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Conscious Cannabis Capitalism With Roger Volodarsky, Puffco CEO (Podcast Transcript)



  • Roger Volodarsky is founder and CEO of Puffco, an award-winning, world renowned company that sees concentrates as the future of cannabis consumption.
  • We discuss scaling while failing, what it takes to be a successful and humane leader and the lessons of starting a business from nothing.
  • We also cover chasing innovation, the state of the vaping industry, why Puffco focuses on concentrates and why they moved their business to California.

Editors' Note: This is the transcript version of the podcast we published last Wednesday with Roger Volodarsky. We hope you enjoy it.

Listen on the go! Subscribe to The cannabis Investing Podcast on Apple Podcasts, Google Podcasts, Spotify, and Stitcher.

Rena Sherbill: Today, I am very happy to be joined by Roger Volodarsky, founder and CEO of Puffco, a company that sees concentrates as the future of cannabis consumption, and whose mission is to provide the best platform for concentrate consumption. Roger started the company when he couldn't find a good way to consume concentrates and decided to build his ideal product instead.

So we talk to him today and we hear from him about what it takes to be a compassionate leader in this marketplace, which he seems to come to naturally? What it takes to build a brand in this space in a saturated market? A lot of important takeaways for creating a successful and human corporate culture, especially interest from the products -- especially interesting from the product side, we had George Allen on last week talking about the future of cannabis products that they're going to be -- he thinks what is obvious to consumers and passer bys -- passers-by that it's -- that you're consuming cannabis. And people that make their branding on that will be the winners in this space. And Puffco is one of the leading brands, if not the leading brand in the vapor product space.

So great talk with Roger, but before we get to our interview, as always, here's some important news in the cannabis world. We saw Colorado's revenue from cannabis sales hit just under $1.75 billion in the past year, which is a 13% increase from 2018. And Canadians on the other hand, Canada brought a total of $1.3 billion in legal rec purchases in cannabis. So I think those numbers are going to keep growing, experts would agree. Some earnings hit the week.

Also we had GW Pharma (GWPH) report, anyone following our Twitter feed knows that. The EPS missed just by a little bit, beat on revenue, and Epidiolex sales were strong, which is their flagship medicine. But the stock fell over 6% after market trading. That could be obviously due to the miss and the loss per share. But I think there's bullishness for followers of their drug pipeline at GW Pharma. Green Growth Brands (GGXBF) reported on Monday. They announced that they would sell their CBD segment, restructure their debt, raise equity finance so that they can improve, so that they can improve their financial infrastructure. They want to scale as an MSO. Because of that news, they pushed up their conference call to later today. And we've seen -- we've heard from a few guests in recent weeks and in recent months, their bearishness on the CBD industry. So really interesting out of Green Growth to see that they are mirroring that negative sentiment.

Valens Groworks (VLNCF) also reported Q4 results. They delivered a pretty solid fourth quarter and fiscal year earnings report. They had an 86% increase over the third quarter and above the high end of the guidance range. And Acreage Holdings (OTCQX:ACRGF) reported earnings earlier today. They beat by a little bit but did miss on revenue, and MedMen (OTCQB:MMNFF) reports later today and Cronos (CRON) tomorrow. So lots of earnings reports to follow, see what's happening with the marketplace.

Speaking of Acreage Holdings, they also announced on Tuesday that it was opening New Jersey's first retail cannabis store for medical marijuana patients, so some headway in that direction. And we've seen some recent bearishness also on cannabis beverages. We had Alan Brochstein talking about that. Obviously Canopy Growth (CGC) delayed their release. And now that's coming on the heels of last week's news that the liners of the aluminum cans may leach cannabinoids from cannabis beverages and the Canopy CEO, David Klein said that that problem was in fact one of the reasons for Canopy Growth's -- Canopy Growth's decision to postpone that release. So interesting to see what they come out with in terms of improving that product design.

In New York, the city had their first legal marijuana edibles roll out in Queens and that was under Curaleaf (OTCPK:CURLF) brand, CuraChews. And then finally for investors seeing the cannabis stocks take a slide on Tuesday largely due to Cowen analysts that downgraded Aurora Cannabis (ACB), Sundial Growers (SNDL) and Tilray (TLRY), which they did over concerns that the headwinds that burdened the Canadian industry throughout the past year, they think will persist into 2020. And that cannabis 2.0, which everyone was bullish about, but I think almost everyone is nearly not as bullish anymore and can see that the excited expectations for growth aren't going to pan out this year and maybe won't pan out at all but certainly won't happen this year. Cowen agrees and Canopy Growth remained their only outperform rating among Canadian cannabis companies.

Before we begin a brief disclaimer, nothing on this podcast should be taken as investment advice of any sort. I do not have positions in any of the stocks mentioned. You can subscribe to us on Libsyn, Apple Podcast, Spotify, Google Play and Stitcher. And as always, we'd really appreciate it if you'd leave us a review, five star or higher. For reference purposes, this interview was recorded on February 11, 2020.

Roger, welcome to the Cannabis Investing Podcast, really happy to have you on the show.

Roger Volodarsky: Thank you so much for having me.

RS: Well, so tell us a bit about how you came to Puffco and your journey to the cannabis, at the very least adjacent industry.

