On this episode of the Cannacurio podcast, host Ed Keating sits down with Chris Violas, CEO and founder of BLAZE. Chris shares his journey into the cannabis industry, dating back to 2010 when he co-founded his first dispensary with his father during California's Prop 215 days. Drawing from his firsthand experience, Chris discusses how his time as a cannabis operator inspired him to create BLAZE®, a company dedicated to improving operational efficiency for cannabis businesses.

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Cannacurio Podcast Episode 61 Transcript

Ed Keating

‍This is the Cannacurio podcast powered by Cannabiz Media. I'm your host, Ed Keating, and today we're joined by Chris Violas, CEO and founder of BLAZE. Chris, welcome.

Chris Violas

‍Thank you Ed. Excited to be here. It's been it's been a minute.

Ed Keating

‍Yeah. Yeah. Great. We got to run into each other in Miami a couple of weeks ago and I'm glad to continue the conversation today.

So first thing we always want to ask on the pod is how long have you been in the cannabis industry and how'd you get here? Like where were you before?

Chris Violas

‍Yeah, no. Great question. And honestly, I tend to surprise people with this. I've actually been in the cannabis industry since about 2010, so it's been quite some time for me.

I started back in the day. I was actually a junior in college when I started our, my first dispensary with my father. This was back in California, you know, Prop 215 days, some medical days. My father had been in the industry for quite some time. He's been a cannabis attorney since he's been doing this since about 2006.

And really started to shape, you know, what California cannabis started to look like back in the day. So I got an early glimpse of, Kind of what some of the dispensaries and growers in Long Beach and LA and Orange County were doing for the medical program, Prop 215. And I got excited and said, Hey, I want to get in business.

I'm an entrepreneur. Like this looks interesting to me. So we started our first dispensary called Cannabest in the central coast, California, and I think it was 2010 and ultimately sold out in 2014. So I've been in the problem. I've I've lived it personally, but ever since then, it's been it's been quite the journey.

Ed Keating

‍Well, that's pretty interesting. I, when I got out of school, I worked for a gigantic publishing compliance software company. And I remember our CEO at one point as they were transforming this, you know, 500 million organization, talked about some of the people who said on our on the teams of the company, They, they lacked a practitioner's perspective, i.e. there were lawyers and accountants who chose to be writers and whatnot, instead of being an accountant or lawyer. So, you know, here, you've actually been on, on the inside and probably got to see the problems firsthand. Did that help you say, I'm going to create a company that's going to make it better to operate these businesses that I just came out of, or, you know, was that sort of the inspiration?

Chris Violas

‍Absolutely. I mean, look. At the end of the day, right? You kind of have that intrinsic, just gut feeling to go help, right? And you kind of know instinctually where to go because you've been in that situation before, but look, it's, it's really shaped our company. Frankly, it's shaped how we hire, what we look for is shaped, how we go to market.

When you talk about that, what our product line looks like. But you know, we, to your point, we use our software. I use, I showed you our point of sale station right before we jumped on the pot, but you know, I run 20 transactions a day at my office to use our software. I do transfers on our software. If we're not using our own, you know, not using our own software, like how are we going to get better at this?

And so being that domain expert going to solve those problems. Yes, we're not. Perfect in every angle we take, but at least we have an opinion that's coming from experience and then we continue to collaborate with our operators, right? To kind of get that full circle feedback loop and ultimately hopefully produce the best product for these operators.

So it's a big part of who we are. It's a big part of our future and something that I take a lot of pride in.

Ed Keating

‍Yeah, that makes sense. I mean, I have to live the same thing when I do a lot of my reports or analysis. I use our product to get the data because that's what our customers do too. If they're trying to figure out well, where was their growth in the industry?

I can go tap into these reports and it actually helped us build them and architect them originally because Ed kept asking for all this info and the data science teams like, yeah, Wait, let's just build this out once. So then you can have it and you won't need to, you know, come to us for us. You can self-serve.

Chris Violas‍

Exactly. Yeah. So that's, yeah, so it's been quite a bit of a journey for me. Right after I sold the, the dispensary, I went into big tech and started working on, with big companies, like Samsung, spent about four years at Amazon web services. And during that time at AWS is really when I started to, , build what is BLAZE today.

So got a little bit of cannabis tech that's kind of driving us forward here.

Ed Keating

‍Wellso what's interesting is you didn't just stop at, Hey, I'm going to build something and just perfect it. Interestingly, and like we'll talk about later, you actually have acquired some companies and brought them into the fold.

