Neil Demers (pictured left), CEO of Diego Pellicer in Colorado, sat down with MRR
Neil Demers, a former client services executive and serial entrepreneur in the cannabis industry, now proudly displays the title of CEO for Diego Pellicer in Colorado. His vision? To try to merge the high-end retail experience with the cannabis industry at the consumer level. Neil sat down with MRR to talk about what it was like being on the forefront of the emerging cannabis industry during the wild west days, throwing events to help not only curate your branding but help your community, as well as how best to shape your dispensary for future success.
Marijuana Retail Report: Tell us a little bit about your background and how you became the CEO of Diego Pellicer in Colorado.
Neil Demers: In 2010 I graduated from The University of Denver with a Masters in Finance, and I wanted to go the entrepreneur route and start a small business. I decided to start a consulting company at the time and cannabis was just taking off in 2010 so that’s where I decided to focus on. I ended up buying a dispensary down in Colorado Springs, but it was kind of the wild west back then. Colorado was still developing the rules and regulations and the federal government hadn’t even really defined the position that they were going to take. Vertical integration was just being put down on us and it kind of forced us to do these shotgun marriages with grows that we didn’t know who the partners were, plus I had no background at the time when it came to cultivation. I thought it was going to be a lot more risk for me, especially financially. Then even the political risk of the federal government and the state still working on their positions and the regulations. I ended up selling my interest to a business partner and then I decided to focus on ancillary services, which included consulting. I also started a staffing company. It was called Canna-Staff and it was the first of its kind ever. It actually focused on the whole value chain, but back then it was tough to find talent. Everyone thought they just needed to smoke weed to get a job. That they actually didn’t have to show up and perform. I even had a training program, but it’s tough to train the higher positions like a salesperson or a manager. We were able to train budtenders and trimmers, but it wasn’t taking off as fast as I wanted it to and consulting had started to take. So I ended up getting picked up full-time by a client for consulting. I was running two other stores as well as two other grows at a place called Universal Herbs, I was with them for about a year and a half. I also had a chance to run an edible company called Beyond Mars. I was successful in that position as well and was even able to get them to be a top 10 medical company at the time. During my time there I decided I wanted to put together my own performers and my own business plan and try to start putting together a portfolio where I could bring on investors. In April of 2017, I was able to secure financing with Diego Connoisseur Worldwide. It took me two years to get through the state and the city to get everything structured right and get all the approvals we needed, but we finally got all the approvals and I ended up bringing on new investors. That’s kind of where I’m at today, man. We opened the Diego Pellicer Colorado flagship store on Valentine’s Day of this year. We’ve been open for about nine months almost and things have been going really well. Diego Pellicer is a brand I’ve been helping build since 2012. I got brought on by the CEO of the public company, his name is Ron Throgmartin and he actually was one of the original people who hired me as a consultant at Universal Herbs because he was consulting them as well and we built a strong relationship and he asked if I could help him build up this brand called Diego Pellicer. I told him, yes, and so it took us several years to get the brand and the concept built. Then we started going after all the licenses and assets and that’s kind of where we’re at today.
Marijuana Retail Report: What process went into the designing, aesthetics and the patient flow for Diego Pellicer in Colorado?
Neil Demers: It started off by talking to our customers and just general consumers in and around the industry. You know that term “listening to the voice of the consumer, voice of the customer”? That’s exactly what we did. We surveyed, we listened and we kind of developed a plan from there. One of the big themes that we really picked up from listening to the customers, especially from women, was that they often said that they did not like to shop at most of the dispensaries. What it came down to is that women really wanted not only a comfortable experience, but they wanted a familiar experience when it came to their shopping. That was really the basis of what we used to build Diego store and that we wanted to get away from that clinical feel so it no longer feels like a doctor’s office and we wanted to get away from that headshot feel and that we wanted to basically establish something that was a little bit more high end, but was going to be comfortable and familiar for people when it comes to retail. Not only that, we took an approach where we really took a look at the consumer journey and every single touchpoint along that journey, whether it was them looking at the building to checking in with our receptionist to shopping with the budtenders or checking out or using a product at home, we really wanted to take a look at all those touchpoints and really maximize the customer experience. From there we were able to develop a merchandising strategy and then we’re like okay, now it’s time to bring on the team. We were able to bring in some really strong interior designers to help us develop the interior and the brand. That’s kind of how we got the design that we have today.
