Transitioning from cannabis consultant to cannabis operator After over eight years of helping clients acquire licenses, design, construct and manage their facilities American Cannabis Company is now taking equity positions and acquiring cannabis companies. Terry Buffalo joins Dan Humiston to explain what prompted them to make this move and why licensees and operators should team up with them. Produced by PodCONX
Transitioning from cannabis consultant to cannabis operator
After over eight years of helping clients acquire licenses, design, construct and manage their facilities American Cannabis Company is now taking equity positions and acquiring cannabis companies. Terry Buffalo joins Dan Humiston to explain what prompted them to make this move and why licensees and operators should team up with them.
American Cannabis Company
[00:00:00]Dan Humiston: raising cannabis capital. We are joined by Kari Buffalo from American cannabis company. Terry, welcome to the
Terry Buffalo: Good morning, Dan. Thanks for having me on your show today.
Dan Humiston: I'm really glad to finally have you on the show up American cannabis companies been around for so long. I'm sacked that we haven't had you on already. And you've been in the business for geez over eight years. And you're really known. For your end to end consulting and from helping clients get licenses to designing and constructing and even managing their facilities.
Your team really understands the business, that cannabis. And one of the things that got me really excited , when I was prepared for this interview is that I found out that , you recently are making a transition from just helping clients get their licenses to actually taking equity positions in even acquiring companies.
What prompted this move?
Terry Buffalo: Dan with the business, as you said, has made it to its name on going into new markets, wedding applications in business plans and proforma, as you know that they develop a out. [00:01:00] And we also know that the one way to short, because there's only so many States that are going to continue needing that type of service.
And so we started looking to be able to figure out a way to levelize our cashflow in the liberal brand, the American cannabis brand and what we stand for. So we started about two years ago looking at tweaking our business model for going some revenues in some of these markets to try and exchange for equities.
Those did not work out well for us because of the rules change in like Oklahoma and Missouri. So what we're doing now, we're strictly just looking for acquisition opportunities in the Colorado market. Some of the other States that are all used to work for cleaning your two public companies, not all state public companies running and operating a cannabis in another state.
Dan Humiston: okay. It makes a lot of sense given the fact that, really you're the experts at this and Mo and the licensees are not in many cases, they're just beginners. So it seems like the likelihood of success for somebody like you coming into this is far greater. I was thinking about this and, coming up [00:02:00] with ways that we can paint some scenarios for people that are out there. And I came up with two scenarios and I was hoping you could walk me through it, but let's just say that I'm a newly licensed business. Why does it make sense to team up with American cannabis company?
Terry Buffalo: It all comes down to experience. You can read a book all you want, but actually go out and do it. And being that we've been doing this for over eight plus years, some more established and much longer, we've made a lot of mistakes. We've seen a lot of mistakes and those mistakes can help you to avoid those same mistakes.
Other people have made. We understand the numbers. We understand, however you want to break it down per square inch per line, per square foot, whatever we understand production, we understand the workflow. And a lot of people may be a very good grower, at home or at a small scale. When you take that to perpetual grows and you have a hundred plus thousand plants growing, you're harvesting every day, that takes a complete different type of skillset.
And that's something that we're very burst. And over the years that we've been doing this.
Dan Humiston: yeah. Why reinvent the wheel? Like [00:03:00] why should you make the same mistakes that other people have made? Why if you can avoid them, it seems like a no brainer. Let's go to the second scenario. And this would be for people that are our experienced people that have been through this established cannabis operators.
, why does it make sense , to let you acquire them?
Terry Buffalo: No, you have a lot of people that got in the space and it's to the point. Now they know that to take it to the next level, they're gonna have to have additional expertise and capital behind them. When you have a one to two store location, it's harder to compete now in a different market. So we might have a much more brand awareness and expertise and capital we can bring to the business and hopefully work out a deal over six months to 12 months to make it beneficial for both parties to join together.
Dan Humiston: Yeah, I think you're right. That there's a time where it's going to be tough to compete with the multiple locations. , I thought I read someplace that you do some licensing where you may be licensed. Your name is that another option?
Terry Buffalo: messenger name and also our SLPs and our growing songs, because we do have a [00:04:00] very interesting style of growing with , which is basically we've taken the best of both worlds. We've taken hydroponics and we've taken it living soul and combine those. And so we've created this whole new concept of cage, free cannabis.