RV: So my journey has been a bit unconventional. I turned -- I was about to turn 30 years old and I kind of went through, I think the same dilemma most people turning 30 go through, which is you aren't quite what you thought you would be by that age, and I had to make a choice, do I want to lean in the direction of what my friends are doing, which is getting regular jobs and starting a family and getting a house. Or do I want to go and do things that will deeply interest me, but have no reward visible. And for some silly reason I chose dream chasing.

And I did that in the form of vape pens, which is extremely odd because it's a weird thing to be passionate about. But I am a New Yorker, and in New York cannabis now is decriminalized, but growing up was extremely illegal. I myself have actually been arrested for cannabis before, and slept on a jail cell floor. So when vape pens came out at the same time that something we were calling the wax, which is just concentrated cannabis or hash, kind of has many different names started hitting the scene.

What I found was that I can walk around New York and consume cannabis without anyone noticing, period. This was a time before e-cigarettes were even popular. And so I became obsessed with these devices. I was strictly a user. I was buying other company stuff. And every single company's products that I was buying were breaking on me. And a friend one day said, hey, man, you really love this stuff. Why don't you consider doing one of your own? And I knew absolutely nothing about product development, or engineering or any of the skills that I would need to do it, which meant that I had just enough ignorance to think that I could.

And that's kind of how the story began, is just a hobby and a side project that deeply interested me, but had no visible path to success. And from there, I started going to Alibaba.com, seeing what my options were, what factories can I work with, send out designs to it, that were drawn on a napkin, or examples that I saw that I wanted to modify that existed in the market. And I spent about -- this is in 2013. I spent about a year developing our first product was called the Puffco Classic. And on my mission with this product was to make something better than existing market options, something that would make me happy as a user to use.

And when the first order came in, I didn't feel good I had accomplished that. And so I got my first purchase order, I sold it to just two or three head shops that were glad to take the order. And I went right back to the drawing board. I didn't order anymore. I started working on the Puffco Pro. And this was the first vape pen with variable temperature control with a large capacity atomizer, so you could put a good amount of oil in there. It didn't have any cotton or fiber wicks. It used ceramic instead, which led to a much better flavor experience. And I just kind of spent the year challenging myself to make something that would consume my life, something that I can personally use every day.

That came out October of 2014. And then a few months later, I believe in April of 2015, we had won Best Vaporizer of the Year by High Times. And that kind of set our trajectory at a much different pace than it was going before. And so we win the award and what happens when you're a small company that is making something that is awarded and people really like, is it gets copied quite heavily, actually. And this started happening around September, I believe of 2015. And so now we have the most popular vaporizer in the United States. It's being copied to death, but that's okay. That's kind of what happens with innovation. And then at the very end of 2015, we lose our entire supply chain, which set a different course than I thought we were going on.

And so now we -- like I said, we have the most popular product in the U.S., it is highly awarded. It is being copied to debt, and we can't even make it anymore. And that's because the factory that we were working with was making our products but was also heavily in the e-liquid space. And e-liquid started taking off. And this company felt that they needed their factory space to work on their own products instead of opening up a line for me. So overnight, they just disappeared. I was also working with something called the Trader. A trader is someone that is in between you and the factories in China, and so you never get full visibility into your supply chain. There's somebody there doing all the work for you which is great, but never giving you transparency into what's going on, which -- what led to that huge, huge failure. So January of 2016 comes and I am unable to sell any product.

Luckily, we were pretty successful at the time. I'm a pretty frugal spender, so we had a good amount of money in the bank. I had just hired my first -- shut up next when I say it, my first really talented engineer. The engineers that I had before then were fresh out of school hadn't done a ton of products. This person had done tens and tens of products that were regularly on shelves, in many stores in the States. And I believe his first day starting at Puffco, I told him, we have to go to China.

And I'm not sure how long we're going to be there because we have no supply chain. We have no way of making anything. We just have to go there and figure it out. And he said he's an experienced engineer. He knows what it's like to go to China and kind of get stuck there. And he's like, okay, I'll go there, but I'm only going to stay there for one week. And we actually ended up staying there for an entire month. And that was just the two of us. We had our operations team member who stayed there, I believe for three months.

And we just went there in hotel rooms traveling around China, finding factories that could potentially get our products back out on the market. And it was probably one of the best times of my life, even though it was the scariest time of my life. There's nothing like -- there's nothing like having nothing to lose. And we had nothing to lose at that time. So is really exciting because every the little way or every inch forward felt like a massive success.

And while this is going on, our products keep getting copied. And I fancy myself an innovator. I entered the space because I wanted to make things that are new and different and serve a purpose that other products haven't served before. And here I am about to release my vaporizer that was very popular, but was copied heavily and I had this fear that if I were to re-release it, people would think that we're just a company that's making white label products that because everyone has something like this on the market, we would just be the same as everyone else.

And so while we were in China, we started actually fast tracking a project that was supposed to release later in 2016. And that was the Puffco Plus, which was the first truly coil less, no exposed heating element vaporizer. This came out in May of 2016 and ended up winning -- that year the High Times wasn't doing, place the words, there was no first place or second place. They did categories and the best of the categories. And we had won the most best of categories without vaporizer.

