"Don't Wait, Take The Plunge." Advice On Entering New Markets From HUXTON
Free Book Preview Cannabis Capital
Adapting and evolving with the industry is paramount to a brand's success story.
Chelsea Johnson and Dustin Johnson have been in the cannabis game for many years. They co-founded and ran one of the busiest medical dispensaries in Arizona called the Monarch Wellness Center, which opened its doors in 2012 in the earliest stages of the state's medical marijuana market. The store grossed over $40 million in total revenue ahead of its sale to MedMen in December of 2018. It became the cannabis retail giant’s first Arizona location.
The Johnson team has evolved from its storefront roots to what it is today: a nationwide cannabis brand. In 2014, Dustin and Chelsea founded HUXTON, a marijuana-centric lifestyle brand the likes of which Arizona had never seen. It was the first consumer packaged goods (CPG) cannabis brand on shelves in the state. Even rarer still, the brand is family-owned.
HUXTON founders Dustin Johnson and Chelsea Johnson. (Photo by Aubrey Lu Nova)
Focusing on the effect or "vibe" over specific strain, HUXTON now sells its cannabis in a lineup of prerolls, as well as a wide array of merchandise and lifestyle clothing. Their products can be found on shelves in Arizona, Washington, Nevada, and soon-to-be California.
Green Entrepreneur spoke to the family-run company duo of founders Dustin and Chelsea to see what has set them up for success, where their passion for cannabis comes from, and the reason consumers seek authentic brands.
Green Entrepreneur: I know your roots in cannabis are tied deeply to your desire to heal, especially helping people heal with alternative pain medications to opioids. Why is the opioid and pharmaceutical epidemic important to you, where do you see cannabis playing a role?
Dustin Johnson: Our mother was in a boating accident, about 20 years ago. She was diagnosed with RSV after a number of surgeries and was just fed a ton of narcotics over those years by her physicians: Vicodin, Oxy, Fentanyl. In addition to that, she was prescribed a ton of prescriptions to just deal with the side effects of all those narcotics. It was a first-hand witness to somebody caught up in the opioids epidemic, we watched her turn into a ghost over 20 years. It was an eye witness experience to the devastating effects those narcotics can have on a person.
Alternatively, when we got her to use cannabis as an alternative to those pain medications, we saw an immediate turnaround. Within 9 months, she was able to get off of all of those narcotics entirely. She was taking 10 to 12 Vicodin a day at the peak. To see that quick shift, also to see that light, the energy, the excitement come back into her, was really an eye-opening experience. One that we wanted to bring to light to and share with other people who might be curious. This was 6 years ago now, so the world was a little different. It was really an important thing for us to say, 'hey, there are a lot of people out here like her going through this battle.' We want to be a storyteller and a purveyor of the ability for people to find a different route to healing.
Tell me what it's like to bring Monarch Wellness Center to the medical market in 2012 in a conservative state like Arizona? What unique challenges did your team face in that process?
Chelsea Johnson: Not only did we face the same challenges that any kind of startup faces, but we faced those challenges in an industry that had never existed before legally. There were no rules. We learned a lot, made a lot of mistakes. We actually officed above Monarch Wellness so that we could see downstairs, work closely with our staff, talk to patients, learning as we went.
Dustin: The other thing that's interesting, there were no professional services, no attorneys or consultants. So we had to do that work ourselves. There were also no real products, no brands, and no cannabis industry yet to serve us. To put quality products on the shelf, we had to do that ourselves. So we started that with HUXTON, with our own brands. We also brought some other brands to Arizona: we were the first to bring Kiva Confections to Arizona, we also brought Mirth Provisions from Washington. In the beginning, it was a challenge on the retail side to go out and grab solid products to fill the shelves.
HUXTON prerolled joint packs in three varieties: RISE, HI-FI, and ZEN. (Image credit: HUXTON)
What challenges have you faced bringing your brand HUXTON to new market states Washington, Nevada, and soon-to-be California?
Chelsea: I think the biggest challenge is upfront, it's finding the right partners. So as you mentioned, we are launching in Nevada this week, which we are super excited about. We launched in Washington in December with Grow Op Farms, one of the largest distributors in the state. We spend a lot of time getting to know our partners, making sure we are working with the right people. It can take a year or two to develop these relationships. We are really getting to know them, inside and out. We haven't faced a lot of challenges once we go live in those new markets. It took about two years since we started the conversation, but it was to make sure we were all comfortable and it would be a long-lasting relationship.
Dustin: A lot of brands, to get built in this space, come from California or maybe the West Coast. Traditionally, the industry hasn't looked at Arizona as a hotbed of creativity and brand development. Coming out of Arizona has been tricky to get attention. We are both native, we want to show people that Arizona really does have a thriving cannabis community.
Family-owned businesses are far and few between in cannabis. What are the best parts of working with your family/sibling?
