You don't have to sell all your equity to open a dispensary. The cost of opening a dispensary in Boston prevents most aspiring entrepreneurs from even attempting it. Unfortunately, Nike John did not allow the price tag obstacle or any other obstacle to prevent her from opening The Heritage Club. She joins Dan Humiston to explain some of the creative ways that she was able to keep her costs down and stretch every dollar. Produced by PodConx MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Nike John - https://www.linkedin.com/in/nikejohn/ The Heritage Club - https://heritageclubthc.com/ Recorded on Squadcast - https://squadcast.fm/
You don't have to sell all your equity to open a dispensary.
The cost of opening a dispensary in Boston prevents most aspiring entrepreneurs from even attempting it. Unfortunately, Nike John did not allow the price tag obstacle or any other obstacle to prevent her from opening The Heritage Club. She joins Dan Humiston to explain some of the creative ways that she was able to keep her costs down and stretch every dollar.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Nike John - https://www.linkedin.com/in/nikejohn/
The Heritage Club - https://heritageclubthc.com/
Recorded on Squadcast - https://squadcast.fm/
Dan Humiston: [00:00:00] Today, and MJ Bulls, we are joined by Nikki John, the founder, and c e o of the Heritage Club. Nikki, welcome to the show.
Nike John: Hi. Thank you so much for having me.
Dan Humiston: I am excited to speak with you after listening to your Proud to Work in Cannabis podcast. I knew the listeners of this show would really benefit from hearing about your journey, specifically how you were able to open a dispensary in Boston no less without taking on on that without. Selling a bunch of equity.
I I, this is the story that people need to hear because especially in this environment and who better to tell it than somebody that's actually lived it and grinded and worked hard to get to this point? So, I wanna just really start off right off from the beginning. The licensing process is so expensive.
I mean, between consultants and lawyers and, and, and sometimes you gotta rent space before you even get the, the license. All this happens. And people need millions, sometimes millions [00:01:00] of dollars to get to, to even to get, apply for a license. Let's start right at the beginning.
How are you able to get through that process?
Nike John: Yeah. So that was a long journey of trying to partner with some people where it didn't work out, and when it didn't work out, you'd think to yourself, okay, maybe I'm not supposed to be in this space. Maybe this isn't for me. But I was able to take those kind of. deals that fell through when you think you have the money secured or whatever, and realized that you could get a better deal.
And not only that, but that you have to keep the ball rolling no matter what. Don't let it stop, so for me it was finding a location, but still keeping a lot, I used a lot of my real estate context cause I come from a background of real estate. Keeping all of these different leads kind of warm, letting people know what I'm doing.
And because it's cannabis, you kinda have to decide who you wanna let know that you're getting into this.
Dan Humiston: Yeah. Right.
Nike John: But you kind of keep all these irons on the fire and hope that either maybe you can get people to join together if they just wanna do smaller amounts or then on the larger side when you have someone who's like, I wanna take this [00:02:00] entire deal and I want 49% of your company, you have to say, do I wanna work for this person?
Or why am I getting into this? Because at fif at 51%, you're backed against a wall. You, you don't have a lot of, say, you don't have a lot of room to pivot. So that's not where I wanted to end up. But there were a few times where I had to say to myself, should we take this? Like, is this the best we're gonna get?
And it, and it never was, and I hope people can take that away. Is that negotiate, push back a little bit and, and have that number in mind where you're willing to say no. Say this is like the line, I can't cross.
Dan Humiston: Yeah. And I think that's awesome advice. , I remember listening to one of your interviews where you said that you even worked an arrangement out with your landlord. Which is, most people don't think about that, but landlords are, are willing to negotiate just like anybody else. And sometimes we just take the lease and say, well, that's it.
And then we move on. But maybe tell, explain to what you did with your landlord.
