- Coming from the blue chip CPG world, CEO Troy Datcher joined The Parent Company last year.
- Fresh off earnings, we discussed getting rid of inflated topline sales and why main competition is the illicit market.
- Moving away from bulk wholesale; branding wholesale still critical.
- Voluntary lockups, getting clear on its True North.
- Legislative baby steps.
Troy Datcher: You know, for three decades, I've had the opportunity to shake categories with a couple of blue chip companies, with Procter and Gamble and Clorox. I worked on guided say 50 plus brands over the course of my career. And the fortunate thing in my last stop at Clorox (CLX) was that 80% of all our volume was in number one and number two brands, which meant that you had to really shape the category of the future, the category or the category wouldn't be healthy.
I looked at this opportunity as an opportunity to go beyond that and help shape an industry. That's what's so exciting about where we are at the very early stages of this. I'm excited to see what this whole thing will look like in the next 25 years.
Rena Sherbill: Welcome again to The Cannabis Investing Podcast, where we speak with C-level executives, analysts and sector experts to provide actionable investment insight and the context with which to understand the burgeoning cannabis industry. I'm your host, Rena Sherbill.
Hi again, everybody. Welcome back to the show. It's great to have you listening with us. As always, for those of you who have listened to the past few episodes, you know, we've been concentrating on California, but also broader picture, the retail picture. California being one of the most mature markets in the world, it's great to suss out the retail trends and what's happening, and think about how that translates into a broader United States.
I'm excited to talk today to Troy Datcher, the CEO of The Parent Company (OTCQX:GRAMF), a company that I am personally invested in. Listeners of this podcast knows a company that I really liked when it came out for various reasons. It has not happened. The growth pattern has not happened the way I wanted it to, or that all the investors have wanted it to. It's been much more down than up. And Troy talks today about coming from the CPG world.
He comes from the Blue Chip CPG world and talks to us about synergies and similarities between all retail experiences, but what is unique to cannabis. And what he enjoys about leading a cannabis company is as opposed to a traditional retail experience. Missteps, changes in paths, how to better strategize going forward, the path in California, the path across the States, especially as the Eastern part of the country is opening up more and more, especially as it relates to The Parent Company brands, and what that means for them.
I really enjoyed this talk with Troy, really enjoyed getting to know him. I've heard a lot of great things about him from a lot of people in the sector. As I said, I'm not just saying that because he's on. I really have heard that.
And so I'm really interested to talk to him today about leading The Parent Company, but also because The Parent Company is so focused on retail and that experience, talking to us from that perspective, and how we can think about that, as investors, as consumers, as people observers, looking out on the industry as it's growing and thinking about how it's going to continue to grow, I think helps us all figure out who are going to be the winners in this space, and how are they going to get to the top of the mountain, or close to the top of the mountain? And how do they stay there? Will they stay there?
So a lot of great things to talk about. I hope you enjoy this conversation. And I'd love to hear from you. So let us know what you're thinking about. Let us know what you want to talk about on this podcast. What you want to hear about on this podcast, what you're thinking about? If we're thinking about things differently, would love to hear from you. My email's mentioned at the end of all episodes, so check it out. Be in touch, connect. Hope you enjoy this conversation.
Troy, welcome to The Cannabis Investing Podcast really, really happy to have you on the show. So thanks for taking the time, especially post-earnings craze. I appreciate it.
TD: Well, it's great to be here. And despite the earnings craze, there's never a dull time in cannabis. So you can -- any day of the week, any time of the month, any time of the quarter, it'd be a crazy time around here. So -- but that's for sure.
RS: I bet that's what it's like building a business in a burgeoning growing industry and trying to find a footing that feels right. As the path -- I mean to extend that metaphor to like find the footing that feels right, as the ground is like constantly shifting underneath you. How do you navigate, like what the right steps are? I think we saw some of that in the earnings call and we've been talking a bit on the podcast about cannabis retail. Where's it going?
I've been in California for a while kind of experiencing, I would say the best cannabis retail experiences probably in the world. And The Parent Company like you just got off an earnings call talking about this omnichannel retail experience, kind of driving that. Talking to you, CEO of The Parent Company, you've taken some shifts with that company. But you're also coming from a real CPG background. And that's -- when people -- I haven't talked to anybody that's given you -- sorry, for the long preamble.
I haven't talked to anybody in the in the kind of California cannabis ecosystem that hasn't. And I'm not just saying this, because you're on the show. But we've said it before, that hasn't had glowing things to say in terms of what you're bringing to the industry with that CPG background. So maybe talk to us, if you will, about where you're coming with that perspective, what you're thinking about vis-à-vis where you stand now, a little bit into your term there.