And who've you brought in and what, what has that been like? Because, you know, having been through that in other industries, it's a, it can be very tough trying to meld two cultures, two companies, or in this case, I think three, tell us what that was like and how that has worked out.

Chris Violas

‍Yeah, look, I think first.

We have to understand kind of the space we're playing in this case, the canvas industry, right? We have capital challenges for the most part, limited capital partners that can come in and finance some of the things that we want to do. So from a traditional technology startup kind of trajectory, we have to think about things differently.

We have to be really stringent, very disciplined in the problems that we tackle. And so naturally, as we started to look up and we started to look at all the opportunity in cannabis, you know, I was very open to finding some partners that could join forces and, and kind of build what I believe to be the chassis for the industry plays be that, that inventory POS rail, and then kind of building things on top of there, whether it be e-commerce or, or so on and so forth.

So, you know, I went out with this thesis essentially that, Hey, if we can find. Companies that find particular that, that match a particular DNA, like let's go ahead and pursue these things. That DNA is, you know, scrappy founder-led teams haven't raised a lot of money, but are very familiar with the domain either have operated in the space or, you know, have some sort of traction.

And so when we started to, once we put that thesis out there to the board, they, they backed it. Then we started to go look and see, okay, well, what are we missing here? What's going on? The U S was very this is back in 2022. It's. Very messy, right? We have new markets coming up, some slower than others. And we can talk about rollouts and all the challenges that the U S has.

We looked up and literally looked up to the North. And the first company that we acquired was a green line, so a Canadian point of sale based out of Vancouver, and a very fortunate to meet that team. Just fantastic operators, frankly, Albert he's the founder. I just did an incredible job building this company along with Peter, Sam, you know, some of the early founders some of the early hires of that company.

And so we went into the, the Canadian cannabis market. And as you know, it's a mature market. It is a difficult market. That being said, there's not that many competitors out there. We've got Cova Tech, POS ated run at it, but didn't quite get the movement they were looking for. And so right away we were able to get market share.

But most importantly, we got a lot of interesting lessons that we learned from the Canadians. You know, they had a lot of customers that. 50, 40, 30 doors. It's very often it's, you know, we had the MSOs in the U S, but we don't get that kind of scale and necessarily right out of the, right out of the gate in the U S we're able to really understand enterprise at a high level.

And so that was back that acquisition happened in June of 22. We talked about the the post-merger integration, but that was that was a great purchase for us. Really enjoyed that team and that market. I've learned quite a bit. And then subsequently in January of last year, it's been about a year now we decided, Hey, we've got a point of sale that is really sophisticated in the US called BLAZE.

We've got a point of sale that is very performant has meets different requirements in Canada. Like, what are we missing to help really drive this forward? And e-commerce was that answer for us? And really trying to bridge that, that solution and, and to really enable commerce. And so. We had partnered with a company called Timber for about four years in the U S.

They've been fantastic. Really fit kind of our, again, that, that perfect DNA, but also the vision for where that product was going. And so we decided, Hey, you know, at this point we've got all these doors. We need to get E comm on top of the, not because we want to win every single deal, but because we think we've got a better product out there.

And so we've. We acquired them and rolled that out pretty damn quick last year. And I'm really, really grateful for Scott and Tiago and Kyle, who are the founders of that company. They've been fantastic to work with. So, but there's challenges. This has not been easy, right? Two, two acquisitions in less than 12 months is not simple.

One from a legal standpoint, financial standpoint, and then obviously you mentioned culture, which is a whole nother piece. So I'm happy to dive in wherever you want to go, but yeah,

Ed Keating

Yeah. Well, and also as you touched on, you know, the boundary of being in, in, in two different markets, I mean, I, I guess the, the other follow-up question is, you know, how do these pieces fit together?

And the other bigger meta question is. What does one need to have to compete in the space now? Like what's POS 2. 0? Like for a while it was like, Oh, we got to get into payments. And then, you know, that got kind of crazy and nutty. So like, I'm just trying to figure out like, what is that really looking like now, or what does it look like for you, Chris?

Chris Violas

‍Yeah, look, I think. We are obsessed with the retailer. We want to empower them and not because we have aspirations to be a marketplace and go, you know, deal with the consumers. That's not, that's not where we want to be at all, or we want to be as, Hey, how can we give you the best tools as an operator to be successful and be profitable and frankly, run your business with as little resources as possible, right?

