In this episode of the Cannacurio Podcast, Ed Keating chats with Brett Gelfand, founder of CannaBIZ Collects and the Cannabiz Credit Association. They discuss Brett's journey from Colorado's cannabis market to pioneering solutions for credit and collection challenges in the industry. Learn how these organizations are transforming financial practices by leveraging data and collaboration to drive smarter credit decisions and foster business stability. Tune in for insights on navigating the industry's financial complexities and predictions for its future.

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Cannacurio Podcast Episode 70 Transcript

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Ed Keating: Welcome to the Cannacurio podcast powered by Cannabiz Media. I'm your host, Ed Keating, and on today's show, we're joined by Brett Gelfand, founder of CannaBIZ Collects and the Cannabiz Credit Association. So Brett, welcome to the show.

Brett Gelfand: Ed, always a pleasure to see you.

Ed Keating: Absolutely. As I was thinking back preparing for this, I think I remember the first time we met at a trade show. It was way back in 2017 or so. I'm thinking it was the West Coast. And I think for both of us, it was like we ran into somebody else who had a booth that had cannabis as part of the name. So we go way back as the two, cannabis founders.

Brett Gelfand: I know way back the name matched us up and I felt like back then I always wanted to use your product I just didn't have enough money back then to pay for it.

Ed Keating: I think you were monthly customers for a month back in 2017, but yeah…

Brett Gelfand: we loved it was like man, we got to grow this thing first So I just remember you guys having an awesome business model and a cool product from the very beginning

Ed Keating: Likewise. I want to, get a chance for other people to get to know you the way we have over all these years. So we'll start at the beginning. How long have you been part of the cannabis industry and how did you stumble in or stride in? However you made it into this this part of the economy?

Brett Gelfand: I'd definitely say stumble is probably the better word. But then I had to definitely stride through it. I I started in 2015, I was. Basically, right out of college I did not want to go the corporate route. Like most of my friends had a business finance degree from university of Georgia and I had a line job lined up to work for a consulting firm out of Atlanta and long story short, got hired. By a family friend to say, Hey, you want to come move out to Aspen, Colorado and help me weed a weed, help me build a weed business.

And I thought that sounds way more fun than than doing consulting. So I left in 2015 to, to go build this company up a vertically integrated grow processor edible manufacturer, whole shebang, raised $20 million, learned a lot, was promoted to CEO and managed 50 people and realized. All the ins and outs of the industry and a lot of the problems that I thought were going to be coming down the road, not just in Colorado, but outside of the state. So that's what led me to where I am today,

Ed Keating: wow. Wow. And during part of your time in the industry, didn't you also do some work in the packaging space? Do I have that right?

Brett Gelfand: Yeah, absolutely. So the big, the two big kind of, I would say opportunities I found when I was in Colorado, one was They were only selling joints, pre rolls and single tubes, and I couldn't stand it, at every dispensary They only were able to offer a single pre roll in the little, pop top tube tubes And I thought why can't you sell a pack of joints like they can sell a pack of cigarettes? People want to buy more than one and then if you're buying five, you're buying five plastic tubes. What a waste of packaging and plastic Long story short we created You Pack case in 2017, we launched was the first child resistant kind of airtight joint pack for pre rolls and, business did really well because we launched right when Canada was going legal and partnered with canopy growth and then had deals with Snoop Dogg and Seth Rogen and did all this really cool creative packaging for joy packs. But throughout that time, the other. Big issue I found in Colorado was credit collection problems. When I was out in Colorado, we were one of the first ones to extend trade credit to dispensaries. And I ended up, being CEO, but really I was a bill collector every day. I was chasing down dispensaries, making sure we had enough money coming in the door to pay our people. And long story short there, my dad happened to be a commercial collection attorney for 30 years. And I thought, all right, I'm going to leave Colorado. I'm going to start building up this packaging business and the whole manufacturing China. It takes a long time. So in the meantime, I'm going to start Cannabis Collects with my dad as a part time side hustle and ends up, as the years went on, people had less of a need for high end premium packaging and way more of a need for credit and collection services. So I ended up selling, my shares in the packaging business and focused all my attention here to tackle this issue.

