Ep 55: Flowing into the industry - Cannapreneurship continued.. An interview w/ Jim Makoso, CEO at Flowe Tech

Jim Makoso is a veteran in the cannabis industry, and he attended mjbizcon 2021 in Las Vegas where we caught up with him for an interview.   In this episode we discuss his background in the finance industry and the transition to the cannabis industry.   

Jim is the CEO of Flowe Technology and Director of Lucid Lab Group. Jim holds board seats in several organizations including Marijuana Business Daily and Biomedican while also serving as Vice Chair of the Scientific Advisory Committee with the National Cannabis Industry Association.  Jim is the go-to person for flow technology involving cannabis oil extraction and distillation.

Flowe is the first to combine microcrystalline cannabinoids and ingredients within a water-based solution. Infused product manufacturing will never be the same. 

Learn more about Jim & Flowe Technology:
https://www.flowetech.com/
https://www.instagram.com/flowetech/

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Transcript

Ronjini Joshua: 0:04

In this next episode, we talked to Jim Makoso, the director at Lucid lab group and CEO of Flow technology. We caught up with Jim at mjbizcon. And we talk about the future of CPG in the cannabis industry. Now let's get into the green room. Hello, we are here with Jim Makoso. So we're here at mjbizcon. And we are talking about lots of things the conference, the state of cannabis, and then also about Jim here. So, Jim, I always start the podcast with a little bit of background, the person so we talk about the journey of your cannabis journey, and then your business journey. So tell us a little bit about how you found cannabis.

Jim Makoso: 0:50

Um, well, you know, I wasn't always a cannabis consumer. In fact, you know, I was a jock in high school. And so, you know, I used to make fun of the cannabis guy who smokes weed, you know, it wasn't really my thing. You know, and because, you know, I was on the football team and the basketball team and the track team and, you know, smoking anything at all, you know, wasn't my thing. You know, you're

Ronjini Joshua: 1:15

irresponsible.