Cause we all know how taxing this industry is. And so for us, it was e-commerce, right? Payments is a big focus for us, obviously, just given where we sit in the point of sale, but I think You know, we're starting to pick our head up and specific to cannabis, there's a lot of things that still need to be solved here.

Okay. They, you know, we're focused a lot right now on just normalizing data. When data is messy, I'm speaking to the choir here, as you know if data is messy, it's almost impossible, right? To find insights and really drive that business forward and optimize it. BLAZE itself is a very enterprise-ish tool.

And so we've got all these fine-tuned knobs we can turn. But again, we don't have the right data sets. It's really difficult to understand what to turn when. And so right now, big focus on, on the, on a catalog. We've, we've got great partners. We're working on that. So you should hear more things coming out there.

But a lot of enterprise feature sets is what we're focused on right now. So things like single sign-on, just. Basic things that really can enhance the experience, especially for those that have 40, 50 doors. Now you talk about de-provisioning someone across what 10, 15 systems. I mean, this just gets out of hand pretty quick.

So there's a lot of things to do to continue to mature where we're going. But I think right now the catalog is really interesting for us. You'll see some thoughts on ads. We're doing some really fun things that call flowers in two weeks. Which has never been done before. We can talk about that, but just basically taking the mobile shopping experience or the in-store shopping experience taking a different approach at it.

So we've got a lot of stuff we're building, but I'd say right now the big theme is really normalization where we can.

Ed Keating

‍Excellent. So when we were at that conference a few weeks ago, Canada Data Con, a lot of the talk was on data. A lot of the talk was on retail. And at that. At the end of the last day, I spoke to an entrepreneur from Colorado who actually runs a bunch of stores.

He was on a lot of panels as you were well-spoken. And the one thing he said with me that really stuck with me is, Ed, retail is retail is retail. And his point, cause he'd worked in other industries. He came from the liquor industry among others, but his point is that cannabis retail is really just retail like other industries.

Obviously there's a couple of things that make it tricky or challenging, but. You know, we're solving problems or the industry is trying to solve problems that have already been solved in other industries. You know, do you agree with that? Like, you know, are there a lot of things that we can just borrow where we're like, Oh, we have too many SKUs.

Well, you know, my supermarket has a lot of SKUs or the state of Connecticut has 89,000 liquor SKUs, that's a lot, you know, and you know, we gripe about stores having too much, but. Is retail the same across different verticals and, you know, cannabis is just a flavor of that.

Chris Violas

‍Good question. I would say. My question, my answer has evolved to that question.

At first, I would say absolutely not. But what really, what made up that answer to the compliance thing? Well, it's very different right now. Is it that much different? No. A lot of people have self-reporting whether it be COAs, right? Certificate of analysis or some, some respect to self-reporting. Like that is something that's been around for quite some time.

So I would say moving forward now where I see things that yeah, retail is retail, of course, we have different challenges and nuances really, particularly around marketing and how we talk to our customer, but generally outside of that, when we talk about inventory, when we talk about auditing reconciling months, when we talk about just purchase orders and demand planning, like these are things that are scientifically based, like, you know, yes, retail is retail in that respect.

So yeah, there's some nuances there. I would say the biggest nuance probably to me is the compliance. And then again, when we start looking at delivery, just. Every other industry and retail has third-party last mile type of delivery, and we just don't have that. So that is an interesting nuance. Is it a complete deal breaker and something to be spent a ton of time on?

No, not in my opinion.

Ed Keating

‍Yeah. Interesting. So in, in terms of, you know, you've helped us understand, you know, what BLAZE does and the different parts of sort of the, the value chain that, that you're in. You know, one thing I'm trying to get an understanding of is. Does your typical customer take advantage of all that, all that BLAZE has to offer, or is it more of a pick-and-choose kind of thing where some of those with a larger footprint take the whole enterprise piece, whereas maybe the mom-and-pop shops are a little bit more, Hey, I just need a POS for now, Chris, and then, and then, you know, we'll move from there.

Chris Violas

‍Yeah, I mean, it really depends on the life cycle of that business. Right. But we've obviously made a huge effort since we acquired Timber to start. Moving e-commerce and at least that offering to our operators. And we've done a hell of a job, I would say in the U S and Canada's really getting moving now had to make some changes just specific to that market, but we got those done.

