She Started Her Cannabis Business With $1500 And A Dream
Now Mary Jane's Medicinals can be found in hundreds of dispensaries across Colorado, Oklahoma, and New Mexico. This is how Dahlia Mertens did it.
What were you doing before you got into the cannabis industry?
Dahlia: I have always been drawn to natural and holistic healing and thought massage could be a way to pursue that interest. During my time working in spas, I was introduced to many lines of body products and always gravitated to the natural ones that were herbally based. Inspired by a few of my favorite brands, I began to wonder if I could create a line of my own. When I got into massage, I did not think it would be my long term career, but I felt that it might lead me somewhere. That it did, and six years into my career as a massage therapist, I began experimenting with cannabis-infused massage oils. A year later, I transitioned my focus completely onto my new business Mary Jane’s Medicinals and I have not looked back.
What led you to decide to start a product company of your own?
After practicing massage for six years, I began to feel the effects on my body. I really enjoyed helping people feel better, but I was tired and weary of spending my days in a dimly lit windowless room. In the fall of 2009, I was invited to help trim the cannabis harvest at my friend’s farm in northern California. It was off-season in Telluride, so there was not much work and I wanted to earn a little extra income. The California cannabis scene also intrigued me, and I wanted to check it out.
I lived in a tent for six weeks with my basset hound Rosie and trimmed weed around the clock. It proved to be a challenging time with helicopters buzzing our camp at 4 am and a lot of uncertainty on whether what we were doing was actually legal- the laws in California were very grey at the time. I did not know if one of those helicopters was going to land and haul us off to prison. But I was committed to staying, and I am glad I did because that is where I was introduced to the concept of cannabis-infused massage oil.
My friend had infused some grapeseed oil with cannabis and offered to give me a neck massage. I had not heard of cannabis being used topically before and did not think it would have any effect. But my neck was killing me from the long hours trimming, so I accepted her offer. To my surprise, I felt the muscles in my neck relax shortly after application, and the pain melt away. The cannabis industry was brand new in Colorado at the time and this got me thinking. Maybe I could create my own cannabis-infused massage oil and incorporate it into my practice back home. I came up with the name Mary Jane’s Medicinals in the backwoods of Trinity County. When I got back to Colorado, I put that money I earned trimming into oils and a crockpot and that was the beginning of Mary Jane’s Medicinals.
Did you have any experience as an entrepreneur before this—how did you know what to do?
My first business was a scrunchie business I developed in the fifth grade. My mother had bags of fabric, a big roll of elastic, and a sewing machine, so I had all the supplies I needed to launch. I sold to stores in the town I grew up in, spent the profits at Penny Auntie, the local toy and candy stop, and kept the red velvet scrunchi for myself because it made me feel cool like Winona Ryder in the movie Heathers.
Other than that, I had never had a business of my own before Mary Jane's Medicinals, so I really had no idea what to do. When I needed to figure something out I asked friends and family for their advice, spent a lot of time on the internet, and learned by trial and error.
Apparently you started your company with only $1500. Take us through the steps of how you managed to launch your business with so little funds.
When I launched Mary Jane’s in 2009, the cannabis industry was in its infancy, and many people that were getting into this sector were new to business just like myself. This made it possible for me to learn while establishing my brand and grow with the industry as it formed. Initially, I focused on the areas of the business that I could grasp and figure out on my own. Since I only had a nest egg of about $1,500 to work with, I had to be strategic on how I spent my money and call in favors where I could.
I knew the first thing I needed was a good product, and then I needed to figure out how to package and brand it. I bought small amounts of ingredients and ran test batches in my home kitchen. I had a friend that grew top-quality cannabis, and I would trim his weed in trade for the cannabis needed to infuse my oils. I found a website that sold containers in small quantities and would purchase 50 jars at a time. Labels were tough because graphic designers were expensive, and you had to buy labels in large quantities. I could not afford them initially, so for the first few months, I sold my products with no labels! Back then, you could walk into a dispensary and sell them a tray of infused cookies with unknown potencies wrapped up in Saran wrap, so my unlabeled bottles of massage oil were acceptable in that immature market.
I remember my first “big” sale was to a local dispensary in Telluride. I walked in with ten bottles of massage oil, and the owner bought the whole box for $250! I was elated and immediately walked across the street to the New Sheridan Bar and bought my friends drinks to celebrate, even though I probably should have put that money towards labels.
Shortly after, I set out on the road with several boxes of unlabeled bottles of massage oil and jars of salve to make some more sales and hopefully generate enough money to get labels designed and printed. I didn’t have a car, so I asked my friend to drive me around the state. I offered him 15% of sales and did not have money to refill the gas tank until we made our first sale. That trip proved fruitful, and when I returned home, I set my sights on creating my branding.
