In the latest episode of the Cannacurio Podcast from Cannabiz Media, my co-host, Amanda Guerrero, and I discuss speak with Robert Mohr, Cannabis Channel Manager, and Haley Hayes, Sales Executive, from PeopleGuru, a cloud-based and cannabis-friendly HR payroll, human capital management, and technology provider.
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Cannacurio Podcast Episode 32 Transcript
Amanda Guerrero: Welcome to the Cannacurio podcast powered by Cannabiz Media. We are your hosts, Amanda Guerrero, and I’m joined by my lovely cohost, Ed Keating. Welcome.
So for today’s show, we will be joined by Robert Moore, Cannabis Channel Manager, and Haley Hayes, a Sales Executive, from PeopleGuru. PeopleGuru is a customer of ours that just has been with us. And we are so curious to learn more about their HR background, but as always, we’re going to jump in with Ed and see what he has for us today from the data vaults. Ed?
Ed Keating: So we’re in the process of releasing our latest blog post on cultivation licenses, but we’re able to do similar to what we did with dispensaries. As we look back three years to see how the market has changed – so 2018 and of ‘19 and ‘20.
And what we found, which was actually pretty interesting for last year, is that California actually added more cultivation licenses than Oklahoma. They were up about 1900 versus 1300 for Oklahoma. And Amanda, I know you’re going to ask, Michigan was pretty far behind, but they were still third at 322. So that’s been a good thing for us to know, just as we sort of track this over time.
The other thing the team has been doing is working to identify facilities nationwide, where we find a collection of licenses at a location that are owned by one company. So, so far we’ve identified over 6,000 of those facilities and we’re essentially going through the whole country, mostly by hand, trying to make sure that we can line those up to help our customers get a size of the industry, not just looking at licenses, which is a proxy, but how many businesses are there. And we think that would be really useful for the marketplace.
Amanda Guerrero: Oh, absolutely. And question regarding the cultivation licenses, was there a specific location in California that those licenses were concentrated?
Ed Keating: I don’t know. There might’ve been. I’m not sure if they came out of a specific area, but we can dig deeper into the data vault and see if we can find that out.
Amanda Guerrero: Digging deeper. Great. Well, like I mentioned, we are joined by two very lovely individuals from PeopleGuru, Rob and Haley. Welcome to the show guys. It’s so happy to have you, see that you’re in the office now.
Haley Hayes: Yes.
Robert Mohr: Yeah, thanks so much for having us. I haven’t been called lovely in a while. I’m sure Haley gets that a lot. But we appreciate it and we’re really, really glad to be here.
Haley Hayes: Thanks for having us.
Amanda Guerrero: Oh, sorry about that. No, we are so happy to have you guys on the show. I’ll kill them with kindness. That’s what my mom always told me. So here’s some kindness your way now, Rob, Haley, tell us a little bit more about PeopleGuru.
Haley Hayes: Yeah, so we are a cloud-based cannabis-friendly HR payroll, human capital management, technology provider, and we focus on the mid-market.
Amanda Guerrero: Okay. Understood. Wow. HR within the cannabis sector, that must be a huge undertaking. Haley, how long have you been with the company?
Haley Hayes: Yeah, so I’m new. I’ve been here about seven months. I started back in July. So, just learning and enjoying being back in the office.
Robert Mohr: Yeah. Now I’m really going to date myself. I was employee number one of PeopleGuru.
Amanda Guerrero: No way.
Robert Mohr: Yeah.
Amanda Guerrero: That’s so cool.
Robert Mohr: The equity behind the company, the owners, people that provided that funding to get started, I’ve worked with them in a previous life, came along with them for this journey, but it was actually got to be employee number one. There was a core group of us that had worked together before, but being the sales guy, I think I was the only one to ask to officially be named employee number one. So, that was me.
And obviously, over the years as we’ve grown, upgraded the talent, people like Haley and our SDR team. And now Haley’s grown into a full blown sales rep. So we’re real proud of the group that we’ve assembled here. Haley, she’s a local celebrity, she was Strawberry Queen. She’s like Plant City, Florida famous. So, she’s definitely the local celebrity here, but we built a great team.