TD: Well, I think it's exciting for me, because for three decades, I've had the opportunity to shape categories, with a couple of blue chip companies, with Procter and Gamble and Clorox. And I worked on -- guided say, 50 plus brands over the course of my career. And the fortunate thing, in my last stop at Clorox was that 80% of all our volume was in number one, and number two brands, which meant that you had to really shape the category, the future of the category, or the category wouldn't be healthy.
I looked at this opportunity, as an opportunity to go beyond that, and help shape an industry. That's what's so exciting about where we are, at the very early stages of this. I'm excited to see what this whole thing will look like in the next 25 years. And if we do things right today, by the consumer, delivering great products that make promises every day, that's going to be a really exciting outcome. And so I couldn't pass up the opportunity, because I just saw a really unique situation where we can be at the forefront of shaping the experiences. And I -- for 30 years, I've longed to have a relationship, this intimate with the consumer.
I would work and build marketing plans and innovation plans. And then at the very moment of truth, of interaction with the consumer, I'd hand that responsibility over to partners, good partners, Walmart, Target, Amazon, all those folks. But candidly, I didn't own the experience. And so when I would walk into their outlet, I'd say, I didn't want to place there or I didn't want it priced at that price point like. And here, because we own 11 dispensaries, we own delivery depots where we can reach about 70% of California, it gives a great opportunity to own the relationship, and collect all the data insights and information to help us be better marketeers better innovators.
So that's what's really exciting about the opportunity that we have today is we can truly be brand builders informed by the consumer choice -- choices, because they are telling us exactly what they want. And that's exciting.
RS: It seems to me, and it's something that we've been talking about is like as a smaller company, right, not a company that has kind of like, the breadth that The Parent Company does, like if you're talking about one of those smaller players, I think the thing that's lacking for them is the money and the ability, the access to get into all of these markets, to get the shelf space, to get past the regulations, all of these things.
And I would say for somebody bigger, like The Parent Company, I would say one of the things that would be a challenge is not tapping in to the consumer, not having an intentionality behind the retail experience, something that we're looking for as consumers. How do you -- and you're talking about like -- I think intentionality starts with data, because it starts with what does the consumer actually want? How do we build that experience for them? So what are you finding out from like talking to the consumer at a more intimate level?
TD: Well, first and foremost, what we're finding is that anything that we bring to market has to be born out of authenticity. So there's an opportunity to miss the mark, if the consumer does not believe that the product can live in that space. And I'll give an example. I think you could chase innovation ideas based off of what's happening in market. So you could create another gummy because guess what, it's exploding. You could create another pre-roll because it's exploding. But you have to understand if the consumer gives that brand permission to go those places.
And that is the -- I think the smart part about what we're doing is we're listening to the consumer and where he or she gives us permission to take the brand. Then we are stepping into that authority that they're giving us. So but it's really born out of this place of authenticity and really understanding the role of the brand in the consumers lives, what role does it play, and not stepping out of that expectation with the consumer.
So that to us is a -- it's something that we're very interested in making sure we stay true to. We have a new Chief Marketing Officer in Esther Song and Esther is a unbelievable marketer that comes to us with great experience. And one of the things we're doing today is really examining our portfolio from end to end to make sure that we have very unique messaging, and niches that we're addressing with consumers. Our brands are fighting each other, that they -- but they also have a very clear path to connect with the consumer based off of their authentic place that they sit.
And so if you have a brand that's focused on luxury, that everything about their brands should be pointing towards a true north, that true authentic place where it sits. We were working with Mirayo, Mirayo, which is Santana's brand. It's a SUNGROWN brand. We're going to say authentic to the purpose of their brand. And everything that their brand holds true. And so I think that you can certainly chase shiny objects and you can chase trends. But the consumer ultimately will inform you whether or not you're on the right path. And we're trying to do a really good job of listening to the consumer to inform our choices.
RS: How do you feel like your experience outside of cannabis has been similar to your experience within it? And I mean, I know obviously, like the regulatory picture is an obvious difference. But is there also something that you're finding unique to cannabis as part of that retail experience? Or do you feel like the retail experience is, for the most part just predicated on what the consumer wants within that, and that is unique to each thing? Is that -- does that question come across?
TD: Yeah, I would say this. There's more similarities to my former role, or the company I worked for and cannabis, then most people would actually would understand or think. I mean, Clorox products were all heavily regulated. They were registered. And so we went through a lengthy process, making sure that we -- our registrations were in line with, obviously, with regulations that were required. And the only difference between those regulatory relationships and the ones here is that Clorox existed for 100 years.
