there’s a company suing. If they are considering giving that company a license, why don’t they hold one license? Why do they have to stop everybody’s progress? That’s another point. We are part of social equity program so the state gave us the advantage of having expedited review because they know that we don’t have much money so we can start our business, and things like this happen. I’ve had my provisional license since May 2020 and I’ve had all the documents ready for them. Now, I have to wait.

That puts me in a disadvantage because everybody who was behind me, they are catching up and we’re all going to be at the same level so the opportunity that I would have to be one of the first ones to open in time, maybe everybody’s going to be able to open at the same time, which makes a big difference. We’re still trying to learn more about what’s going on. We have made a decision that we’re most likely going to start with Berkley, which is not that far. We’ll probably going to get the same, if not more people to come to our store because the other ones in town. They’re not going to be open.

That’s how I see it. I could be wrong. Maybe they would change and say, “We’re going to let you go ahead with your meeting.” I’m thinking about doing this. We’re going to have a meeting with the architect as well. I have another person going to give me a different quote for Berkley. I want to see if I can get different plans to make that project cheaper because that way I’ll be able to do one store cheaper, and when it’s time to go back to Taunton, then I’ll have cashflow and I can make it a nice store. It’s not that I want to make it a bad looking store, but I want to make sure that we can afford, especially because things are getting tight. That’s going to be our goal.

Sometimes, something that will get you past an extra 30-60 days is all the difference you need to be successful. Click To Tweet

You sound a little different from when we talked last time. At least from what I’m gathering is you’re focusing in on what counts. If I can open one store, you seem like, “That will get me to the opportunity open the second one. I have to maneuver around the city and they’re hearing stuff.” It’s nice to hear you say that because as you’ve worked through this, this is how you can become successful. You’re thinking, “How do I build it cheaper? How do I get in that? I can put more money in when I have more cash, but I don’t have to.” I heard this one and you can take it however you want, but you don’t have to shoot your entire cash amount at one deal. A lot of people will do that expecting that they’re going to win. You can always go back through and do a remodel.

You said it too last time. That stuck in my mind and I saw this picture right before our meeting. I’m thinking, this might be what we need, let’s make it basic. The other thing was COVID. We don’t even know who’s going to be even be able to be inside the store, and have friends and family working in the store and try to work out a deal and say, “Can I pay you later?”

This is how you squeeze every little penny out. You get friends and family there like, “I need everything to get this open. Will you guys help work with me? I’ll pay you after the first week after we get some money coming in.” That’s hustling. You’re hustling now. It’s getting me excited because I can see it happening. I can see you going to your friend and they’re like, “I’d love to be a part of opening a store. Who gets to do that?” I talked to my friends when I was opening a store and they’re seeing all this stuff all over the news. They glamorize cannabis and all the cash. Who wouldn’t want to be a part of making history? It’s a big deal. Your mind is getting in the right spot. You’re segmenting different decisions in the right way. It’s exciting to see. I like where you’re heading.

I was upset at first when I heard about that the meeting got canceled, then I’m thinking, “Hold on, this makes my decision-making easier.”

I went through both your business plans on Taunton and Berkley. Maybe you haven’t showed me this information yet, this is all great stuff. You’ve got your executive team that you have in place, which is you and your business partners. You’ve got some advisories that are in there. Description and facility. You get detailed in how this is set up, which is good. It’s good for you to follow, but what this helps is for the city.

For me, it’s not new. When I first write these business plans, I was try trying to see what do people write on their business plans for cannabis? It becomes most likely the same thing in every business plan because everybody’s going to sell the same type of product. The quality could be different. That’s what could differentiate you from your competition, having a better-quality product. On paper, nobody knows the difference. The politicians maybe do or don’t understand. They want to know what type of products you have, hours of opening, hours of closing. Some people might ask, “How many people do you expect to have? How much revenue are you expecting?”

I didn’t pay anybody to create my business plan, which I could have done, but I didn’t have the money for that. I’ve been talking to different people about raising funds. I’ve got some high goals for business plan that I might have to do it. I just don’t have the money, but it might be important for me if I want to raise a certain amount of money for my cultivation project, which is a much bigger project. That’s something that I have to consider, but I don’t have the money right now, so I have to figure out what my options are for that. Whatever I presented to you, it’s a basic business plan.