Haley Hayes: Thanks for mentioning that Rob.
Amanda Guerrero: I love that the energy, I can feel it from all the way here in Denver, Colorado. Maybe you guys can send us some of that sunshine too. Rob being part of the company and being, number one employee, Ed and I both know what that’s like, within our both previous lives from, Cannabiz Media, but you have a very interesting vantage point of seeing the evolution of this company – not only getting into HR compliance, but also getting into the cannabis industry. So can you tell us a little bit about what that journey was like and the role that you’ve played in there?
Robert Mohr: Yeah, absolutely. I wish I could tell you that it started off as this grand vision, but what had actually happened with us is that a Florida based … and we’re a Florida based company headquartered in Tampa, we service all 50 States. And I was a national sales rep at the time.
So I was covering multiple states, but locally in Florida a group reached out to us and said, “Hey, we’re in the cannabis industry, do you think you could help us?” And I was like, “Well, tell me a little bit more.” And they’re vertically integrated. So they said, “Well, we actually grow it. So there’s this agricultural aspect.” And I was like, “Fine, we have a lot of agricultural clients, all industries, all verticals, tons of agriculture. So, that sounds good.”
Then they mentioned that, “Oh, well we have a manufacturing production type facility where we’re packaging our goods and creating things from the cannabis.” And I was like, “Well, manufacturing doesn’t sound like anything unusual.” The ones we do a lot of time. And then finally, they had these dispensaries, which, retail location, we’ve got grocery stores, we’ve got tons of clients in that space. So I was like, this is perfect. It makes so much sense.
And at that time, they were already a fairly large group. So this was early on for us, probably about four years ago. And I got real excited, and I went to my chief revenue officer who was also an equity holder of the company. And I was like, I’ve got this great idea. I’ve got this client, they do all these things. I don’t know that anybody else would be able to handle this. This is perfect for us. And he was like, that sounds like a great idea. We took it to the CEO, and he was like, yeah, just newly legalized in Florida we’re at the beginning of a trend. This is a great idea, talk to our bank.
This is a horrible idea. If you want us to take all of, not only their money, but your client’s money and kind of, impound it that’s, what’s going to happen. So we have a lot of very persistent people here, a lot of very creative and entrepreneurial people. So that’s when the phone calls to the lawyers began and then vetting different banks and finding out how everybody else was doing it in industry. Not that there were that many at the time, they were maybe one or two.
So, we set out and our client was awesome. They understood that we were facing these headwinds as we were getting into the space. We worked on some less than optimal solutions for a little bit while we could get that set up. So, props to them for hanging with us while we figured it out. And they really helped us figure it out.
But ultimately, we became affiliated with the safe harbor banking network. I believe it’s out by you guys. And we learned, the process of what goes into moving money that’s been associated with cannabis in a way that provides that safe harbor for the beneficial owners of the companies that are producing the cannabis.
So, it ended up being a massive undertaking, very legally intense, but ultimately, we became associated with a few different banks. So we had that backup and redundancy. They know exactly what we’re doing. We’ve been through their auditing process, and then all of our clients then go through that same venting process, probably not as onerous as the actual licensing vetting, but nevertheless, we’re keeping them compliant.
And I think they appreciate and respect that fact in that we’re taking that extra step to keep their owners and it looks like all the legal things are moving in the right direction, like on the federal level and things are going to be okay, but if that were to ever change. No one wants to be the Al Capone of cannabis that gets arrested for racketeering and wire fraud and everything else that they could potentially charge you with.
So, one of our core objectives here is to provide that safe harbor level of protection for the beneficial owners of the groups that we work with. So short story long, they found us and we figured out how to make that happen.
Well, no, I mean, there’s a huge need for it in the industry. I mean, I come from a staffing background and primarily focused within the cannabis or have only focused within the cannabis industry. And I can tell you, there were some clients, especially very early on, that it’s like, they were having these payroll struggles but weren’t able to get on a payroll provider.
I mean, there was a situation where we, a staffing company, a well-known staffing company at that point, got kicked off of our payroll provider because we had done some things that they weren’t happy about because they found out that we were cannabis.
