Ca$hing Out 00: ENCORE PERFORMANCE

"Cashing Out" a show that follows the weekly journey of one cannabis entrepreneurs sale of his cannabis company.   In this week's episode we announce the company and the cannabis entrepreneurs who we will follow through his sales journey.   Our co-host Dena Jalbert leads the discussion and walks us through how the company was started, where it's going and why it's time to exit. 

ENCORE PERFORMANCE 

Produced By MJBulls Media

MJBulls 0036 Cashing Out 103 draft.mp3 | Convert audio-to-text with Sonix

Dena Jalbert:
You know I commend you for sure for. For seeing that and and knowing that you know you want to cash out on the value that you've built today. But but also put it in the hands of someone who can work with these key partners and help them achieve that long term vision and want to have that type of role in the organization.

Dena Jalbert:
It's always the right people the right places create the right results.

Dan Humiston:
Hello everyone. And welcome back to cashing out brought to you each week by Hope in law. I'm Dan Humiston. And with me today is my co-host Dina Jalbert from align business advisory services. Hey Dena.

Dena Jalbert:
Hey Dan. Hello everyone. You'll be here.

Dena Jalbert:
So we're back from exhausting week in Las Vegas. Indeed. That's right. The trade show is over the top. There are so many people it's just so many people.

Dena Jalbert:
I was I was pretty impressed with the sheer volume of folks and I was really impressed by the breadth of the different types of organizations and businesses and people that were there. It was it was definitely a good subset of what that industry or what this industry is going to continue to do and have to offer.

Dena Jalbert:
And I tell you what really blew my mind was how fast the industry is growing and how rising rising tide raises all ships. But one of the speakers said something to me the first time I heard this and I said you know you're right. He was just doing the valuations of different companies he said we've got to stop worrying about other companies taking over our companies like Big Pharma and Big Tobacco and Big Alcohol.

Dan Humiston:
He knows it's going to be the other way around cannabis and cannabis valuations are so much higher than those companies we're going to be. We're gonna be buying them. They better be worried about us. Yeah and I was like holy cow this industry is exploding. It's crazy.

Dena Jalbert:
Yeah absolutely so true. I think we're gonna see it both ways. I think the wave right now is definitely in and hands are doing this series is I think consolidation is coming to the industry to start. But then once those organizations hit scale I mean who it's off to the races.

Dan Humiston:
Oh yeah. And we haven't even begun because candidates just came on United States eventually will not won't be that long after we have the rest of the world. We don't even think about Europe and all these other companies all this is happening at the same place and it's because we're sort of locked in the United States we're like what's happening here it's happening everywhere everywhere.

Dena Jalbert:
Totally. Absolutely.

Dan Humiston:
Well let's jump into it today for our because everyone I'm sure. Hopefully people are anxious to find out who's going to be the first company that we're selling on cashing out. Yes. The idea is a great idea but it was more challenging than I expected to find find companies that would want to take a chance on it the first time out. Was really no proof of concept and it was like I'm not positive how this is going to go so I didn't have a lot of takers. I think first time around I have a feeling that next time around we're gonna get tons of takers for the next time but for this sale. Yeah I guess it's gonna be me and we're gonna sell. I know I know I'm going to be your guinea pig.

Dan Humiston:
My company O.G. ventures which you probably don't know it because it's a holding company but you would know the name of the company that we O.G. ventures owns 50 percent of the cannabis World Congress business expo CWCBExpo which I started back in 2014. So we're gonna sell our 50 percent ownership stake in that company. So that's the first company that we're selling.

Dena Jalbert:
Yes. Yes. And thank you for pulling me in to help you do that. I'm excited. I'm excited to do this. I think you're right. I think that after we take them through your journey Dan we're going to have folks lined up to see to be the next the next series that we do on this. So it's exciting stuff.

Dan Humiston:
Yeah. I'm really excited so I'll let you take it away. Co-host you can start asking the questions.

Dena Jalbert:
Fantastic. So keep that in. You were just mentioning a bit about how and why you started the show. You know maybe take it back to the beginning and tell us your story. You started it to where you are today and your journey. That's always the first thing people want to know is this is your is your story.

Dan Humiston:
You know I was it was in the indoor tanning business for about most of my life 30 years and that industry was coming to the coming to an end and I could see it. So I was interested in this industry MJ biz had a show in Seattle 2013. And at that show they had about 20 tabletops there and I said oh my gosh there's an opportunity here. So. So I quickly formed a company and talked another one of my colleagues in the tanning industry to join me and the two of us did a trade show in Las Vegas. I think we were the first cannabis trade show ever in Las Vegas.

