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hi everybody thanks for joining us today this is Nathan we're with rain networks we're excited to get our webinar kicked off here we've got a really fun webinar for you today many of you that have been on our webinars here at rain networks in the past know that we're often doing webinars kind of more product focused and today we're really going to give you a webinar with a different flavor because we're going to be doing more of an industry focused webinar an industry that we are getting a lot of feedback from from our partner base or reseller base that they have that they're kind of intrigued with and so we're gonna we're going to talk about some interesting stuff today with us today is a gentleman named Harry Brailsford Harry thank you so much for taking the time out to do this webinar with us today well you're welcome CERN is you can see in the photo I'm on the road just finished the Acronis this is my Florida luck yeah yeah Harry is always on the road some of you may have may know Harry he has been in this industry for a very long time and many of you might know Harry from his background and SMB nation well I remember meeting Harry for the first time back in the kind of windows small business server days boy that seems like so long ago but Harry really pioneered kind of that whole user base and a lot of you may have been members of SMB nation way back in the day so Harry still has SMB nation but now has new organization called 420 MSP he has a book that he's authored on the subject of the cannabis industry and so Harry's joining us today to kind of give us his thoughts on where technology is going with with the cannabis industry and maybe how it's going to affect all of your businesses maybe how you can capitalize on what's happening in this industry so Harry why don't I why don't you give everybody just like a quick bio and background of yourself so they kind of know where you're coming from absolutely so you've done a good job of it but you know been in Seattle but in tech well over well not well over about 30 years rode the server wave and then Nathan what happened is smo business server was announced end of life and mid 2012 which again is actually quite a while ago and ever since then our partner community our MSP community the they've been looking for a new business model and many have found that right scaling and automation and things we know to be true in the industry but people consistently came up to me and said what's next right what's the next great thing and that's what led me to the research and the Cannabis vertical technology specifically and you know as you see on the screen the sort of the reason we're here and and and I think will cover over the next hour is why does the MSP need to pay attention to the cannabis industry in the Nathan just yesterday Sheri Coleman out of Reno Nevada asked the second question and in sort of a different way she's like well how can I break in to this industry and so that raises the bigger question of what type of businesses exist in that cannabis industry is that that makes sense Nathan that it's there's a lot of entry points yeah well there's a lot of different types of businesses so there's a lot of different businesses that may be the managed service provider out there we need to kind of connect up with and kind of understand those businesses so that they can connect with up with them and the right way right manner yeah and just this morning I've already put a couple hours in I'm attending an all-day online summit from the commercial insurance business and folks after this you're you're certainly welcome to Google the insuring cannabis summit 2019 it's free goes on for another five or six hours you're welcome to hop on board that but Nathan the point is is that this is a big ecosystem I liken it to you know what type of businesses exist well it's it's it's like oilfield services right people and oil would think it's just Roughnecks doing the drilling well that's that's not true there's security firms there's catering there's housing right oilfield services is a big industry and I just put this example up and encourage people to you know after we're done maybe pop into this thing because commercial insurance right that's another Avenue and you as the MSP could pick up insurance climate quite clients with a twist so there there you go Nathan yeah yeah so so who what are some of these so in the categories you've got growers right you got retail shops what are some of the other categories yeah so in my mind there's really four categories so there's the supply chain which starts at the beginning with the growers then you have the processors or manufacturers in the middle where they take the flour and either use science to come up with different varietals or make edibles or make oils and lotions and medical type solutions and then you have the dispensaries and the dispensaries are a storefront typically a retail storefront they behave like a retail store with a twist I I would offer they're acting very much like a combination of a pharmacy with all the regulation and measurement and expertise but they're also acting like a high-end wine shop you go to your wine shop the gentleman says I have a new red wine and I encourage you to pair it with sea salt chocolate and so you're looking for that gentleman to or lady to make recommendations on the purchase at the the retail level so those are the three elements of the supply chain but then there's the fourth which again is what this slide kind of alludes to is the services industry so you have CPAs niching on the Cannabis vertical there's specific regulations you have law firms niching you