Jim Makoso: 1:16

I was very irresponsible with the boys. I just, you know, smoking. For me. It was like, Well, you know, especially with football, I was like, it'll ruin my performance. But after my senior year of football, you know, I didn't play I didn't do any sports. The rest of the year, I was going to be lazy and wait for college and friend of mine from a football team was like, You need to smoke weed. And I was like, no, like, I don't want to be old dumb and Dopey. He's like, trust me, you need it. I was like, All right. So we cut school, went to his house, parents were working. I smoked weed for the first time really smoked weed and got high for the first time with him. I was just before my 18th birthday. So 17. And I remember the first time I hit the bomb, you know, I like inhaled. But like exhale really quickly, like I didn't really breathe it in. And he was like, Nah, you got to do it again. Like, gotta hit the bar, like breathe into your belly. And I remember like, so, you know, I ripped it, you know, like, not knowing what was about to happen. reppin this bar is like a foot and a half old school bog bowl this bottom. You know, it had like, all these colors on it. Never rookie mistake. Yeah, so I ripped it and I got, like, super hot, like, I held it in. I cough. It could have been an hour I was coughing, because I kept coughing and coughing. But I remember like, when I first got the euphoria, it completely, you know, like, changed my perspective on on, you know, weed at the time. You know, we call the weed we call the Chiba Long Island where I grew up and, you know, that kind of began my interest in cannabis. And then, you know, when I went to college, is when I really started to, you know, learn about like, the medicinal aspects of it, and keep mine in New York was very illegal. Yeah, I graduated from high school in 2002. It's very illegal. You if you had a joint you can be charged with a misdemeanor and some people were especially if you had a prior conviction, they could get a felony for drug possession of a schedule one substance and they were putting people in jail for years for roach clips for shake. And, you know, I knew a friend of mine who got a misdemeanor for a roach in his ashtray got pulled over at roaches ashtray. They tried him in the misdemeanor possession of a controlled substance schedule. And and so, you know, when I started to educate myself about what was going on, you know, always, you know, the first kind of studies that I learned about were CBD related. And people using it to treat you know, epilepsy. Yeah. CBDs and anti spasmodic. And, you know, there were a couple papers out there, this is back in my 2000 60,000 70,008 A lot of the scientific work was coming out of Israel, you know, groups like Rafeal mushrooms. You know, they were putting out research, but very little research here in the States. And, you know, even less of it, could you find, right, the internet wasn't as prolific back in oh seven as it is now. Yeah. In terms of aggregating data that people want. And so, you know, I consume cannabis, basically frequently from my 18th birthday, you know, right before my 18th birthday, all the way through until now, and I would say now, I smoke, the least amount I have in the last 20 years of my life found your balance. I did and it's probably because I'm busy and I got a lot on the line because I'm making you know, but and especially now the wheat is so good. And you know, edibles are so powerful that, you know, if you consume too much and I'm definitely sensitive to cannabinoids, you know, you can you can go overboard, but that was like kind of my journey with like discovering cannabis, but really professionally. I didn't get involved professionally in the industry, officially and until the end of 2013. And, you know, at the time I was living in Miami, I wasn't doing anything except for spending money I'd earned as a finance professional and, you know, just being, you know, unemployed and living my best life and not doing very much going to the beach, going out, you know, hanging out with my friends traveling, and not doing much just spending money and being irresponsible as a, you know, mid 20s. Guy. And friend of mine, he worked for a magazine called Northwest Northwest leaf out of Seattle. And he was a writer, and he was the person that would test cannabis products and do reviews. And he was like, Man, you got to come out here and see what's going on like, so, you know, long story short, I came to Washington in 2013. And, you know, Seattle, Washington, and he took me to, you know, meet all these people. And I remember I'll never forget, I walked into what was the essentially abandoned warehouse where there was an extraction setup of hydrocarbon extractors. And they were doing what looked like to me was like, Breaking Bad. Science illegal, I was like, Man with the cops can come in at any second, you know, keep in mind, this was still extremely federally illegal, right. And they were still raiding people in California for doing this exact thing. So I felt sketchy, but the one thing I noticed is when I saw them, taking the plant, packing these tubes, and out was coming this beautiful golden oil. And then he handed me a vape cartridge. This was, you know, mid 2013, I was like this, is it the process? Yeah, this is the this is the future of at the time, we, you know, now obviously professionally called cannabis, because that's its scientific name. And we want to normalize it, because you know, it's a plant, and people should have access to herbs. But, but, you know, I got involved in the industry in that way. And I invested in a vaporizer company at that time called Uber Technologies. And that was one of the few investors didn't have a business plan. So I got really favorable terms. And, you know, the caveat of me investing was, I would write the business plan, but you know, they'd have to hire me, as a salesperson, not as an executive, just let me come and sell. And for me, the law there was, you know, as a salesperson, I'm getting to meet the people, learn the industry, you know, get my feet wet, and understand that this is something that I want to really be committed to. And, you know, it didn't take me very long for it to really take hold. And so, you know, got involved in that company, we, me and my current business partner, we sold our stake in that company, and subsequent financing. We invested that in a processing company. And that's really what we're known for lucid lab group. We started that in 2015. We, we do consulting on other people's extraction facilities, we redesign some capital equipment that became industry standard and and built a consumer brand called lucid oils. And that's kind of how we're, we're Known throughout the industry.

Ronjini Joshua: 7:52

So we don't have I don't think we have a lot of time now to ask all the questions I want to ask. But I want to talk about like what like, you know, right now is obviously really, like exciting. A lot of things are happening. There's a pandemic, which kind of, I don't know, I think some would argue would accelerated the cannabis industry, some would argue, it just put a damper on everyone's mood. So what do you think is like the most exciting thing that is coming in the future? And like, how do you think it's gonna pan out? And like maybe the next year?

