What’s Your Problem?: Growing a Weed Business

Ellen Scanlon (00:00):

This podcast discusses cannabis and is intended for audiences 21 and over. Welcome to How to Do the Pot, a podcast demystifying cannabis for women. I’m Ellen Scanlon.

Ellen Scanlon (00:15):

We are doing things a bit differently today and sharing an episode from a podcast called What’s Your Problem, where Jacob Goldstein, the former host of Planet Money, talks to very smart people who are facing some of the biggest challenges in modern business. Today’s episode is especially close to my heart because Jacob is joined by Joy and Raft Hollingsworth, the brother and sister team that run the Hollingsworth Cannabis Company, which is based in Washington State. They tell us about a problem they’re having, trying to figure out how to help more black people get into the largely white legal cannabis industry, which is a dilemma I’d like to help solve too. This story includes a paper bag full of cash, dinner with Anthony Bourdain, and hundreds of millions of dollars in cannabis taxes.

Ellen Scanlon (01:10):

And if you haven’t yet, be sure to listen to our latest Weed Words episode on the word marijuana. Weed Words is How to Do the Pot series where we unpack a widely recognized, but narrowly understood term or phrase related to cannabis. If you weren’t aware of the weight the word marijuana carries, you’re not alone, and this episode will help shed light on its complicated past. Back to today, I hope you enjoy this episode of What’s Your Problem with Jacob Goldstein.

Jacob Goldstein (02:00):

I’m Jacob Goldstein, and this is What’s Your Problem, the show where entrepreneurs and engineers talk about the world they’re going to build once they solve a few problems. My guests today are Raft and Joy Hollingsworth, the brother and sister team that runs the Hollingsworth Cannabis Company, AKA THC Co.

Jacob Goldstein (02:21):

Joy and Raft run a farm in Washington State where they grow and sell about $600,000 of marijuana a year. Their problem, how do you help more black people get into the legal weed business? They’ve been working on this problem for a long time. It started about a decade ago, right after Washington State legalized recreational marijuana and Joy and Raft decided to start their own weed farm from scratch in rural Washington State, despite having lived their whole lives in downtown Seattle. At the time, their dad had just retired after a career at the Seattle Parks Department, and he put up a big chunk of his retirement savings to fund the farm. Joy and Raft told me, like a lot of entrepreneurs when they started out, they really didn’t know what they were doing.

Joy Hollingsworth (03:06):

You got to be a little crazy. You know how they say entrepreneurs, you jump off a cliff and you’re going to figure out how to build your plane on the way down?

Jacob Goldstein (03:13):

Yes.

Joy Hollingsworth (03:13):

That’s when it kind of felt like.

Raft Hollingsworth (03:15):

Yeah, and we start driving out, found the property on Craigslist. It was a six acre plot of land in Mason County. We see this land, we like it. I say, I’ll take it. And the real estate agent, Larry, at the time said, okay, well meet me at the Mason County title office. Okay, great, Larry. So we go down there, and I had a Safeway bag, like a paper bag full of cash.

Jacob Goldstein (03:40):

Oh my God.

Raft Hollingsworth (03:40):

And we were going to pay for this land. And we were so like evasive at the time. We didn’t want to tell anybody our plans. What are these two black guys from Seattle want with six acres off of this private dirt road by the prison? What do they want? It was ridiculous in hindsight, but-

Jacob Goldstein (03:58):

I mean, you’re telling it as funny, right? But like, were there any other black people there? Was that scary? Was it fine? How was that part of it?

Raft Hollingsworth (04:10):

There’s no other black people out there. And the neighbors have been really nice to us. To this day they’ve been great stewards as neighbors.

Jacob Goldstein (04:18):

So how did you get from there to here? Right? So you got your farm, you get to know the neighbors.

Raft Hollingsworth (04:23):

Chaos.

Jacob Goldstein (04:23):

Chaos.