have publishers you have the insurance industry You certainly have security right that there there there would literally be firms that specialize in armored car services to transport the cash and you know Nathan those those are kind of the big four categories and it's in particular that fourth category of other other services that's still being defined I mean dude you you you you name it man there's John Deere tractors there's you you there they're involved if that makes sense well I mean it's different in different places so like we're gonna we're in kind of a unique perspective of the as we're both in the state of Washington and so we have maybe a little bit ahead of some of the other states but so when did all of this kind of kick off here this is like what about a five-year-old or so in this you know five to seven year old industry what do you say no that's exactly right the legalization was 2012 and there is a highboy with sure that I could draw the finance term but it amounts to basically duration so 2012 it was legalized but typically it's 18 months before the product becomes available on the market because they have to put in the supply chain the regulations you know justjust because the voters approve something in November in 2012 that does not mean a dispensary opens the next day right takes about a year and a half and when I get to the slide of the 11 legal stage so I'll give a shout out in particular to Michigan and Illinois is probably the hottest opportunities but yeah you know it's it's seven years legal in Colorado and Washington and let's just say maybe five years practical in those two states and then everybody flowed well maybe this is a good lead-in to talk about like you know what states are doing what and I'm kind of surprised like considering of election year coming up next year that that there's not more like a national movement going on I know if that's ever going to happen but but so so Washington where we obviously kind of the full meal deal out here about how many states are like where Washington is where we have like retail yep well I'll tell you what let me let me knock out a couple of fun facts and I have a slide on that fun facts folks what we're trying to we're trying to answer that first question why should an MSP care about the Cannabis vertical so a couple of fun facts to arm you with today so we have a lot of people don't know this but the recreational cannabis market is significantly larger than the medical market and that may reverse itself someday with increased legalization and and research research is limited because cannabis is a schedule 1 drug akin to heroin at the federal level so research funds are hard to get but what's that pops you know Nathan cannabis has a place in palliative care for pain management nausea and and appetite that kind of stuff sales last year 10 billion grow operations the largest in Colorado 34 acres now folks write that down or make a mental note 34 acres I'm gonna show you what the value of an acre is industry employs a quarter million people for a real good time go to glass store and I'd actually encourage you to go to indeed.com is where I did my research but according to glass door people are baking what they're worth now if you go to in deed and type in cannabis and do the state of Washington Nathan its hundreds of job openings it's unbelievable and then the I'll skip over the the arrest and part part of the dead Nathan part of the challenge with increased legalization as advocates are fighting for people who have been arrested to get their records expunged and that is actually holding up forward progress that's kind of a backward view well what will touch that in our three-part series another day fun facts lower right I'm gonna say cell c8 in Excel terms cumulative revenue to Colorado 1.1 billion so even conservatives are now excited about this in Colorado and Washington state resembles this we've also crossed a billion now I told you to remember those 38 acres in Colorado Nathan this is really cool we would yield two hundred and thirty two dollars per acre cannabis yields 1.1 million per acre now we're talking right this is where I want you guys to get excited about yeah this is this is this is the real deal so the value chain is incredible and and just guys put it in perspective that a lot of us are still a little fussy about the value chain and I T you know we were server side we're making coins and and reboot you had to go in and put him patches and do reboots and then came cloud and it devalued the value chain it's almost Nathan that's almost the opposite our acres were over a million with servers and and with cloud that the value has has decreased right the the business models have changed cloud is just so efficient so folks this is a view of a very high value value chain well we'll get through another couple fun slides and then get to the legalization and Nathan's questions quick view a forecast for recreational medical medicals light-blue shows the proportion of revenue between the two more importantly 2023 you know we're basically going from 10 billion to 30 billion by 2023 those are real numbers and again the the infrastructure to support that from a technology view is not only critical but it's it's comprehensive I mean it's a real opportunity a quick shot up the book center photo amongst my other books avail yourself at 420 MSP comm we're gonna talk about the Colorado event a little bit more later all right Nathan now now we're getting to your question I'm answering your questions so yeah because this is really like that growth that you mapped out there to 2023 part of that is is like new states coming on board Thanks it is and you know Nathan thank