It’s fine. It’s good for the city for them to know. It also helps you line out. You’ve got stuff in here like security layout and how you’re going to somewhat approach that. You’re going to figure out all these little things as you move along. You’ve got a relationship you’ve built with a bank.

There’s a bank that I’ve been working with. There are not many banks that deal with cannabis in Massachusetts. As I understand, it’s a lot more than any other places. Maybe when you first started, probably there were no banks out there doing it.

We had to make up names and go in as concession groups. It’s a form of money laundering because you’re using a different entity to put money through, but we didn’t have any choices until banks started understanding that they could regulate. Do you have more than one relationship with banks?

No, I do not. I only have one, but I’ve been approached by different other banks that are trying to get into the game. I haven’t felt the need yet to pursue another banking option. It’s something that I think that’s important to do so you’re not stuck with one thing in front of you.

PP 74 | Personal Finance

Personal Finance: You have to make sure that you have a sharp business plan so that you can capture the right interest from the person who is lending the money.


What can happen is banks can accept you as you are at the beginning. If you start being successful, which I think you’re going to be down this road, the bigger the deposits get, the more nervous they get. What I learned is make sure I had some other people on the side that I was keeping relationship with. If they shut my account down, I got to move it somewhere else. For example, in 2012, there are a couple of times when we went through two banks a month where they were shutting our account down constantly. What happens is it forces you into some tough situations because you have payroll. How the hell am I going to pay payroll?

What’s helpful is if you get a couple of banks that you know well. The second thing is, if I have no bank, how am I going to pay my bills? Building a little basic plan of, how am I going to take payroll tax for my employees? I know you have some bookkeeping backgrounds, so you can start working on this stuff ahead of time. What’s going to happen is that’s your fail safe. You get your plan B and sometimes plan C. Usually in cannabis, it’s C and D. It goes all the way down. You want to have these in mind and put a bit of thought into those because they will save you a huge amount of stress. When it comes to, “What am I supposed to do? My mortgage is due or my lease is due. I’ve got rent in this other property and I have to pay payroll tax and I’ve got payroll. What am I going to do at that point?” We had points where there was almost a year we were paying everything in cash, but that came as a scramble like, “How do we do this?” It’s a lot easier not to go through that if you’re ready and if you’ve got some other banking relationships, and understand what you’re doing.

They also have those cash apps, they have CanPay. They have higher fee, but those are things that I’m considering adopting as well, because not many people have cash in hand, so they rather pay an extra fee and use a credit card or debit card.

You’re thinking about it. Keep going in that direction as you grow. You asked me a question about the business plan. This is important so I’m going to continue this episode a little further because you’ve got people that are coming to you saying, “We think you should spend $40,000 with us and build this business plan.”

Yes, if I decide to go and look for funding for my cultivation project, that requires a larger amount than for the retail. Something that I wasn’t even aware of before until I learned this is that when you said something like raising this type of money, you have to protect yourself. First of all, you have to make sure you have a sharp business plan so you can capture the right interest from the person who is lending the money. That’s one thing. The business plans that I have might not be specific and detailed that would capture the right investor.

Number two, as I understand, there are certain things that you got to be compliant. For example, some people might lend you the money and you end up losing your whole business because they see that you sign a contract that it’s not even valid. They lend you the money then you can’t pay them back so they take your whole business. That’s what I understood and besides that, it’s such a higher value project that the person who was the intermediary, they need to make sure that both sides are following everything that they’re supposed to follow.

There are a lot of regulations when it comes to borrowing money, and those are ever changing on a local level. Things will be happening that are allowed this week, and next week they’re not because some regulations changed. It’s having those attorneys you can turn to on the local level that can keep up with that. This takes us back to when I was talking to you about different association groups that can help out with a lot of this. Did you happen to have a chance to research any of those or talk to any of those groups since we last discussed that?

There is a group that I’ve heard about them before that I initiated a conversation. However, they do require a certain amount of money that you’ve got to pay per month. My situation is not that easy, so I decided not to pursue. They offered to help me for the first three months for free. After that, I would have stopped making payments and the hoping that I’ll be able to have my store open, then I’ll be able to continue with that. What I’m going to do, I haven’t done that yet, but I will reach out to them and I’m going to join that. I know this one that I’ve spoken with before, but I couldn’t find many others. I found Support Cultivation, but I don’t know exactly where to find these groups. You mentioned the NCIA. I know that they hosted up something in Massachusetts in the beginning of 2020, but I wasn’t even aware at that time.