Ed Keating: So Brett, Help us understand because we read a lot about this now. How big is the credit crisis in cannabis?

Brett Gelfand: Yeah, I mean there's been i'm sure you guys have seen studies and there's a lot of numbers being thrown out All I can say is just you know, we've represented close to 1300 different cannabis related businesses with collection issues so we've had you know over 1300 clients of ours that have come to us with some sort of problem in almost every legal market. And, it's very state by state dependent, but I would say, I haven't heard anyone that has extended terms in this industry and not have had at least one problem. So that's one way to put it, we can throw out big numbers here and there, but, to really scale it in my mind. We process over 150 million of debt alone just through our collection agency, 150 million of cannabis debt has been submitted to our firm to collect. And that's just people submitting through us. Imagine, how many other people are used to working with a collection agency and doing it on their own. Exactly.

Ed Keating: Yeah, and yeah, because I know you know self is often a competitor in a way where people try and do it on their own But if they're not doing it all day every day They may not be very good at it or not getting the same kind of results that I imagine that you're able to to offer

Brett Gelfand: exactly, and I think it's something that we battle with every day and something I definitely battled with when I started cannabis collects in 2017 because The industry was not familiar at all with what a collection agency even was. If you talk to any other business in any other industry, of course they have a collection agency partner. Of course they know what an escalation process looks like. What I get a lot in cannabis is, oh no, we don't want to have to pay a potential contingency fee and shrink into our margins to escalate a claim to collections. We will be better off doing it ourselves. But people don't realize that. The more that they're putting attention on accounts that are 90, 120 days, six months late, the less attention and energy they can focus on their current receivables and their, active customers. And it just becomes a snowball effect And those late invoices and customers, what we're seeing right now those guys are going out of business, every other day there's companies going out of business. You know for us it's preaching and trying to educate you don't even have to use our firm Just make sure you have an escalation process in place and it's not usually worth your time to chase the old stuff

Ed Keating: Yeah, I many years ago when I was still working in corporate america. I went to a it's really marketing product management training session and It was about market segmentation specifically and they had a unique way of segmenting your market Who are your most valuable customers, no surprise who are your most growable customers? You know those that will become the big ones and then they had a term that they called bz below zero They cost more to service than they give to the firm fire them and get rid of them So in some ways, you know offloading them or having you know You manage that relationship would certainly make a lot of sense so that you can focus on growing the business, not chasing down somebody who doesn't want to pay you or perhaps can't pay you. So with all that Brett, you've done something that I've only seen happen a couple times where somebody in a business essentially creates an association as a way to I don't know if it's extending your reach into the market or providing more services. Help us understand, the creation story of the Cannabiz Credit Association.

Brett Gelfand: Yeah, absolutely. So seven years into collecting money for cannabis clients and realizing that this problem is not going away so many of our clients and say, Brett, thank you so much for helping collect our money. But how the hell can we make sure this doesn't happen again? Because it's detrimental to our business. And you brought up a great point, Ed, just as a side note, like what we're seeing so often is cannabis companies. Not let's say dialing in on who the below zero customers are as well as they need to, they think a sale is a sale. And right now the industry is in such a tough position. Anything is better than nothing. And I'm here to scream. That is not true. If a customer is not creditworthy or, they're not paying other people, there is no reason to put your time, energy, and money building a product to ship it out. with a huge risk of you never getting paid because that's definitely below zero. You've spent cost and energy to build the product or solution that you probably won't get paid on. So there's a very big difference between a sale and cash in the bank. And I think that's really what we're trying to tackle here. So with that said, after running CannaBIZ Collects and realizing The mentality, the philosophy, the sophistication of a lot of operators in the industry needed some help there. We thought, all right let me try to go find how we can help provide credit scoring, credit reporting to our client base. I went to almost every major bureau. I talked to the small SMB bureaus that handle maybe more small mid market credit scoring, commercial reporting. Nobody has data on these companies and the reason is none of the cannabis companies understood credit reporting or were willing to share their data. So because we had over seven or eight years of collection data, we, like I mentioned, $150 million, close to 8, 000 individual placements. That's 8, 000 companies being placed into collections in the U. S. cannabis market. We are the only ones that had that kind of information. So last year we decided to create an association. CannaBIZ Collects has a sister company, totally different entity as Cannabiz Credit Association and provide the visibility of who was sent to collections through CannaBIZ Collects in order to incentivize members to share their data. Because if, let's say, DNB or TransUnion or any of these other bureaus went out and said, hey, run a credit score and share data with us, Most people are going to say, you guys don't have any data. Why would I share our data? There's not, there's no fair trade here. And the way that we were able to leap start this was the fact that we had such valuable information from CannaBIZ Collects, our collection agency, to say, Hey, look at all these accounts that have been flagged in our system that have been sent to collection and the outcomes of each claim. And in exchange, become a member, share your data. So over time we can have right now, we have over a billion dollars worth of AR data and collection data that the industry is working together to share information and make better decisions finally. And without, I don't, I think without having that leverage the credibility, the contacts from CannaBIZ Collects, it would be very difficult for the industry to adopt credit reporting because there's still a long road of let's say, understanding the normalcy of sharing information and credit reporting, et cetera.