So you actually knew the playbook when it came to regulations. You know, how much lead time it would take to influence outcomes. And that -- and you had some influence over shaping the future, because of the rich history of being innovators and working well with government agencies. We were just on that beginning stages of that journey in cannabis. And so I do see some parallels there. You just can't go out and do things without understanding the regulatory framework and very similar to how things were done at Clorox. So that's a similarity.
In terms of the consumer experience, I'd say dramatically different in this sense. When you walk into one of our dispensaries, the bud tenders and what you're engaging with are incredibly informed employees. And they really help to solve problems, shape experiences, guide people along the journey, in terms of making decisions. And that's not something I had, in my previous days in consumer products. You walk into your local grocery store, and there wasn't someone there to help answer those questions and guide you on the journey.
And so I see it as a really great opportunity to influence the consumers' perception of the categories, of the offerings, of the innovation, and the science that goes behind what we do, because you actually have that one on one relationship. And I've seen the power of our bud tenders in terms of their influence and impact.
And there are some dispensaries where shoppers have their favorite bud tender. And they will -- if that person is not there that day, they'll wait until the next day when they're there. And so that's a very unique opportunity that we have to really educate our team to make sure that they're being as helpful on their journey as possible. And that's something I didn't have in my three decades in consumer practice before this experience.
RS: Yeah, it's an interesting point. I mean, it goes to emphasize like, what a personal item commodity cannabis is because the personal relationship that the person has to it is quite personal. And then I've seen it -- spending time in California, I've been struck by, I think budtender is a good title, because it is that familiarity, that like a bartender you think historically has with like the person and the patron at the bar. I've seen it so many times them asking by name for the bartender or the bartender saying, hey, so and so. It's a very kind of, like, local neighborhoody feel and I think that's born out of a lot of the education and what they're talking about and all of these kind of like personal things.
TD: A lot of our employees that are budtenders are from those locales. They're from those neighborhoods. And so they're folks that grew up in those towns. They know the consumers who are walking through the door. And that that local feel is very important to us. As I go out and talk to municipalities, as we're looking at new store openings and being a part of a community. We start with our hiring practices and the fact that we are bringing people from the local community, into our ecosystem to be a part of this journey, people that care about the folks that are walking through the door. And that goes a long, long way.
RS: Switching gears to something that you talked about on the earnings call, which we've also been talking a bit about is, kind of the move away from wholesale. And obviously, like the pricing went down there and it was less attractive. There's this glut of supply. Is that basically the reasoning behind it? Is there a different -- have you been planning on this since you've come on board? Can you talk to us a little bit about that?
TD: Yeah, so one of the first thing that I did want to join was I actually brought some friends over to help me take a look strategically at our plants. And the Boston Consulting Group is an organization I've worked with in my past, was a part of writing two strategies at Clorox with them. And I -- they speak my language. We speak the same consumer language. And so I brought them in to take a look with me, as I joined the organization.
And one of the things that we looked at was, what was going to be the future of the industry over the next five years. What things will be critically important to identify true north, and that identified true north for us is brand building. And we knew that the bulk wholesale business, separate that from the wholesale branded business, the bulk wholesale business would not be a strategic part of our future. So that was a very important strategic choice we made early in my tenure.
Now what accelerated that move, obviously, was the degradation of that part of the marketplace. But that was always a part of our plan was to deemphasize what I call like the low calorie, like revenue, that was a part of our portfolio. It was giving us really inflated top line sales, but no opportunity for profit margin at all. And so while it looked great from a top line standpoint, there wasn't much to work with, to take those dollars, to invest in to make us a better organization. So we knew long term, that will not be a part of who we want it to be.
Now the branded wholesale piece is still a critical part of who we want to be because we want to get our brands in front of more consumers in the State of California, beyond our ecosystem, and that branded wholesale component is a big part of that. But the bulk wholesale piece was strategically a choice that we're making that just got accelerated by the marketplace conditions.
RS: Can I -- I want to ask a point because talking to people in California and talking about you've brought people on from like your previous experience, and also talking about getting away from inflated numbers. Have you been struck at all? Has this been your experience that when you got into cannabis, you're kind of like, what is going on here? Like is -- why are people doing things this way? Like was it important to you to bring people that kind of got it more than you were seeing around you?
TD: Yeah, when I was staring at the opportunity to enter the industry, I saw a lot of great ingredients. But I felt like the cake wasn't being baked right. But you can see like, hey, this is the making of something really special. And so I did want to bring people in to validate what I was seeing. Because at times, I felt like it was the only person seeing it. So I wanted to have some backup here.