It was a bumpy release for sure. We had some early issues with the products. When it first shipped, we were still pretty much amateurs at that point. And that was my first really good lesson in how to deal with a failure -- with a product failure with really passionate customer base. And we shipped product that wasn't -- it wasn't vaporizing at the temperature that it was intended to. And that was because one of the parts in the product was a half a millimeter off. And so it wasn't providing the power that it needed to receive. And what we did was immediately halt all sales, reached out to every customer told them that we would be either refunding them or replacing their product, they could pick one or the other. If they don't want to wait, they can get a refund. And most people chose to wait. It took us about two weeks.

And in that search for where the issue was coming from, by the time we had found the part that was a half a millimeter off, we had found three other solutions to increase the efficiency of the product by playing with the type of ceramics that we were using, by playing with the placement of some of the parts that we were using. And so in two to four weeks' time, we had taken a product failure and actually made the product better than it ever was in development.

And that was bumpy. And we never wanted to be there. But we were amateurs. And we were chasing innovation with a team of like six people with only one or two of them actually being from the product space. So that was another bump in the road. But we had made it through that. And that was incredible. And I guess this is where it gets a little bit interesting. So we released the Plus, we went through --

RS: I think it already got interesting, it already got interesting.

RV: Yeah, that was the early story. There were a few articles written about it at the time. I think one of them was called scaling while failing because we kept investing in the business. While thing -- everything seemed to be going wrong. But this next part is interesting more, because it's about personal choices as a CEO and innovator. So we released the Plus right, and we had discontinued the Pro because it was being copied. And we didn't want to sell something that was like many other things on the market, even though they're all copying.

Well, when we released the Plus, it was a different experience. It wasn't burning your oil anymore. And so you were getting slightly less vapor, but we believe an overall better experience. Well, there are people there that love that old experience. So every time they would see us talking about the Plus, they would say, we missed the Pro, bring the Pro back, and it was daily. And it -- I would say it bordered on harassment, because they were such an obsessive user group over this old product. And being real, I hated this old product now because we had innovated away from it.

So when I would use it again, I would just feel like I'm using old technology like I'm rolling up the windows in my car instead of using a button. It felt wrong, but I caved into pressure. And that was probably one of the biggest mistakes I've made in my life in general. And that was by releasing the Puffco Pro 2. It's very similar to the Pro, it was redesigned to be a little bit smaller, have about the same battery life, have the same capacity. So you could fit as much into it without it being as big of a size.

But the mistake that I made was that I started making products, I don't believe in. I started doing something strictly for money, but I never got in this for money. In fact, I've been foolish with money in my business because I never at the time really even pulled any out. I would just keep spending it on growing the business. And here I was chasing revenue when that wasn't why I started the company, when it wasn't why I came into work every day. And I kind of lost my soul in that. I believe the product's very successful, made us millions of dollars. So it's not like it failed on us in any way that a business person would look at and be like, wow, man, you really messed up there.

It failed -- I had failed my own ambitions, and my own morals, and not that I was doing anything wrong, I just wasn't doing what I believed in. And right after it came out, Avi, our head of product development, engineer at the time, the same one that went to China with me asked what the next product is. And I told him, f**k this, I hate what we just did. Let's get to work on the Peak. And the Peak is the current product that we had all of our success from.

This is when Avi first started, he asked me what do you need me to work on today? And what is your dream for me to work on? And I told him today we have to get products back out into the market. But I have this dream of a device that will vaporize hash oil in such a way that it will be attractive to new users. That they won't have to use a torch, that it won't look intimidating, that it will just look like an attractive, easy to use product. And the experience is even better than it looks. And then I also told them about another project that I can't talk about, that people might see later this year.

And so after the Pro 2 came out, I told him let's get to work on this, because I had made the decision to come out with the Pro, I had gone into the biggest depression of my life. I started coming into work at 2 p.m. I had started letting competitors that are always trying to find a way to get to us or disrupt our business because it benefits theirs, I started letting them get to me. I had completely fallen from my path of being someone who chases innovation. And it actually got so bad that I had a few people in my life that were ready to no longer be in my life. And they had to pull me and have a conversation with me and not quite intervention, but all, not even realizing they were all equally as frustrated with me, coming to me and being like, I don't know if I could do this much longer.

And that's kind of when this Roger started to be born. I ended up having to go -- and again it's not like I was abusing addictive drugs. It's -- I mean, I was over eating, oversleeping and just the most classic version of depressed you can be, which I'm sure some people listening to this, have people like that in their lives or are that type of person. It's very difficult to be around somebody like that, somebody that has had the imposter syndrome, is deeply insecure about where they are in life. They are not fun people to be around. And for the first time, people in my life had held up a mirror to me, or maybe for the first time I saw what they were describing.

And so I started my own personal development journey. At the time Puffco was doing well, but we kept scaling. And so we were quickly spending a lot of our cash on the development of the Puffco Peak, on the expansion of our business. At the time, we're considering moving to Los Angeles. And I fully invested myself at this time. The Peak was already designed. So now it just has to be made and go through all the process of taking it from design to actual product. And so I spent the next four months, starting boxing training, getting a nutritionist, getting a therapist, and starting to try to understand how did I become this way?

How am I somebody that has a successful, seemingly to the world multimillion dollar business, is pretty accomplished in this space, have reached the goals that I set, and even beyond them. But I am outright miserable. And it was my relationship with myself. That's why I said this is where things get interesting. And I'm very lucky that it was a short journey of leaving my old toxic mind state and getting to my new healthy one only took me about five months. Again, I had therapy and a nutritionist and I would go to the gym. So I was investing heavily in myself.