Dan Humiston:
We did it at the Hard Rock convention center and you know it's a challenge maybe 30 exhibitors there and a lot of them couldn't even pay us. But a lot of those 30 now have like 40 by 40 at the last show.

Dan Humiston:
I mean they've these these companies were some of the beginning companies and have all shot up and it's it's been great for them but we. We knew this is a good idea. So I quickly rented out the Marriott Marquee in Manhattan right at Times Square. It was such a cool location we were right we overlook Times Square and we their second show at the Marriott Marquee and it was great. Everybody loved and at that show I was approached by some people that worked for a company called H.A. Bruno and H.A. Bruno is one of the most recognized names in the trade show industry. It's a family owned company. The iron Susie's own it and they've been in the trade show industry for 40 or 50 years and they've they've owned some of the biggest shows in the world. And they approached me about buying or being become a partner with us. And so long story short we ended up cutting a deal with them. They bought 50 percent of the company from me and we moved the operation from my offices in Buffalo to their offices in Paramus New Jersey and they took over managing the company and I continued to work remotely from Buffalo. We got into the Javits Center which is the Convention Center in Manhattan. Big convention center and we locked. We locked in on a lease there and then we also locked in in Los Angeles went to Los Angeles Convention Center. We decided to move from LA from Las Vegas because there's no reason to compete and Los Angeles was wide open so we opened up in LA. We did an art show in Los Angeles so we'd been in New York. I think we're coming up on our sixth year at these shows and then we. Two years ago we added Boston to the mix so three shows every year and every year keeps growing.

Dena Jalbert:
Fantastic. That's quite a journey. Tell me a little bit about some of the mechanics of a trade show. Why is it such a great business. Why why does it work.

Dan Humiston:
Well it's an interesting business. Barriers to entry are a lot greater than most people realize because you need a lot of money upfront mostly because your exhibitors especially in cannabis are kind of slow pay.

Dan Humiston:
So you're usually usually paying up your your expenses upfront and you end up getting paid sort of at the end. But the interesting part of it is there aren't a lot of variable costs in the trade show business. It's mostly fixed. So once you get to that point were you covered all your expenses. It becomes very very profitable. You know that's one of the reasons why mature B2B trade shows sell at such high multiples because it's almost automatic that these companies keep coming back. It's on the schedule it's on their calendar. You know that's the best part about the trade show business is that it's tough for people to get into it but once you're into it and you get to that certain point it becomes pretty profitable.

Dena Jalbert:
Where would you say the show is now in relation to that economic card.

Dan Humiston:
Well we're in a good place. We've positioned ourselves pretty wisely I mentioned earlier that H.A. Bruno they've been in the industry in the trade show business forever they own some of the trade shows that they own were the P.C. expo that was the software electronics show right. Right when tactic took off and you know they sold that show for I want to say close to a billion dollars. I mean it was one of it was the biggest sale ever. And they've also they also in the franchise show and they've owned a ton of shows. You know Ralph I and who's he that runs the company I mean he's a legend in the industry. One of his biggest strengths is his ability to sell these shows. He was the architect the sale of their P.C. Expo and this guy. I mean he's a he's a carnivore. I mean when it comes to selling stuff I mean you want him on your side. Yeah. He's a he's a T-Rex of sale. You would want him on your side when it comes to that. But we expect that mainstream businesses will be migrating into this industry. And when they do they're not looking for the party they're really looking for business. So they're they're gonna be looking for the shows in the right markets. And we have the right markets New York L.A. Boston and my partners have relationships with the show managers of each of those bigger companies. They've already worked with them in the past. The relationships are built. So that's a natural I think that's natural for them and I think that's what positions us so well. The other thing that positions the show is our locations being in New York. We have by far the most money walking through that floor. The investment community that just you know just wanders over.

Dena Jalbert:
Yeah because they're down the street right.

Dan Humiston:
Yeah. Right. You know Wall Street walks over takes a look at our show so our shows are just packed with investment dollars ready to go. Other thing is media. Same thing there. New York L.A. we have so much media. It's just easy with the media so that I think those things really position as well for as this industry gets to a point where mainstream businesses in America want to exhibit and that shows I think we're positioned best to accommodate that group.

Dena Jalbert:
Yeah. Just going to the one last thing right. It shows the size and scale that they can reach and get you so quickly. So there's there's a ton of growth opportunity. So with all of those value propositions if you will all of those key strengths Why are you selling them.