And so that validation was helpful for me to really lean in confidently. And once we sat down with our executive team and our Board and walked through our strategy, the really great news for us is they could see a vision that was creating a very different company than where we started. And that vote of confidence was the Board and all of our key leadership invest and really making it a personal choice to sign a voluntary lockup.
So everyone's kind of all-in like we're not going to exercise selling off any equity for the next 12 months. And that was all done because we actually saw a path to a different company 12 months from now versus the next quarter or the next two quarters. And so for me, it was really getting clear on our true north like who we want it to be and then making sure that we -- everyone understood their role in delivering that new plan. So yes, you're absolutely right.
RS: I think the other thing that is quite challenging for players, specifically in California is dealing with the illicit market. And I feel like, it seems that the best way to combat the illicit market is like a great retail experience, because they can't bring that to you. It is really unique. It is really fun. It is really informative. It's all these things. Can you talk a little bit about, like, trying to have this vision, with this illicit market constantly, I would imagine, like in the side view, or rear view, or wherever mirror that you have thinking about it?
TD: Well, for us, the illicit market is very much in our in our purview, like we pay attention to the illicit market, because I believe it's really our competition, like there are other dispensaries and other brands in California, but can't allow -- I love to fight against those folks like that -- like give me that competition any day. Give me a fair playing field with the team that we're assembling. I feel great about those chances.
It's the illicit market that keeps me up at night. And so as I think about our business model, and what we're offering to consumers, that's why keep in mind, so after all those frictions that the weed guy has eliminated. So you want your product delivered to your doorstep, your weed guy will do that. So we have to make sure that our delivery experience is frictionless. You order something, it's on time, it's complete, it's priced right, all those things because guess what, we're competing as someone who has a track record of removing all those frictions, quality products, there from the illicit market.
We know that and so we have to deliver freshness every day, we have to deliver great quality product. And the one piece of help I think we need from our legislators is obviously helping us on the value piece of it is how do we get rid of some of these onerous taxes so that we can compete on a value standpoint. But I think about the convenience factor, the quality factor, and then the value factor, those things are so important and the illicit market has all those things checked today.
And so we're absolutely keeping that in mind and staying focused on trying to deliver experiences that gets us close to that experience that they expect. And obviously delivering products that are save the efficacies there, the promises there, all those things that you would expect from a regulated marketplace that we are living in this -- in the legal market.
RS: Yeah, it is pretty wild that the government is kind of helping the illicit market stay relevant. As I mean, my gosh, there's so many wild points to the cannabis industry, I suppose that's just one of them. Are you encouraged by -- there was the cultivation tax, there's talk of the delivery case pack value, tax, or the value that you're allowed to take with you in a delivery to be increased? Are you hopeful of that? Are you encouraged by these laws? Do you feel…?
TD: Absolutely, yeah, I'm absolutely encouraged, that we're taking steps in the right direction. But I've been on the record and I just spent some time up in Sacramento meeting with lawmakers, encouraging them to understand that that's not enough. And so I think there'll be some impact. They'll see some positive impact on these changes, which I think it'll be a positive indicator, if they do more, than there's more in it.
From a tax revenue standpoint, from a safety standpoint, these baby steps, I think, will actually help improve our business case. And so that's what I'm excited about is that I think we have folks that are listening. My visits to Sacramento have had some -- been welcomed with open arms as we try to tackle these challenges. And importantly, if you've got people that are listening, you've got a shot at influencing the outcome.
And so I feel good about the fact that folks are listening. And one of the things we've served up as an operator in California because we compete, again, across the entire state. And so we're touching quite a few of these legislators backyards, is we want to be the company they can come to and ask us about the practical implications of these changes, because they are really making a difference.
What will be more impactful if they could help us, and so we're having the right conversations, and that's encouraging, but we're nowhere near where we need to be as an industry?
RS: Speaking of nowhere near where we need to be -- nowhere near where we need to be, what are your thoughts about -- and also kind of I was thinking about this as you were talking about getting into the east coast through the Curio deal, how are you thinking about the legislative part and kind of the opening up of the states? How do you think about that kind of like, big picture, and then also just like into terms of like shareholders, like how long does this take? Like what are the steps, until we get to this wide open space?
TD: Well, I encourage folks to stay patient. I think this is not going to be an overnight situation where we wake up tomorrow morning and things are legal across all 50 states. However, I feel like there's -- the right conversations are being had on both sides of the aisle, which I think is encouraging. We've got both Democrats and Republicans talking about legislative changes. And they're talking about it for maybe different reasons. But the fact that we're talking, I think, is a very important piece.