But what I found that was that I was a deeply insecure person. I had compared my success to everyone else. I couldn't feel good about anything I had done, unless I felt that it was the best in the world. What it meant to me didn't matter. It's almost what it meant to everyone else that mattered most to me. And that's a really toxic life to live. My value didn't come from within. It came from the world. And that was the biggest lesson that I took away from that was that I was a deeply insecure person. And I had identified the voice in my head that were telling me you can't, you shouldn't, you're just pretending, it's only a matter of time till they figure out you're an idiot. I stopped not respecting people that believed in me. When you have imposter syndrome if somebody believes in you, you think they're one of two things, an idiot or a liar. And we don't really respect idiots or liars.

And so by getting rid of this very insecure voice in my head, I had a new type of empowerment that I had never had before in my life, of I enjoy what I do. And that's the only value that I care about is that I enjoy what I do and I get to keep doing it. And all that had happened just before the Puffco Peak was released, which ended up being the first smart rig. It is arguably the best device for vaporizing concentrates and hash oil. It has definitely swept the world. We are in a ton of stores. We've been written about in arguably every single blog that I was reading when I was 16 years old, from Engadget to Gizmodo. It's kind of taken the world by storm. But the important thing to me in all that is, in January of 2018, I had found my fulfillment. I've finally become happy with myself. And this was a few weeks before the Puffco Peak was released.

And through all the accomplishments that the Puffco Peak has gotten us and our company, all the recognition, all the accolades, I am not 1% happier today than I was that January 2018, before the Peak came out, because nothing that's happened is what I tie my value to. I tie my value to being able to work on what I love every day. And I've been able to do that for the past two years and change. So that's kind of how I got here, very long story.

RS: Long story, but I really appreciate your openness and honesty. I mean, it's so nice to hear from somebody who's achieving things and living their dream but also being really honest about the fact that that's not a smooth ride. Not just in terms of the business, which I think people are pretty clear about that that's almost never a smooth process, but also just personally and what it means to be a person growing a company and to be a human being within that. I find that really moving and energizing to hear somebody else talk about their journey. So thanks for sharing that.

RV: Of course, I think a lot of people want to make it look easy, or I think a lot of entrepreneurs fall into the same thing that people on Instagram do. You see that 1% that is all of the glory and all the accomplishments. And it's a challenging journey, being an entrepreneur, I don't know this is more about investing. But at least for me, being an entrepreneur is more of the journey of yourself, and how you handle failure and your relationship with yourself through those failures. And everything else kind of just falls to the background because nothing else is as hard as beating yourself, your own ambitions.

What you think you should be doing? To me, that has been the real challenge of my career. And I like talking about it because I know there are other people that often feel like giving up. And if I could help them in any way, understand that their relationship with themselves is the key to their success, I feel an obligation to do that.

RS: If you could tell people like, even in the face of success, how you maintain that, what would be your like one takeaway, a lot of people say fake it till you make it. You're talking about even somebody that's accomplishing things, still feeling that imposter syndrome. What would you say is your one takeaway to being able to kind of move through those self-negating feelings?

RV: So I'll give a short answer and a long answer. Short answer is therapy. Therapy is probably the best investment you can make in yourself. Finding a therapist is very hard. But somebody who is only interested in your success, they're not attached to you in any way is somebody you can hear, really, really important to have that in your life, if you're going through what I described.

But the advice that cut through to me, actually ended up coming, I believe, from my nutritionist, oddly enough. And she said, you got to treat your mind and all the voices in your mind like a boardroom. And in that boardroom, there's a bunch of voices. We all know those voices. There's the one that says, you're stupid, you shouldn't, you can't, they're going to find out that your fake, or you know, whatever. Then there are the other voices that are interested in things. They like new stuff. And they're the voices that calm you down. There's so many of them in your head and you kind of get used to them over a lifetime of being with them. But there's one voice and it's pretty loud. It's almost always louder than the rest of the voices. And it's your insecure one.

And it does say things like you're stupid. You can't. It could say that you're too fat, I have lost 100 pounds, by the way in that transition from 2017 to now. But it can say that you're fat, it can say that you're stupid. It could say that this partner you're chasing will never love you. Whatever it is, that's your insecure voice. And the advice that she told me was you need to identify that voice in your head the same way you would in a boardroom. And you need to tell that voice to shut the fuck up and tell it that it's useless right now that we're trying to figure out solutions for where we want to go. And it's getting in the way.

And this worked almost immediately for me. It took me like a week or two of just listening to myself when I speak to myself. And when I heard that voice come up, I would feel bad and as soon as I feel bad I went, hey, wait a minute. Shut the f**k up. I -- you're getting in the way right now. I actually need to figure out this problem. And you're just telling me why it's going to fail. Great, it'll fail. I at least need to try right now. So who in this room has a solution that we can work with right now?

And instantly, instantly, I started giving credit to the other thoughts in my mind and the other voices in my head. And I can say with damn near certainty, I don't live with that voice anymore. That voice has no power over me. It's gone. I don't question myself, I don't feel like I'm a very special person or outwardly more talented than anyone else. I think I have a pretty good relationship with the growth where I'm willing to find out how much of a novice I am at certain things and move forward an inch until I'm happy with my progress. And so that means that there's nothing in this world that's going to make me feel like an idiot because I know I'm an idiot about most things in the world I haven't tried.

