January 25, 2019
Recently I had the honor of interviewing Josh D., of the righteously world-famous Josh D. Farms for Forbes Vices. I didn't realize at the time that Calyx Peak was the parent company of Josh D. Farms, but that's already confusing me, so I'll try to keep this deep-dive as crisp as possible!
It takes real money to bring a fine flower brand in the vast cannabis space, and then to market. It's not like the bad-old-days where you could set up an illicit grow in a garage, way off the beaten path. Regulations and new forms of legalization have all but put a cap on the fine art of backyard cannabis propagation, and probably for good reason! It's not legal! But the point of the conversation is not what makes the core product legal, it's the path to legality and that path helping to remove the deeply ingrained stigma using of cannabis at all in the first place.
To enter into a conversation with an investment banker, you have to be a grown-up person, with grown up education and understanding of complex financial systems. The idea of taking a back-yard grow, to a multi-million dollar corporation is only as far as your venture capital believes in your metric. And those plants better be the very best. (Which Josh D. Farms has accomplished.) To eMeet and get to know Ed Schmults is one of those honors in life that I take very seriously. It wasn't so long ago that I was working as an executive assistant in private banking, so I understand the rigors of the American Business Model. You are forced to have a passion, you'd better have a passion otherwise cannabis is not going to be a good fit for you. There is that counter-culture thing. And that deeply set stigma, yes. It's not the thing that everyone will understand. In the end it cost me deeply on a very personal level, so I understand this difficulty of working in cannabis when everyone else seems to be in more traditional careers. One must be able to stand the risk of being in cannabis. It's not easy out to be a success, but Ed is certainly making waves in the continuum of life.
Forbes: Tell Forbes where you’re from? Did you go to business school? Why did you decide to work in the cannabis industry, having come from more traditional business environments previously?
ES: I was born in New York City and raised outside New York and around Washington, DC. My family moved back and forth between the two cities as I was growing up. You could say my background before cannabis was traditional in nature - after college, I got a job on Wall Street with Goldman Sachs in New York and London, followed by business school at Harvard, and eventually landing executive posts as COO at Patagonia and CEO at FAO Schwarz. I never would’ve imagined that a role in cannabis would be in my future, but I couldn’t deny that I was drawn to the passion and innovation of this industry. Ultimately, I decided to make the jump into the cannabis business for the following reasons:
Legalization at the state level was accelerating due to broad social acceptance
Belief in the benefits of cannabis for medicinal and wellness purposes. I was stunned to find out how many people I knew were already using it.
Social justice – there’s an opportunity for the industry to help those with a criminal record for possession of cannabis.
Opportunity to help build a great brand in a new $50 billion industry and move customers from an unregulated black market to a market that is tested and taxed at a local level.
This is an incredibly exciting time for the legal cannabis industry, and we’re lucky to have the support of forward-thinking investors that share our beliefs and values.
My experience with national companies like Patagonia and FAO Schwarz taught me that smart storytelling is crucial to building a brand and gaining consumer trust – and that’s what I’m striving to bring to the cannabis industry as we work towards full federal legalization.
Forbes: Tell Forbes about Calyx Peak Companies. Where do you see the company in 6 months? One year?
ES: Calyx Peak Companies is a multi-state operator with over 280,000 square feet of cultivation, extraction and distribution facilities across multiple states. We launched with a small investment in Nevada last year and have quickly expanded to seven permits in four states, with one pending. Our passion lies in bolstering entrepreneurs and businesses leading the legal cannabis revolution, like our house brand, Josh D Farms, a highly respected grower that offers consumers a direct and specialized link to one of the most popular cannabis varietals ever (OG Kush).
Currently, we’re expanding our presence across multiple states, build out our brands, and grow our business in California. We have been successful in growing our business through new license acquisition – both in states where we already operate and in new states. Our executives are part of a team that was recently awarded a provisional license to operate a dispensary in Santa Monica. Through AT-CPC, our Level 1 cultivation facility in Ohio, we have also obtained a processing license to go with our Tier 1 cultivation license, and will be conducting Akron’s first medical marijuana harvest next week. We’re currently applying for licenses in other states as well.
Beyond license acquisitions, we’re focused on building out our brands, operational capabilities and our team. It is vital that we get nimble people who can not only excel at the work, but also are fully aligned with our brand and values.
In six months, we should see the opening of our first retail store; in 12 months, we may have up to 5 retail locations across multiple states. In addition, our brands will be selling in at least four states with a plan for national distribution in place.
Forbes: How do you feel about medical cannabis vs. recreational? How do you view stigmas to legalization?
ES: I believe medical cannabis has the potential to have a profound impact on health and wellness in the U.S. – we’ve already seen it as an effective treatment for more common maladies like anxiety, inflammation and challenges with sleep, to more serious issues like chronic pain, PTSD, seizures and alleviating cancer treatment symptoms. It’s integral that research surrounding the medical benefits of cannabis be allowed to move forward unimpeded by government restrictions.
Recreational use is already a huge market, but it holds significant risks from use of contaminated, unregulated product. Social stigma is real for both uses, but I think this will fade over time as effective medicinal use and responsible social use become more prevalent. Cannabis, like alcohol, will not be for everyone.
Forbes: If you could be anywhere in the world, right now - where would that be? Doing what?
ES: Given it is January in New England, I am going to say somewhere warm with my family. Years ago I visited a beach in northern Australia that seemed to go on forever. I bet there is no cell phone and no Wifi. That would be a great adventure for my wife and I to enjoy with our kids (14, 10 and 7). Good waves, warm water and just ourselves.
Forbes: Do you cook? What is your favorite food to prepare? Who taught you? (Mother, father, grandparents)?
ES: I enjoy cooking and preparing a variety of food for family and friends, but I have a particular fondness for baking. Cookies, cake, pie. I grew up baking with my mom and my grandmother. Nana had these great old cookbooks that were dotted with food stains and flour as any well-used cookbook should be. I remember making these wonderful donuts with her and my brother and sister. She would melt a block of lard in a pot and cut out donuts. We would wait with brown paper bags full of powdered sugar or cinnamon and sugar. After frying, she would drop a doughnut into our bag and we would shake them until they were covered with sugary goodness. Very few actually made it out of the kitchen to my Dad.
My grandmother was particularly tolerant of my sampling whatever we were making – both in dough form and the finished product. I continue to honor this family tradition and have passed it on to my children.
Thank you Ed for such an enlightening interview! Cheers!