Yeah. So I think in general, we obviously preach an open system. We want the best tool for these operators. And so a tool for a mature company, that's got 10 doors, 15 doors that has a technology team. Like they want API access. They want to programmatically control things. So we allow them to do that.

And then we've got some operators that really like, you know really like reviews, and so they might go with a different e-commerce provider that can provide a review type of format onto their products. So like we integrate with a lot of operators or a lot of different partners. That being said, I would say the US almost half our operators tend to use the full stack with us a good amount.

And in Canada, we are just getting that moving, but we're seeing a healthy trajectory and trying to move that needle quite a bit. So again, we want to win on us being the best product. And so hopefully our e-commerce, which I believe, you know, Timber and BLAZE e-com to be the best in class, like continues to resonate the way it does.

Ed Keating

‍Excellent. Excellent. And that's a good segue you know, for the last five years, we published the point of sale report where we call as many stores as we can and try and get who to use, who to use, and we chart the changes, see who switched from whom, who gained, who lost. We count, at least as of last year, over a hundred, Okay.

North American vendors in sort of the POS space, or at least those are the answers that people gave us when we called, which is crazy. It's about 70, 75, just in the U S alone. How does one stand out when you know, it's, it's competitive and you guys are pretty close to the top in terms of our, our survey, the top five, I think have like 60 to 70 percent share and then it gets a little nutty after that.

But you know, how, how do you guys stand out in an environment like that?

Chris Violas

‍Yes, it's hard, right? It's extremely hard. I would say the top five, I would imagine are well capitalized to some extent. So you've got to be able to traverse regions well, and that is not hard. When I talk regions, I'm talking states most of the time.

Moving from California to let's say Washington or Oregon, very different types of requirements, right? And so it's very difficult to be able to traverse these states. We've had our fair of challenge, you know, our fair share of challenges and also successes in that, that front, you can look at New York, New Jersey, we've had great, great traction, but, you know, we've, we've definitely stumbled.

So at least for us what makes us stand out at the end of the day? We have a very good inventory system that really helps us stand out. And yes, we have to adapt to these compliance nuances, but generally speaking, you can tell when our sales team gets on, when our account care team gets on, again, we talk about kind of why it's important to be a domain expert.

Like you can feel that come through the call and that's one of the biggest pieces of feedback we get is, Hey, the system feels like it was built from someone that like knew what they were doing and what they wanted to do with this particular product and operation. So for us, we've done very well in California.

That's where we started. It's one of the largest markets. So we've had different challenges, you know, we've got some dispensaries that have incredible volume, you know. 1,200, 1500 orders a day. We're talking in volume, which is just fantastic. I'm a single location. We have some that are the size of Costco.

It's kind of crazy to watch transact, but we were fortunate to be kind of, you know, I would say hammered on right off the bat. We had some really sophisticated operators. We had to kind of build that. With, or we had to build a product out of mind. And so for us, I think standing out one, you got to do right by your customer.

A lot of our sales are all inbound, you know, for the most part coming in. So these are referrals that people are talking about. And again, it's just, it's one thing to get a product out there, but then to support it and have people stick with you for three, four years, I think that's really where people start to build that trust and honestly, you know, root for us to a partner or someone in another state and say, Hey, you should really go with these guys.

They are here for you nonstop. And I think that's what makes us stand out is like it's post sale. This is really where the rubber meets the road.

Ed Keating

‍It's true. That's true. Now you touched on inventory, which was a big part of the conversation at Canada Data Con. And I learned a lot listening to you and others speak on panels.

And one speaker did sort of a whole premise on Inventory is just a lot of carry debt. Like, you know, it's, it's just, you know, where all your money's getting tied up. So how does your solution help people? Because that seems to be, you know, if you could tell me if I'm running a store and you got way too much invested in X, you know, you have 45 days worth of inventory for that.

You don't want that, you want this. Like, are you able to provide those insights for your customers so that suddenly they're like, wow, we're way more profitable now that we have BLAZE than before.

Chris Violas

‍Yeah, no, absolutely. I mean, look, inventory is the name of the game and you are right. Like I always tell our operators or anyone that's getting into retail in general, inventories, cash, that's it.

Like if you give something, if you give something to someone, like you just gave them 20 or whatever that value is that you paid, cause it is real cash. It's going in and out here. So yes to that, that viewpoint to the question on how do we help? Absolutely. I mean, we see inventory aging, we have inventory aging reports.