goodness it's coming on slowly two reasons one is mr. mrs. MSP you're not too late okay we're at the beginning of this so you were in no way too late number two the new states learn from the other states mistakes and so that's very interesting in that you know people are learning from the Washington and Colorado experience that's exactly what California did is they looked at what Oregon Washington and Colorado did so when they came online they had the benefit of that history and but this is what ten billion looks like now let me give you a little bit better view of the different statuses eleven states are legal now Nathan and and here's the dates by the way that show when it came out when it was legalized to repeat myself if you go to Colorado and you go to the state of Washington and you see 2012 yes that's when it became legal but it was clearly another year 18 months 24 months before availability and then Nathan and our field what we want to use is the nomenclature of adult use laws so fully legal typically known as recreational the proper nomenclature because we are a serious business and we are overcoming identity issues and stigmas so the proper way to talk about this is adult use laws if if that makes sense and they 'then it hits it head-on politically in a couple of in no way are we you know promoting the consumption of cannabis we're just capitalizing on the opportunity and we certainly would not want to promote the consumption of cannabis below the age of 21 so year ago the new language shout-out to Illinois and shout out to Michigan is the two hottest opportunities because it's a Greenfield so what you're seeing in the state of Washington which I know best is yes there's a don't get me wrong there's a there's obviously opportunity but these firms have had the doors open for a while so Nathan a lot of times you're gonna be coming in to someone in the cannabis supply chain as an MSP and you're going to be displacing somebody right it could be the son-in-law knows computers it could be an in-house IT person knows computers Harry we already have a point-of-sale system that you know what Harry we're not entirely happy with the POS but we also don't want to go through a migration so Nathan nothing nothing you've never seen before and what I would call the secular business community but boy you you be you go to L it only in particular in closeby Michigan and you were talking Greenfield and boy howdy that's that's where I like to be in business well yeah so okay so let's let's talk about these kind of so run me through you you mentioned earlier the four type so we had the dispensary go where that other it were the other three types again yeah we'll go back up the supply chain so the dispensaries at the end and then we go upstream to midpoint and midpoint is going to be the processors and the manufacturers and then we go to the start of the supply chain and it's the growers and then what I would do if if your kind of mapping out little squares so that that would be three squares with arrows now put a big circle around those squares in the fourth would be the the infrastructure or the supporting law firm accounting our architect I've met an architect who specializes in gorgeous dispensary design Nathan it's all that so let's take a grower for example because some people in this colony now I have a picture of what one of those businesses look like what is what is the technology look like at a grower like how bigger these companies do they have servers what does it look like yeah you know it's it's interesting so first of all it depends on the state and I'm gonna say Colorado is yes Colorado you have to grow inside a greenhouse and in the state of Washington you can grow outside so there's again there's all these regulations so right there the physical appearance would would vary and then number two you know there's an interesting thing about the growers is there's an MSP in central California who's often featured at the channel Pro summits now talk about that um upcoming events Luis Alvarez and he served wine growers in California and Nathan he was very easily he was able to easily pivot his business models to cannabis because it acted the same as growing grape is to growing the flower and so with that you're bringing IOT and drones because you know you want to be able to inspect the crop you want to be able to maintain the crop you need to use RFID or barcode to manage the crop and and have traceability and and then the IOT component could also be Jenny and I have talked to a firm in the lighting business that's out of Boston's in in there entering aggressively entering the cannabis field and the IOT component Nathan would be the sensors that are in the soil for a moist and and that would be a function of lighting right because too much lights gonna try out the the flower in the soil yeah so that's what a grower opportunity looks like in i