Nike John: Yeah. So fortunately I had a landlord who was willing to work with me on this and who understood the potential gains on both of our ends. That it wasn't [00:03:00] just saying like, Hey, I can't pay because I don't wanna pay my rent. It was, I'm fundraising, but this process is set up in a way where I need to have an l o I or a lease in place before I can even get to the starting line.
of, of actually even fundraising. And, and a lot of the people investing don't wanna invest until you have a license. So it's the chicken and the egg back and forth over and over again. Whether that's with the investors, the landlord, the state, the investor wants proof of funds. Before your L loi, the investors want proof of license before investment.
The state wants an l LOI in place and you can't, you need to pay and then they want you to hold. For the two years that it took me to get open. So my landlord is willing to, yeah, work with me over the course of that two years so that I wasn't spending any money in the beginning until we got to the starting line.
And if they hadn't have done that, odds are I would've found a way. So I don't wanna say I wouldn't be here, but the odds are I would've been here a little bit later. So that was key . And I think that's the important thing is just asking. If you don't ask your, you, you wouldn't know the answer if you don't [00:04:00] ask them.
Dan Humiston: And you're, another important thing is your persistence is that I am gonna do this. Nothing's gonna stop me. Every time I see a roadblock, I'm gonna work my way around it. , let's jump forward. And now that you have the license, you rewarded the license, you gotta build find, get the space built out, all of that, that takes a lot of money.
So how did you, how were you able to finance that?
Nike John: Yep. So the first step in, you have to get in Boston permits architectural plans. E the first step in Boston is sum to submit a plan that you're never gonna use. So you need to pay someone to do that. And there's these like, and then they're gonna reject you and then you submit your real plans. So, and then as like during projects, plans change.
So you need to plan, yeah, you need to pay for any changes to your plans and all of that. So, when I was getting quotes for what this entire project would cost, everyone's like, you need 2.5. Like you're not gonna get this open without 2.5. And I was like talking to people and I could get people to that one, I could get them to 1.5, and the people who I could get to say, I want to take the [00:05:00] 2.5 to myself, they wanted that 49%.
So I was like, well, can't do 2.5 . I just know there has to be another way. That was the only thing that came to mind for me. And I come from a family of people who have worked in construction and the, if you can do it yourself, do it yourself. Caroline of Caroline's cannabis in Massachusetts, that was one piece of advice she gave me when I first met her.
She said, everything you can do yourself, do yourself, whether that's tiling or whatever. And I'm telling you, I was hands and knees when my hands and knees in the store are doing everything I can. Blood, sweat and tears into this place, and my family, friends, everybody involved. So that was just one way to kind of save on labor.
Labor is super expensive, but in covid, there's materials, back orders, there's all of the different delays that can come in on your project, which is why you have these overruns. And to manage all of that, we, we place all of our orders ourselves. I ended up opening my own construction company because my lease required $5 million of coverage.
And a lot of smaller contractors don't have $5 [00:06:00] million policies. They have like one or $2 million policies. So by starting my own construction company and having them contract under me, I was able. one, give them better coverage, meet the requirements of my lease and actually save some money because I was able to source better product, all of these things that I couldn't have done with a bigger company.
And I learned a lot about the construction side of this business and, and, and how to make a place come to life. We were in a what used to be a glass tinting and auto building. And so how to make something like that into something beautiful, something exciting. So that was really cool and we ended up doing it at probably.
Way less than half less, a little less than half a million. So 2.5 was just a number
Dan Humiston: You're right. It was just a number and you figured out a way how to overcome that. Now let's just move it, keep moving along forward in the process. Now the places are open, but you still have to pay staff. You still have to buy inventory and market this and that doesn't come cheap cuz you haven't made penny [00:07:00] one yet until you get the inventory.
And how do you do? How do you make that work?
Nike John: Yeah, so this was super important and I really, anybody listening who's out there trying to get. I decided to work with vendors who would give us 60 day terms, and when I was speaking to our inventory manager, I told him, I was like, they're gonna say 30, but like, tell them 60. Tell them we need 60. Because this is our first time purchasing.
We don't know our customers yet. We don't know how quickly things are gonna sell, and. , we don't have a lot of money, but don't tell them that. I was like, but just tell them 60 and and that we can't budge on it. And he is like, well, I'll let you know, but I don't think this is gonna work out. And I was like, okay, let me know.