We. We've got BLAZE Insights that, you know, give you recommendations on what to clear, when to clear it, right? When things are expiring, right? A lot of people forget about expiration dates and it's like, no, we actually, we have to adhere to those, right? And so BLAZE Insights is our reporting tool, sits on top of our point of sale and gives you a lot of visibility into inventory.

Great flow, right? We can look at sell-through rates and all the great stuff that we have access to that said, you also partner with a lot of other folks that were at Canada con that can kind of go that deeper, deeper level and have, they spend all their time just looking at that stuff. We are doing a lot of other stuff outside of just reporting.

And just inventory control. So we've got, I would say we can definitely help an operator get their inventory under control and really understand it. And then from there, if you want to take it to that next level, you know, you can go talk to the happy cabbages, the causes, right. Of the world.

Ed Keating

‍No, that, that, that makes sense.

Cause the, you know, there's a, there's a lot of data to be analyzed and understood. And, and I think different operators have different skill sets at that and there were have a team for that.

Chris Violas

‍I think, you know, for us, what I took away from Canada, what I'm hearing continuously throughout the industry is just like, help me do it and make it simple, right?

Because in the past, we talked about kind of the trajectory and the life cycle of these point of sales and not bucket us in there. It was very much just, hey, we've got the data. Here it is. Here's a big spreadsheet, right? That's great. But analysis, you know, or process by analysis. It's just like, what do I do now?

Right? Especially at the velocity that some of these, these doors move. And so that's what we're really focused on is, okay, again, retail is retail. What are those core metrics that are going to pop out and really help you, especially at the inventory level, right? Really help you optimize. You don't have.

You know too much carry and you're not holding on to products that are not moving and are not wanted by your customer So yeah, that is actually where we sit and you know We have a lot of fun with it actually because it's so different by market and so you can have one operator in California go to New York go to New Jersey go to Mass, you know, go up to Toronto Manitoba.

I mean everything's Yeah,

Ed Keating

Well, and your point about to write his actual data reminds me of where we were 10 years ago, like, Hey, we have all these licenses. Isn't that great? Like all the data and people like, well, yeah, it's pretty good. But do you know any of the people there? We'll get that. And what about we just got it?

Got it. Got it. Got it. And now it's more like, Oh, yeah. We have things like, well, which ones have labor peace agreements and union contracts, and which ones have real estate investment? Like just, you know, as you said, talk before about smarter operators, people asking for, you know, harder, more interesting things.

And so but you're right. Like at first, it's just, well, we have a big pile of data. Well, that's good, but great would be this. So so, so I appreciate, I appreciate that. So, you know, we talked about the point-of-sale play space being really crowded. There's also been. Sort of a lot of tumult in the Canatech space over the last year with acquisitions.

So, you know, the couple that I remember, Biotrack and Alleaves, Corona sort of getting merged out of existence, a board coup at Dutchie, Positive Bit buying Hyper. I mean, a lot of stuff moving around and we always hear that another one's in the offing. Do you think, do you think the shakeout is going to continue?

Chris Violas

‍I do. You know, and, and I do think you're going to continue to see that. Why again, limited capital, right? And so how do you, how do you maximize resources, right? And reach, well, you gotta have the reach and you gotta have the resources. So oftentimes in a number of these, right these M&A activities, like one tends to be the top dog on tech, one's got distribution, and then you see these guys kind of come together.

So I think it will continue. I think what we're going to see is. Less of these bigger deals happening, frankly and it's just more regional stuff. You know, I would say like the positive hyper, something around those sizes is what we're going to probably see. There's just a lot of really good technologists out there that built some good companies that, again, are so locked into that specific region where they just need access, right, to a bigger distribution.

But I think at the same time why it's, you know, you kind of ask the question, I think with a negative context, that's what I got at least coming from you. And it's like, these just haven't gone very well. And I think that's, it's hard to do M&A, and a lot of people don't understand how hard it is to, again, started off with it.

It's like culturally to get that, that fit in is very, very difficult. You know, we had, let's say like, that's one of the things I focus on most right off the bat was, Hey. How can we really get these guys integrated? And I've got a candidate to con from the first candidate to con talk on this, but like, how do we get them integrated fast, right?

From a culture standpoint, the first thing that I did was, Hey, comms and, you know, wherever your CRM, like that goes first, that happens literally within week one, week two is once that happens, it just has a center of gravity and starts to pull everyone together. But it's interesting, you know, we've had to work with different cultures, whether it be.