My best friend from childhood was a successful artist out of New York. She was high priced and sought after for her illustration talents by prominent publications like Rolling Stone Magazine. Still, she offered to help me with my branding for a fraction of her usual fees, and she gave me very flexible terms. She helped me create our nurse logo and connected me with a student of hers who designed my labels for a nominal fee. I remember when I received my first labels in the mail and put them on my containers I experienced a rush of excitement. I finally felt like I had a real product, and it looked so darn cute!
I did not have money for website developers, accountants, lawyers, or sales teams, so I determined what I could do myself, got help from my friends when possible, and bumbled through the rest as best I could. When I was in college, I had to put myself through school, pay for my tuition, and living expenses. I learned how to navigate financial aid, had several work-study jobs, and waited tables at night. Even though it was challenging and I often wished my parents could afford to pay for my schooling, I am grateful for that experience. It taught me how to be very resourceful, which gave me the tools to navigate the early days of Mary Jane’s.
Essentially the way I was able to start my business with such a small amount of seed money was my ability to take it one step at a time. Business loans were not available to me at that time, so accruing debt was not even an option. In retrospect, I am grateful that I couldn’t overextend myself because it forced me to build the business solely on the capitol it generated. As a result, my business has grown very organically over the years, and I have grown with it. I still own 100 percent of Mary Jane’s Medicinals and have no debt. After more than a decade, I’m very proud of that.
What were the biggest challenges and hurdles you faced and how did you overcome them?
For the first two years of the legal industry in Colorado, there was no regulatory structure for cannabis businesses, so essentially anyone could get into the industry. Back then, all you needed was your medical card from a doctor, and then you could start making and selling cannabis products. So that is what I did. However, in 2010 the Marijuana Enforcement Division (MED) was created, and that changed everything. All of a sudden extensive background checks were required, steep licensing fees were instituted, and long and daunting applications had to be completed to continue to operate your cannabis business.
The MED also created an extensive list of regulations that seemed insurmountable at the time. I needed a dedicated kitchen to create my products that was zoned properly, a high tech security system with expensive DVRs and cameras. Additionally, my employees and I all had to get badged through the state, and we were required to track all of our cannabis, cannabis-infused products, and byproducts through a confusing track-and-trace system called Metrc.
I was completely overwhelmed and did not have the money for the licensing fees and all of the infrastructure the state was now requiring. The deadline was approaching/looming to get the 20+ page application submitted, along with the $3,500 licensing fee, which was pretty much all the money I had in the bank at that time. I had been procrastinating completing the application, and two days before it was due I found myself at a crossroads. Should I give the state all the money I had and risk not being able to pay rent? If I completed this application, would I even get approved? And even if I got approved, how would I afford a new space and all the equipment that was now required? I seriously considered giving up at that moment.
I called my mom because I did not know what to do. She advised me to stick with it, sit down and fill out that bear of an application, and write that hefty check. My mother was supportive of what I was doing and believed in the potential of my business. She told me that if I did not take the initiative at that moment and take a leap of faith, I might really regret it. I heeded my mother’s advice, sat down, filled out that super annoying and lengthy application, and wrote that check with a lump in my throat. I am so glad I did and grateful for my mother’s support because she gave me the much-needed nudge at that moment to continue forward. As a result, I have never looked back or regretted giving up on a dream.
Since then, I have been faced with all kinds of challenges. They actually seem to get bigger and potentially more intimidating as my business grows. But with each test I face, I feel like I evolve and become more confident. My mother says that challenges are valuable opportunities to grow. If you can keep a positive mindset during difficult times, I have found this to be very true.
Where is Mary Jane’s now? What are your margins and how are you expanding?
A: Mary Jane’s Medicinals products can be found in hundreds of dispensaries across Colorado and are now available in Oklahoma and New Mexico, with expansion planned for more states in the upcoming year. We are launching a hemp-based line this fall, which we will be able to ship nationwide. We recently launched a new product called Super Strength Nano Salve that combines a very high potency of cannabinoids, a 1:1 ratio of CBD to THC, and nanotechnology for improved absorption. We are already receiving wonderful feedback from our customers on the efficacy of this product and sales are growing rapidly.
It is a turbulent market and some years have boomed while other years have felt more like a bust, so our margins have fluctuated. But I have managed to hang on to my business during this roller coaster of a ride, and I am working towards making Mary Jane’s Medicinals into a national brand that can bring the benefits of cannabis-infused topicals to millions.
What advice would you give to others getting into the topical business?
It is a different industry now than it was when I entered it back in 2009. I would recommend to anyone interested in getting in to do their homework. There are so many regulations now, so many eccentricities in operating a federally illegal business, as well as a lot of competition with corporations that have deep pockets. Make sure you fully understand the laws, which differ significantly from state to state. Have a solid grasp of all the unique issues a cannabis business has to face, such as limited access to proper banking and unfair tax laws. Then make sure you have a unique quality product and a solid team. Take it one step at a time, try not to get overwhelmed and stay positive!