Looking to break into the cannabis industry but feeling intimidated by the challenges that come with it?

 

Meet a determined entrepreneur who, like you, was once just starting out in this exciting and rapidly growing field. In this inspiring conversation, she shares her hard-earned wisdom and practical advice for navigating the twists and turns of the cannabis industry with confidence and success.

Before I dive into the story, I just have to share how Devin came into my world. At the time, I was running Blum Oakland, a store that had seen countless brands come and go. One day, my buyer brought me some soap that had been dropped off, and I was immediately drawn in by the gorgeous packaging. It was the type of packaging that had an eco-friendly vibe, and I knew that if I planted it, wildflowers would grow. But then I tried the soap, and it was like nothing I had ever experienced before.

I just had to have this soap in my store. I begged my buyer to carry it, but unfortunately, our demographic in Oakland wasn’t interested in it. So, I ended up buying all of the soap for myself. I would gift it to friends, use it in my shower, and just enjoy it in general. It wasn’t until later that I decided to track down the people behind the brand. I had to meet the person responsible for creating such amazing products. That’s how I came to meet Devin Aracena, the genius girl behind that brand!

Devin has given us an opportunity to walk us through her success in the cannabis business and how she was able to strategically move from California to Tennessee and grow her business. Let’s get into it!

Devin’s Journey

Now, Devin is the owner of Canvast Supply Co, a cannabis/CBD company based in Nashville, Tennessee. She started in the cannabis industry ten years ago and worked her way up from sweeping floors to managing operations and brand development. Along with her husband, she even went back to school for formal education in greenhouse crop production to further their careers.

After several years of working together as a power duo for various farms and brands, Devin and her husband decided it was time to find mentors and take the leap into starting their own company. They strategically chose Tennessee for its legislative landscape and opportunities in the national CBD market, prompting their move from California.

The Transition from Employment to Entrepreneurship

Starting a business is no easy feat, but for Devin, it was always a clear path. Coming from a family of entrepreneurs, Devin knew from a young age that she wanted to own her own business. Her previous jobs only confirmed that desire and provided her with valuable experience that would later prove useful in her startup journey.

Devin worked with Mita, a phenomenal manager and business owner, at Leaf Organics, and also gained exposure to the wine and spirits industry through a mentor named Richard Betts. With Richard’s guidance, Devin started doing small design projects and eventually traveled the world representing his brands, growing sales and distribution channels.

When the time came to start Canvast Supply Co, Devin felt ready thanks to the support and guidance of mentors around her. However, launching a business proved to be much harder than expected. Now going into their fourth year of owning a business, Devin has a deep appreciation for those who have been in the industry for longer and understand the trials and tribulations of running a responsible business. 

What makes Devin move from California to Tennessee?

Devin and her husband were burnt out on the California cannabis market, which was becoming increasingly saturated in 2017. They were also tired of the high cost of living in California, so they lived in a van for two years before having their first child, Remy. After realizing the importance of having a support system while raising a child, they moved to a boat in South Florida to reset and connect with their child.

With the help of an attorney, Devin and her husband decided to pursue the CBD market rather than medical or recreational cannabis. They developed a scorecard of different states with established hemp-growing programs and eventually settled on Tennessee, which not only had the best program but also had great people and entrepreneurial support in Nashville.

After visiting the state and spending time with their now-business partners, Christy and Will, Devin and her family made the move to Nashville. They made the decision based on several factors, including cost of living, school systems, and affordable childcare.

The Importance of Showing Up and Following Up in Your Cannabis Business

Showing up is half the battle when it comes to making connections and learning from industry events. Devin emphasizes the importance of physically attending meetings and events, rather than simply reading about them later. By showing up, you never know who you might meet or what opportunities may arise.

Following up is also crucial to building connections and relationships. Devin recommends sending a text or email to those you meet, thanking them for their time and insights. It’s important to nurture those connections and continue to support each other’s businesses.

In short, showing up and following up are the keys to making the most out of industry events and building meaningful relationships. According to Devin, don’t be afraid to attend events alone or bring a friend, and always take the initiative to reach out and thank those you meet.

Building a CBD Company in Tennessee

Initially, Devin and her co-founder, Richard, a master sommelier, established a company to develop a skincare line featuring topical products. However, as the market shifted towards consumables, they pivoted and began developing cannabis products in Tennessee. At the time, their business focused more on agricultural services than a national consumer brand. America was experiencing a green rush of CBD, with farmers taking out multiple lines of credit to convert their farms, hoping for significant revenue. Unfortunately, an oversupply and insufficient demand led to a market collapse.

