Raising Cannabis Capital 0123: Made By Hemp

Six years ago Made By Hemp started as a simple website to introduce people to CBD's benefits.  The company has expanded from an online reseller of CBD to a manufacture and brick and mortar retailer.  Mason Koffman joins Dan Humiston to talk about the demands the industry's amazing growth has put on their company and their need to expand just to keep up with their current customers.  They are raising capital and looking for a 'Right-Fit' investor.

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Dan Humiston:
Today's show is sponsored by a former guest, the fintech group, and their solution for Cannabis online companies and dispensaries to accept cashless payments. If you want a Cannabis dispensary or a Cannabis online business, you know that banking laws make it impossible for you to accept any form of payment other than cash. The fintech group finally provides an option that was previously not available. To learn more. Go to fin tech merchant accounts dot com forward slash marijuana hyphen dispensaries. Listen to Raising Cannabis Capital episode fifty five.

Mason Koffman:
What our customers want when our customers are wholesalers, obviously. And we have that wholesale business model. The only way you're going to understand how to help them sell product is retail organizations or outfits is by ourselves being able to say, hey, this is how people shop. This is what their experiences are. It's been nice, really nice to be in that retail environment to really help our customers.

Dan Humiston:
From MJBulls Media, it's the Raising Cannabis Capital show.

Dan Humiston:
I'm Dan Humiston. And on today's show, how this Michigan Hemp company has evolved over last six years from being an online reseller to a Hemp manufacturer with an actual brick and mortar retail location.

Dan Humiston:
Today on Raising Cannabis Capital, we are joined by Mason Kaufman from Made by Hemp. Mason, welcome to the show.

Mason Koffman:
Thanks a lot for the invitation.

Dan Humiston:
Well made by Hemp is a Michigan based manufacturer and distributor of CBD products which you guys sell online, which you also have a wholesale business and a retail business, which is interesting. When do we start off and talk about the products that you manufacturer?

Mason Koffman:
Yes. So we're a wellness manufacturer and distributor as well as retailer. We really started from different beginning. So seven years ago when the Hemp industry was supposedly founded, just Gallagher, the owner of starting a Web site and one thing led to another master a couple months old, suddenly realized that not only helping people, you know, being the goal, but it actually turned into a business for him. So it made my Hemp started. And that was about six and a half years ago. We were just selling other people's products as a e-commerce reseller. We realized that people started running out of stock. And so as a result of not wanting to be out of stock, he decided not I'm to make my own. And so he started formulating and making his own product shortly thereafter. And one thing led to another and it took off. And so since then, we are now manufacturing moved from an e-commerce company over to a distribution company. Now, actually, the majority of our business, 70 percent of our business is actually in wholesale.

Dan Humiston:
I was going to ask you that next. I know you're in wholesale business. I just wasn't sure that 70 percent. That's a big commitment to that market.

Mason Koffman:
Definitely is. And so, you know, the organization at this point, public knowledge, we're a company that's turning to twelve million dollar organization right now. So we're not small in the space. We're not one of the giants, but we're in that middle territory and just trying to manage the business going forward from that point. But yeah, things have really taken off and worked to the point where we have been approached by some large big box retailers that are out there. Well, we've been approached by some of the larger brokers in the space in order to try to get our material in there. Now it's just a matter of just doing it intelligently. You know, we've done it without incurring any additional debt and bootstrapping it ourselves. And now we're kind of at that jump.

Dan Humiston:
Yeah. Well, before we get to the jump off point, let's talk about one other thing. I think it's interesting, the retail location that you have coming back around with from retail background. And I know what a huge advantage it is to get that real time feedback from your customers, especially as you know, you're starting to talk to retailers about this. You can walk the walk and talk the talk and say our customers like this was at one of the one of the reasons for the retail location.

Mason Koffman:
It's actually the primary reason for the retail location. The retail location was actually sort of as a result of just saying you need to understand better what our customers want. When our customers are wholesalers, obviously, and we have that wholesale business model, the only way you're going to understand how to help them sell the product is retail organizations are outfits is by ourselves being able to say, hey, this is how people shop. This is what their experiences are. It's been nice. It's been really nice to be in that retail environment. I think really help our customers.

Dan Humiston:
I think I see it on your website when I like the most about it was under the shop section. You've broken it up basically into two categories and underneath each category is a bunch of subcategories. But just for instance, under shop by health benefits, you have CBD for focus, CBD for pain, CBD for pets and so on and so on. And then under the other one is does it shop by product type? And then you have a CBD capsules and CBD concentrates and CBD patches. And when I'm looking at it, I'm thinking myself. I bet that came from the retail store because that's what you did. Yeah, it's brilliant. I mean, it's so simple. It's brilliant.