But my question, and then I’ll kick it over to Ed, but when you guys are looking at the ideal client profile, do you see that like vertically integrated groups are more inclined or are you working more with like cultivators, retailers, or are you guys kind of all over the place in terms of who you would ideally like to work with?
Robert Mohr: Yeah. So, our solution is really geared towards mid-market companies. So outside of cannabis, this space where we hunt or actively pursue new clients usually starts about 300 to 5,000. The cannabis space, specifically, we’ve just seen so much growth in the industry where we made a business decision that we want to catch them earlier, right. So they start to make sense at a different tier for us. But the actual question was probably better suited to you.
Haley Hayes: Yeah, I would say that a lot of the ones we target, I mean, it’s definitely a variety, but I would say vertically integrated companies, multi-state operators are more likely the ones that we go for, just because they end up having higher employee counts and are growing quickly.
Robert Mohr: Yes.
Ed Keating: So, from a MSO perspective, having come from a background in sort of tax and HR compliance, what I learned is that when somebody has to manage businesses in multiple states, their headaches kind of multiply. So, does that fit in with sort of your middle market size, where they’re not in one state but probably in two, three or four? And is that when the phone calls come in to you guys to help them out?
Robert Mohr: Yeah. So a few different kind of phone calls come in there. There’s the one which Amanda mentioned, “My payroll provider’s dropping me what can I do, and it needs to be done in 20 seconds?” And then we also get the phone calls from, “Okay, we’re opening up in a new state. My current system won’t allow me to have a multiple companies or multiple EIN within the same container. Do you guys do anything different?” And that’s where we start to play really well.
So the more complex the operator becomes, the more our software can help and provide value to those clients. Don’t get me wrong, I love the single state folks that are vertically integrated, even people that have three and four dispensaries. They’re all great and they all have their own unique challenges, but where we see the biggest bang for the buck from the client side is where they are incorporating multiple EINs, multiple companies, and they have that complexity around tax.
They have the complexity around different companies, different handbooks, just different businesses. We do really well with those folks. The architecture on the backside of the system, the way everything works is, everything that goes into the system is mapped to the client’s chart of accounts for the output. So that’s what helps us with like 280E reporting and keeping these companies separately, but still being able to report at a global level.
So, we see we can add value to clients all the way through the food chain, but the folks that are really maximizing the technology, multiple EIN, multiple states, multiple companies, maybe they have multiple investment groups behind each one of those licenses. We can really help with those folks.
Ed Keating: Rob, at the outset, you mentioned when the idea sort of came in to you to do PeopleGuru for the cannabis space. You’re like agriculture check, we do that. Manufacturing, yep. Retail, we do that. Does that help you, when you go to some of these new clients where they’re asking, “Tell us about your history,” because this is not your first industry. You’ve been doing this before. You’ve been compliant for, I don’t know how long, but does that help when people know that you already have, let’s say MSO experience – might be in a different industry, but you’ve already been there and done that?
Robert Mohr: Yeah, I do. I mean, well, that helped us get out of the gate strong. Right. So it’s one thing to say, “Okay, I’ll service the cannabis industry,” but the next question for the client typically is, “Well, you can do it, but can you do it well?”
So we did have that broad range of expertise where, okay at one point, we only had one client, right. One cannabis client. So to be able to say to them, like, okay, I can let you talk to, a mustard grower in Pennsylvania that have some similar agricultural style challenges that you have. I can let you talk to them. I can let you talk to a manufacturing client, yeah they make airplane parts, but the distribution is kind of a similar story. And then, the retail account at a grocery store or a chain of restaurants, that might face some similar challenges when it comes to scheduling or managing PTO requests or whatever that might be.
So it allowed us to get out of the box strong and build a really nice vertical around cannabis. Just having those other people from the other industries that would speak on behalf… Fast forward five years, and now we’ve got tons of raving fans in the cannabis space. So I can say, Hey, let me arrange a conversation for you with someone who’s exactly like you [crosstalk 00:15:22] that way.