Ed Keating: Yeah, no, that's a great point. There's some analogs with Cannabiz Media where we felt we're bringing in good sort of data processes in terms of understanding an industry being a database of record. One thing that you said a few minutes ago was really interesting. Why would you make a sale if you know you're not going to get paid? And I don't know how many of those companies or businesses. Know whether they're going to get paid or not and the visibility that the Cannabiz Credit Association can bring to this, is really a powerful light because for the first time, I think folks are going to be able to get that insight that they haven't had. So let's talk a little bit about the data and the data process. You mentioned you've got lots of contributors who are part of the association or, part of Cannabiz Credit. And how do you manage that madness? Cause that's a lot of data coming in. We have a lot of data coming in too, but yours is different because. Every, every customer can build their own adventure in terms of how they report information. So how do you manage that?

Brett Gelfand: It's an amazing question. And I would say it makes what we do very valuable. But because it's not easy work, right? You like every month we have a cutoff date, the 20th of the following month that we're acquiring our members to share data, the data we're looking for is as simple as essentially like an AR report exported from your accounting software. So it really shouldn't take any more than a few minutes. However, it's funny because I get a lot of prospects, people that don't fully understand what we do. Wait, why would we pay you guys to share our data? Why would we, be paying you to give you our information? And the price that we're offering the service for is such an immaterial cost to someone's, to most people's businesses. We're talking like a dinner date a month, less than 200 a month for the platform. To have access to over a billion dollars of debtor information. And this isn't just supposed to be like Like I, I can't stand seeing these things like the shit list, and showing who doesn't pay. That's not our intention here. Our intention is to build up credibility of who pays and also who doesn't pay well. And the ones that don't pay well, show them that there's now an association to help build guardrails so they can start paying better so they have better credibility. Not to just single out the good versus the bad, but long, long story here. It's about how do we make sure that we're getting data in monthly and as a terms and conditions, because it's only fair to members that are sharing that all other members share, right? It wouldn't be fair to get that price. And not be able to share. So it's pretty simple. We have a cutoff date. If you don't share your data, which is set expectations from the beginning, then we'll have to, we'll unfortunately have to create it. We'll have to lock you out of access until you share your information. And then we add you back in. So we've got processes in place. We've got an amazing team that's in place. And I think a lot of our initial members are very into what we're doing and are very proactive around, being part of this group. Cause it really is a community. In the near future, we've got some, API connections and data pools that we can take directly from, I'd say QuickBooks without anyone having to touch anything. So ways to automate this is going to make things a little bit easier, but it hasn't been a huge problem yet.