So that voice is just gone. And if you can identify it in your mind and learn to quiet it. So the more valuable voices in your head that are solution seekers that are problem fixers that are creative, you will live a much happier life in general, but likely you'll be better at whatever your professional goals are.

RS: Yeah, and I imagine it also makes you a much better CEO, leader, manager of people. I imagine it makes you much more compassionate and willing to listen to other voices and not be so singularly focused, I guess.

RV: I mean, what I found is that everyone suffers, it's not -- maybe not everyone. There is some people who had a great upbringing. Somehow they had a great support network, growing up, people promoted them being creative, and pursuing new things and getting back up when they fail. But that's not most people. Most people have a terrible relationship with failure and a terrible relationship with growth. And I found that a lot of people in my company, at least are all ready to challenge themselves to grow.

And so anytime they hit a bump in the road where they don't believe in themselves, I get excited about the opportunity to go in there, and pep talk them. And my pep talks are usually like, you can do it, don't worry. It's making them lay out, why they think they can't do it, and face themselves with how silly their insecurities are. And once they say it out loud, it's like, ah, you're right. Why would I even think that, like, I'm not going to get fired, if I mess this up. This is not going to embarrass me in front of anyone. I'm just going to give it a shot. And let's see what happens.

I'm like, yeah, and if it doesn't work, great. Now we know what doesn't work. We don't have to waste our time on that anymore. So positive relationship with your efforts and the things that you dedicate yourself to. It makes for a great culture at Puffco. We all really enjoy extremely challenging work. Not because it's long and strenuous, but because there's a high risk of failure. And every single time we don't fail, it feels like you won the Olympics. And that's almost daily, that we feel that way. Both ways maybe, some days are harder than others. But yeah, it makes for a great work environment.

RS: So Puffco, where -- what do you think -- I mean, it sounds like a lot of it is innovation and making the best product. What do you think separates you? Or what is your focus as a CEO for Puffco? Like what do you think differentiates yourself from a quite saturated market?

RV: So I mean, we're lucky that we make products that are -- at least when we come out with them, they're very different from everything else in the market. Overtime, people start copying it and there are similar looking things coming up. But the differences is that we make products for ourselves. I don't know of a single other company that does that.

The Peak came because I'm a New Yorker. And if you're using a blowtorch in New York on a nail, and throwing the substance on there and then vaporizing it, it can look like you're smoking crack. And I couldn't get my friends to smoke with me, because they thought that it was some crazy shit. And I made that product, because I thought they would like it, because I thought it would be good in social situations, I thought they would say yes to it. And more importantly, I wanted to be able to vaporize my hash oil, without any stress without any torch without any process without any failure, just works the same every single time. And I don't know of any other companies that do that.

We don't have a product manager in our company. I am the product manager in our company. That means that like not all of the ideas come from me, some ideas certainly come from a product department and other areas. But all of our ideas come from people looking to make products for themselves, not products that would do well in the market.

And there are products that will do that have almost no margin that we put out there just, because we need them to exist. And that's we made these little loading tool on one side and a Q tip on the other. That's a product we make no money on. We just believed in it. We wanted to put it out there. We're also extremely dedicated to our goals. We're willing to risk it all. And this is our money. I'm a bootstrap company. We have absolutely no investors. Somehow we've gotten this far, without ever taking any money.

Yeah. So for me that that's what makes us different. What we serve is our own interests and our interests or the interests of our community that we come from. I meet a lot of CEOs in the space and as far as hardware companies go and anything comparable to us people are just trying to make money and that's totally okay, people need to survive. But nobody does this, because they need these products to exist. And I do think that's what makes Puffco different than every other company in the space.

RS: And was it always your decision to focus on concentrates? Do you have the desire to extend -- expand into other products or do you want to stay focused on the concentrate?

RV: As of right now we're staying focused on the concentrates. I believe that vaporizing is a sub-optimal experience. I think that the medical community certainly seems to benefit from it and they enjoy it. But for me as a daily -- it's hard to call myself a recreational weed user, because I do suffer from depression and it helps me a lot with that. But for the sake of this conversation, we'll say, I'm a daily recreational user. And when I vaporize herb, I am not getting the experience I like. It doesn't taste very good. It gets me a light headed kind of high, asleep you're kind of high.

When I vaporize hash oil. I'm excited to do stuff. I become chatty. I become interested in my work. Creatively I explode. It gives me everything that I want from cannabis while herb does it. And the only way that I -- and I do still smoke flower every single day. But I smoke a joint at the end of the day. Mainly because I used to be a cigarette smoker and I still like getting some smoke in. But I do not believe that that is the experience that is going to activate the world.

I believe that concentrates are, not because they're stronger. But because they're able to give you a flavor experience that flower can't. They're able to give you a head experience that flower can't and they're able to keep you up and doing things over getting you tired and wanting to end your day. And I believe that, that is a disruptive factor in the global adaptation of cannabis or adoption, sorry, of cannabis. So as of right now, I don't see us getting into flower, mainly because I don't use any flower vaporizers. And as of today, we only make things that we would use ourselves.

RS: And did you find any problems with, I mean, I imagine it affected you in some ways, the vaping crisis and how do you think kind of the masses are moving on from it or the FDA? How much does that affect your business?