I do like the momentum that's starting to pick up state by state. Again, it's proving out a business case that we can be really great corporate citizens. We can help, tamp down on illicit market, get rid of some of the challenges that come along with that, and also solve some problems on the revenue side for the states that are participating. And so I do see an opportunity for us to continue to pick up momentum, based off of the success we're having kind of state by state.
I've spent a lot of time talking to folks on the Hill. And I'm encouraged by some of those conversations. I was with Cory Booker about eight weeks ago, and really encouraged by the fact that he's gathering great information by spending time with operatives like me, as well as social equity applicants are being really challenged by the lack of access to banking and financing. And so I think that the right currencies are being handled. I preach patience when it comes to federal legalization. I think it's going to take a while to get there.
I'm certainly not building plans, with that in mind as being the savior today, but I do believe that it is forming some of our longer term decisions. So as the organization, we've decided to expand our brands to other states through an asset light approach through partners who've already made a infrastructure bet. And so I do believe at some point, those infrastructure bets will be redundant. It'll just take a long time for that to be a part of the reality. And so we're excited about the strategic choices. They're kind of lined up with what we think is the pace of the change, but we'll be ready. If there's national legalization, we'll be ready for that. And we'll be ready to have our brands in all 50 states and be excited about that opportunity to do so.
RS: Do you feel like the patience that that people need to kind of get on board with the realistic timeline of federal legalization? Do you think that extends? Do you think that is the catalyst that's stock wise, going to push the price, going to have the value more in line with the fundamentals? Is that how you see it?
TD: I do think that from a macro standpoint, we need momentum, from a regulatory and legislative standpoint to get momentum behind investing in this segment, because to your point, some of the fundamentals are right, and no one's getting rewarded for that. And so it is incredibly frustrating, as an operator, when those things don't match up, because in my 30 years of being with public companies, that's how it works. You get the fundamentals right, you start making changes, you state those changes, you move in the right direction, people rewards you for that.
But there is a challenge here, obviously in -- some tamped down enthusiasm about the sector, because people don't actually know when this will be a full blown legal industry. And so the good news is, I think we see when there's signs of progress, we see there's a tension that swings to add to the industry. And if we can keep the momentum going on more states, more good conversations with lawmakers around the things that matter long term, hopeful we'll start to build some confidence in investors that this is a great place to be in. And they can do it on the ground -- at the ground level before this thing explodes.
And so I think we're, again, setting the right foundation. There haven't been a lot of missteps from an industry standpoint on our end. I think we're living up to the promises. And that just I think lays a great foundation for what could be a really exciting future.
RS: Speaking to the social equity component that you touched on a little bit, and in terms of like maybe that that's a point that they're trying to negotiate in terms of broader federal legalization, but also speaking to what's happening in New York, what's happened in Illinois and kind of these measures that are being put to the public. Do you think -- are you, I guess, encouraged by what's happening? Do you feel like -- because sometimes I feel encouraged. And then other times I feel like realistically, is anything actually even happening? Is anybody really getting the real help? Like it's like a fraction of what they actually need? How do you think about those -- that part of the industry?
TD: Yeah, I think we have a long way to go to make sure that we build an industry that we're all going to be really proud of. Here's the exciting part, from my standpoint, is that my experience over my decades of working in corporate America, is we've been really trying to retrofit these organizations to fit the demographic trends of the country. We've been trying to invite people to the party, like many decades into the journey. And I can tell you, I've been on the forefront of…
RS: Many centuries, many centuries.
TD: I've been on in front of a lot of inclusion and diversity conversations over my years, and it is hard, it is hard to, to reinvent things once they're in motion. The great news for us is we're at the beginning of the journey, so we have a really great opportunity to get it right now. And that is inviting the right people to the table to be a part of the conversation, putting the right infrastructure in place for them to be successful. And we have a long way to go. But we're still so early that I won't declare defeat yet.
I don't think we should say it's never going to work. I think there's an opportunity to take some lessons learned and apply them now. So for example, we have a lot of lessons in California around social equity, that we can apply share with New York, because we have lived through the things we thought were good for social equity, but didn't pan out. And so I think if we are just listening and sharing our experiences, we can build a much better industry that brings a lot more people to the table to be successful. But I'd say we've not done a great job yet. But I'm hopeful that it's not too late.
RS: Specifically with New York, are you encouraged by how they're approaching that? And also like, it does seem to me that the slow rollout is also impinging on company's ability or the industry in general's ability to kind of grow legally because it seems like the illicit market might be burgeoning right now, instead of the legal one, maybe? How are you feeling about New York specifically?