Ed Keating: And you've touched on a whole bunch of great points there, which is, you can't have this be the tragedy of the commons where we're all responsible, nobody's responsible. And I think by building that network effect of getting more and more people to be part of this community and sharing their data, that, that network effect, that benefit really benefits everybody. And if you choose not to participate, that is your right. But I can, it's so obvious that there's just a competitive advantage. If you're able to tell a company Here's people you want to sell to. Here's people you should be cautious with. We're all fighting for every dollar in this industry, especially now, and When those dollars are so precious, you need to be really smart and strategic. And if you're just looking at everything transactionally, knowing that you won't get paid, if the sales rep works a bad deal, that is not going to be a good situation. So it's a great opportunity for the industry and certainly one for you and your team.

Brett Gelfand: I think the biggest issue we're falling into today. And I'm sure you've dealt with similar kind of issues with being in the data business and having a sophisticated product and solution behind you is that what's happening now is credit extension has become so normal in cannabis because of the issues with banking, because of so many other factors, but we can all call a spade, it's become very normal for cannabis companies to extend net term to dispensaries or, ancillary to the growers. It's happening across the industry that trade credit has become normalized. The problem is the management and the experience and the skill set of credit and collection is not meeting the activity of credit and collection. So most other companies That are outside of cannabis that are extending terms have a very serious process around how do we extend credit terms? What's the process around doing credit checks? What paperwork are we getting? What's going to happen if they default because when you extend credit you are literally acting like A bank would never just give a company 10, 000 without having a personal guarantee or without having, tons of paperwork and having some sort of credit checks here in cannabis. It's sure I'll sell you 20, 000 worth of product and, maybe pay me in 30 days. No problem with no interest. It's a free loan. And. I think right now it's the next evolution of we are getting to a place where our data is getting better and better every day. I'm sure we'll touch on how we're doing that, especially with some of our internal conversations with the cannabis media team and as our data gets better and as the information is literally right in front of you, you search a company name and you have the information to assess. Is this company credible or not?

Ed Keating: Yeah.

Brett Gelfand: The issue that we're finding is even with that information, people are saying, Brett, thanks for showing me the information, but I still got to make the sale or I don't really know what to do with it. Cool. I know that this company may or may not pay me, but what do you want me to do about it? So now we're trying to work in how to almost act as an extension of our members to say, here's at least some quick checks, maybe instead of giving them that 30, you give them, next seven and work them up. If they're requiring terms, like you have to earn credit, you can do. You have to

Ed Keating: earn it. And if you show that you're making your payments in a timely manner. I would be happy to extend credit, but if you've got lots of red circles next to your accounts, that's not somebody who I'd be willing to, enter that relationship. A lot of people talk about the analogies with the liquor industry, where I think it's pretty much, Cash on delivery. There's no credit extended. I believe that's how it works, at least in some states.

Brett Gelfand: It's something like that. Yeah. They've got like a control board where they really, they're really tight on credit extension, even in Washington and Canada is for example the state of Washington doesn't really allow for credit extension to happen. It's almost all COD. So we have almost zero collection issues. activity in the state of Washington because of that. And that's another huge topic. I'm curious to hear what your side you're on this, but so many, operators I see are basically screaming out, we need the states to get involved. We need the states to put in, a stricter policy. We need the states to do this. And not to make this any what political at all, cause I'm the most neutral on, on political stances ever, but really it's around, okay, I get it. Yeah. There needs to be, something done, but years ago when I was in Colorado in 2015, and the MED came down and cut down all of our plants because we couldn't show some tag or something. It was like prohibition. We were saying, get these. You get the government out of here let us get to work now. And now everyone's saying, Oh, we need help, help us. And I think what's so important is that we need to treat this as a business. It's risk versus reward. We need to work together to have information to make decisions. And if the government comes and helps one day, awesome. But at the end of the day, it's your responsibility. It's the food that you're putting on your family's plate to say, what makes sense for me? To extend a free loan or not. And what options do I have? And now there are options for you to make better decisions. Now, how do you implement those decisions is the next phase of where we're going with it.

Ed Keating: Yeah. I think to sum that up or the way I think about it is government policies should not be saved me from myself and make those good decisions. I think I know in some States. We start to hear, Hey, how about a licensed moratorium? IE, I don't want any more competitors and keep the other people away. I was here first. And a lot of regulators have not responded to that. Oh, some have. And, trying to manage the supply and demand, but businesses are going to go out of business if there's too much competition, or I think to your point, if they're not managing it well let's talk more specifically about some of the data. So what kind of data will users find when they pull up a record? Let's say, Keating's house of hemp in Connecticut, you pull that pretend a record of what might you find there if if I'm not a a timely payer.