Mason Koffman:
Really appreciate that feedback, too. It's very kind. But yes, I mean, that's really what that came from when we started the retail locations. We actually were not selling by benefit. But you see how each one of those customers come in. And when they shop, they shop by coming and saying, hey, listen, this is what I have going on. The reality is, is that CBD in itself is a really powerful, powerful supplementary product. You can take us a wellness, this product that can help a lot of different things. And the retail locations, we noticed customers shopping in near exclusivity by benefit. And so that's when we started changing our websites and started seeing a definite uptick there. And then even our sales approach internally with our wholesale market, it's definitely beneficial.

Dan Humiston:
Again, like I think that information comes from the front lines and the best place to get it is the right from the customer's mouth. I want to take a quick break to think all of our Raising Cannabis Capital listeners and to remind you that you can support the show by subscribing to MJBulls premium. It's only four dollars and ninety nine cents per month and you gain access to all previous Raising Cannabis Capital episodes as well as all other MJBulls produced podcast and exclusive content, including companies, investor pitch decks, good MJ Bulls, Dot.com and enter promo code raising to get your first month free.

Dan Humiston:
Well, jump ahead. Give us an idea where you guys are going over the, say, the next 12, 18 months.

Mason Koffman:
So when we look at the space in general, you have the large entities that are already over 100 million dollars plus. We play in that next space, about 20 of us. That kind of sit in that 10 to 15 million dollar category where we're really playing with made by Hemp is trying to say, OK, how can we start to really drive business forward where we're not turning away our purchase orders? We've been in situations at this stage because we've done everything independently ourselves. Things are self-funded. We want to make sure to stay true to our customer service initiatives for our existing customers and then also be able to, you know, still hold true to those quality standards for our future customers. And so we've gotten to a point where we've been turning away that initial order or trying to adjust that initial order in order to make sure that we can grow naturally. Understanding that was kind of hang up. We already went out and started purchasing warehouse automation equipment. That's next level. And so it allows us to be a little bit more nimble and be able to take on those larger orders and grow with our customers that are also growing Stitcher. So, yeah, I mean, that's really where we're going. It's really that implementation of warehouse automation, that implementation of enhanced customer service as a result of that, as was asked delivery times. And that's going to bring us to the point where we're growing financially.

Dan Humiston:
Well, and that's the thing about growth company is the you can't walk away from turn down purchase orders. You just can't because it's absolutely somebody else's. Right. They're going to fill it. And so if you want to get the market share, this is the time to get it when the market is exploding like this, will. It's tough to do it out of cash flow, though. So are you in the process of raising capital?

Mason Koffman:
So we are in the process of raising capital right now. We're looking at a couple different avenues. We have to looking at some standardized lending options, but no standardized lending options still aren't to the level of what we'd look for long term. These lending institutions, I mean, they think in this space, large amount of credit, we're Dena. fifty thousand dollars. We already do that for our customers independently. And so for us, you know, we're looking for, you know, million dollar line of credit or more to try to support really inventory so we can go ahead and front that inventory so we don't have to turn away those purchase orders or harp on the bad times. We already have those items actually in stock where we're not manufacturing to order necessarily key for us. And so we're already taking steps to do that. I the big thing is we just want to make sure that we keep intact our company culture. The business is definitely grown organically and it's been a controlled growth model. And in doing that, we have the right people in place and we are seeking capital, but we're looking for that right investor.

Dan Humiston:
So like if there are people that would might be a good fit and if this reach out to you directly to talk to you about what the options are or what you're looking at. I do.

Mason Koffman:
So I think that at this point, you know, we're really open. We're not a company that's interested in selling off the entire business at this point. So if we have an investor come in, if somebody is looking like an equity stake in a sample or a convertible note, it's typically what we would look at. And in terms of, you know, an equity play is somebody that comes in with a smaller minority share and wants to play in the space with an organization that's exceptionally stable.

Mason Koffman:
A little bit more story than most in the space because we're six and a half years old and has a strong track record of a diversified business model. That's definitely us.

Dan Humiston:
Yeah. And I think that checks a lot of boxes for companies or for investors or different people. I think you've checked a lot of boxes. So I mean, we have so much more to talk about. But I'm sorry. Time's running short. We've been speaking with Mason Kaufman from made by him and we'll have all of his contact information on the MJBulls website in any investor information that you have available. We'll also have that on our website. So, Mason, like I said, we keep going on forever on this, but it's good stuff. I really appreciate you being on the show.

Mason Koffman:
Yeah. Thanks so much for your time. I really appreciate it. Good luck with this.

Dan Humiston:
Thanks for listening to Raising Cannabis Capital to learn more about today's guest or to become a guest. Visit our Web site at MJBulls.com. Today's show is produced by MJBulls Media with original music produced in part by Jamie Humiston.

I'm Dan Humiston and you've been listening to the Raising Cannabis Capital podcast.

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