you know in addition to 365 email powerpoint SharePoint you know outlook it's all that it's it's I mean they have to like track because don't they have to like report to the states like what they're growing so they have to track like their volume and all that stuff very closely right every single stock every siesta well there's a database there probably a server of some sort that's how you've got you know pretty pretty intense technology requirements there so let's go down now to the this manufacturer guys for this next guy down what does one of those businesses look like you know is this five people 50 people oh oh it all the above it can be quite large and what you're seeing in Canada and we'll have a slide about Canada in a few slides but what you're seeing there is because it's federally legal you have Corona has the corona beer Corona has made a significant multi-billion dollar investment in this sector so one would say Corona is basically a manufacturer right they're taking what the farmer grew the wheat knops and their manufacturing beer Corona doesn't directly sell beer it goes to a distributor it out to the store so use that as your visualization as to what a processor manufacturer looks like and it they can be quite large in terms of their employment base now let me give you a little bit better example that people will relate to huh new is a edible manufacturer down in Southwest Washington that makes peanut butter cups and s'mores and that kind of thing and hanno did a couple of things so they they're a commercial kitchen right there a bakery a very secure bakery and Nathan two things happened with hot Oh what is there chocolates are so popular that they actually now manufacture non infused chocolates that can be bought at a store right like a sea salt chocolate so they operate in a couple of different markets based on their reception but here's an interesting story they had they stopped producing for a while they outgrew their existing manufacturing facility in Southwest Washington and had to move to a new facility and because of the complex regulations they had to get Reaper mitad at the new facility it wasn't like you know Nathan it's almost like a liquor license right a liquor license reporter in a neighborhood has to you know he can't be within a thousand feet of a church or school that kind of thing and and so when you move you would have to reapply for your liquor license well that had the effect of Holly disappeared for like forty five days from the marketplace in the Nathan here's the good news moves are always a demand trigger for MSPs right when do people want to upgrade their their network instead of cat five they go to Wi-Fi instead of the old-fashioned phone system nobody's happy with they go to UC unified communicate and Nathan moobs have always been a demand trigger so oh yeah yeah I mean that's good yeah every MNC company on this call has helped somebody their technology I'm sure from one building or one office to the other yes absolutely really quick here before we move on to the next question let me just throw out to everybody we've got about ten more minutes in today's webinar this is going to be a three part series guys we when Harry and I kind of dreamed up doing this webinar we just knew we could never pack everything into one session and those people for smaller sessions and larger sessions so we're going to do three parts so you'll get an invitation for part two soon and so we've got about ten minutes left I want to tell everybody if you got questions for hair you feel free to use the chat utility in the GoToWebinar and we'd love to field some questions but so here we've got the eleven states here okay this is where I was going so we got the eleven states or legal who's next yes so partially legal so quitting quickly because I do want to you know get to questions and folks if we don't get to them well we'll get to them in the next segment these are medically legal so this would be people who have a medical card except for or it yeah except for say number six number ten number twenty and Texas law I actually know number twenty four would be CBD oil only so medical cards at lest they say CBD oil in the Nathan the photos so this is interesting at the Acronis global cyber summit this week at the Fountainbleu hotel down in Miami Beach a five-star gorgeous this was a sign in the hallway for their spa and is like wow I am gonna take a photo of that that here you have arguably a little more conservative hotel very high-end very nice Nathan they're just out there with it in Miami Florida that they will massage you with CBD oil so this is what partially legal states look like in folks here's the opportunity Nathan a lot of times people will say well I'm not one of the eleven states I yeah I get it I understood but you might be one of these twenty seven states and the numbers changing frequently so you know if you're in Austin Texas you and Dean can start to look at this industry and then this is also a pathway towards adult use our full legalization next slide please we have fully illegal so if you're in these states this is going to be tougher now that said Nathan you could still be a service provider right you could still be an author who wrote a cannabis business book you could be a CPA firm you could be an architect an architect based in Alabama can certainly drop designs for a retail dispensary right that's entirely it's just an architect and then well go ahead well I was gonna say I mean we got the eleven guys that are fully legal for adult so then we got the 27 that are in the partial I mean if you're on this webinar and you're one in one of these 27 states you should probably be the most excited because you have an opportunity to really catch this at the front end because your state it's fair to say right if you're in this state full adult usage is coming right this is like the they'd crack the door open and soon right wouldn't you say that most of these are going to be full adult usage soon well I'll give you an example in the 2018 elections and again I a lot of time here so I'll just share but the statewide initiative barely lost in Florida for statewide legalization and I think part of that was is Florida went with de scientists for governor and a couple of other twists and turns that made in Florida you know there are a purple state and an 18 they arguably went a little bit more towards red and that initiative barely lost its on the ballot in 2020 so to your point Nathan it will pass in 2020 is my