RV: So here's a -- I would encourage anyone listening to me to please fact check this, because I would hate to say the wrong thing. But I believe that the CDC Center for Disease Control in the United States came out and said that all of these vaping deaths have come from black market vape cartridges. So it wasn't coming from e-liquid, again far as I know, please fact check this.

RS: No, I have fact checked that and that is correct.

RV: Okay, great. I would just hate to put out any misinformation. And apparently nothing in the recreational market actually was bad. However what this did do was make people trust prefilled cartridges less. And so our Plus that same device that came out in 2016 that we arguably built and designed in Chinese hotel rooms, while we were figuring out our supply chain, that product is still around and has actually been trending up in sales and it's quickly reaching its point of most units sold per month.

And that all happened after the vape scare and the reason is that Puffco Plus is a load your own concentrate vaporizer. So now instead of just getting whatever they put in those cartridges and you have no idea what it is, you can go into a dispensary, buy something that you know is safe and lab tested and still have the convenience of putting it in something that fits in your pocket.

So for us, it's actually helped sales in a weird way people are trusting prefilled vaporizers less and are turning to load your own vaporizers more. I don't know if that applies to the entire market. But that's what our numbers have showed us at least.

RS: Interesting. I also imagine as a trusted brand that also helps in terms of people hearing, the untrusted brand, the illicit products are the ones causing problems. I imagine people flooded to trustworthy products that still wanted to be?

RV: Definitely, I mean, we earned a lot of the consumers respect with the Puffco Peak. So there's people that never even knew that we made the Puffco Plus. They thought we were a new company, when the Puffco Peak came out. So when they saw that they just -- they kind of jumped on it. It's been very cool to see that this old product that we still love, it is an incredible product. It is, in my opinion and I honestly don't say this, because I'm the owner of the company or because it's been awarded with that name many times before, but it is the best load your own vape pen on the market. And it's cool to see that there is a new wave of people that agree with us. All these years, I mean, almost four years after it originally came out, it's very cool to us.

RS: I don't know how much this has to do with concentrates. But I talked to somebody in the industry recently and they said that the future of cannabis related products is going to be that you see what you're doing, that it's not as hidden that everything has been focused on things been in the shadows, but with the onset and the widespread legalization and they think it will be federally legal soon, do you envision that that products will change with further legalization.

RV: Yeah, I mean, I think and my hope, I was -- it's hard to tell where the market is going to go. But my hope is that people seek more transparency. Now I am a top tier cannabis user, meaning I spend in the top 1% of people that spend money on cannabis. I am a part of that user group. And I was probably a part of that user group, even before Puffco started, because I would smoke every single day and I would smoke heavily and I would spend most of my income on it. If I wasn't making very much I would not reduce my smoking habits at all.

I have always chased transparency. I want to know how it was made. I want to know that it's safe for consumption, because I'm using so very much of it. If there's even something a little bit wrong with it, but I'm smoking it every single day that can potentially lead to some issues. So my hope is that as potentially more scares come out, as people see the pitfalls of making cannabis cheap and commoditized that they ask for transparency.

That is a hope of mine. But I think that there will always be two types of users. There will always be the one that wants the best and the safest and this exists in food as well, right? There are people that want to eat organic foods. They don't need to be vegan or anything else. They just want to know that their food was made safely. It isn't full of chemicals, it isn't overly processed. My hope is that there will be the same type of obsession in cannabis where people want to make sure that what they are putting into their bodies is made as safely as possible. But there will always be two markets. There will always be the people that are chasing healthy organic foods. There will always be the McDonalds user.

My hope is that people chase more of the organic stuff and the healthy stuff, because I want to see the people investing in that, and building businesses to serve that. I want to see them succeed, because they're really making things that are hard to do, at low margin, just to keep cannabis great while others are just trying to make as much of it as cheap as possible.

RS: And how hard is it to stay -- as a product; being more on the product side -- do the regulations affect you as much?

RV: Currently, there are no regulations really when it comes to hardware, or federal regulations really when it comes to cannabis. That being said, we are obsessed with health and safety. So when the Puffco Pro first came out, our tagline for the product was no plastics, no glues and no fibers, because none of those things existed in our atomizer. So we've always positioned ourselves as using cutting edge products that -- or parts -- that we believe will be extremely safe. I don't have all of the testing that we're currently doing on our products in front of me. But we are already putting our products under the testing that the FDA would put us through in anticipation of regulation ever coming up.

RS: It seems like those companies that are already preparing for that are going to be the ones to survive, right? Because they already have it in their business model?

RV: I would think so. I mean, we -- I'm going to think of how to say this. We don't see the government as the enemy. We think that there are two positions that cannabis companies take with the government. One is screw you guys, we're going to do what we want. We're going to find a loophole and a way to get around the blockades you put in front of us. And that's gotten us where we are today. A lot of cannabis companies have become very successful by playing with loopholes.

Our position is that we want to be ready to work with the government if and when they want to work with companies like us. And so we're kind of just doing all of our homework, making sure that if a conversation is to ever happen, that we can say, here's all the studies and things we've done leading up to this point, without ever having to do this. And we did this one for ourselves to make damn sure that what we're putting out there is safe for consumer use. But also because when you guys are able to scrutinize us, we want to be able to pass that scrutiny.

So we just have a very proactive approach of when the government is ready. It will be our honor to prove that our products are safe, and we believe we should be in the future of cannabis.