He's like, they said it works. I was like, we should ask for 90 But every single vendor we brought in in the first two months gave us 60 day terms, and that was so important for us to figure out what to reorder. Right now we're selling through some things that we had bought in those first two months, just now, six months later.
So if you mess up in the beginning, you don't leave yourself any room for error. That's not a good space to be [00:08:00] in. If you wanna do, sometimes you can get loans for purchasing product, but that can charge 8%. Well, there goes some of your margins. So if you're key stoning, which means 50% margin on your product, 8% eating into that, you can't afford that.
In this market, if you have 21% corporate. To the federal government, you have all these other fees in terms of overhead, sg a, well, you're, you look at what you're taking home and you look at what the government's taking home and you're like, dang,
Dan Humiston: I know it's, it's not easy. It's not easy. But that's, that's, that's surprisingly most businesses is if as long as they're, they trust you and as long as you follow your word, if you say 60 days and you get it to 'em 59 or 58 days, they're gonna do this forever with you. And I think a lot of people don't appreciate that.
They're just like, oh, they gotta cut a deal. And I think on the flip side, at least in my mind, if somebody were. Taking a trust in me to give me the extra time, [00:09:00] then they're, I'm gonna be loyal to them. I'm not gonna jump ship for a better, a brighter price because they were there in the beginning with me.
And I, I, I think that's a really important point that I think especially new business owners need to keep in mind is that there's a, a lot to be said for loyalty and working with vendors for a long period of time, and they're there for you when you need 'em, and then you're there for them when they need you.
So,
Nike John: And I think we're seeing that now as some of these people who helped us in the beginning are seeing their flower prices drop and maybe the testing isn't at 30%. People are really looking in Massachusetts right now for 30% tack. And I have people who are trying to sell 20 to 23% flower, which will end up sitting for about a month on the shelves.
There's the 30% stuff will sell through in a week or two. So. , I wanna make sure that they stay open because they help me stay open, so, like you said, it's, it's that. It's a small community. Everything in Massachusetts that's for sale on this adult use market was grown in Massachusetts by Massachusetts operators, and we're in this together.
So there is that loyalty and. [00:10:00] Just everybody's in the grind together. But it's been a lot of fun learning about that and figuring out how to, how to make it work and float it and, and push those margins. How do you get better margins? How do you buy more when you're a small shop? So that's been my main question that I'm thinking about this year.
Dan Humiston: Well, I'm sure you'll figure that one out. And I don't, we're, we're wrapping it up here, but before we wrap it up, I just wanted, because most of our listeners are investors, I'm sure a bunch of 'em are saying, wow, I wish I would've gotten on that. This is a dynamic person that, that's gonna grow like crazy.
Do you ever get calls from people saying, now, can I invest? Or if you do get those calls, what do you say to 'em? Are, are, is there ever gonna be a chance where they can invest?
Nike John: Yes. So we are looking to expand. We have two more locations that we're looking to take on and also add delivery. So we will be raising funds and we'll, we'll definitely do a announcement somewhere on our website. So if you set up for our mailing list, that's a good way to stay in touch. But yeah, people are always reaching out now saying like, well, you did it.
Can I get in now? And I [00:11:00] guess, and you have to do that. That was just my first proof of concept. Like you said, the goal is not to stop here.
Dan Humiston: No, no, no. And, and we'll just for our listeners, we'll make sure that we have all the contact information links , in the show notes. So just click the links in the show notes. I'm sure somebody from Nikki's team or Nicki will get right back to you and, and, and, and get on their mailing list.
Nikki, I really appreciate this. I'm so proud of you. I think this is what every, every entrepreneur needs to hear this story because, Persistence. Don't let anything stop you. You're gonna make this happen no matter what. And I love, and we didn't get a chance to talk about your mom, but I know in the last interview you're how much you've depended on your mom.
And I'm, I'm sure she's so proud. But thanks for being on the show today
Nike John: Thank you so much and thank you for sharing our story.