In Canada, right? Great, great folks, different culture than the US just how we type, how we talk, how we, how we manage meetings. And that just takes time and you gotta be patient and flexible. So I think with a lot of these acquisitions, you know, there's a, this sounds great, but that hard work of that integration just hasn't been there.

And so maybe not hard, the hard work has, but it just hasn't really panned out. Right. So I go back to, Hey, these smaller deals are just easier to consume, easier to integrate versus these larger deals. They're just hard.

Ed Keating

‍Yeah, right. And it sounds like you got a very thoughtful approach to it as well, which is what's going to make it successful because it is, it is really hard to do well.

And I think a lot of times in any industry. The opportunities are supply-based where something, something is suddenly for sale and you have to sort of react as opposed to respond like, well, what are we going to do about that? And if you're not ready or haven't been, let's say, as thoughtful as some, and it's just, Let's call our, our, our financial people and see if we can do this.

That can lead to some tough outcomes, I think.

Chris Violas

‍Yeah, I agree. But look, I think we're going to see some more, you know, M&A. I just think it's natural for, you know, an industry that's so early on as cannabis. So we'll see where it goes. We're seeing a lot of operators start to, you know, continue to merge and kind of create larger entities.

But yeah, I'm interested. This year is going to be always it's going to be fun because you got, you got to be, like I said, capital stuff right now. So you got to put yourself in a position to win on your own and we'll see what happens this year.

Ed Keating

‍Indeed. No, I totally agree. Now, as you look out of state, you touched on a couple of them before.

You know, how do you decide which states to go into? Because I believe most POS systems don't just cover every state that, that happens to have a license. Like you're probably not going to spend a lot of time in Iowa where there's a handful versus New York, where there's going to be, you know, well over a thousand.

Chris Violas

‍I mean, look, it's just business at this point. So we first off population centers, right? We're, we're the population centers that can support these doors, right? You look at Oklahoma, didn't quite work out that way because the population center wasn't quite there, but California and the Michigans, right.

Even though Massachusetts to some extent, New Jersey, New York. That's really where we start to look at it. It's like, where can we go in, you know, a lot of doors and do it quickly. The other markets for us, too, is just the S&Bs are really, we do really well with them. And so wherever we can find states that don't necessarily have that limited license set up we do very, very well.

We are trying to change that because we would like to go into those states, but generally speaking, we look for those large population centers that are going to support those licenses.

Ed Keating

‍That makes sense. And that, you know, probably helps from a sales and a market, a support team structure as well to have it sort of concentrated or even in the right time zone sometimes matters too.

Chris Violas

‍Yeah, there's definitely, you know, benefits of that, but I would say our goal is to cover every state. We've got about 19, I believe, or 19 or 20 or so, I think, in kind of the green check mark for compliance. Yeah. And we're continuing to work through obviously New York just threw some fun stuff at us trying to integrate bio track in 60 days.

So, yeah. We're on that. But yeah, generally speaking, like our goal is to get across all markets. Like to your point, Iowa, Utah might be some of the last ones we get to, but you know, there's, there's good operators there. There's good volume there. It's just, Hey, we got to pick a, choose our battle. So we, we've started to think of you know, what are the commonalities to enter new States, right?

Like, let's go attack those and try to create frameworks around those, those variables that we can address them quicker. Our team's been able to do that. We've established a new program called the Trailblazer program, which when we ever, we get into a new state, one or two customers, we are partners with them.

Like we are there day in and day out for the first call three months and having executive sinks weekly and making sure things are going. Cause again, we can read the rags, we can have our interpretation of them. We can get caught 95 percent there, but it's on the ground that kind of completes that full loop for us.

So that program has been very successful. Again, we're just trying to be respectful and mindful of working with new operators in new states, because it is, it is challenging.

Ed Keating

‍Absolutely. Now I was curious, you know, sort of trend-wise, looking at other things that are happening in the industry as we sort of look a little bit more forward.

You know, and we spoke about this in Miami. What do you think is going on with. You know, hemp and hemp-derived cannabinoids because, you know, as a guy who was an econ major in college a million years ago, I remember substitutes and compliments. And I think a lot of people are just like, Oh, I went to the dispensary today and bought something.

And they don't know that it's not a quote-unquote licensed cannabis store. Like, is that having an impact at all for, your clients or, or, or even for BLAZE?

Chris Violas

‍Absolutely. Like we've had, look, I would say when it comes to hemp, there's just so many topics to cover, but generally is it eating cannabis consumers?