Marijuana Retail Report: You hosted a glass and art show a couple months back with live glass blowing, music, craft vendors and a whole bunch more. Can you tell us a little bit about how much work goes into putting on an event like that?
Neil Demers: Sure, absolutely. So the arts and the art community has been something that I have always been passionate about and not only myself, but several members of the team. So we spoke with our, I guess you’d call it sister store out there in Seattle, and we all decided we wanted to kind of come up with something consistent that both stores would do that would allow us to kind of engage with the art community. What we settled on was that we wanted to hire muralists to put murals on our building. So out here in Denver I got connected to Forrest J Morrison. He’s the gentleman I was telling you about who is the actually the Vice President of the Board for the Art District. He actually is a very talented artist, especially when it comes to murals. I ended up commissioning him to design a mural for the east side of our building and that’s kind of where this whole process started. As we were kind of sitting down saying that we thought it would be fun to do a mural unveiling party, he kind of gave us a heads up that oftentimes a mural unveiling party is not exciting enough by itself to really generate a lot of word of mouth or create a lot of traction. He proposed that we kind of come up with another idea that would compliment the mural unveiling. So after kind of racking our brains and brainstorming for a while we came up with the idea of tying it into a glass show and working with local glass artists, excuse me, working with local glass artists to throw an art and glass event. The event kind of evolved from there. You asked me how much work did it take to do this event and it was a lot more than we anticipated. So I started to reach out through the network and I was able to get connected to a gentleman’s name is Chris and he’s in the art, the glass artist network and community, and so I started there. He got me connected to several artists which kind of started to grow as the event developed. In the end we ended up bringing in about five or six different glass artists, all very strong. Some of the stronger ones is going to be Ben Bertoni, who is Bertoni Glass. We have another artists who goes by Soul Fire Glass. Then another gentleman whose name is Nick Rousseau. Those three will probably be the strongest ones. Then we had some other smaller glass artists that were up and coming. Mark’s Box Glass Mechanic is one and he’s actually the one who kind of stepped up and helped me manage the glass artists to make sure I had all the equipment to go with what they needed to do a live glass blowing and that he helped me kind of just kind of manage all the different artists and also make sure we were getting a lot of their art on display in the store so that way we could help sell and promote their products. Then we had even Hand to Man and Jacks, so basically we had a great lineup, some of the best talent we can get in Colorado that were involved in the event. Then we had the mural unveiling with Forrest and actually Forrest has just recently launched a business called Satellite, let me think, Satellite Exhibition Services so we were able to get engaged with him on an art rotation. We brought in about four different artists to put on, these are painting artists, to put on the walls in the store. They look amazing. Then one of the things we had is one of the board members involved with the public company who owns the brand Diego Pellicer, he had just recently moved and he had some Chihuly pieces that were in stores that we were looking to bring out here. It actually turned out to be cheaper for us to just buy a Chihuly piece and ship it out here. That’s one of the things we wanted to do, especially being an art and glass show is bringing Dale Chihuly. We ended up buying a piece called The … Oh, I can’t remember off the top of my head. Anyway, we brought in that Chihuly piece and that was just kind of the cherry on top. Then we partnered with the Dairy Queen next to us. We wanted to offer free ice cream to any of the attendees. We even had a smoking bus and we brought in and worked with, there’s a Denver organization called Handcrafted Homemade, or HAHO, and we even worked with them to bring in a lot of craft vendors for the event.
Marijuana Retail Report: Was it part of your overall marketing strategy for the shops branding?
Neil Demers: Oh, absolutely. So first off, this is an event that we’re actually looking to maybe possibly turn into an annual event. Basically, a Diego Pellicer Art and Glass Show that we can do every year. We incorporated the brand into the mural design and there are some subtleties such as the glass on the window, there’s a stain glass window as part of the mural that was a similar design to some of the tiles that we use in our store. We have a subtle logo, a smaller version of our logo in some of the stonework of the girl that’s sitting on the stone holding the sword. Then from there, we wanted to give the artist some creative flexibility in that we wanted to make something that was going to be an experience, and from there we allowed him to kind of come up with different renditions of the mural. What we have today is what we settled on, but we find that a lot of people have stopped because the mural is right there on the east side of the building where traffic off Alameda is heading west and so we get so many people who actually pull in to take a look at the mural. A lot of the local community has come up to us and thanked us. Thanks for one, investing and building us such a nice extension of the community because we’re kind of located in a middle to low-income neighborhood. Then we’ve also had a lot of people approach us with just thanking us for doing the mural and bringing something beautiful like that to the community as well. Even our registered neighborhood organization has been promoting us, so it was really important. This wasn’t 100% about Diego Pellicer. Really what we wanted to do was to create a partnership opportunity with the community and not only our local community surrounding the store but also the art community and to tie everything together to make a fun event for everyone.
