Tim Cullen has always been on the leading edge of Colorado's cannabis sector. After opening a medical cannabis dispensary on Denver's fabled Green Mile in 2009, the former high school biology teacher and current CEO of Colorado Harvest Company in Denver introduced one of the first vape brands to the market, O.penVAPE (since sold to SLANG Worldwide); launched the state's first cannabis delivery operation in Aurora in early 2021; and looks to repeat that second feat in Denver by the end of the year.
There are currently three Colorado Harvest Company locations in Denver and Aurora, with about 50 employees across the entire enterprise. As the company has grown and evolved, Cullen has had a front-row seat to the ever-changing cannabis business in Colorado.
CompanyWeek: How did COVID-19 impact operations for Colorado Harvest Company?
Tim Cullen: We never missed a beat. First, they allowed curbside delivery. That was a total shitshow -- like telling King Soopers to have a farmers market in their parking lot. We have this retail store here with all these video cameras, cash registers, and a guard, and they said, "No, you have to do it one the sidewalk."
So we did that for a little bit, then we modified our buildings to put in carry-out windows, so people could put in online orders and pick up products without really having to come in through the front door. That became 50 percent of our business through these carry-out windows, which is phenomenal, and that's sort of stuck around. People actually enjoy shopping like that. So we didn't miss a beat through COVID.
CW: You have been leading the way with cannabis delivery. How is that going?
TC: We were able to get literally the first recreational delivery license in the state of Colorado. Jared Polis gave it to me, which is pretty incredible, too. We launched delivery in Aurora. It's been pretty exciting and I've learned a lot about that. Denver is moving along the same path on the social equity side of things. We formed a new company [Go Harvest] with a fantastic social equity partners. We should receive our license sometime in early August from the state to do delivery in the City and County of Denver. I would imagine by the end of August we'll have a fleet of cars like we do in Aurora. We have four cars out there doing deliveries all day long every day, and I anticipate Denver will be three or four times as busy.
CW: What were the biggest surprises looking back at your dozen years in Colorado's cannabis industry?
TC: I do personally reflect on that a lot, because there were definitely times in 2009 that I thought I made a huge mistake -- that I had invested all of my money into something I couldn't see through, that the laws were not going to be where I needed them to be and I had no control over that. I had gone from a position of not very much risk and a lot of comfort in terms of my work gig -- I was a teacher, so I didn't worry about my paycheck; it wasn't big, but I knew it was always there -- to spending all of my savings on opening this company, and all of a sudden, I had no control over what the next rules would be, or how the Marijuana Enforcement Division was going to look at us, or any of those things. There was a point of time when I was really concerned. Had someone been able to tell me this was all going to work out okay for you, it would have been easier to persevere through some of those dark early days.
I've always believed cannabis was going to move forward into a socially acceptable space and continue to gain popularity across the country -- I didn't think Colorado was where it stopped -- but I had no idea recreational cannabis coming about just a couple years after we started. I didn't see myself in the role I've taken in this company. I saw myself as someone who worked in the warehouse and was really good with the plants. Now, I haven't gotten dirt under my fingernails for years. I walk through the grows all the time, but it's just not my job to mess with the plants any longer. My job is now about the expansion of the company and making sure we're making good decisions along the way, like moving into the delivery market or opening the pickup windows or how we handle cash.
I also didn't see how much personal growth there would be in business ownership. There is a lot of space to be able to reflect and grow within the bubble of your own organization, and that's something that's really special about being an entrepreneur. I didn't realize I was heading on that journey when I started it, but now that it's been 12 years, that's enough time to look back and go, "Oh my god! This has been a really rewarding experience as a person on the planet."
CW: How do you gauge the success of Colorado Harvest Company?
TC: Where we are now, it needs to be measured in our year-over-year growth. I think we reached this point five or six years ago where we had our processes in place, we knew who our vendors were, we knew what our monthly costs were, and we could really focus on the margins and the ability of the company to be profitable.
These companies are also very different than running anything else, and I don't have experience running anything else -- this is my first entrepreneurial experience running Colorado Harvest Company -- but I am aware other companies use the banking system to take loans. No one walks into a situation where they want to open a new store and says, "We brought a duffel bag of cash because we're buying that." Everyone else gets a loans from a bank and they finance that -- and they depreciate it. It's hard to measure growth on the number of stores you can open when opening a store is dependent on having cash to buy the store.
One thing we started that I think is a neat way to measure our growth: Last year, we started a 401(k) for the staff. Watching the 401(k) grow is a cool way to measure the success of the company, because those people contributing into the 401(k) are people who really believe in the company and are looking at the company as a long-term investment. Watching people sink their money into a savings account that we're matching the money into, it's so cool. It keeps growing every single month.
CW: How has the broader cannabis industry changed? What are the big catalysts?
TC: I really think the competition has gotten better over the last five years in particular. It couldn't be further from the 2009 days of writing a strain name on a baggie versus the packaging we use today, the complexity of the marketing systems that we use, all these different ways.