Jim Makoso: 8:22

Well, you know, what, when we look at the industry, and specifically our businesses, and how, you know, we're going to navigate the industry, what type of strategy we're going to take, we always look short term, intermediate, long term, right? Short term, you know, what decisions are we going to make in the next, you know, two to four quarters? You know, intermediate term, what's that three year plan look like? And long term is five years out and longer. Right. So for us in the short term in the next year, what we're seeing and I think we've seen this even this last week, with with the canopy deal that went off with one is, you know, there's consolidation is starting to re accelerate in the industry. Companies that are well capitalized are coming back and purchasing really good value plays in either. And there's a number of reasons, right. One is because there may be value there another could be to get investors excited about their stocks that have been stagnating for the last year and a half. But there's value there. So we're seeing capital within the industry get reallocated, right. So if you have a good company that's earning revenue, creating alpha, or let's say you have good technology, or maybe you don't have a lot of revenue, but your technology is exceptionally attractive to people who already have really robust distribution networks, you know, you're going to be an acquisition target. So make sure you clean up your company, make sure your books look good, so that you're prepared for that offer if and when it comes. So I think that's, that's what's exciting now for us, you know, we're not in that position. You know, for us, what we're really excited about is what's happening on the research front. You know, yeah, we're at a stage in the industry now where companies that are developing products specifically outside of flour, where I'm talking about the other 40 45% of the market, which is the CPG sector, you know, edibles, beverages, cosmetic supplements, that part of the of the market is really going to grow. And there's so much potential in that area right now, especially with companies with the big CPG companies that are circling and starting to make small investments, partnerships, you know, Nestle, Nestle brought a company accompanies capsules CBD capsules out to Europe, and are distributing it through one of their subsidiaries. You know, Pepsi through its monster acquisition, they're doing a heavy CBD hemp oil, energy. Yeah, but think about it, this is a low risk opportunity. So, you know, for us, you know, with Flow technology, we're excited about that space. And that's where a lot of our technology and a lot of art, a lot of focuses is looking for opportunities to, to work in that space to build partnerships and work with good brands and offer them solutions.

Ronjini Joshua: 11:05

Do you think it's going to be more of existing brands, in those spaces? Adopting this new stuff? Or? Because I find it hard? It's so crowded right now. So like, how are I mean, there are some brands like can and like, you know, you see some of these beverage brands coming out? And I'm just using beverages as a first example. But, um, are you going to see are we gonna see that other brands that are legacy brands are really just gonna dive in and maybe kick some of these smaller guys out?

Jim Makoso: 11:40

But it's possible. But you know, today, and one of the interesting things I saw today, or at least I heard today, in the finance forum at mjbizcon, was just one of the last speakers before the last panel. And what he showed was a graph of the growth in the industry. And what was really interesting about it is what you know, he showed kind of the decline in illicit sales or black market sales and the increase in you know, regulated sales. But what you know, what stuck out to me the most is net net, more people are buying cannabis this year than they are last year, right? The regulated market Yeah, took a damper on the so called illicit market, which, you know, I still buy, you know, buy weed from my homie in, in Oregon, who says to grows fire, and he he grows fire for his personal garden, and he grows fire for his, his regulated garden, but I still buy it from him because it's good. And there's a market for it. But you know, what it showed me is that more people are consuming cannabis. And what that means is, the more people that consume cannabis, certainly the big players are gonna be the first in line for that piece. But that means that there's still plenty of opportunity for companies that are coming in, if you got a good story, if you're well capitalized, you got a good product, and you know how to tell that story to the right consumers, you can earn a place in this market, it's wide open, there's still so much opportunity, just make sure you know, if you're coming into this business like any other, this is not a free for all, you got to still have a good business plan, you got a good team, you got to be well capitalized. And then you got to execute, you got to be able to perform. And and so I would encourage everybody who's thinking about coming into this industry, be it on the ancillary side, anywhere on the supply chain, consulting, this industry is growing, and it will continue to grow for the foreseeable future. So you know, now's the

Ronjini Joshua: 13:29

time, for sure. Now's the time. So we do sometimes do some few few tips. Like your business tips for Kansas, people coming into the stream, because people who are listening to this are typically folks that are in the industry want to get into the industry, or just want to hear other people in the industry talk. What would you say is like your number one thing that you've learned in the last like decade of you being there?