Like generally? Yeah, it is. It's starting to pull from dispensaries and retail. At the end of the day, there's obviously different types of archetypes, right, two archetypes, and there are certain ones that are more prone to exit, call it the recreational cannabis market and move over to kind of the hemp and CBD direct derivatives.

But look, it's a huge market it's growing and it's something that's, you know, it's frankly unregulated. And so you've got a lot of folks shipping products across state lines. And so folks are being like, why can't I just get it like this? This is normal. And to your point, they just don't have the education to understand this is totally not in the cannabis, like legal supply chain necessarily.

This is, you know, under the farm bill, it's a little different. Oftentimes they're not reading the farm bill to a T when they're producing these products. So it's just, It's complicated. It's kind of confusing. I think for us you, there's an opportunity there. Call it high-risk retail. If you want to call it that we're square and just other point of sales are not going to want to play.

And so for us, it might be something we'll look at and support in the future, but generally, it's definitely full of its own challenges for sure. You don't have a state-by-state stuff, but. You have a lot of hair. Is this even a legal question? And if they're processing sales through our platform, like, Hey, we have an onus to, to, to understand what's going on.

Ed Keating

‍Yeah. Yeah. And similarly, I mean, we see a related trend with with vape and smoke shops, because, you know, in Connecticut where I am, they are often the ones getting in trouble with the regulator for selling. Cannabis vapes under the table or to kids and whatnot. And so, so they'll make a big pronouncement about it.

And then I know that all those businesses have legit other licenses with the state, like they're vape sellers and they're approved by the state, but they're just not approved for cannabis. So, yeah, I think we're in for some interesting times ahead is that all figures its way out. So.

Chris Violas

‍I do think it's a good, you know, it's a good platform to look outside North America and look outside interactivity across the, you know, the, the global market for us, I'm always, that's always been a question.

You know, when I look at businesses, I look at even at our own business, like what's our total TAM, like, how do we make this a, you know, a two, three, 5 billion company. We need that global reach. Hence why I went to Canada. Hence why we're looking at other, other folks, other ways. But I think CBD is a great platform in, in hemp to really open up global trade.

And I think once that happens, whether, you know, various markets take on the THC component of it or not, we'll, we'll see, time will tell. But I think just opening that up, it's a good vehicle for that.

Ed Keating

‍That's a great thoughtful view of trying to, you know, get out of our green bubble here in the US and realize that there's a lot of other people on the planet and there's a lot of other initiatives.

I mean, you know, look at Germany in the last week or so, moving along or even the Netherlands, kind of, although that seems slow and pokey, Switzerland, so you know, you've been in it longer than, than, than most. So so it'll be interesting to see how, how it plays out. In terms of the industry as a whole, it's sort of, you know, wrap up and, and I think back to something you said at breakfast a few weeks ago, that, you know, you really tried hard to be very capital efficient and, you know, spend your money carefully, which is good, especially in this environment.

When do you think our industry is going to emerge from this kind of funk that we're in? Because it's been a capital crunch, you know, almost since 2019. And then we got the boost in COVID when money came in and now has receded. So any thoughts or guesses on that Chris, to play economist for me here today?

Chris Violas

‍Yeah, look, oh man, it's, I feel that when you say, when you, when you, when you say that our operators feel it, you know, our partners feel it and it's just, man, we're doing some great work, but then to have this. Some of these constraints are really, it's tough, right? It takes a lot of willpower to push through.

So yes, I've had a huge focus for our company and, and, and being capital efficient and, you know, if you look at all the major ones, like we're very much at the bottom from a capital raise perspective, but yet look at our door count, look at our market share or we're well above our punching weight will this change?

You know, obviously the schedule three gives us a little bit of hope. From just it being capital, be more accessible, whether that floods in the market or slowly trickles in. I'm not quite sure. And when that happens again, really, really up in the air. I I'm sure we could have a whole hour conversation.

But look, I think at the end of the day, you need that and we, we need better, a better financial system. I mean, we talked about some of the payment hurdles, right? We need a Visa. We need a MasterCard to come together to work with us and say, Hey, look, just as similar to, I don't know people, you know, buy firearms with credit cards.

Like, why is it so different to buy cannabis? Like, why can't we work together and make this more efficient for everyone involved, right? And safer for everyone involved. So I think you get a V, you get a credit card brand to start getting some movement to support this industry. The banks are willing to support it.