Chelsea: It's been really fun, we've been working together now for 6 years, which is crazy. It's flown by. We balance each other out really well. With relatives, everyone's a little bit different right? All siblings. Dustin is the creative, topical, big ideas, inspiring leader. He motivates us all every single day, and I'm definitely more focused on the operational component. Taking his ideas and turning them into reality. It's been really wonderful, I don't have a single complaint. Especially in this industry, it feels like there are a lot of failed partnerships. We are lucky we have each other.
Dustin: Without Chelsea, we'd probably just have a lot of cool drawings and t-shirt designs and creative brand ideas that just filtered off into the ether. Like she said, having different focuses and knowing what our strengths and weaknesses are, being able to play off each other, has been great. Also, having that deep trust. It's something that you can't really develop in a more traditional working environment. Knowing that you have somebody who's got your back. It gives us a lot more bandwidth and a lot more trust.
How do you feel the odds are for Arizona, your home state, to pass the adult-use cannabis initiative on the ballot this November?
Dustin: Based on how its polling and the momentum there's a really good chance for it to pass. We're super excited about that. From a policy perspective, we are firm believers that taxation and regulation is a better approach than allowing the black market to run in mystery. For all the benefits that you know, the welfare for society, all the tax income that can be generated and put back into schools, I think it's a great way to benefit a community. And alleviate some of the crime and the negative effects of prohibition. We have fingers crossed and high hopes that it can get there.
In your eyes, do consumers prefer family or friend-owned businesses? Why?
Chelsea: I think consumers, in general, are looking for genuine and authentic businesses. Many times, those family-owned and friend-owned businesses are truly genuine. They see a problem, they are passionate about it, and find a solution to it. They bring something to life, that genuine and authentic portion of it is why consumers are drawn in.
What other entrepreneurs can learn from HUXTON? If you could distill maybe one lesson or take away advice for our readers?
Dustin: Don't wait. Don't wait around for experts or consultants or attorneys or anybody else for that matter to tell you what to do, what you should do, what you can and can't do. Especially in this industry, I think it's super important to challenge the status quo and have confidence in your own decision. Realized that in a disruptive environment, there are not necessarily right answers. You need momentum and a little juice, the faster you get there and make a whole bunch of mistakes, the faster you'll be able to grow and evolve. Take the plunge, into the deep end. As Chelsea said, we started off in the Monarch above the retail floor so we could be hands-on in every aspect of the business. I made the first sale to our mother, it actually ended up being ur second sale because I couldn't' figure out how to get the POS System up. Getting involved and getting a little gritty with it.
Chelsea: You've got to become the world's greatest problem solver. A 'no' or 'we can't do it' doesn't hold up in this industry. Get ready. I think that you've got to think creatively, be really disruptive, and figure out how to navigate a bunch of different problems that get thrown at your every day.
ZEN preroll joint pack from HUXTON (Image credit: HUXTON)
In your opinion, what will the cannabis industry look like in a decade?
Chelsea: I get excited when someone asks me this question more than anything, I try to think of a response and I just get giddy. Because we've seen how far we've come this last decade. In one more decade, I am hoping to see cannabis be stigma-free. Providing something for everyone. I think we can get there and we're on the right track. I'm excited more than anything.
Dustin: I second that for sure. The fact that we've gotten to this moment in history, thinking about what's going to happen in the next ten years, is phenomenal. My hope is, whatever happens, that future entrepreneurs, business operators, folks who carry the torch forward continue to remember the rebels and activists and cultivators who've been hoarding seeds for twenty years. Those who have challenged the laws and fought to change the policies. All those guys got us where we are. I hope future generations remember those folks. Hold on to that rebel spirit, so that we don't turn into a bunch of corporate types. Challenging that status quo and having a little bit of that edge is what got us here today.
I love your brand's marketing by effect or vibes rather than the binary indica and sativa. Why do you market in effects?
Chelsea: That comes full circle back to us working in Monarch. When we were working downstairs with consumers, making purchasing cannabis simple was one of our biggest goals. And then we also would have consumers come in every day and say, 'I bought this Blue Dream down the street but yours is completely different.' We quickly realized that the genetics thing was going away, a little bit, so we wanted to make it consistent. The easiest way to do that would be to label by effect.
Dustin: That was the number one question people asked us, 'how is this going to make me feel? Is it going to give me energy, make me feel relaxed?' We really dug into it with our cultivation team and asked them that. Sativa is more of a description of a plant type than an effect. You can find a correlation there, but really what we heard from our growth staff is, all the plants are hybrid at this point. Everything has been cross-bred so many times. It's difficult to determine the effect of a strain. What you really need to do is understand your client and how that product would work. We did that on the back end, testing thousands and thousands of surveys, different blends, to really understand. We wanted to know how it made people feel. We coded all that information so we could deliver it in a super simple fashion. It was really just a way to hopefully simplify things for folks.