We sat down with Avis to discuss cannabis from a business perspective
Building on over a decade of hands-on experience in multiple segments of the cannabis industry, Avis Bulbulyan founded SIVA Enterprises, and serves as its Chief Executive Officer. As CEO, Avis oversees the development, operation, and interaction of SIVA Consulting, Management, Ventures, and Brands in serving its diverse national clientele. Avis was one of the early entrants into this newly legalized industry, having started from a garage grow to founding one of the most diverse cannabis business development firms on the planet. We recently sat down with Avis to discuss the ins and outs of cannabis from a business perspective.
Marijuana Retail Report: Can you tell our readers a little bit about how you started SIVA Enterprises?
Avis Bulbulyan: Oh, it was a combination of a couple things. One, I had an opportunity to do a compliance run through for a client of mine. While we’re hanging out, one of the guys came by, and he had bought some cannabis from a store, and I didn’t think you could buy cannabis at a store that wasn’t illegal. Then a week later, another friend, the same situation happened. Right around that time, I had another friend, a third friend, who asked me to do a compliance walkthrough of a business that he had just opened up. And when I did it, it happened to be a cannabis dispensary. So that’s when I started really getting intrigued by it, started looking into it, realized the opportunity that was gonna create in the future. Coincidentally, around that time I also had a medical condition where I was prescribed a synthetic version of THC, MARINOL. So it was just all these different things all happening at the same time, and I just started doing my homework on it. The next thing I know, I was growing in the garage. So I started growing in the garage, and then that’s how I got into it. One thing led to another, didn’t really plan to start a company or anything like that, it was really just more; get into it, start learning about it, learning how it grows, learning what it does, how it benefits people medicinally. Then as the industry started maturing, as the industry started moving forward, I recognized a lot of the opportunities. One thing led to another and after a couple of evolutions, here we are.
Marijuana Retail Report: What was the thought process behind deciding to expand the company?
Avis Bulbulyan: So deciding to expand wasn’t really any one thing, it was a combination of more a sense as I started growing in the garage to learn how to grow, learn what makes cannabis, cannabis. So as I started doing that, I got involved in the retail side of it, with all the relationships that I started creating by being a cultivator. So I started off consulting a lot of other people in the industry that didn’t know that needed consulting. They didn’t know how to grow, didn’t know how to go to market the stuff. And as I did that in 2012, Massachusetts passed their bill for a state-wide program. Through a combination of being at the right place at the right time and having made all the right moves, what ended up happening was I ended up picking up a group, which ended up turning into a partnership with them. Then when the process was done, we ended up with the high score in the state, and we were the only group that had the maximum 3 out of 3 licenses. So what started off as cultivation ended up branching off into retail operations, ended up branching off into manufacturing operations, turned into consulting, then turned into state licensing in Massachusetts. So then when Massachusetts began to roll out their program, I came back from Massachusetts, and Nevada was going through their program. So I formally incorporated the company as Bulbulyan Consulting Group, and started focusing on state licensing, and did Nevada and received 4 out of 5 applications approved there. Did Illinois, and then we did New York. Then right around that time, I recognized the industry is kind of evolving again. So to get ahead of it, I rebranded the company to SIVA Enterprises with the vision in consulting and management and started doing that. As the industry matured, as the company matured, I recognized that the industry is moving more towards the mainstream, traditional business, more branding. There was an opportunity for acquisition, so that was another evolution of the company. More recently we added an insurance division to give us insurance services. So yet again, that was another layer that was added on top of it. Then with the California regulations, and because I started on the manufacturing side, I took my national experience and went out to California, both on the third-party client services side, with application support. And because of our experience, that created an opportunity for us to consult a lot as a municipality in California. So now we started getting involved in the world of doing work with municipalities, with the government, ext. So then with licensing right around the corner, and now there was an opportunity to plant the operational flag in LA. So that created another opportunity, another pivot. And because of the relationships, we had all the investors, all the clients over the past couple years, we decided to now finally do our first raise for operations, and that’s how we got to where we are. So it wasn’t really finding any one thing, it was really about recognizing the trend of where the industry’s going, how it’s evolving, and being I guess smart enough, quick enough, to adapt and evolve.
Marijuana Retail Report: What in your opinion were the easiest markets to license in, and what were the absolute hardest?