prediction in Florida yeah Canada again shout out to Canada Nathan those are kind of my fun facts and if you have one more I had one more question I was going to turn about to just because I remember seeing a situation happened here in the state of Washington with a business they were actually a manufacturer and I remembered them really struggling with like nobody would give him a bank account basically and when they wanted to buy stuff like when they went to Dell or something like that to get a lease machines there were some difficulties there so what are you seeing on on that into the business in terms of these guys having money and being able to spend on their technology stuff well remember so you're specifically talking about an entity that touches the flower right so a CPA and an architect will have no such restrictions on buying ten new laptops from Dell right they're an architect a grower would have two pathways number one cash number two and we have an MSP down in LA Josh Weiss who often gets paid in cash who's complaining it's it's the money's good and then number two in the state of Washington you can utilize state credit unions so state credit unions are typically at the trade shows in the state of Washington signing up members because they're not federally regulated so that's a loophole would be the credit union movement so there we are so okay Nathan quickly on events I I know we're starting to bump up on time folks I'm gonna get you the deck I want you to think about December 11th through 13th this is last year was thirty thousand attendees this is the biggest business show in the in the country I went 1,000 vendors not possible to visit each one in three days 30,000 attendees this time in Vegas they have the south and the north all 50,000 attendees projected and Jack Smith and I Jack Smith out of Jim for an MSP Blake Shuang an MSP out of Colorado Springs and myself we're gonna do an Airbnb house and depending on you know Nathan you're invited to join us depending on the excitement level we can get a big house in Vegas we can have Animal House split the costs right hey we have five people staying at a house it's going to be all fun and giggles we'll go to the conference and so we're calling it 420 MSP house I'll be coordinating that folks raise your hand you mean you can reply back into the email you got or Harry be an SME nation.com or Nathan's email as well Jimmy if you could get our emails out in the thank-you note tomorrow let us know if you would like to stay at 420 MSP house and as simple as it sounds if the house is a thousand a night we'll split it by five we'll split it by ten whatever it takes shows we'll be at next week I met rad Expo in Portland Wednesday Thursday I'm at lemon haze Friday Nathan shows her starting to get on top of each other very quickly in the cemetery channel pro SMB November 6 will have the 420 booth and work Ingram won I'm media but I am in Denver so I'm not officially at that show and a 420 MSP capacity but I am in Denver if anyone wants to get together for a beer fest and finally MJ biz and Nathan do we have additional questions with our remaining time well so we'll talk about this more in parts two and three but you work directly with MSP so like how can MSP work with you from you know like you almost are like a consultant I guess you would say that is that kind of the right how does that work yeah that's actually a really timely question so a couple of ways number one is sign up at 420 MSP take advantage of our free resources right I'm doing I just did an interview this morning I fitted in you know the insurance conference is going on and I fit it in an interview with like shuang kind of Colorado Springs so you know we're we're streaming content to help you get into this business number one also at the site you can buy my book it's a 90 day roadmap on how to enter in this vertical after the first of the year we're gonna have premium content the good stuff so 420 MSP will be a conduit for that and then we're very close to finalizing a business model with me a cake Kennedy who was the editor of my book Mia Mia Cade is an MSP out of Spokane Washington who served cannabis industry players and she is going to do business coaching per our business coaching for this specific vertical so Nathan you actually asked a very good question that's not announced I'd like to say that's under NDA although I just I just shared that information but Mia Cate will be heading up a business coaching practice for MSPs based on her dual experience yeah okay cool all right well so we're gonna have part two in November we're gonna part three in December on those we're going to be talking about some of maybe the regulations that's the industry might be looking at you have been working with a bunch of companies in this industry so you've seen some of the mistakes that have been made you know we'll talk about yes we'll talk about you know maybe a what things that look like in five years so that the guys that are on this call can kind of plan and like hey this is what I need to be looking for so we have a whole bunch of topics to cover in part two and three again if you want to get the book go to 420 MSP calm and keep an eye out in your inbox for your invitation to part two of our series Harry thank you so much for doing this with us today you find it yeah I think it's nice to be on the other side of the aisle it's fun to be the guest thank you day today yeah you bet and special shout out to Jenny who works at Harry's company who put all of this together for us so thank you Jenny for organizing this and everybody have a great day and we'll be we'll be back with part two next month have a great day everybody bye thank you
