Joe Hodas has high hopes for the expanding portfolio of services at General Cannabis Corp.
Joe Hodas says he was “amazed” when the cannabis industry came calling in 2013. His resume included stints as a public relations and marketing executive for such brands as Smashburger, Quiznos, and Frontier Airlines. But Dixie Elixirs’s Chief Executive Officer Tripp Keber was persuasive, so Hodas left the security of mainstream America and embarked on a whirlwind adventure as Dixie’s chief marketing officer. “There were many days when I came home and wondered what the hell I had gotten myself into,” he said. “For every historic moment there was an equal moment of fear, uncertainty, and downright immaturity.”
Although Hodas had worked for lean start-ups, he was taken aback by the utter lack of resources and infrastructure—or even a road map—when he arrived at Dixie’s downtown Denver headquarters. But the marketing team pressed forward, doggedly building the company into one of Colorado’s most recognizable brands while also expanding into five other states. Although much of the experience is a blur and “many people contributed to Dixie’s inexplicable rise,” Hodas does take credit for one thing: having the cojones to jump into the cannabis industry before his corporate-America peers. “I do believe it was upon the shoulders of brands like Dixie and others that this industry was able to grow to where we are today,” he said. “I am pretty confident in stating that we single-handedly changed the minds of many regulators, investors, and consumers with the brand we created.”
In early 2018, General Cannabis Corp. recruited Hodas to fill the position of chief operating officer. He jumped at the opportunity, he said. Hodas has always believed that things happen for a reason, and the GC job was an opportunity for him not only to flex his operational muscles but also develop his managerial skills. General Cannabis Chairman Michael Feinsod had just raised a new round of funding, paid down the company’s debt, and was ready to grow—fast.
“General Cannabis is fully intent on becoming not only a strategic hub of growth and innovation for the industry, but also a partner of choice on a national level,” said Feinsod. “I have known Joe for the better part of his cannabis industry career, and I am confident that with his leadership and experience, both within and outside the industry, he will help us achieve those goals in a relatively short period of time.”
General Cannabis launched in 2014 as a real estate and investment organization. With its acquisition of Iron Protection Group (IPG), Chiefton Supply Co., and Next Big Crop (NBC), GC quickly morphed into a service provider. The company announced revenues of more than $1 million for the second quarter of 2018—an increase of 34 percent—while year-to-date revenues were up 32 percent.
“With a suite of goods and services for customers across the cannabis industry, we are realizing the benefit of providing a synergistic set of solutions to help cannabis businesses realize their growth potential,” Hodas said. “Our revenue growth reflects the effectiveness of our focus on driving sales and the quality of our deliverables.
“It’s an exciting time at General Cannabis,” he added. “We have a great foundation with our existing lines of business. We have a strong balance sheet that allows us to look at deals at every level of the industry that could potentially benefit from our mix of funding and back-office skills and support.”
mg: What goals have you set for General Cannabis?
Joe Hodas: My goals are pretty straightforward and intimately linked with us being publicly traded. We have great assets and a strong team in place. My goal is to help each of the divisions find efficiencies, grow their revenue, and find sustainable profitability—all of which is critically important, of course, as a publicly traded company. But I am also there to create a brand that is identifiable, both for GC corporately and for each of its divisions. All of that is linked to our plans for expansion as I help the team identify and manage future additions to our portfolio of companies.
How do you plan to approach those goals?
I think the most important thing I am trying to implement isn’t exactly a cannabis experience thing. It’s simply discipline in effective decision-making. We have smart but young directors managing our business units, and my job is to be the gray-haired guy in the room saying, “Hold on. Have you thought about…?
But the other thing I am trying to instill is what I call the currency of connectivity. I have been able to develop some really great, long-lasting and strategic relationships in this business over the past five years, and I want to continue to find ways to work with the best in the industry.
How many employees does General Cannabis have now? What’s the company culture like?
Right about 100 [employees]. There is no hierarchy at GC, and even less ego. We all have the same goal in mind: to create a company that we, and others, want to work for and with and to do that profitably and to the highest levels of regulatory and [Securities and Exchange Commission] compliance. It’s important to note that Michael Feinsod, our chairman, is a big part of that team and vision.
You often describe GC using the word “synergy.”
We have a very robust back-office support functionality that allows each of our businesses to focus on the things they do best: security, apparel, and growing and selling cannabis. Meanwhile, we provide the [human resources], accounting, marketing, and strategic support to help them grow. Combine that with a solid amount of capital, and we can be a catalyst for growth in any and every area of this industry.
On the back end, we get to weave the synergies among them all. It works really well right now as we bring on new clients with Next Big Crop, then perhaps provide branding apparel work via Chiefton and, of course, support their security needs from planning to application to implementation [through Iron Protection Group]. I have yet to look at a potential acquisition that wouldn’t be accretive to that value proposition. In addition, we are publicly traded and we are maniacally focused on acting as if we are a multi-billion dollar company traded on a major index. It didn’t take me long to realize the value that can bring to our partners, employees, and shareholders.
Which division brings in the most revenue?
Iron Protection Group drives the largest share of our revenue. But in terms of growth, Next Big Crop has the greatest potential, as their deals are pretty large in scale and scope. A few additional deals a quarter could easily double their revenues.
Chiefton Supply recently signed a deal to supply the national action sports retailer Tilly’s with hemp apparel. You must be excited.
We have a brand, and a hemp apparel strategy, that are really hot. People love the Chiefton brand, and the team behind it is doing great things in bringing the hemp and cannabis lifestyle to a more mainstream audience. With Chiefton, we have an opportunity to bring the brand to a broad consumer audience that none of our other companies has access to. We plan to be at a few upcoming mainstream fashion and apparel trade shows, and I have a feeling we will land a few more exciting distribution deals as a result.
It sounds like you’re bullish on hemp.
Absolutely! As consumers and businesses become more educated about the advantages of hemp—antimicrobial, less resource-intensive to produce, more durable—demand is only going to trend up. And we know regulation follows the money, so I would expect we will see commensurate loosening of some of the restrictions hemp farmers have faced.
A few months ago, IPG launched in Northern California. That’s a crowded market. How are things progressing?
We are rapidly building that market out. In fact, we just hired a new director of the operation in California. And the Next Big Crop is actively working on no less than a half-dozen high-profile applications and large-scale builds in states throughout the U.S. In addition, we are about to fix our sights on potential international expansion.
What sectors or verticals is GC eyeing for expansion?
Acquisitions are key to our growth and success, but I have come to learn just how difficult they are. In my short few months here, there have been many starts and stops in the process, in some cases caused by the legal and SEC hurdles that a publicly traded company can face, and in other cases a result of many in the industry not understanding their true value as a company. It would help us all if we could just begin to bring valuations back to a normal and reasonable range.
As for sectors and verticals, I can’t give away too much. But I will say that I have learned a new philosophy here at GC: Opportunity abounds, if you know how to identify it.