The big catalysts are decisions made by the State of Colorado and municipal decisions made about packaging, about consumer safety, about the testing. At the time, it seemed like a road bump for a small business that sees a new rule as a large capital investment with no financing -- like child-resistant packaging. At the same time, when you consider child-resistant packaging and what that's done to the acceptance of cannabis in the culture as it's teed it up to be a national product, it is absolutely the right decision.
Every aspect of the business has professionalized, from the marketing to the packaging to the overall consumer experience inside the store. I think the product has gotten quite a bit better.In 2009, I saw a lot of people complaining about this mass-produced warehouse product. I don't hear anyone talking about it anymore, because the cannabis being grown is absolutely the best cannabis being grown in the world. It doesn't matter if it's being grown in a warehouse or not, there is some outstanding product on the shelves in lots of dispensaries.
At the end of the day, it's the consumers who have really been the winners of a lot of these changes in the market. They're the ones who get these great experiences in the store that have the best products to buy and walk out the door with packaging that looks like it could be on any pharmacy shelf in any major pharmacy chain in the country. You're starting to see the same things with hemp products as well that are being carried in some mainstream stores.
It's really grown up in a short period of time. You really have watched it go from a tiny infant that needed a lot of care to a mature market where it really creates its own weather at times. It's a driving force in this economy.
CW: What are some of the big trends in the cannabis industry as of 2021? What's the next big thing?
TC: One thing I did not see coming that has been evolving since 2014 was the idea vertical integration would go away. Medical marijuana in House Bill 1284 mandated that if you wanted to grow, you had to own a store. When recreational became the law with Amendment 64, they said that's not the case anymore, but everyone was vertically integrated, so people stayed vertically integrated. So you saw some of these other brands start to emerge. Now there are a large number of independent brands that don't own a store and only operate on the wholesale market that are just absolutely crushing it. It's been really cool to see brands come out that create their own space in the marketplace. Snaxland is one that comes to mind. That just wasn't around pre-2014. We now market these little brands inside of the store, rather than the dispensary being the brand.
I think concentrates are still coming up in the market. They're the equivalent of hard liquor in the alcohol world. People called them hash for a long time, but they've evolved into their own organisms now. There are a lot of manufacturers making a lot of different products that fall under that category of concentrates. There's a lot to choose from them, and consumers see the value in a little bit of something that's really good rather than having to ingest more of something to get the same end result.
All of that's going to be overshadowed by delivery. Marijuana is the only consumer product that can't be delivered to your house, and that's about to change, and that's going to change the market forever in a very positive way that's going to put it in line with every consumer product -- period. You can get everything delivered to your house.
CW: You opened one of the first dispensaries on the stretch now nicknamed the Green Mile on South Broadway. How has it changed since 2009?
TC: I'm so proud of all of these entrepreneurs who are still sitting here. It's a lot of the same people -- a lot of the same stores are still here. A handful of them have changed owners, and some stiffer competition has moved in. Now there are some MSOs -- multi-state operators -- on the stretch as well, but I have always taken the approach that South Broadway is like the food court: You can either be mad about all the competition here or you can be excited because this is where people are coming to shop for cannabis. If you're looking for cannabis in Colorado and you're not coming to the Green Mile, you're missing the highest concentration of dispensaries anywhere in the world: There are still 17 stores on this little stretch right here, and they've only gotten better and better. Just like the high tide raises all the boats, everybody's had to up their game as the competition has gotten better.
CW: What's in your crystal ball for the industry?
TC: I don't think it could be in a better spot than it is right now. We're on the precipice of federal legalization, Denver is about to launch delivery as well as hospitality consumption as it's being called, the idea that social equity is involved in the cannabis industry right now is something people should be proud of. It just continues to impress me year after year where this is moving -- and how much bigger it could be.
At one time, I thought cannabis companies could be absorbed by alcohol, tobacco, or pharmaceutical companies, and now I think cannabis companies are just going to pull up a chair right at the table. No one is taking over the cannabis industry -- the cannabis industry is an industry of itself.
CW: Any other comments, Tim?
TC: This is the most farm-to-table, locally operated business in the state -- period. Everything is manufactured here, everything is sold here, everything is consumed here. The money can't cross state lines, and neither can the product. This is the epitome of craft.
I also think consumers don't understand the level of care that goes into their products. It's more organic than the organic foods you buy at Whole Foods. We're not allowed to use any of the pesticides that are watered or sprayed onto organic food. When we talk pesticides in cannabis, we're talking about concentrated cayenne pepper and mint and thyme, and some essential plant oils, things that in Iowa a corn farmer would laugh at you about.
This is the most organic product in the most farm-to-table state that cannabis could be produced in. People love that. That's why microbreweries are so popular here. People love that whole idea, and that's what cannabis has done as well through the rule-making. I'm not sure that exactly was the goal, but that has been the end result.
Eric Peterson is editor of CompanyWeek and its Cannabis Manufacturing Report. Reach him at epeterson@companyweek.com.