Do me a favor and try to reach out to them first and ask them who they have locally there because I guarantee they know some. If you can’t find one through them, let me know. A lot of what you’re dealing with, you could find the answers in some of these groups. On that first group that you were talking about, what are they charging per month? What’s their fee?

I think it was $1,000.

We were a part of the early time and we had to make some tough decisions because there were few groups and that’s probably what part of this is, and there are smaller. In order to get people to help you and people that are in the political system, lobbyists, it takes a significant amount of money. If you only have 10 or 20 people, a few thousand here, a few thousand there to these representatives, it’s gone like that. A lot of them aren’t making any money. They’re trying to get to that next step. I understand that it’s not possible for you. Where they able to let you sit in on a meeting of any kind? They probably do a weekly meeting or monthly meeting. How does it work?

The one that I spoke with, they do once every two weeks or maybe once a month.

Building a thriving cannabis business is not a sprint. It’s a marathon. Click To Tweet

The busier they get, the more often they should be doing it because regulations are going to be changing a lot. When you do feel comfortable in picking a group, what I can see happening is it’s going to help you answer a lot of the questions that you and I have been talking about especially with this business plan. You’re going to be seeing different entrepreneurs operating their companies. You’d be like, “I didn’t even think about that.” When you talk about these guys that are approaching you about spending $40,000 on a business plan, for one, it’s too much. Secondly, it’s too early. You don’t even have a store open yet. You’re not sure how that’s going to pull out. The third thing is how does Flavia see the overall picture of what her business looks like in the next five years? Spending the time on that is more valuable for you as opposed to bringing somebody in that’s going to tell you, “You need to do this and you need to do that.” We built a multimillion-dollar company without a $40,000 business plan. It’s possible.

How did you raise the money? That’s the key because that’s what they’re saying. This type of business plan that costs this much can help me raise up to $10 million for this cultivation facility.

The sales pitch sounds awesome. That’s what’s hard and I’ve fallen for ones like that too. However, as you move forward and you grow your company, you see different avenues. What happens with people and you borrow $10 million, they want a significant amount of your business. They want a certain amount of control. Unless you’ve had some experience in this industry for a while, you’re not going to know what’s coming at you because they’re going to have more expensive lawyers. They’re going to have people that have been in business longer that have the experience on how to screw you out of certain parts of the contract. Even the lawyers you bring are not going to see some of the stuff that they have coming. That’s the challenging part. When you get into selling off parts of your company, that’s when I go back to, “I think it’s too early for you.”

You don’t have the experience to deal with those people like that. If you had somebody on your side and was your business partner and has raised hundreds of millions of dollars, at least you could trust that person and say, “What’s good for him is also good for me because we’re partners.” As long as you have that trust there, but where you’re at now, there’s blood in the water. They see that there’s a lot of people that are not to the level that they’re used to dealing with. These money guys are smart. There are a lot of sharks out there. I’ve encountered several. You’re too early to go that route. You’ve got some amazing stuff working for you that’s in front of you.

All that you’re missing on this business plan is, “Where does Flavia see?” It’s simple as, “Flavia sees that she wants open a new store every year for the next five years.” That might not be your goal. Maybe it’s two stores and you want to be doing $500,000 a month in revenue so that you’re doing $12 million in sales. Maybe that’s your goal. Building this business plan aside from the ones that you did for the city and state, that’s where you’re going to find out these parts. Once you’re like, “Now I’ve got my five stores, how do I get there?” You can then start filling in the gaps on how to do that.

We want to get more of an overall picture of what you envision. Had I understood the amount of volume you can put through one store, I would have focused my efforts on having two amazing stores. The locations, they’re going to get gobbled up, but if you have some amazing stores, you don’t need multiple stores everywhere. Depending on your goal, some people they want to run all of Massachusetts. We’re going to have a store in every city. That’s fine. Maybe you want to sell out to them and they can take your store over in five years and you’re like, “I’m onto something else.” The part of a business plan that’s the biggest thing I missed was my exit strategy. They’re thinking, “I’m going to get bought out.” They don’t know how and they don’t know when.