TD: Well, Rena, I was -- have just been in New York, the last three weeks of business, and I get increasingly concerned about the strength of illicit market, and how it's phasing [ph] is. When we just go to Times Square, and you can see the impact of the illicit market. It's not hidden at all. And I think every day that that continues, it'll be just tougher to make those changes. It's really extremely tough to -- we're facing that in California, once it's rooted as a part of the fabric. It's a very different, difficult thing to really challenge. And so I'm hopeful that, again, people learn from challenges of California and hopefully take some of the lessons to bear, to hopefully not be in the same situation.
I am encouraged though, by some of the things they've done around social equity in terms of giving folks a shot at licenses early in the process. I'm really excited about that. We have to make sure though, that they also pay attention to the things that allow folks to compete. So I'm hearing some rumors around -- some restrictions around packaging and marketing and things of that nature that could hinder any industry from being successful, if done the right way. And so I'm hopeful that while people are still listening, there's an opportunity to shape things as far as the regulations are being built, so that we can have a shot at being successful.
When I was up in Sacramento just a couple of weeks ago, what I was encouraging the lawmakers to do, was to really just walk a day in my shoes. Like, come spend some time with me, let me show you the operations. Let me tell you why this thing doesn't work or this thing works well. And I think just making sure that the folks that are writing the rules have an understanding of how those applications will impact the day to day operations of an organization, and its ability to be successful in terms of who it's truly competing against is important.
RS: Do you feel like when -- one of the things that I always really liked, I am personally invested in The Parent Company and have been way back when the price looked a lot different. One of the things that I…
TD: Me too, by the way.
RS: Yeah, exactly, exactly. I know misery loves company. I feel like one of the things that was really exciting about the company and has remained that way is, talking about publicity and advertising is the way that The Parent Company approach, I mean, through their different brands approach publicity and kind of like in your face advertising about the ridiculous inequities in the cannabis industry. But I think in a really clever, humorous apt way? Is that something that you are still kind of, do you still feel like that that's the right way to go? Is that still how you're approaching it? And I'm also curious like, Jay Z, when I first started getting involved, I was curious, like, how much is he involved with his role in the company? Is he still a part of it? Is that still part of the conversations like, especially as you get into the East Coast, and things like open up a bit? How are you kind of envisioning that part of things?
TD: Well, I'll start by saying, well, thank you for the compliment around the marketing advertising campaign. We truly believe that that hypocrisy campaign will be something that 10 years from now, people will reflect on and see its impact. And while it wasn't a big lift for our brands, because we -- there's no mention of really brands in the advertising, it was just -- it was important to make sure that people understood as an organization, what we stood for.
And I think that, as you're trying to shape, culture, and create an identity for your organization, it was important for us to take a stand. And that is something we're incredibly proud of. So you'll see us raise our hand and point our fingers at things that are -- we think are ridiculous, and that can be addressed. It's a passion point, actually, that we share with Jay Z and Rock Nation, where they take in their energy and put it against shining a light on social justice issues. And so we're very like-minded. And we have a very common belief that together, along with other like-minded people, we can make a difference in this area.
And so that's what's exciting about The Parent Company. One of the things that drew me to the organization was a statement about being a company of impact. And what I love about that word is that it impacted me in many ways. It can be on shareholder value, it can be on consumers' lives, it can certainly be on the industry, and its opportunity to be fair, and equal to everyone who's participating. And so for us, it was a very natural place to start.
So you'll see us continuing to show our personality, and the thing -- and importantly, our values through those kinds of conversations that we want to be a part of and lead. As far as the lecture with Jay Z and Rock Nation, it can be stronger than ever before. The way that relationship works is not how some other people may define it. Like it's not -- you may never -- you probably have never seen Jay on an advertising campaign or at a store opening for any brand, that you and I wouldn't expect that to be the case here.
But you can you can believe me when I say that there's a tremendous amount of influence in Rock and that team, on our vision as a company, and importantly, on how our brands would show up in market. We got some exciting news coming up next year that I'm not at liberty to talk about, that people will see that partnership front and center in terms of how we shape culture, how we cut through clutter and make an impact. And that's the beauty of working with an organization like Rock Nation is if you just pay attention to how they move and just sit in a room and soak up some of their energy, you become a much better organization.
And that's been a highlight for me is getting the chance to sit with their teams and learn how they build brands, how they influence outcomes, how they invite others to be a part of what they're doing, how they inspire others. And that's going to make us a really great, a better organization every day. And so it's not going to probably in a traditional sense of how people see relationships and endorsements and those kinds of things. But I'm incredibly excited about what we've been able to accomplish with our partners, and importantly their engagement involvement and what we do every day.