Jim Makoso: 13:54

For sure, uh, probably the most important things for me, when it when it came to, you know, being in this industry, any industry, but definitely in this industry is, you know, make sure if you're going to come into this industry, you have a business plan, like that's applicable to any industry, but I think people assume, just because there are people, you know, they hear their stories of people selling their company for 300 million or getting bought out for a billion or, you know, so and so company worth 10 billion. Those companies even get there by guessing and hoping and wishing they put together great plans, they were well capitalized and they executed, you know, some of its timing, which is why some of these companies have ridiculous multiples, but, you know, the majority of the successful companies got there by having a plan and then executing it. So, you know, that was that's one of the key things I would say is you know, make sure you have a plan. The second thing I would say is make sure you have the grit to see it through. You know what is it Seven out of 10 businesses are going to fail miserably within the first couple of years. That's the statistic. And once you go out to like five to seven years, nine out of 10 businesses fail. So I'm not saying you will fail, I'm saying most of you will fail. But you know what? Michael Jordan says, he says it all the time, part of succeeding is failing, right? The companies that make it, they're not companies that didn't fail. They're companies that failed and got back exactly. Again, and again. And again. And again, until you hear the success story, you don't hear about the late nights, you don't hear about being broke, you don't hear about the problems and the fights, you hear about the success story. But every person that was successful, I promise you, they felt multiple times, they hit multiple walls before they made it through. So have grit, have determination. And, you know, don't be afraid to get your, your hands a little dirty, and you can make it you can make a living, whether or not you'll be the billion dollar company, that's up to you, but you can make a living, and you can have fun doing it. This is an amazing industry filled with amazing people, you know, even this, you know, this conversation we're having now, you know, it's, there's so many amazing people doing amazing things, and the energy is so positive, that I encourage everyone if they want to be involved, get involved.

Ronjini Joshua: 16:11

Yeah, that's the one thing that I have appreciated about doing this podcast, and I'm sure Ben will agree that like, we've just heard a lot of positivity, everyone's like ready to go. But the people that are in it are like, like, if you're going to be in it, be in it, don't be half assed, like, do what you're here to do. And, like, have a little bit of a backbone, when you're getting into it. And, and you'll, you'll have a good time. And people are pretty respectful and, you know, collaborative when it comes down to for sure.

Jim Makoso: 16:40

And you know, I would even say, you know, even beyond that one of the things I noticed in this industry, because it's still so new, is, you know, and relatively speaking, right, seven, you know, we're seven years in from federal legalization a little over seven years, or excuse me, from state legalization, in Washington and Colorado, but states are still turning on all the time, right? Because it's still so new, you have access to people who did sell their company for $300 million, or invested 100 million, like you can walk up to them and have a conversation and get their contact information. Yeah. And you know, they might not give you 40 hours a week, but they'll give you an hour a month to help you out. Because that's what I found in this industry. People are willing to help, you know, you go to other mature industries, good luck getting a conversation with the mover or shaker. Good luck getting past their Secretary Secretary because they've set up walls so people can access them, right? Because time is so valuable. So there are people in this industry that will are willing to help and willing to give you a hand and willing to give you some advice. And and you know, that's what's unique right now. So yeah, they're

Ronjini Joshua: 17:48

advocating so for sure, absolutely. For sure. Well, thank you so much for joining us. It was great to meet you here. And I think, hopefully we can have you back. Talk about the next thing that you guys are doing. But

Jim Makoso: 17:59

well, you know, if I come back, one of the things I'd love to discuss because you're a person of color is as a snippet. There's a lot going on on the social equity front right now. Yeah, I'm a part of a social equity and cannabis taskforce in Washington, we got a lot of work to do up there. But I would say now is a very important time to, you know, really push, push, what, what a lot of people would consider is one of the most important kind of transitions that's happening in our society in culture now, and that is, you know, what is equity? And how do we make sure at least in our industry, that's still so new, and generating still so much new wealth? How do we make sure that that is being appropriated in an appropriate way? Yeah. And And certainly, I think that's a conversation worth having.

Ronjini Joshua: 18:45

Yeah, I think that's gonna be a big conversation this week. So yeah, absolutely. Thanks for having me. Awesome. Thanks. The Green Room podcast is brought to life by green seed PR, a cannabis green tech focus PR agency, and a dedicated production team of editors mixers and show Booker's. A huge thank you to the vessel team for providing their studio for our recordings. Don't forget to subscribe and share the green room podcast with friends, colleagues, and family. That way you'll never miss an episode and we can keep the lights on. If you're feeling extra generous, please leave us a review on your favorite podcast listening platform. You can also find us on Instagram at green seed PR and to the live video versions of all of our podcasts on YouTube. Would you like to be on the guest on the show or do you have a great guest referral? Awesome. Submit your guests at Green hyphen room. Thanks for listening and be well