Brett Gelfand: Hopefully not too much stuff on Keating's house of hemp, but you pull up a company name it's super straightforward. You search a company's name. And the first thing that you're going to see is what kind of collection activity, if any has happened on the account. So again, Because of the partnership with CannaBIZ Collects, we've got more data around collections than anyone else in the cannabis industry. How many claims were sent to collection? We have some, pretty easy to digest outcomes based on yellow, green, red. Green, was the account settled? Yellow, is the account still open or pending? Red, was it sent to legal or closed out? Basically What happened with the claim? How many claims have been sent? When was the most recent claim? And you can even see a breakdown of all of those collection claims, purely anonymous, you have no idea who the creditor was, in other words, who the vendor was, who actually was owed the money. You only see the company that you pulled up and how much money they owe. And what the outcome was. And then what's getting even more interesting on top of that is now that we're getting more and more members. We've got close to 200 active members on the platform today. We've only been around for about 9 to 12 months 200 members, including names like Jeter, Piva, Leafly some of the biggest names industry reporting their data with this information, you're able to see a breakdown of, current 30, 60, 90 day plus So when you search, Keating's House of Hemp, how much, what percent of that is in the current bucket? What percent is the 60 day bucket, 90 day bucket. And we're even starting to show some graphs and visualizations of showing is Keating paying or is he getting later and later, right? So you can see on a month by month basis, how Keating is trending with his payment behavior. And that's right now should provide. Our members and our future members, the ability to, assess that risk.

Ed Keating: It also seems to address that question of, Hey Brett, thanks for the data. What the hell do I do with it? So if you're starting to put in like moving averages or what's the velocity of payments for Keating or whoever to see there's a trend here. And that may help me make better. Business sales decisions so that I'm doing this. Maybe I can work with my sales team to make sure that they're not focusing on those below zero customers that are probably not going to pay based on data that they're getting through Cannabiz Credit Association.

Brett Gelfand: A hundred percent. We have some members that have a very simple process. They basically have their own internal SOP that says if there's more than, let's say three claims sent to collections. And let's say at least, three claims sent to collections. It doesn't mean if they were resolved or it was, closed out because it was uncollectible. Three accounts sent to collections, they're going to say we can't extend terms. And then that's all they use the CCA for right now is just looking at collection claims. We have more sophisticated members that have full stack AR credit collection teams that are looking at every line of data and have their own internal algorithm to basically assess risk. Sure. Everyone always asks, Brett when, and if you do come out with some sort of credit rating or credit score. That's going to solve all of our problems. And there are, some distributors out there that have some sort of a credit rating or some score, which I think is extremely helpful. And it's a positive impact for the industry. However, it's really important for the industry to understand that every company is different. Like just because, like just because someone has, let's say a risk score of a C that they're not a good payer will. There's some companies that have a lot of cash behind them that might be willing and able to take that risk and extend a lot of terms versus a small mom and pop that if they took that risk, they could go out of business. So like even with a score or a rating, it's a helpful indicator, but you have to be responsible if you choose to extend credit terms, how to digest that information for your business. It's not a one size fits all.

Ed Keating: Yeah. Yeah. It's you have to balance that in your portfolio because you can't have all those customers in on on, on your on your accounts receivable, or you're gonna probably be in trouble before too long. Let's pivot a bit from data for a little bit and let's talk about the partnerships. So I know we're excited to be integrating. content into Cannabiz Media for Cannabiz Credit Association members. I think it's just a great way to integrate The two Cannabiz's and our data set, you know in a way that even people at trade shows have said hey how can you guys put your stuff together? So could you talk a little bit about how you see that working because I know from our side and our sales team side They're very excited about that