During the early days of Canvast Suppy Co., Devin and her team spent more time convincing farmers not to invest in this venture as they could see it wasn’t a good fit. There was a learning curve to growing cannabis, and Tennessee presented unique challenges like weather and pests. Despite the unstable genetics and challenging environment, Devin and her team found some people who were succeeding and joined forces with them.

Canvast Suppy Co. started in the summer of 2019 after an all-nighter with Devin’s current business partners. They raised 1.2 million dollars from friends and family to get off the ground, but as they saw pitfalls in the industry, Devin and her team pivoted their focus to developing a brand before the COVID-19 pandemic. Around this time, delta-8 emerged in the CBD market, offering psychoactive effects similar to delta-9 THC. This development led to increased interest in the market segment of CBD, prompting Devin and her team to shut down gardens, genetic projects, and brokerage operations to focus on the brand and use their resources efficiently.

Strategically Raising Fund for Canvast Co Supply

For the first time, Devin raised funds from close acquaintances rather than venture capitalists, putting significant weight on her responsibility to ensure the success of the venture. A strong foundation in financial data from the beginning helped drive her decision-making on how to allocate resources, and being proactive allowed for adjustments as needed. Aiming to maintain a six-month financial runway provided stability for her growing team and avoided operating on a paycheck-to-paycheck basis.

Devin’s company experienced impressive growth, raising funds in 2019 and achieving a million in revenue within their first 10 months. In the following six months, they doubled their revenue to reach 2 million, and by their second year, they broke even in terms of profitability. Now entering their fourth year with healthy cash flow, they are currently raising funds to scale the business. Learning the distinction between growth and scaling has been an essential lesson throughout this journey.

Devin’s team is dedicated to the mission and vision, and maintaining financial stability and responsibility is crucial not only for her personal well-being but also for her team’s morale. The goal is to build a company with a fortitude that can eventually be handed off to new leadership as a well-tuned machine. Understanding financial data and knowing when more funds are needed for scaling has been a learning experience for Devin. 

While raising 1.2 million was substantial early on, economies of scale in product manufacturing require further investment in manufacturing, packaging, and marketing. To avoid being consumed by inventory or hindered in marketing efforts, additional capital must be raised, which has led Devin to a new fundraising round that is both exciting and challenging.

Lower Barriers to Entry and Opportunities for Aspiring Cannabis Entrepreneurs

Choosing to focus on the CBD market was a significant decision for Devin, as she acknowledged the high barriers to entry in the THC industry. Some people who own medical and recreational licenses may view the CBD industry with skepticism, but it’s important to consider the opportunities it offers. With fewer licensing fees and lower barriers to entry, the CBD industry is more accessible. 

Devin operates her CBD business much like a clothing store, with only a few additional taxes and fees, and the ability to ship products nationwide. However, the cost of doing business in the THC space continues to be a major challenge for many companies, which is why the CBD market offers an alternative path for entrepreneurs.

Navigating Legislative Challenges: Understanding and Addressing Major Concerns in the CBD Industry

Devin acknowledges that the politics and legislation surrounding the CBD industry can change rapidly, and her experience has evolved over time. Initially, she spent two years quietly attending meetings, observing, and learning about the landscape, groups, legislation, and tone of the CBD industry in Tennessee. She also assessed the potential pitfalls and opportunities within the state.

Together with other businesses, Devin started a nonprofit called Cultivate Tennessee. Initially, the nonprofit aimed to work on a medical program for Tennessee to provide access to high-quality plant medicine. However, they had to pivot their mission when two lawmakers introduced a ban on the CBD industry in the state. The ban would have put thousands of people out of work and eliminated the marketplace.

Cultivate Tennessee quickly raised funds and engaged a top-tier lobbyist to block the ban. The organization collaborated with other groups in the state to present a united front. They spent the next year working with legislators, listening to their concerns, and proposing solutions instead of simply trying to convince them.

The legislators who initially proposed the ban are now bill sponsors for the regulation of hemp-derived cannabinoids. The focus is on public safety and ensuring the products don’t fall into the wrong hands. By proposing the right-sized regulations, businesses can continue to grow, and consumers can learn about the products they consume.

