Dona Frank and Stephen Smith are in the medical marijuana business in California. Controversy about cannabis aside, this industry poses several very unique challenges to business owners, because of the fact that it is legal at a state level, but not at the federal level. In this episode, Dona and Stephen join John to talk about the problems they face with taxes and the IRS, getting permits and licences, state regulations, and a whole lot more. Tune in to find out how they take on these problems, and how to apply some of their tactics to your own business.

 

Key Takeaways:

[:17] John introduces his guests for this episode — Dona Frank and Stephen Smith.

[1:30] How is the company Natural Cannabis organized?

[3:00] Cannabis has historically been illegal, but now it is legal in 26 states, with California leading the way. It sounds easy to sell a product with high demand, but the reality is much more complicated.

[5:05] The IRS Code 280E poses a lot of problems for Dona's business, in terms of taxes.

[9:13] How does Dona handle online sales in multiple states, and all the additional problems that comes with that?

[10:56] Dona believes that most of her problems with the IRS started when they began gunning for smaller, and odd businesses. She shares her personal experience with the IRS during the time of her company's audit.

[14:30] Business people may be on different sides of the political fence, but they tend to believe in the same things. They are business people first!

[15:46] Dealing with the stigma of running a business centered around marijuana — how does Dona get good employees who are not stoned all the time?

[19:00] The quality of art produced by Dona's clients is staggering. How did she come up with the idea to start a crowd-sourcing event based on art from clients?

[21:40] Dona's idea to take her product and connect it to something bigger than itself is something all business owners can do.

[24:50] Dona also uses the art generated during this process in her marketing materials and uses it to create a giant community.

[27:47] Is the cannabis industry experiencing something similar to the gold rush?

[30:20] John observes that what's likely to happen in the cannabis market in California is something that all business owners have to deal with — every business gets commoditized, and business owners need to figure out how to market their products as being higher value for the higher prices they have to charge.

[31:18] Dona shares some of the advantages she has in her industry, compared to new entrants.

[34:50] The cannabis business is still in its toddler stage, and as it grows, it will give rise to a whole host of new problems.

[37:03] Dona made the decision when she started out to be both a manufacturer and a distributor, but she is being forced by state laws to decide which aspect she wants to continue in.

[41:10] Dona shares a recent situation she faced that highlights the fine line between legality and illegality that business owners in her industry tread.

[44:22] Stephen shares an advantage of operating in a difficult industry.

[46:30] What is Dona's unique ability?

[52:04] What has research shown about cannabis and the different forms and means of cannabis consumption?

[55:10] John, Dona and Stephen discuss the possibility of taking a company like Natural Cannabis public.

[59:36] Check out the Natural Cannabis store if you're in California, but if you're outside the state of California, do check out some of the amazing art that the High Art artists have produced!

 

Mentioned in This Episode:

Financial Gravity

The Financial Gravity Podcast with John Pollock

Financial Gravity Podcast Episode 31: “Abundance 360 — Looking to the Future”

Shop Marijuana

Natural Cannabis

High Art

IRS Code 280E

Peter Diamandis’ Abundance 360

The Toyota Way, by Jeffrey Liker

Blue Ocean Strategy, by Renée Mauborgne and W. Chan Kim

Atlas Shrugged, by Ayn Rand