Brett Gelfand: Yeah, we're absolutely thrilled for what's to come. But long story here is that, we're getting all this raw data every day from our members. And as you can imagine, coming from different accounting systems, the data is coming in and the format that it's being submitted from the membership base, which is an amazing thing at one end, because we're showing real raw data. That's true actual accounting information coming from the industry, right? We're not just a black box and going to throw out a score based on our cca risk, right? We're going to have a true information being reported The problem is as you know more than probably anybody else the standardization of license numbers dba names Entity locations. It's all over the place. So we realized we needed a solution and we found that solution with cannabis media Of how can we tie our information together with the backbone of cannabis media's license information cannabis media’s? Full, hierarchy of really amazing data sets to combine with the data that we're getting so we can provide our users a really clean and friendly way to actually find the exact company that they're looking for. Yeah. And we call that data hygiene. And on top of that once and once this data is cleaned up by our partnership with Cannabiz Media. And we have really easy to find clean access information. We could easily now integrate directly into Cannabiz Media. So if someone's already a Cannabiz Media client or potential client, you wouldn't have to jump off, the Cannabiz Media screen while you're doing sales and marketing and lookups for contacts in order to basically see. If that same salesperson is looking for a contact to do a sale, why not give that same VP, a salesperson that's on Cannabiz Media, the ability to quickly assess the risk. of that potential prospect without having to jump back and forth onto our platforms. And I think that's going to be a very powerful way to keep your clients happy and to make sure that our information is limited on friction when it comes to allowing companies to make quick decisions.

Ed Keating: And we're thrilled to be part of helping grow that network effect of the Cannabiz Credit Association because If you're not a member, you'll see a blurry page and be like, Hey, Ed, you don't get access to this until you really partner with the Cannabiz Credit Association. So we think that's a great way to bring these opportunities together to the market with, both companies really selling each other's products and, us trying to funnel more and more people to the Cannabiz Credit Association.

Brett Gelfand: Absolutely. We already have a lot of crossover and I think we've had clients that have asked both of us like, Hey, when can you guys get integrated? Because. We have, we want to integrate both of these in our own CRM or we want, we want to have all this connected. It's extremely exciting. And I think also there's so many of our clients that yeah, they're maybe very finance heavy and they're just starting to get involved in credit scoring, but Hey, do you know that there's a way to basically find emails and phone numbers and contacts of these same companies through Cannabiz Media? So the ability to stay in our lane, but provide a very win solution for a very similar set of clients is I think going to be extremely powerful and a win across the board

Ed Keating: yeah, and I think a competitive advantage for our shared clients because they'll really have a view into the industry that is You Can't be done anywhere else. So we're thrilled about that. So digging into some of the data, what I wanted to, ask is since you've been building this, what trends are you seeing? For example, are there certain regulated activities that have more problems paying their bills? You've got retail, you've got cultivation, manufacturing, are there any trends there, Brett, that, that jump out at you and your team?

Brett Gelfand: The most, trends in front of our face now, I'll put it that way are mostly around states. And it's insane to see some of these states just follow the same disaster that has happened in Colorado and then California and Oregon happening now in Massachusetts and Michigan very quickly. And, I do think, one of our heaviest membership bases now is Michigan and Massachusetts. Massachusetts was. I think an amazing start to the CCA and they really banded together and started referring a lot of different, their own competitors to, Hey, you guys got to join this. This is really helping us make decisions. So I would say trends around, the activity of collection issues and AR issues happening, let's say in Michigan, especially Michigan right now is becoming a huge problem. And also as we're getting. Dialed in with trying to really look at industry segments, which I think is really in line with your question Are the retailers owing the most amount of money versus the growers? And that's something that we're working on as we speak to really dial in the percentages of the genre of creditors to debtors But what I can say from more of a theoretical a high level position here is that what we notice is, these MSOs are given much more lenient terms, just like the Walmart or the target models, where. You just expect that these MSOs are going to pay late and there's not much you can do about it because you need them to buy your product. And so we're realizing also that there's money owed to, there's money owed to these. larger MSOs that might not be perfectly on time. But what's the industry going to do about it? And usually those MSOs do end up paying as well. Most, almost most of them do. So it's a balancing act of like, how do you protect maybe the smaller guys, the smaller vendors? That are extending terms where, they're put in the corner a little bit of, okay, we're offering that 30, but they're not getting paid for 45, 60 days from some of the larger groups out there.