Devin acknowledges that the legislative landscape is complicated, especially in the Bible Belt, but she believes that a little bit of regulation can help create boundaries and ensure a better experience for everyone involved.

The Republican Issue

Taking a stand as a business owner and navigating the complex world of politics can be both challenging and uncomfortable. Engaging in tough conversations with industry peers and being open to different perspectives has been a humbling experience for Devin.

 Politics can be intricate, with rules and laws being influenced by various factors, often with a touch of pettiness. However, Devin has learned the importance of having the right lobbyist on your side, as their expertise can be invaluable in securing crucial meetings and making a difference in the legislative process.

Women Navigating Conflicting Interests and Leadership Challenges in the Cannabis Industry

Sticking one’s neck out and taking a stand, especially for women in the industry, can be daunting. With many already juggling various responsibilities, the added pressure of addressing industry issues may seem overwhelming. However, it’s essential to establish clear leadership and a unified voice in order to effectively engage with public comment periods and other legislative matters.

Unfortunately, the industry currently lacks such leadership, which is particularly noticeable within organizations like the National Cannabis Industry Association. It often falls upon dedicated women in the industry to navigate these challenges and draw lines that might have been previously uncomfortable.

The situation is further complicated by conflicting interests within the industry. Some leaders are profit-driven, while others, like Devin, prioritize the plant and its benefits to consumers. Additionally, there are growers and farmers who focus on cultivating the plant. These differing perspectives make it difficult to find a cohesive path forward, resulting in emotional struggles and complex navigation through the industry’s various layers.

Traversing Internal Conflicts and Big Pharma’s Influence in the Cannabis Industry

The cannabis industry is currently facing internal conflicts, with some industry giants lobbying against the hemp sector. If their efforts are successful, many businesses selling CBD and other hemp-derived products could be forced to close overnight. Rumors suggest that these industry giants may be backed by Big Pharma, further fueling the discord within the industry. This has led to a situation where industry groups on a national level struggle to unify and take a stand due to their reluctance to get political and draw clear lines.

The current state of affairs is particularly challenging as federal legalization could potentially resolve some of these issues. However, it remains uncertain whether the internal battles will cease or worsen once the industry reaches this critical tipping point. The lack of clear leadership and unity exacerbates the situation, making it a complex and tumultuous time for those in the cannabis industry.

Lesson from Devin Aracena

It’s important to remember that the groundwork has already been laid by those who came before us and those who stand beside us. However, it seems that no one is currently taking the initiative to build the next segment of this metaphorical highway. This realization highlights the importance of stepping up, despite the long hours, and building a solid team to help navigate the industry.

For those listening, it’s crucial to understand that there is a lack of long-term strategy for the greater good. If you see a gap in the market or an issue that needs advocacy, don’t wait for someone else to address it – you are the one to make the difference. The cannabis industry requires a collective effort, with everyone contributing their time, energy, and resources. So, if you feel called to action or notice an area that needs attention, please step up and fill the gap.

Moreover, when you succeed, remember to share your accomplishments and bring others along on your journey. An important lesson we can learn from Devin is always thinking about who you’ll bring with you when you kick down the door and walk through it. By helping others grow and succeed, we create a rising tide that benefits the entire industry. Historically, the cannabis sector has been somewhat secretive and hesitant to share, but now is the time to change that mindset and support each other as we cultivate new leaders in this space.

To listen to the full conversation with Devin, check out the full episode

Want to learn more about Devin and her company?

Devin’s leadership in this arena deserves recognition, as she has managed to stay focused on her goals despite the challenges in the industry. Many others with similar business structures have struggled to make the same impact, quickly exhausting their investments without achieving the desired results. For those interested in learning more or getting involved in Devin’s business, her contact information can be found on her company’s website, along with an investor button to schedule a call. Check out Canvast Supply Co. to learn more!

In the upcoming funding round, Devin is specifically seeking women investors and partners with experience in CPG brands and marketing. She is looking for individuals who are interested in actively contributing to the company’s growth and supporting its continued success in the ever-evolving cannabis industry. 

If you’re competing, or you’re thinking about competing for a license, but you don’t know where to start, I went ahead and cleaned up all of my application material, and updated a lot of it and you can get your own copy here: https://highsalwa.com/business-downloads.  It is what I use to win licenses in multiple different markets. I have cultivation, production and retail that’s currently available and I’m looking forward to adding more to give you a head start.