RS: Do you have any sense, are you in touch with regulators? Do you have any sense of what the timeline is or if you think it's going to go federally legal?

RV: I mean, it's hard to tell, it doesn't... I feel like if Trump was going to do it, he would have already done it. Bernie has announced that day one, he's going to put a bill in place to make it federally legal. It's kind of like the whole world, right, this is kind of up in the air right now. I think we don't know what the future holds not just for our industry, but yeah, for many things going on in the world.

So really, really hard to say, if Bernie wins, it looks like the entire cannabis industry is going to have a lot of work to do, because our models are all going to shift. And if he doesn't win, who knows? Maybe it'll be four more years of the federal government allowing state governments to roll out their programs, or it can turn around and they can be like you know what, we don't want to do this anymore. So this is all now illegal all over again. So it's really, really hard to tell and it's hard to have confidence in one path over the other. We just -- we want to make sure that we work with the government in any way they allow us to.

RS: So what are your plans for the company, let's say this year, and then in 5 years, where would you like to be?

RV: So that's a little bit of a hard question to answer for a few reasons. One there are things that I thought I would be doing five years from now that I'm actively working on today. But I actually have some recommended reading for those. I feel like a lot of people I talked to that are entrepreneurs read this book, but if you have it, Zero To One is an absolutely incredible book on how to go from nothing in an industry to the leader of an industry. And we've kind of -- that's one of the books that definitely inspired my strategy. But one of the things that the books -- the book focuses on is that every company is pretty much one or a few well kept secrets. And we are a company with many well kept secrets. So it's kind of tough to talk about what the future is without giving away our roadmap of how we plan on disrupting the space.

What I can say is that it is very likely there will be an update to the Puffco Peak later on this year. I can say that we are looking to release a total of three new products in the next 12 to 14 months. However, I can't confirm. And those are three vaporizers not like the accessories and other things that we do. I can't confirm what purposes the other two products have. Just because yeah, one of those products is the product that I told Abe when he first started, what are you dream products? One of them was the Puffco Peak. The other one was this. So effectively, it's our life's work that we spent the past four plus years on.

RS: Well, that's exciting.

RV: It's stressful. Exciting and stressful.

RS: Yeah. Like any excitement somewhat stressful. Yeah. It's not a simple task, creating and innovating. So within your plans for growth, a lot of people are looking at the cannabis space and wondering, some people investing, some people, entrepreneurs. As somebody who has gotten into the industry, where would you? Or how would you advise people that are thinking about getting into the industry and wondering which part of the industry they want to get into? How do you advise kind of managing that or navigating that?

RV: I mean, I'll probably give a slightly unconventional answer, because it's truly coming from my perspective. If you're entering the industry, because it's new and exciting, and you think that you can make your career in the cannabis industry, but you're there just because you want a career. You might have a hard time. You need to do this, because you love it.

Because it's extremely really challenging, and you're often disincentivized to continue. If I was doing this for money, I would have quit in 2017. Like as money was dwindling, and I was doing things just to make money, I would have taken a few million dollars and ran. And that would have been the end of it. The reason we are successful as we are, is because we put everything on the line. When I moved my company to California, this is in -- what is this January of 2018.

At that point, my company had been almost five years old. And when I moved to LA, I had one payroll period left in our corporate bank account, and two months' rent left in my private bank account. Everything was on the line. I don't think this is something people just do. And I support my family. I have people that count on me. I risked it all, because I love what I do and I believe in what I do. And if you're just trying to enter to have something not boring to pass your time with, you might be able to find a job. Or you might be able to find a company to invest in. But if you're just looking at how you're going to transact in whatever effort you're putting out there, it likely will not be what you hope it is.

And so my advice to anyone is, do this because you love it. Or you're already successful in operations, and you want to apply to the cannabis space, great. Come in here, show us what we need to learn from other industries. Do you want to be in operations and you assume that cannabis is easy because there aren't as many experienced people in there and you want to make yourself within their, possible, but much more challenging?

We need experienced here. And yeah, if you're not into it, or if you're just into it for the money. It doesn't mean that you'll fail, you just might find that it's not worth it in the way you thought it was when you started. On the investing side, I will say that I believe that there is a lot of company, or a lot of investors in our space, I don't speak to really any of them. This is what I hear through my friends that do seek investment. CEO or rather, investors just want to jump in and invest in your company and quickly see a return. And that is killing some of the best things in our space.

That's taking the company that had a successful brand that people are excited about, and investors come in and tell them you need to make this more profitable. And the second they make it more profitable, their brand goes away. Now they're competing with all the other commoditized brands when that's never what they were. And if you're going to invest in the space and you're investing in a popular brand, if you change it to being a commoditized brand, you've thrown your money in the trash. And if you're not investing in them to be the best they can be with their founder's mission, you're not you're not capitalizing on what I think will be the biggest returns in the space. So that's kind of my weird advice, I guess, for people entering.

RS: No, I think it's really smart advice. And I think we're already starting to see it shake out, the people that got into the industry, from other industries, trying to make an exit in three to five years are now leaving the space wondering where that money is. And I think the people that are in it for the long haul are seeing -- and you see a lot of management changes in the big companies now. So -- and no, I think it's really important advice. I think the kind of the share prices, got ahead of a lot of companies and got people's interests really piqued and I think it's a bit of people needing to come back down to reality and they're being forced to.