Ed Keating: Yeah. Yeah. It's interesting. Because I imagine the more sophisticated users of your data can start to get an understanding, as your data is categorized, hope if you're his media, those companies that are, In the MSO index, average time to pay is this versus those that are a single state operator and SSO are more like this. What is your composition of your AR? How do they fall into those categories? So that people just know, because I imagine if I were a board member at some of these companies, that would be something important to, to really know is what is our, the complexion, of our AR.

Brett Gelfand: I think that's so well said. And Without knowing that, how can you do any cash flow projections at all? How can you have any kind of safety net if you think you're going to get paid in 30 days, but you're really getting paid in 60 days and you're counting your money to come in on 30? But you don't really have an idea of when the money's coming in the bank. So I think that's another massive reason that we're seeing so many companies go out of business. It's because they're not as savvy as they need to be when it comes to financial and cashflow management. I don't see enough temporary CFOs, finance managers in a lot of these single state operators or these individual brands, I don't see it. And the issue is. A lot of these, a lot of these players probably can't afford it. I know we couldn't afford to have a CFO when I was out in Colorado. However, at least what I learned from the past is if I'm going to extend terms now, I need to have somebody that's on my side that knows how to do it correctly. I need an, I need to have some sort of a process, some sort of management around credit collections. And if you don't, Then do your best to go to COD. And we know that's a whole nother conversation because how many people can just do COD, but if you're going to be in the game of extending credit terms and dealing with collection issues, you need to have somebody in your organization that knows how to manage that. If not, you're going to be in bad shape.

Ed Keating: Yeah. Yeah. Hopefully some of those fractional CFO companies that are in our space, if you can make some good inroads there when you probably already have and get them to basically go into all their postings and say, the first thing you need is to join the association. Like we see that with cannabis media, where we've had some people who have held four different positions in the industry and every place they go, they say. I need to have Cannabiz. I need access to Cannabiz Media. And, we love that. And then we appreciate those ambassadors, if you will. And I'm sure the same is true for you or will be true as people start to really rely on this data.

Brett Gelfand: Yeah. And I think as we get savvier ourselves, mind you, we're just within a year of starting this and now having amazing conversations with yourself and the team at Cannabiz Media. It's how can we make this? As user friendly and as easy to adopt where our members and some of the smaller members that we have don't need to pay more for adoption or implementation because it is really as simple as searching a company and looking at buckets. But if we could really try to tailor the solution to make it as simple as humanly possible for someone to at least de risk themselves for at least, we're charging. Like I said, less than 200 bucks a month. Some of it, some of our plans are 125 a month. So if at least we could help you make one good credit decision in your contract term with us. And we save you at 125 a month, then we've done our job. And if, and that's all we're focused on every day is how can we deliver that product in a big, part of that and a piece of that long term is going to be the true data integrity that will be enhanced with our partnership with Cannabiz Media.

Ed Keating: Absolutely. So Brett, as we head to the end, any challenges that you guys were dealing with, you've obviously, you're a serial entrepreneur, you, this is not your first rodeo, but are there any things that have jumped out at you like, huh, that was not on my bingo card, but yeah, we're getting through it.

Brett Gelfand: The biggest one is the fact that people are like, I love what you're doing. This is really valuable data, but I'm going to have to extend terms anyways. That's a challenge. That's an objection that like you can't overcome and I've heard it more and more. And it's really coming from States like Colorado and Oregon. Where it's like, Hey, we're in such an unfortunate situation that even if you're telling us who we should be careful about doing business with, we're have to do it anyways. And we're just probably gonna have to go more below zero. And that has been a surprise. It's been a challenge because I really thought Ed, when I launched this group, Oh, no brainer for the price that we're charging. Everybody is going to sign up and be able to have access to all of our credit or all of our collection data. Literally every single claim ever submitted to cannabis collection, you can have access to tomorrow. The only condition is you have to share your AR data with us. And I thought it was going to be a no brainer. It's been a no brainer for a lot of the leading brands in the industry, a lot of leading distributors in the industry, a lot of MSOs now jumping on board. But it hasn't been a no brainer for the ones that in my opinion need it the most. The ones that are truly. In a tough time financially because they're still extending terms, but they don't know how to extend terms and they're not willing to invest. Like I said, 125 a month to make better decisions. That was a little bit of a surprise for me because we really tried to price this out to not just be a high end, solution that it's going to lock out a smaller piece of the market. It was actually intended for the opposite to help those people.