Ed Keating: We do the same thing. We totally do the same thing. So lots of happy customers. So, now talking more about the technology side of things. You mentioned that the software may interact or connect to somebody’s chart of accounts. What other kinds of connections does this software need to make? Like, does it connect to Metrc? Does it connect to grow software? Does it connect to other types of tools that are sort of cannabis industry specific?
Robert Mohr: Yeah. So one thing about PeopleGuru, when you look at some of our competitors, they’re reselling someone else’s technology. So, they don’t have a lot of that control and ownership. Where with the PeopleGuru, we own all this technology. It’s developed by us, everybody’s a W2 PeopleGuru domestic employee. Nothing’s outsourced or offshore, but we own all those APIs. And we have the ability to really integrate with anything.
The system’s also very friendly with like a flat file type interface. So, if a client wants to use a scheduled type of system through a secure FTP transfer, system works. If they want to upload an Excel spreadsheet into the payroll, no problem. So a lot of great ways to get information into the system, a lot of great ways to get information out of this system and communicate with other systems. So, the universal one is the GL or the finance package, but there’s lots of other ones. There’s real reason we cannot communicate with any other modern platform.
Ed Keating: Great. Well, as I mentioned before, my background has been in a lot of compliance industries, tax, corporate law, securities law, HR law. So this is really a fascinating business to hear more about. One thing that I know that’s a challenge from having managed this function is trying to stay up to date on the regulatory changes for tax, HR, et cetera. Those are all the business rules that I imagine feed your engine, your rule engine, so that all the calculations are right. I’m curious how you guys do that and how you’re set up to do that in the cannabis space.
Robert Mohr: Yeah. So one of the big ways is actually through that GLX board file, right? So there’s a couple of things when you’re dealing with the federal government, the state of the union today, as far as cannabis being a schedule one controlled substance. We never know what’s going to happen, but the federal government’s been known to do this for years, right?
ACA kind of came out of the blue. It was a whole new thing. That’s one area or another area where owning the technology, having the development talent in staff or on staff, keeps us ready to comply with what orders could ever come our way from the federal government.
But now that being said, things like the 280E report was just kind of another big one for us, that underlying technology of how we map everything back to the chart of accounts. We’re going to track all those plant touching, non-plant touching activities. And it gives the accounting staff a really nice export file. CFOs typically love us, not a lot of manual entries with this system.
But then ongoing legislation and potential changes in laws. That’s all industries, all over like California, like Amanda where you’re at, or no you’re in Colorado, Amanda. The California folks, they keep us on their toes.
So, we do have legal experts that monitor for those types of activities. And then, any changes that come down the pipe are fed into our development team, and depending on the level or required response time from the government, those changes do become implemented into the system. But it’s a constant, I don’t want to say battle, but we’re very aware that things change all the time.
And that’s part of what makes the Software as a Service business model work. The client doesn’t have to be out there, “Oh, I’ve got this new law. What am I going to do with it? How do I do that in the system?” We manage all that for our clients. We push them the release, we give them training if necessary, the release notes to tell them how we’re keeping them compliant. But it’s a constant, operational objective of PeopleGuru. You have to manage those things.
Ed Keating: Well, and I would imagine like your California example was a good one, because I was just going to ask about the California Family Rights Act. Where it’s sort of like a Family Medical Leave Act for California that has its own rules just for that state. But because I imagine you need to have that in place for all your other industries, it’s not that hard necessarily to syndicate that back to the cannabis space, right?
Robert Mohr: Exactly. They’re playing on the same field in that regard as everybody else.
Ed Keating: Right.
Robert Mohr: The way we’ve developed this system, we have unlimited accruals, unlimited buckets for all your leaves and PTs. So, adding a new code, activating it in the clients that fall within that regulatory body or agency or under that jurisdiction – yeah, that’s just part of what we do on the daily basis. Yeah.
Ed Keating: So Haley, trying to bring together the sales and the compliance side, from what I remember, a lot of the HR rules get really interesting once you hit 50 employees or 50 FTEs – that’s sort of like that magic number when FEMLA comes in and these other rules. Does that come into any of the segmentation that you do? Like as you’re trying to figure out, who’s an ideal client, are they too small to benefit from the system? Or, maybe they’ll grow into it. How does that factor in for you as you’re trying to figure out that the right client fit for PeopleGuru?