Avis Bulbulyan: As far as easy or hard, that’s a difficult question to answer because every state is different. And it’s not necessarily the application. See where a lot of people make a mistake with their applications and just licensing, in general, is they think it comes down to the SOPs and the operations manual. For instance, in cultivation, there are 100 ways to grow cannabis, and there is no right or wrong way to grow cannabis, it’s recognizing what the group strengths are, and what the weaknesses are, and being able to highlight the strengths while plugging up the holes. For instance, some groups are very heavy on the medical side, so that group has more of a medical story to tell in their application. Some groups are heavier on the compliance side, on the business side, on the financial side. So that’s one aspect of it, the story that you tell in your application. The other side of it is understanding how that group and their vision applies to that given market. For instance, Massachusetts issued one license. That license was a fully vertical license, and it was a non-profit structure. So you were expected to grow, process, and dispense your product. Nevada broke it up into four categories: cultivation, manufacturing, dispensing, and laboratory tests. Then you look at New York, New York was a heavily pharmaceutical, medical-oriented program where there was no flower sales, no edible sales, it’s all concentrates. So it’s a very different system, and not all business models would function and work in a state like New York. So it’s really identifying the strengths and weaknesses of the group, identifying the opportunities under the state program, and being able to model the application and tell that story. So I think that’s what really lends to our success and the experience that we have. For instance, in California, the average person that wants to put together a group in California, provide application and licensing services in California, doesn’t have a lot of experience outside of California to be able to bring that experience and apply it to any group, any client. And I think that’s what really differentiates us, we’re more of an accumulation of knowledge over the years going from one state, then another state, then another state. Whereas if you were to start fresh and want to understand it all, it’s just incredibly difficult. And because you’re involved in every state as the frontline at the state level, at the local level, at the application level, you have a front row seat to how the ordinances get deployed and how the industry adapts and evolves and is created in all these markets, and now when you take that experience and you apply it to a market like California, where it’s fairly flexible in what you are able to do, that’s what really separates us from a lot of other groups and a lot of other companies. And it’s just out of first frontline, firsthand experience.
Marijuana Retail Report: What are some compliance issues that most cannapreneurs overlook when first starting their business?
Avis Bulbulyan: Oh, it’s a lot of different things. So the best way to look at it is, you have to look at a license as a privileged license, that’s how the state looks at it, what qualifies one group to get it, not the other and vice-versa. So compliance is very heavy. Most of the time, compliance and security makes up anywhere from 25% to 35% of your overall application score. So compliance, you want to understand what your financial lit is, you want to understand what your tax liabilities are. You wanna understand the regulatory compliance issues, the banking compliance issues, the cash handling compliance issues, the compliance issues that come with staff, the compliance issues in just traditional business that … a big part of it is understanding the implications, and being able to highlight that and develop your financial projections, and you’ll perform it based on that. But a lot of it has to do … Look, you look at it as any other traditional business. Retail, you’re dealing with a schedule I drug and a lot of cash. If you can learn to manage both of them, you’re not different than any other traditional cooperation. So it’s recognizing what traditional businesses have to go through, and understanding what limitations are as a cannabis business, and being able to merge them both together, and again, run it as a traditional business with some additional regulatory requirements.
Marijuana Retail Report: If you could give our readers one tip for their cannabis businesses, what would it be?
Avis Bulbulyan: Really understand what you’re getting into. A couple years ago, if you were looking to get into the cannabis industry, you were looking to get into primarily either the dispensary side or the cultivation side. Then, later on, manufacturing was added to it, and laboratory testing was added to it. Today, you’ve got six general categories, and those categories are cultivation, manufacturing, dispensing, laboratory testing, distribution, and delivery. So it’s really about creating a model that’s not necessarily any one of those strictly. For instance, you don’t need a license to have a brand, you don’t need to have a brand to have a license. So a lot of people that want to get into the manufacturing space, you don’t necessarily need to have your own license, because having your own license comes with compliance issues but liability stops with the license holder. So it is an opportunity for you to possibly partner with a license holder who has the license, he’s got the infrastructure, you’ve got a really great idea for a brand. So where you can focus on being the executive and CEO of your brand and scaling your brand, the person with the license can focus on efficiencies of scale and be providing you that opportunity and that platform for you to be able to scale that brand. So it doesn’t always mean, “I’m in the business of manufacturing, I must have a license.” It’s being creative with it. You can think of, for instance, a fulfillment model. California, for instance, is a prepackaged model next year where when you sell a product to a dispensary, you have to sell to them prepackaged. So now you’re gonna start seeing a lot of branding concepts. Most of the growers, most of the manufacturers don’t have a lot of branding experience, don’t have a lot of traditional experience when it comes to stuff like that. Where the manufacturer, the grower doesn’t want to invest money into packaging equipment, you can be a fulfillment center. So let the grower grow their product, let the manufacturer manufacture their product. They bring it to you, and you as a fulfillment center will focus on their packaging and the branding and the labeling and all that, and help them go to market like that. So don’t limit yourself to strictly cultivation, strictly manufacturing, strictly dispensing. Use your imagination and get creative with it.
Marijuana Retail Report: What’s next for you and SIVA Enterprises?
Avis Bulbulyan: For us as a company, it’s always about being the trendsetter. You’re gonna see a lot of evolution in the industry, and it’s about being flexible enough and having the foresight to be able to adapt to it. So right now, the next plan is to launch the operational headquarters in LA. What we have planned over the next 18 months to 24 months as a company, as a platform, is to be able to provide scale to existing companies and provide opportunities to get into the market for new companies starting up that don’t have an opportunity. But, we’re gonna be doing it on a national scale. Where if you’re to launch a brand, you focus on any jurisdiction, let’s say LA. From LA, expand into Orange County, expand state-wide, then expand into another state. Then in 18 to 24 months, we’re gonna be in a position to be able to provide national shelf rate to any company right out the gate