Ed Keating: What's fascinating for me is, I'm thinking if I was looking at your data, if I was you, I'd be like, wow, it's been a cannabis credit member for a year. And he's stupid. He doesn't get it. His accounts, he keeps doing the bad thing over and over. Whereas Bob over there, he's gone the other way. And you could, you can't really publish it, but internally who's on the wall of fame and who's on the wall of shame, because. Maybe those folks who haven't gotten it need more help, or that's where those CFOs for hire may have an opportunity from a lead perspective you could make some probably pretty powerful introductions to help out the industry, but that's consulting and we'll get to that later on. Brett, we've all been through this crazy industry, for a decade now. We've been at a bear market for three years. Has the industry hit bottom yet? Are we just bumping along the bottom of the water trying to come back up? What do you think?

Brett Gelfand: We all heard pretty sad news. I'm in Florida. I'm in St. Pete today, so that was unfortunate that you know, Florida is gonna have a little bit longer of a road than we expected Yeah, And to be honest with you, it's been It's weird for me, right? Because CannaBIZ Collects is a recession proof business. The harder the industry gets, the busier we get. And as much as I obviously am, managing and owning CannaBIZ Collects for personal financial reasons, I started Cannabiz Credit Association to truly move the industry forward, which I knew should probably directly affect negatively my collection business. Because if I can help people make better decisions, There's going to be less collections and my collection agency is not going to be as busy. However, we're not seeing that happen. We're seeing a lot more activity. We're seeing a lot of claims being submitted. We're seeing a lot of people, companies going to receivership going out of business. I'm hoping 2024 was like, you know the turn like the bottom and we're going to turn around in 2025 I've sensed energy at the expos a little bit more excitement after coded there's been you know I think a little bit more money starting to move in the M&A activity around the industry and I think as more states get developed Ohio's of the world and the New Jersey’s and more money starts just flowing. New York, of course, I do think that things are gonna come around, but some states right now are just so bad and in tough shape that I'm just hoping we can learn from that in 2025. Utilize data like you guys are offering through Cannabiz Media that we're offering. Use lessons learned. To just start being a little bit smarter. And I think with that, I will say, and I am optimistic that 2025 for the industry as a whole is going to look a lot more promising. I hope so.

Ed Keating: Yeah. I think, with the association you've built, it puts you really there as. Somebody who's a visionary and also somebody who's selfless, trying to just make the industry better. I could totally see that at some point, if you haven't already, you start pulling those members together to do webinars on best practices or masterclasses or Someday, even a conference like, Hey here's how you manage this because people really need that help. So final point, final question, if people want to join the Cannabiz Credit Association, how would they go about doing that, Brett?

Brett Gelfand: Yeah, and we do actually have a you owe me podcast that we're starting exclusive to members. So maybe there'll be a way to combine this one or have you on the show as well. But yeah visit www. cannabiz, we know how to spell biz obviously now, cannabizcredit. com You we can get you, hooked up on a demo, peek under the hood of what we're doing. Pretty straightforward process. If you ever want to connect with me, I'm very accessible on LinkedIn. My name, Brett Gelfand, but yeah, www. cannabiscredit. com. And if you have any collection issues or you've got a situation you're dealing with, cannabizcollects. com and it's as easy as that contingency only if we can't collect, you don't pay. No risk.

Ed Keating: Excellent. Excellent. Brett, thank you so much for joining us today. It was really a pleasure getting to hear the the creation story and really this massive network effect you're building into the industry. So thank you for all that you've done, because I think it's only going to help us move the industry forward in a way that it needs to go,

Brett Gelfand: I feel the same thanks for having me and we'll talk soon.