I know that today. So if we can get some movement there so moving on schedule three, I think we're going to see one, our retailers become what? With a schedule three, I'm predicting about 20, 25 percent margin gain for these folks. Like all of a sudden those folks that are just making it are sitting really well and they can start to grow and they can start to reinvest.

Everything that they've done to help grow their business. Right. So I think that is going to be super meaningful for everybody. Again, when it hits, I do not know. So whether get ready for the storm, it's going to continue. I would say for a while. But you know, those that are, that are doing well right now, I mean, it just.

They are really going to shoot like when it happens, it's going to be exciting. So yeah, definitely tough. Hopeful for some movement. Again, those that have been here and are here still have deserve a ton of respect just for making it and sustaining it. And now at this point You know, I think we're all ready for some relief somewhere.

Ed Keating

‍Yeah, well, well, well said. I totally agree. So last question I want to ask you, you touched on this a little bit more earlier, which is what are some of the things that we might be able to expect from Blaze in the future without giving away too many details? You mentioned, I think, advertising and whatnot.

So we'd just love to hear what you can share so that we can think about that.

Chris Violas

‍Yeah, absolutely. Look, we're really excited about some of the product work we've done with our acquisition. So you look at Timber we are just launching our in-store mobile shopping experience. I don't know if you've been to Ikea or to Home Depot and you have the wrap, but it basically, you know, your most stores retail, when you want to order in the store without going to a retail associate, you go to a kiosk.

Who wants to put their personal information on a damn kiosk in the public? No one. So we built what we call the in-store shopping app, which basically allows you to be your own kiosk, go around the store, scan QR codes, and add it to your cart build the cart check out and have it ready in a minute Once it's like my

Ed Keating

Grocery store actually and yeah, we could do that here where my phone is my scanner

Chris Violas

‍Exactly, so that's we just launched something similar to that in with our ecom product. We're debuting this thing at a large scale with Hall of Flowers in about two weeks in Ventura. The whole Hall of Flowers experience I don't know if you've been there before or experienced it, but each retail buyer will be scanning you know QR code from the brand, building their cart, and then getting their samples through our apps.

That's really exciting to see that technology used at that scale. So that is new for us. We've also, you know, I really challenged our team about 18 months ago to be like, guys, if we were to rewrite our software, what would we do differently? What, what could we do to really make ourselves compete better, help our operators out more.

And so ultimately we came down to. Rewriting our point-of-sale. And so we are really excited. That is, you know, a month or so away from being deployed. And our biggest hurdle has been just kind of device-agnostic platform. We've had operators have to buy iPads to run the point of sale, which is fine. But in a capital-constrained market, if people don't have those, they're not going to go drop, you know, 20G's to go switch out hardware, to go move to a better system, right?

It's that kind of, that balance. And so for us, we are, our points, it will be a hardware agnostic or really platform agnostic. Web Android iOS. We're just extremely excited to get that out. And our you know, we're about, we reduced the clicks by 40%. So transaction speed will improve the actual performance of the point of sale has improved.

So generally it's just kind of our 2.0. It's, it's something that I told the team, like, I don't want to build a point of sale again. This has got to be it. So we really challenged the team to do it. And I think that'll be a huge for us amongst, you know, some of the work we're doing in the catalog that I mentioned.

And that really, not necessarily from an ads perspective, just from a data normalization and helping an operator scale perspective that I'm really excited about so they can go in benefit from some of our partners catalog and be able to enrich their data set very quickly and not have someone, you know, in the closet from the back, just like typing and editing descriptions and uploading pictures, like we just don't, that's not a good use of our time anymore.

So that'll be coming out. All right, then. Yeah, I think the rest, the second half is going to be, see what else we can produce. But there's just a lot going on over here and I think we'll continue to push the innovation front. That's something that I really enjoy. I just don't want to build something.

I want to continue to iterate on it and improve it. So I would say BLAZE, we're at, you know, the best posture we've been in quite some time. All teams are moving at great velocity and everyone's happy. So we're just kind of. Day by day, chugging away and producing some good work.

Ed Keating

‍All right. All right. Well, what a great note to end on the Chris. Thanks so much for joining us today on the podcast. It was really great to learn more about you and your long background in the industry, as well as all the cool things going on in place.

Chris Violas

‍Yeah, I really appreciate you. Thank you. And the whole Cannabiz Team, you guys do a great job, and thank you for all the insights on the industry because it is it's needed, so I appreciate you and appreciate you having me on.

Ed Keating

‍Excellent. All right. Thanks very much.