RV: Yeah, I mean, I was speaking to -- I won't mention their name. But they're a very successful person from another industry that's looking to invest in ours. And he came to me he was like, what do you think about investing in the space? And I'm like, I think it's a joke. I think people are either getting scammed, or people are trying to make companies serve what they think is successful businesses, but they've never dealt with a business like this.

And he was like, okay, cool. I kind of got that vibe. And when he said, it seems like a bunch of hot potato, somebody buys a company, they find it, they flip it to someone else. And really, whoever gets stuck with it last is the person who loses all their money. I was like, that is strangely accurate for what is happening in this space.

So it's -- I have never been one of those businessmen, I'm sure they're out there. They're like, I can take this and flip it and make money with it. That's their passion. It's not mine, and you know, so I hope it works for them. But if I was listening to your podcast, and somebody was giving me advice that wouldn't resonate with me. What would resonate with me is find something you're passionate about in this space and give yourself to it. And potentially, if you're lucky, and the timing is right, and the odds are stacked in your favor, you could hit it really, really big. But if you're here just to make some money, I hope you're not using all of your money to play in this industry.

RS: And in terms of going to California was the idea behind it being a mature and in a bigger market?

RV: California is actually a little bit different. Two reasons I would say one is, LA seems to be the Silicon Valley of cannabis. It's where the biggest brands are. It's where the most visibility is. If you're big as a brand in LA, you're seeing across the world, because everybody is tuning in here to watch what happens in the space. But there's actually a small part of why we moved here. Back in 2017, I was in this huge hiring push. I wanted to hire titans from other industries to come help me build up my dreams.

And what I found was that every person in New York that would have a conversation with me, was doing me a favor. They felt like they were potentially sacrificing their careers, to work at Puffco or to help us with our dreams. I had multiple people that I interviewed in New York that said that they could not start working at Puffco, because their parents would be too embarrassed. I mean, that's the reality we were in, living in an illegal state, with people wanting to join or considering joining the fastest growing industry in the world.

So moving here was really about people being excited to be a part of our mission. And here, it's a completely different story here, people are dying to work for Puffco. And though our interview process is usually I believe, on the low side, five different interviews on the regular side eight to ten. And it's usually a month to two months long process. And with some people were doing trial day. So they come in and they work for a few days. We're obsessed with who we let in to our company. And we are able to be that because we're in a place where a lot of people are interested in what we do, and feel safe with their careers in our hands. And that was just not the case in New York. And that's really what drove me here.

RS: You know, it's funny, I was talking to Irwin Simon, the CEO of Aphria (APHA) a few months ago at a conference and he was saying that he had brought his kids to the conference, it was in LA, because he always asks them, are you embarrassed to tell your friends what your dad does for a living? So he wanted them to see it in LA, wherever, it's totally normalized. I thought that was so funny.

RV: Yeah, it's the one great thing about LA is being in New York. I'm a New Yorker. I grew up in the street ware scene and the hip hop scene and all these things, but…

RS: It sounds like you miss it.

RV: I mean, I miss the era. I miss New York being a place where creativity thrives. And it doesn't feel that way to me anymore. But I heard that's what happens to every someone New York or when they turn 30, because it's just not special to them. But going to LA, you come here and you feel normal. And to feel normal as a cannabis user is a luxury. I felt like an outsider most of my life. I was the black sheep. I was the bad kid, because I would smoke weed.

And sort of go to a place where it's completely normal. There's nothing to worry about if you have weed in your car. You don't have to be afraid that you're going to go and spend a weekend sleeping on a jail floor for it. I mean people here aren't as stressed as we are on the East Coast. And sure, California living everybody here is more relaxed. But to be a cannabis user and not feel like you have to operate in the darkness. I mean, that's why this place truly felt like home. And I still miss New York. I don't super love LA, it doesn't -- still up to two years, doesn't quite feel like home. But the safety that I feel here to be myself the truest version of myself without any judgment of anybody around me, that's what makes this place so very special to me.

RS: Well, Roger, it's been a real pleasure talking to you. I feel like this has been a real education in conscious capitalism. So I really…

RV: I've never heard that term before. I like it.

RS: Yeah. You seem to promote it very well.

RV: Thank you.

RS: Yeah, I really enjoyed talking to you. And thanks for sharing your journey and your story and your advice with us and I really appreciate you taking the time to come on.

RV: Yeah. Thank you. Thank you so much for having me on our websites. If you're interested in our products, it's puffco.com We can be found on Instagram at Puffco. And my personal page on Instagram is Jolly Roger. If you hear this podcast and you have any questions, please feel free to throw me a DM. I often speak to our community members because it's important for me that our culture is what spreads throughout the world, one of positivity, one of kindness to one another. And one mainly we're not just trying to capitalize on each other, but we're trying to build something that people believe in. And if any of this has resonated with you feel free to throw me a DM, would love to talk about it.

RS: Awesome. So hit up Roger -- Roger, thanks for taking the time. Really a pleasure.

RV: Yes. Thank you so much.

This article was written by

On The Cannabis Investing Podcast, host Rena Sherbill provides actionable investment insight and the context with which to understand the burgeoning cannabis industry. Interviews with C-level executives, analysts and sector experts give you investment ideas to consider, help you think through your investing approach and provide you a new lens with which to understand this ever-growing sector.

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