Dan Humiston:
All right well before I answer that let me do a little business first and thank one of our sponsors Siva Enterprises which is a full service cannabis business development firm. You know their CEO Avis pavilion is one of my oldest endears cannabis friends. Actually met him in 2014. He was one of my speakers at my Las Vegas show. So if you're getting or try applying for a license or you know anything in the cannabis industry there is no one more qualified than Avis to get information go to SivaLLC dot com see the LLC scam. All right so back to your question why am I selling.

Dan Humiston:
Well you know let's see two summers ago we let our sales manager go and I moved to New York. I actually moved in with Ralph an easy move lived. I lived in his house and worked there for about six months. We finally got a killer sales manager Greg Marco His he worked for Ralph in H.A. Bruno for many years and we talked him out of entire retirement in this guy. He's a former athlete great sales manager super good team in place we have four great salespeople Roger Oh Cyrus Shawn and Ellen and these guys know everybody in the industry they've been with us for a while. Great relationships with people. My role in the company I don't really have one anymore. I'm yeah I worked myself out of a job. I'm turned into an investor and you know that's never been my role. I've never been a partner in a company I've never been a passive investor. I've always been a hands on entrepreneur and I spent the last five years building this company up basically living off my savings and I'm ready to start something new. I am really excited about the M.J. bulls podcast and I have some big ideas things I want to do with the show and need the capital to do it. So I'm going to sell my shares and move on. In the end my partners are looking at this as is the long play. You know they got at least three probably seven or eight nine years left in this thing. That's not for me. I'm ready to move on so. So that's my gate my story.

Dena Jalbert:
Yeah that's that's great. We talked to a lot of our clients and that's one of the first things we ask is the why. Right because it's a very personal thing and people really have to think about you know what do you want your world to look like. And if the business that you're in and the combined entity just isn't what you want it to be you don't go down that path.

Dena Jalbert:
You know look look for other avenues and so you know I commend you for sure for seeing that and and knowing that you know you want to cash out on the value that you gave back but also put it in the hands of someone who can work with these key partners and help them achieve that long term vision and want to have that type of role in the organization that's always the right people the right places create the right results. So I can get well intentioned. So that's that's great.

Dan Humiston:
Yeah and I should mention that anybody that would buy in. We all have all the partners who have to prove. We're pretty tight group and we will make sure we bring in the right partner. But you know I again I'm I'm not ready to retire. I'm certainly not ready to sit back and watch my investments grow. I want to work and I love this industry and I know and I really love this podcast. I'm having a ball doing the M.J. bulls podcast and I just see all kinds of opportunity. And I can't wait to run with it. So it's time for me to move on.

Dena Jalbert:
Sure sure. Absolutely. And so to that end you and I are working together right and we're going to kick the process off with this show essentially officially.

Dan Humiston:
So and you know let's make this fun. Let's do it on a podcast. That's really what I think how this is going to play out. I have a few people already lined up that I've already looked at the pitch deck. You know they want to come on and they want to sort of grill me on air and which is great. That'll be fun. We'll have if you're if you're if you want to be a guest on the show and talk about the deal and some of your thoughts about the deal or give us advice on the deal that's great too. Our information will be on our Web site. And you know you can get both Dina and me whenever you know we have some questions.

Dena Jalbert:
Yeah yeah anytime. And in what we do it's these conversations Dan that often take place in the back. And so I think it's great that we're doing this on the podcast because people can really see what the process entails and the type of questions and the things people think about as a buyer evaluating an opportunity or as a seller value winning opportunities that are coming to them and how those puzzle pieces fit together. So opening that is and making it a public thing it's just going to be incredibly educational for so many people especially in this industry you know because everyday is a new thing within the last couple of years and so it's going to be exciting.

Dan Humiston:
Yeah. I can't I really I'm really looking forward to it. I have like I said next week we have some people already interested in talking to us next week on air. So that's gonna be fun and yeah. So I'm going to put I'll put the pitch deck on our Web site so anybody can take a look at it and you know we'll take it from there again. If you have any questions or comments or concerns or criticisms whatever. Email me to connect at MJ bulls dot com connected MJ bulls dot com for more. The community is involved with this the more fun we'll have with it the better ideas will get the better and the more likely we'll get somebody to do this next time.

Dena Jalbert:
Yeah absolutely.

Dan Humiston:
All right. All right. So anything else do we have anything they left off for us. OK we're good.

Dena Jalbert:
I got it. I think we officially kicked off my friend bag or cat's out of the bag.

Dan Humiston:
Well we had a lot of work ahead of us so let's get to work. We got to get this get this thing geared up for our next show so we have something to report back to everyone. That's right. All right. Well thank you and everyone have a great week. And we will talk to you again next Sunday.

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