Cashing in on Consulting

Denver dispensary’s decision to branch out pays big dividends

by Tony C. Dreibus

Five years ago, Ean Seeb was asked to debate the head of a Denver school on whether marijuana is kosher.

While the debate was short-lived – almost everybody in attendance agreed that cannabis is indeed kosher – Seeb’s knowledge of the industry impressed someone in the audience. That person, in turn, contacted an executive at a 95-year-old Denver packaging company that was looking to expand into the marijuana industry.
A few days later the executive contacted Seeb, asking how the company should go about getting into the nascent industry.

“That was when we realized there were people willing to pay us for our time and knowledge,” said Seeb, co-founder of Denver Relief, one of the first dispensaries in Colorado. “After a while we realized `A-ha, we’re on to something – a lot of people want the knowledge we have.’ That’s when we started focusing on the consulting side.”

Seeb and his business partner, Kayvan Khalatbari, agreed to help the packaging company (now called MMC Depot) design its logo, choose a business name and even find an attorney. That initial side work quickly resulted in the birth of Denver Relief Consulting.

Look for a Niche

While the initial push into consulting was unexpected, Seeb and Khalatbari made a conscious decision to branch out from their dispensary and help entrepreneurs get into the cannabis business. Few people were consulting in the cannabis industry at the time, while more well-funded individuals, groups and companies were opening dispensaries.

“We recognized there was a niche we could fill and decided to put our resources into consulting” instead of opening another dispensary location and competing with those deep-pocketed entrepreneurs, Seeb said.

He and Khalatbari had helped pioneer the dispensary concept in Denver, starting a delivery business in 2008 with a few thousand dollars and moving into a storefront location in 2010. They used a similar low-cost strategy to enter the emerging world of cannabis consulting and build an initial client base.

It was slow-going at first, but through word-of-mouth and a little advertising via the ArcView Group and Marijuana Business Daily, they were able to gain some traction.

They focused on ancillary companies in the Colorado market, because that’s what they knew. But their expertise in running a delivery company and a dispensary helped them expand into other markets, Seeb said.

“It took a little bit of time, but you have to keep in mind there weren’t a lot of cannabis consulting companies out there, and there weren’t any that were affiliated with an active dispensary,” he said. “It was something we suggested clients ask other consulting companies: ‘Are you part of an actively running company and if not, why not?’”

They collected testimonials from happy clients and passed them on to other potential new customers. Some businesses hold back the names of their clients, which Seeb said is a bad idea. That strategy creates an air of mistrust, making would-be customers feel suspicious.

Soon, companies from other states were calling, asking for help landing business licenses. Businesses in Massachusetts and Connecticut were the first to seek consulting from Denver Relief, and it spread from there.

The business grew so quickly that in 2011, Seeb and Khalatbari became full-time consultants, leaving the daily operations of the dispensary in the hands of a general manager.

Play to Your Strengths

Khalatbari now works with companies in new states that are sifting through mountains of legal documents. Seeb works to form “strategic alliances” with ancillary companies such as MMC Depot and Stink Sack, which makes smell-proof and child-resistant bags for the industry.

Choosing which role they’d take on came naturally, as each decided to play to their strengths. Khalatbari is much more of a project manager and is more comfortable in front of a computer than a room full of people, whereas Seeb describes himself as more of a “people person and rainmaker.”

“He’s not too keen on going to events, and I’m not keen on doing documentation,” Seeb said.

Hire to Step Back

Expanding in some way was never a question, Seeb said. Whether it’s geographically, selling new products or moving into a new field within the industry, expansion should always be on a business owner’s mind, he said. Those who don’t expand or at the very least look to the future will get left behind.

That may be easier said than done, however, as it’s stressful for a person to step away from a business they built from scratch to focus on new endeavors.

Becoming full-time consultants left Seeb worried about the dispensary. After hiring a general manager they could trust, Seeb and Khalatbari started showing up three or four days a week, and then only once or twice a week.

“The goal with any small business is to get into a position where one can step out from being involved in every minute detail,” Seeb said. “We trained good managers and made it so we could step out completely.”

Hiring well and being able to trust managers allows enterprising business owners to look forward rather than get caught up in the day-to-day operations of their business.

Owners of companies “that practically run” themselves should be scanning the industry and looking for expansion opportunities, whether it’s a new store, a new operation, a better product or the proverbial better mousetrap, Seeb said.

“If companies don’t focus on expansion and provide additional solutions, they’ll be swallowed up,” he said. “This industry takes no prisoners. It’s not the easiest to work in, but if somebody isn’t constantly adapting and they’re not dynamic, they’re going to be at a disadvantage because a lot of people realize a unique opportunity, and they’ll say if so-and-so isn’t doing this, I will, and if they are, I will anyway. And I’ll do it better.”