A Full Spectrum Cannabis Company
IgadI has been one of the fastest growing, vertically-integrated companies in Colorado. Since its inception in 2015, it has acquired six dispensaries in key locations and a total of sixteen licences.
When last we spoke with Kemsley Wilton, the chief executive officer of IgadI Ltd., in April of 2017, he told us how the company strives to educate its consumers on the merits of cannabis. We recently caught up with Kemsley to see what progress has been made.
“We plan on growing responsibly and efficiently going forward with a focus on optimizing our company to create the best experience possible for our customer base in Colorado. Responsible growth and making sure that we are continuously building a stronger team in every department is key to our future success and sustainability,” says Kemsley.
There truly is quite the scientific approach to what IgadI does. The majority of its employees are skilled technicians with unique expertise at creating truly unique, cutting-edge marijuana concentrates, distillates and edibles as well as top shelf flower for its customers. Being able to apply chemistry and soil sciences is a crucial aspect of manufacturing its product lines. This has allowed the company to produce one-of-a-kind, high-quality products, and it will continue to push its research and development toward new products that will best serve its customers.
This industry is filled with obstacles due to the federal government’s stance that cannabis for recreational and even medicinal use is illegal. However, IgadI is expanding and growing.
Marketing efforts are restrictive and regulations are constantly changing. Cannabis marketing has unique rules as to what avenues can be used to reach customers. IgadI’s marketing is in constant communication with its customers through social media.
“This has allowed us to receive consumer feedback and optimize our product lines, along with the overall customer experience at all of our locations,” says Kemsley.
The marijuana industry in Colorado is much more limited in its marketing capabilities than any standard industry due to the advertising regulations. Accordingly, IgadI has been required to use a different approach to effectively communicate with its customer base.
“We like to use local publications for advertising around all of our locations as well as deals and specials we offer. We also use a text message marketing system that our customers can sign up for in store, to receive location-specific deals and special event information,” says Kemsley.
The federal government does not seem to be interested in furthering cannabis education and understanding. This is one of the major issues facing cannabis companies and dispensaries going forward. This inaction on the part of the federal government means that it has not made any substantive changes to help academic institutions perform cross sectional and longitudinal studies on the effects of THC.
“Foreign governments, such as the UK and Israel, are taking steps to open up true academic avenues of discussion around the topic which we hope will collect relevant data related to the cannabis industry,” says Kemsley.
The FDA has approved the first cannabis-derived pharmaceutical product for sale in the United States this fall, which is a step in the right direction. There is still a huge need for healthy academic scrutiny, peer review, and debate.
In the past year, IgadI has developed a few new products and developed a host of others that will be released soon. These new product lines have a heavy focus on THC distillates and live resin. These products allow the consumer to experience the distinctive strain flavors from live resin while producing a smoother, higher-potency product with the THC distillate blend.
“We will continue a focus on product lines using THC molecular distillate in every form ranging from cartridges to edibles as it is the purest form of the desired active ingredient in cannabis – THC,” says Kemsley.
Flower prices are dropping drastically across the U.S., forcing a lot of companies to resort to cheaper sub-standard growing practices. IgadI is confronting the issue by creating efficiencies through automation and sustainable organic growing techniques to ensure that it can provide the highest quality flower at a competitive price.
“We will always be dedicated to becoming better at what we do to tackle challenges and trends such as this without taking any shortcuts to ensure we are maintaining our quality standards,” says Kemsley.
Expansion efforts have been going at a rapid pace, and 2018 has been a highly successful year for IgadI’s Lafayette location. IgadI is excited about being the market leader in the area, continuing to provide an exceptional and positive cannabis experience.
“We also just opened our sixth dispensary in Northglenn this past month at one of the busiest intersections in the Denver metro area on 120th St. and Washington Ave. We are looking forward to being a part of the Northglenn community and helping to meet the needs of a massive customer base in that area,” says Kemsley.
Consulting efforts were underway when we spoke last, and this continues to be one of the primary focal points going forward, especially as it relates to emerging markets. IgadI has put together comprehensive consulting manuals and videos for cultivation, labs, and kitchens.
The manuals include equipment schedules, recipes, temperatures, cultivation schedules, nutrient regiments, and staffing requirements as a few examples. These manuals along with IgadI oversight can be applied to any jurisdiction in the U.S. and provide a good basis for a franchise model.
“We have strong beliefs that strategic partnerships in this industry are key to long-term success. We will be offering consulting services in unison with Witlon, a company that provides staffing and payroll services. Our partnership with Witlon has been instrumental to our success,” says Kemsley. IgadI and Witlon have developed a system that allows employees to have a standardized style of payroll that has enormous advantages for both IgadI and its employees over other payroll systems currently deployed in the industry.
Along with the production expertise, retail expertise, and staffing, IgadI also offers licensing, real estate analysis, financial, business administration and compliance-related consulting to ensure a sustainable business model. Kemsley states that: “Our biggest competition would be companies that are fully integrated like us, meaning that they produce their own flower, concentrate, and edibles in-house. There are hundreds of medical and recreational shops throughout Colorado, but only a handful that are truly vertically integrated,” he explains.
“On a federal level, the recreational use of marijuana is still illegal. This presents many issues for the industry. The biggest effects are felt in our dealings with financial institutions for common business practices,” says Kemsley.
While IgadI has stable banking, insurance, employee benefits, and debit card processing, most marijuana businesses are not as fortunate. Debit card processing transaction fees currently offered for marijuana are higher than those of many other businesses because of the risks involved. Banks’ reluctance to deal with most cannabis companies stems from the simple fact that, like many small businesses, they have disorganized financials. As a result, many marijuana businesses have been forced to use questionable sources for banking such as foreign bank accounts or bitcoin scenarios. Accordingly, the financial system for the majority of the marijuana industry, who are not set up like IgadI, at this point remains unstable.
Marijuana businesses are unable to get loans from financial institutions which leads to loans from private investors which frequently come along with higher interest rates and predatory terms and conditions. IgadI has been fortunate in having a bank since the beginning, but it spends a lot of time making sure the accounts are accurate to the penny.
The other big effect from marijuana being federally illegal comes from section 280e of the tax code. The IRS views marijuana companies as traffickers of a Schedule 1 controlled substance and therefore does not allow cannabis businesses to take many ordinary business deductions on tax returns that all other businesses can deduct from their income. This can lead to high tax rates that drastically hurt the profitability of marijuana companies that do not have the sophistication to understand and mitigate against these unique issues by carefully avoiding expenditures that are uniquely not deductible for cannabis companies.
“As for employees, our system allows them to cash cheques, get loans, and have health insurance. We must jump through a lot of hoops to be able to offer these things to our employees. We follow all of the state regulations as a business and provide a friendly, educational, and supportive workplace for over one hundred employees. We have been voted the best place to work in Grand County, Colorado, where IgadI’s main facility is located in 2016 and 2017 and are up for the same distinction in 2018,” says Kemsley.