Building your company as Flavia sees where her dreams and goals are at is way more important than spending $40,000 on a business plan built by somebody else that’s going to give you $10 million to do all this stuff with. I don’t think you’re ready. That’s where I come from on this. You’re going to change your mind on how you do things several times over, but the one thing is getting that vision and where your goals and dreams are.

The whole point about entertaining this was I want to have my cultivation to a good start. That was my original goal, to have the cultivation. I then got myself into the retails. I want to go back to my original goal and make sure that I can supply myself, my own stores, that I don’t have to depend on anybody else who charges a higher amount of money for the product, which is the top dollar for $4,000 a pound.

Once those growers get caught up, it’s not going to be that much anymore. It’s going to be far less. If you can take and build your store sales off the backs of all these other guys that are putting millions of dollars into these grow locations, and then take those funds and either build into this facility over the next two years, start putting money into that, or at least saying, “I’ve got $200,000 and I’m going to put it into this grow.” I’m going to go look for some Angel investors, which I prefer anyway, that is able to bring something to the table, not only business knowledge and experience, but also sees that I’m putting in $200,000 and he’s going to come with $1 million. He knows I’m serious because once you’re in there, you’ve got some skin in the game too. You’re going to find that your pick of different investors is going to be much better. You’re going to have more variety and it’s going to take you longer, but patience is good. You have a lot of other things you’re dealing with. Being patient, as you build this grow, ultimately you want to be able to facilitate your stores, but do you have to do it tomorrow?

Yes and no. Yes because I have that lease that I’ve been paying every month. Pushing my project forward, that way I’ll be able to start making money, but I don’t have to go with the full project. Maybe a lot smaller.

To do a grow there are several ways where you can phase in certain sections and planning that out and spending your time working on a good drawing with some guys that have built several of these is where your value is going to come in because you can do phase 1, phase 2, phase 3, phase 4. Coming to a grow, the building inspectors scrutinize you even worse in a grow. The delays on that can be far out there. If you’ve got issues with, “I’ve got to bring in more electrical because I don’t have enough power.” If everybody’s doing that at the same time and that’s what’s starting to happen I’m sure in Massachusetts, you go on another waiting list.

PP 74 | Personal Finance

Personal Finance: If you’re looking to build a cannabis business, you will have a lot of decisions to make. You want to make sure you make the right ones.


You can open up a store a lot faster than you can a grow because there’s a lot less construction and there’s a lot less for the city to worry about when it comes to safety. That’s what you’re going to be dealing with. I can pay $40,000 for a business plan and I look out there and then that’s what’s going to give me the $10 million. My concern is that you’re not ready for it and you don’t know what’s coming at you. You tend to make another lease decision like what happened already. You don’t want to stack up bad decisions because that will eliminate you. For the readers out there, Flavia is going to do whatever she wants to do. I hope that I can give her enough information that she is able to make some good decisions as she moves forward. I want to see as many people like you hit a home run and it’s not realistic. There’s not a ton of people that are going to be successful in this. It’s a hard game to play.

It’s hard. There are a lot of factors that play into this. Everybody’s trying to get you out of the game.

Either your competition wants to open before you, the city locally wants your tax dollars but they don’t like cannabis anyway, but they’ll take your tax money. There are a lot of landlords out there that are looking at taking advantage of a lot of the small business owner. With those three right there, that’s enough to make your head blow up sometimes. Flavia, I want to thank you for being on the show with us. You have a lot of things you’re going to have to figure out here over the next years. For you out there that are looking into taking on a cannabis business, this is what it looks like when you are pushing forward. You have a lot of decisions to make. You want to make sure you make the right ones.

Patience is huge and it’s hard to wait six months or a year or two years, but opportunities will start unfolding in front of you if you allow yourself the courtesy of like, “I don’t have to sprint now.” This is a marathon. You got to train for a marathon. As you’re doing this and getting your experience in cannabis, you’re going to see more of this. Flavia, thank you for being on the show. For you out there, if you have any questions or anything you would like me to ask Flavia what she’s doing, reach out to me at PlantProblem.com. I can answer those for you. Thanks a lot for being out there with us and we’ll see you next time.

Thank you.

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