RS: And I'm curious, does -- as we see these like new states and regions open up in terms of legalization and thinking that they're going to open up, do you approach each region the same, like is your media approach or advertising approach or kind of this in your face type of integral way of advertising? Is it the same, like on the big coasts, as it is, let's say in the south or in the Midwest? Is that part of your thinking?
TD: I think it'll be different by market based off of one, our ability to talk to the consumer. So what are the tools available? And then two, like what will resonate with the consumer in a way that allows them to see the value, and we're bringing it to market. So I think it'll differ. There always be this, call it national halo effect from the things that we're doing on a bigger scale. But there will be opportunities for us to localize our messaging to make sure it's getting through to the consumer.
The way that consumers going to interact with a brand in the Midwest will be very different than it is on the coasts. And so we just have to be very mindful of that. And as we think about our out of state partnerships, we do know that how we reach the consumer will be different. And I'll give an example nothing that we've announced yet. But as we look for like culturally relevant cities across the country, you would just -- you would activate differently.
How we'd activate in Las Vegas will be very different because of what you have available in Las Vegas, the venues, like the stars that go through there, all the athletes, all the musicians, our friends at Rock Nation, and the fact that they have shows every weekend with some artists that they manage in Las Vegas, that'll look very different in terms of partnership and execution, versus in the State of Maryland, for example, because it's medically legal today, not recreationally legal. So you're going to have to work through all those nuances and speak to the consumer where they are, and how they expect you to connect with them.
RS: Kind of in closing things up, I wanted to ask kind of bigger picture, as you speak to shareholders speak to investors speak to how the industry is moving. How do you? I mean, aside from the patience, that is obviously a necessity here, how do you talk about kind of like EBITDA generation or investing for the future? How do you talk about it from a higher level kind of perspective?
TD: Well, one, I think that we're trying to do a better job of articulating our strategy as a company, because then people can connect the dots between the activities that we're taking or taking on the things that we're sharing in terms of responsibilities and capabilities, and things we're getting into. We have taken a very different approach than others. As we look at how we're building our organization, I'm building a very marketing, consumer-centric organization. So if you look at the investments we made as a company over the course of the last 12 months, I'm leaning into our brand building on the demand side of the organization, while I may be de-emphasizing other things.
So I'd say, one, understand the company's strategy and whether or not they're being true to those choices. As you know, strategy is not just about the things you say yes to, a lot of it is would you say no to, like how clear are you in terms of investment choices, direction, and what type of capabilities are required to win. So if you're strategy lead, that's one thing. And I think that's, that's something that we are really leaning into. And we were telling that story today better than we were just a couple of months ago.
The second thing I'd say pay attention to is the caliber of talent that is being assembled to run the organizations. I've been spending my last 10 months in really trying to build the best consumer focused team in this entire industry. And I'd say we made a lot of strides towards that. I'm not completely done yet. So anyone who's listening and you are at the top of your game, like we may want to have a conversation. But I feel great about some of the choices we made. And some of the folks that we've added to the team. It's incredible difference maker.
So when I -- I actually pay attention to the industry, headlines and all the announcements, I pay really close attention to the people part, like who's attracting the best talent, because in the end, that's who's going to win. And so I'm excited about the journey we're on, the fact that we're attracting some interesting people to be a part of our team. I've been incredibly fortunate to what I'd say is to over hire in some places. And we're going to just continue to make sure that we are -- our organization that is attracting folks who want to make a difference and make an impact.
And importantly, we want to build the most diverse team in the industry so that we can bring all these voices to the table. So it can be better in terms of making decisions for consumers as they encounter our ecosystem. So I'm excited about those things that we're doing. We're strategically lead, we got the right team. And we've got a strong balance sheet, which is something that others don't have in California. And we were doing a lot of great work today to protect that so that it stays an advantage. But I'm excited about the future because of the foundation we're laying this year.
RS: I'm curious, just like when you came in as CEO, was there something that you thought that you are going to do or thought that needed to happen? And you're like, no, actually, I'm going to rethink this.
TD: How about everything? Quite a bit, actually. I mean, interestingly enough, there's some things I thought I'd do. Other people talked me out of it, when I got landed, like, hey, you don't know enough about this industry. I -- don't change that. And now I'm at a point where I'm 10 months in and I'm like, no, I should have changed it the first month, and we're going to change it. And so I'm growing, obviously more confident in my understanding of the industry and what works and does not work. And so now we're leaning into situations that candidly I wish had been several quarters ago. But there's every day, the industry is changing. And so we have to be incredibly flexible to make sure that we can pivot.
As we talked at the beginning of this conversation, the wholesale market collapsed, and we were, we had a really clear strategy in terms of where we wanted to go. But it allowed us to pivot and pivot quickly, and we got to be ready for the pivot whenever there are changes thrown our way. So I think everything's been challenged since I got here. I'm learning a lot. And we have a lot of fun over here.