People are more interesting and now and eating. Healthier organic. And so we were basically take the same approach of our cannabis consumption, cannabis growing, even though, are you concerned on what you're putting in your body and if that's the case, we definitely out the the product for that conservative.
Dan Humiston: You touched on your proprietary products. Maybe you can expand on it a little bit. I saw the Soham living products. Is that how you pronounce it? So hum. Living product or living Soleil.
Terry Buffalo: Yes, it's a loving and this was created many years ago for really bringing up the terpene profiles in the cannabis. However it is a product it's made from start all the way to finish. So what's nice about this eliminates all the guessing, adding chemicals, changing this and doing that. So basically it's just add water from start to finish and you get a very high quality product and very [00:05:00] clean there's no flushing or anything of that sort.
And so again, it's almost like we call it the chia fat method, big her, she has water and let it grow up.
Dan Humiston: Man. That's great that she has that I love it with COVID. Has it created acquisition opportunities?
Terry Buffalo: Yes and no. Some of the opportunities now because of the of the tennis business take has taken off since, say March or April with Cobra, you've been a lot of people now, going back to these outrageous multiples, you do a million in gross, you're losing a million. I think it's worth 3 million now because it's essential, in the whole capital markets have changed over the last year in general.
No, it used to be about top numbers. Now it's actually about wanting a business and how some bottom line profit, because the investors are tired. You seeing millions of dollars and cents blown in this market. So it has created some opportunities, but again, meet people are getting out of greedy. And on the other side of it, you have people just maybe throwing up their hands because they're not able to compete, but again, once you start negotiating, all of a sudden their value [00:06:00] goes up tremendously.
Dan Humiston: Yeah.
Terry Buffalo: And that's what the biggest problem we've been having when negotiating against Shay and then the 11th hour, they want to change the deal. And I'm just not our method, our style.
Dan Humiston: Yeah. , I think that's part of the negotiation process. I think people always expect they're going to get the most further value out of there, but yeah, . I'm not surprised. Pre COVID. We heard that a lot of MSLs were just gobbling up licenses almost as soon as they were issued.
And there were a lot of. Licensee's objective was to get the license so that they could flip it. And and I understand that some of the MSLs are flushing. , some of their licenses are passing em on. Does that create an opportunity?
Terry Buffalo: It does in certain markets that we'd be interested in by all means, like I say, I don't the markets again, or friendly to public companies, but mostly it's in there. So it was already public. So the market only markedly would like to venture into.
Dan Humiston: You mentioned that you and I see that you're trading on the OTC under symbol, [00:07:00] a M J that's a M J a lot of our listeners we're really deep into the. Cannabis stock market , in the, unfortunately they got beat up. But I think the liquidity aspect of a publicly traded cannabis stock is always going to be attractive.
And it's at what point does it make sense for cannabis investors to get back in and buy some cannabis stock?
Terry Buffalo: Just having the election just part of the election process. Now, at least the cannabis side is, a fly by stage enrollment initiative cleared. So we're already seeing a pickup and I have to coming in. So Kobe has really slowed down our type of business, not being, we're touching the plants, a lot of platelets.
So stop. But now that we're starting to see a turn now with these new States looking to come on at 2021, you never know the right time, it's always a guessing game. You can't be guessing the market or whatever time the market, but, we always say that, I'm sorry. I have a new state to come on.
And also just the investors [00:08:00] warrants are changing again, that one in companies that are actually producing a net number as opposed to top line number. So I feel personally, over the next few months, there's, you're probably gonna see a lot more capital coming back into the cannabis space with investors and also capital into the companies to make acquisitions or expansion.
Dan Humiston: I hope you're right. I hope you're right, because this is, yeah, it'd be good for the entire industry. Yeah, I think so. I know we just briefly touched on all the services that American cannabis company offers, but if you want to learn more, if you'd like to discuss possible mergers or acquisitions, we have the links.
In the show notes and you can just connect with Terry directly and resume this conversation offline. Terry, appreciate you being on the show
Terry Buffalo: Dan, thank you so much. And I'll give him how many bikes sometime in the near future.
Dan Humiston: for sure. For sure. Let's just get through this election bologna and will we get the show on the road,