Haley Hayes: Yeah, definitely. So, like Rob mentioned, our system is very complex and it’s a larger system. So for companies with less than 50 employees, it just doesn’t make sense until they’re looking to grow to over a hundred employees within a quick timeframe.
So when we are targeting these companies, I’ll reach out to companies with about 50 employees. But one of the main questions that I’ll ask is if they’re looking to grow and how quickly they’re looking to grow, which normally with a lot of these cannabis companies, especially the multi-state operators and the ones opening multiple dispensaries and things like that, they grow very quickly.
Robert Mohr: Yeah, and quick growth. I mean, it’s a problem in itself.
Haley Hayes: Yeah.
Robert Mohr: The increase, well, “How do I hire 50 people in a month? I’m doing everything on Excel spreadsheets and I’m printing out applications.” That’s where we can really provide a value story in that we can not only make that paperless, but we can provide portals for the applicants, portals for onboarding where your new employees can come in and do everything in a paperless format.
Our system adopts all the company’s marks, their brand, their look, and so it really provides a great experience for that new hire, like they’re coming to be part of something big and it just really helps us build the value for the client when they can not only provide that great experience, but it can make HR lives so much easier without [crosstalk 00:22:38]. And then on the back end of that, when they get audited, all that paperwork’s right there ready for them. Right.
Amanda Guerrero: Which they most certainly will get audited, especially if they’re a cannabis company.
Haley Hayes: Yeah.
Robert Mohr: Oh, it’s coming.
Amanda Guerrero: Oh, it’s coming.
Robert Mohr: They’ll be knocking on the door sooner or later.
Amanda Guerrero: Yeah, definitely. Well, so given all that you guys do within the industry and coming from other sectors, right, it sounds like you do have a pretty good lead generation prospecting process for outside of the industry. I’m curious to see how your team utilizes our platform.
Haley Hayes: Yeah. I can take that one. So, Cannabiz Media has been an integral part for the sales development rep program. We use it every day to track licenses. Makes it super easy to kind of filter and search. If I want to look for companies with over a hundred employees and my specific like target territories, then I can track all their licenses. I can check and see like who’s opened my email and the most recent activity and the most recent licenses. So yeah, it’s been a great tool.
Robert Mohr: Not only great from that perspective, the quality of the leads that are coming upstream, way better than prior to having access to that technology and that information. Before, it’s really a crap shoot. I might get on the call and the prospect might be completely different than what I had imagined or saw on their website. But with that additional insight, it seems like the SDR group is really able to provide us valuable information along with those leads. So all around company-wide, it’s been a big benefit.
Amanda Guerrero: We’re so glad to hear that. I mean, we definitely put some years into this platform – about six years. Right Ed? Working in this space. So we’re very glad to hear how you guys are utilizing it.
Now taking kind of a look ahead. I wish I had a crystal ball, but I don’t, what does the future look like for PeopleGuru? If, there are changes to the 280E tax rules or the MORE Act passes, what does that look like for you guys?
Robert Mohr: Well, it’s federal government, so we anticipate these things all the time and we discuss internally how this might play out. The 280E, less of a concern for us in that it will just change the rules around the accounting, the way we’re exporting data. We do that stuff all the time.
The banking is very interesting for us, it could bring more competition to the space, which is always great. It could also, depending on how it’s written, open up the banking completely, which for us cannabis banking, even, in our scale, moving hundreds of millions of dollars, still super expensive. So it could potentially make things more profitable for us. We’ve already got a really strong group of clients in this vertical.
So we’re in it to stay whether the MORE Act passes or not, but we’re looking forward to those changes because as cannabis becomes more mainstream, the clients become larger. There’re more opportunities and we’re already competing against everybody else every day, anyway. So we like our platform, our, like, our story. So we think there’s a lot to look forward to. And, I think only positive things can come from, the banking regulations in the MORE Act.
And then furthermore, just societally speaking, there’s a lot of people out there with some, I don’t know, maybe onerous convictions for small level cannabis. And, it’d be really nice just to see those people be able to remove that from the records, maybe move forward with their lives. So I imagine that expungement piece that the EMEN, it’s very important to a lot of people. And I think I’d like to see that for them.