Marijuana Retail Report: How do you determine which new products and accessories to stock at Diego Pellicer? What goes into that thought process?
Neil Demers: Yeah, you know having a diverse product mix is very important for us. We’re finding that it’s important for our customers as well. So in the beginning, I’ve actually been asked this question, how did you guys put together the product mix that you have today? What I usually say is that we’re consumers ourselves. Everyone on our staff and the leadership are consumers and we also want to have the best. Then a lot of that has just come with our experience. Most of us have been in this industry since 2010 running retail stores and knowing the market and knowing the vendors as well as the product choices out there, and so we reached out and went after the best products in the market with the best brands that actually work and that customers will get a good value on. That’s how we put together our initial product mix. Then from there we actively seek out up and coming edible and concentrate companies to try to continue to find the best products out there and put them on our shelf. When it comes to the flower supply, we actually have our own cultivation facilities and so we grow our own product in-house. Now we don’t have an ego here. We also go out and find other strong growers.
Marijuana Retail Report: Considering that emerging markets are starting to get into vertical integration, what are the benefits that you’ve seen?
Neil Demers: With vertical integration and seed to sale tracking, first off, controlling your supply chain is so important to the success of an operation. The grow is the cornerstone of any cannabis operation in that as much as you can grow will translate into as successful as you can become. So with that mentality, we wanted to really try to put in the best technology, use the best nutrient regiments, hunt down the best genetics, have strong soil regiments and environmental controls. We really wanted to make the strongest facilities that we can. What that has shown us is that we get strong weights, over two pounds per light and one of our grows is almost a three pounds per light. The quality is really good and so with having the vertical integration we can control our supply chain. That way we can offer our customers the best quality possible and we can maintain a consistent supply for the shelves. Seed to sale tracking is so important with the states that it’s just become a natural operational item that we focus on in that everything has RFID tag from the moment that plant gets big enough to hold an RFID tag all the way through harvest. Then you actually have to package that into a package. Then tag it and send it to the store. That tag will stay with the product the whole time. It does help reduce theft. It also helps make sure that this industry is competing compliantly and that there are no products going to the black market and that it allows, it’s another way for the state to get benefit in that as long as the product’s staying within the legal market they can benefit from the tax revenues. So vertical integration has a lot of benefits for the state and the local municipalities, but it also has huge benefits from the operator standpoint because you can have a lower cost of production in what you can buy at the wholesale market, but you can also control the quality.
Marijuana Retail Report: What qualifications do you look for in your own staff when hiring? Also, what are some red flags that people should be aware of?
Neil Demers: So the first thing is there’s that saying that you try to hire for attitude, not necessarily aptitude. So if there are candidates that have a strong work ethic and they’re driven and they want to learn and they’re going to take the extra steps on their own time to learn and study, that goes a long ways to show the potential of what that candidate can possess. From there, then we look at the aptitude side and what skillsets that they have. Do they have a background in this industry? Have they worked in cultivation? Have they worked at other stores and have they worked even on metric? If not, that’s okay because there are still positions that create opportunity, whether they have an accounting background, for example, they can help out with the record keeping and the bookkeeping. That’s probably the number one important thing when it comes to state compliance is your record keeping and bookkeeping to stay in operation. So then we go from attitude to aptitude. Then we really start to dial in synergy in that it’s so important to find a candidate that is going to mesh well with the culture of the company and that is going to mesh well with their supervisors and leaders. So giving them a chance to get to know the supervisors and leaders is important. Then we start making our hiring decisions from there.
Marijuana Retail Report: If you could leave our readers with a tip, what would it be?
Neil Demers: I would say to any entrepreneur, where entrepreneurs succeed or fail is in the execution. There are always people who have ideas. There are always people who like the idea of becoming an entrepreneur and working on building a business that they can own themselves, but really it comes down to the execution and actually performing and launching your business. If people aren’t willing to execute, then they’re not going to have a successful business.