RS: I want to ask you about what product kind of category you're most excited about. But every time you answer a question I think of another thing to ask you. I just want to ask you quickly, when you're as kind of -- not kind of -- as a successful leader in a number of different industries. Do you feel that sometimes, oh, I should have -- do you feel like oh, I always should have listened to my gut? Is that always a recurring thing? Or do you find that there's value in learning the lesson kind of organically? Or is this something like a layperson, like me, you struggle with the same as like, oh, dammit, I should have listened to myself more.
TD: I always struggle with that, because, especially in like -- I come back around to that original thought. And I do kick myself. I think that's what makes -- I think, actually, if you're -- if you can actually omit the times when you're wrong, I think that's a really good thing as a leader. And for me, yeah, trusting my gut, is incredibly important. And something that is tough to do when you're moving into something that's new, because you walk into a space, and there are people a lot of experience around you. And you make a bow to that.
But what got you here was typically leaning in on your 30 years of experience I have, making sure that leading to that you shortcut some decisions, and make the decisions faster. And that's those are -- what people personnel and talent, for example, you -- I kick myself, every time I delay a decision around, making a change or adding a resource or getting rid of a resource, like, I kick myself if I wait too long. And but I'm always evaluating myself against that. And so it's I don't think I'll ever give myself A plus when it comes to those things, that it's always going to be a work in progress.
And yes, there are times I wish that I would trust my gut even more. And I have a great story about that. When I was at Clorox, I was meeting with the former CEO. I was meeting with their executive coach. And they said, why do you think the CEO pays you all this money, right? And I said, well, let's debate if it's a lot of money. We can have that debate. They are like, but why do you think that they pay you this money? And I said something stupid, like market share growth and shaping of categories or something of that nature. And they said, no, no, no, no, no. They pay you for your gut. That's exactly what they pay you for.
They take all the experience you have, all the things you've done, all the things you've seen, all the mistakes you made, like they pay you for that, because that accelerates decision making. That shortcuts like meeting 90% of the data to make a decision. You only make 60% go. And I think in this industry, I don't have the luxury of having all the information I had at my fingertips when I worked at Procter Gamble/Clorox. So I should not wait on data and information to make every choice but lean in, based on my experience. And so that's a great question. And something that I wrestle with all the time.
And now that my team's probably hearing this information, they can kick me and make sure that they got to play this back for me for sure.
RS: Well, three cheers for humility. I mean, I love to hear a real answer. So I appreciate that. I'll let you go. I'm curious what you are. We've been talking about how flower's a bit down and pre-rolls are up and beverages are a bit up? How are you thinking about product, the categories and the form factors? And are you excited about something and something we're not thinking about maybe?
TD: Well, I think, you know, flower is always going to be critically important to me, the quality of your flower then gives you permission to do other things. And so chasing that excellence, when it comes to flower is something that is intriguing to us as an organization. So getting that part of it, right? Flower first, and then it gives you the permission to be good at other things. And so I'm excited about the fact that we are really clear on the importance of good quality, fresh flower and what that means as people come into our ecosystem. And then we want to make sure we're paying attention to trends and making sure that, especially when it comes to convenience, that we're meeting the consumer where they are.
And so I'm excited about things that can or we may not even imagine today. And so while I think there's so much work to be done on, getting great quality flour, that's a great indicator of your ability to produce a really fantastic product, that delivers against expectations, and it kind of sets your brand promise up. I'm excited about the things that I don't know about today. I mentioned I've been in consumer products for 30 years, and there are categories we created that I didn't know about, like I wish I had 30 years ago, I wish I knew what a Clorox wipe was going to be to the world, right?
So like it was just paper towels and spray bottles for decades and decades, right? So sometimes you can't even imagine what's going to be the thing that is -- that really pushes the industry forward. You just got to keep working at, listen to consumer, they're going to tell you, hey, this is a hassle. That's not working for me. I need something more for me, something that works for me and we keep listening. The answer is going to be there. It'll be right in front of us.
RS: Troy I think I'm going to leave it there. I so appreciate you taking the time and having a great conversation. I really, really appreciate it. So I hope this is the first conversation we have. But I really enjoyed it. Thank you.
TD: I've thoroughly enjoyed it as well. Call me anytime. I love to connect. And let's keep the conversation going. And play this interview in the next five years and we'll see how much of it was right.
RS: Yeah, yeah, yeah, I do that. I really listen to them, I'm like, got that right, got that wrong. Got that right. Yeah, they're very helpful.
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