Amanda Guerrero: Oh yeah, absolutely. I mean, I think it’s not just important for that group. It’s important for the industry as a whole. I mean, it’s not just about reparations. It’s about acknowledging that there were disparities in the first place and taking steps in the future to move forward, to provide a level playing field. And it’s important for businesses like ours to advocate for that.
So I’m definitely going to look forward to seeing what PeopleGuru is up to here in the coming year. And hopefully seeing you guys at trade shows soon enough. I don’t know, who knows. But you guys are in an office and you’re giving me hope that maybe there’s life after COVID.
Robert Mohr: I want to get out of the state. I haven’t been to a trade show now in, I don’t know, it’s over a year.
Amanda Guerrero: Oh, it’s been so long. Yeah.
Robert Mohr: I’d love to get out and see people again, meet people, press the flesh, shake a hand. It’d be great.
Amanda Guerrero: Oh, yeah. It would be so nice. I miss it so much, but Rob, Haley, thank you so much for your time. It was such a pleasure speaking to you both. I learned a lot about PeopleGuru, and I know Ed was very happy to speak with you guys as well. So we’re going to take a quick look ahead at what Ed has for us from the data vault for the future.
Ed Keating: So looking ahead, I’m digging into the manufacturing licenses just as we did with cultivation and with the dispensaries. What we’ve seen is they tend not to swing quite as much in terms of new licenses being issued, but they’re really important because, especially with the focus on brand, these manufacturers are starting to be really quite a force in the industry, and as their brands become more prominent, I think we’re going to hear more about those. So I expect to see a lot of time spent on that.
And then we’re also digging in very deeply into the MSOs and the licenses that they own. We have found that a lot of these licenses sometimes get sort of hidden under subsidiaries in states like Nevada and Arizona, and they’re just sort of hard to unearth. So we’re spending a lot of time going through public SEC and filings, making sure that we have that lined up so that people, like PeopleGuru can have a good, complete picture of a license or a company. So that we know all the licenses that they have, because for those that size, the market, knowing that they have 150 licenses is different than if they have five licenses. So, a lot of work by the research team so far this year.
Amanda Guerrero: Yeah. I’m definitely looking forward to more information on the manufacturing licenses. I mean, that’s just been such a huge, you’re so right, brands have been such a huge conversation driver over the last few years, especially when you look at markets like California, Illinois, Massachusetts. People are becoming more with these MSOs becoming more prominent in those markets. I’ve just noticed that there’s been more of a need or a rush to create the brand that rules them all, right?
Ed Keating: Well that, and I think what we’re seeing and I’m sure others are with a lot of talent and expertise coming in from the consumer packaged goods industry. It’s really transforming how cannabis is being sold and with more rec products out there and even medical products, I think we’re just going to see that really coming to prominence as these companies that are basically multi-state manufacturers start to build a brand, start to advertise. And I think we’re just going to see a lot more of them.
Amanda Guerrero: Yeah. There’s a huge, huge thirst for that information. Good point about the CPG, but everyone, this was our show. Thank you so much for tuning in. We had Haley and Rob from PeopleGuru on. I’m Amanda joined by my lovely co-host Ed Keating, and I hope you all have a great day. And this was the Cannacurio Podcast. Stay tuned for more updates from the data vault.
Ed Keating is a co-founder and Chief Data Officer of Cannabiz Media and oversees our data research and government relations efforts. He has spent his whole career working with and advising information companies in the compliance space. Ed has overseen complex multijurisdictional product lines in the securities, corporate, UCC, safety, environmental and human resource markets and focuses on workflow products over the last twenty five years. During that time he has worked for both startup and established information companies where he has led marketing, product management and sales organizations. These companies include Wolters Kluwer/Commerce Clearing House, CT Corporation, EDGAR Online and Business & Legal Reports. At Cannabiz Media Ed enjoys the challenge of working with regulators across the globe as he and his team gather corporate, financial, and license information to track the people, products and businesses in the cannabis economy. Ed graduated from Hamilton College and received his MBA from the Kellogg School at Northwestern University.