Raft Hollingsworth (04:23):

It was chaotic. We had a fence, we had cameras. We had a couple of buildings, but the rest was just we’re in the open field. We don’t really know what’s going on. We’re going to grow plants. Not only we’re going to grow plants, we’re going to grow 4,000 plants in the dirt. We buy dirt from this guy down the road, because we heard from a friend that he has good dirt. And it’s like, landscaping dirt. It’s not even dirt you grow like plants it.

Jacob Goldstein (04:53):

Like you bought the wrong dirt? You bought the wrong dirt?

Raft Hollingsworth (04:57):

Yeah.

Jacob Goldstein (04:57):

That sounds like a problem.

Raft Hollingsworth (04:58):

From this guy we paid like $7,000. It was a problem. I mean, there was just so many different things. We’re freaking out. I moved to the farm. I’m living in the construction trailer that we have put on the farm as our office space. I’m sleeping in the office. We hire a guy on Craigslist. We hire everybody that first year from Craigslist.

Jacob Goldstein (05:19):

No Joy, tell me, it’s been all Raft so far. Tell me what [inaudible 00:05:23] like that.

Joy Hollingsworth (05:23):

I thought I was on mute listening to, yeah, no. I’m sorry. We’re still on year one and I think you want to get from year one to now.

Jacob Goldstein (05:31):

So Joy you pick up the story here.

Raft Hollingsworth (05:33):

I’m sorry.

Jacob Goldstein (05:33):

No, I love it. But Joy, you pick up the story. Get me over the next nine years here.

Joy Hollingsworth (05:37):

I’m listening to year one right now, Jacob, and I’m like, bro will get us to 2021, please.

Jacob Goldstein (05:45):

Okay Joy. You’ve got it. No, you got it. Joy, this is your moment I want to hear it from you now.

Joy Hollingsworth (05:49):

No, no, no. You’re good. I’m sorry. And I didn’t know I was not on mute.

Jacob Goldstein (05:53):

No, I mean it. I mean it, Joy, you tell me the story of the next nine years.

Joy Hollingsworth (05:55):

RAF is right, it was such a learning piece and a learning curve with everything. And it felt like an experiment for year one. And we didn’t know what we were doing wrong. We just kind of like, it just felt like it was this whole entire thing of solving problems, one after the other. So every year it felt like we got better. It just kept continuing to get better and better until that moment, right, in 2017, which I think switched when we were on and got to have dinner with Anthony Bourdain and crew. And that was really the year that really put us on the map for so many different reasons.

Jacob Goldstein (06:34):

And just to be clear here, a producer for Anthony Bourdain’s CNN show read an article about your farm in a Seattle newspaper. And then like a month later, there’s a TV crew filming you at the farm, and you’re having dinner with Anthony Bourdain, and you wind up on his show on CNN. What does that do for your business?

Joy Hollingsworth (06:53):

Right after that show, all these people he hit us up and said, hey, we’d love to buy your product. Can you ship us a pound? I live in Texas. I live in California, and it’s like, no, that’s actually illegal. We can’t do that. And so it’s hard to monetize that piece when you can’t be close to the consumer, but on that branding piece, absolutely. Absolutely. It gave us a lot of credibility in spaces that we didn’t know existed.

Jacob Goldstein (07:20):

So let’s just talk about the business today. Like sort of what it is, how it works. I pulled it up on Google Maps on the like satellite images one. If you just Google map Hollingsworth Cannabis Company, it comes up, and like I’m zooming in, but first of all, it is clearly like way out in the middle of nowhere, right? It’s just trees and farms, and what is that? Maybe a creek all around. But if I zoom in more, I can actually see it looks like mostly greenhouses and that’s where you grow the weed, grow the cannabis.

Raft Hollingsworth (07:51):

Correct. So we have eight greenhouses. We have three shipping containers and we just modified them to be buildings, like wired and with doors. So I mean, they feel like steel frame buildings, but then we have a converted construction trailer and that’s where we do all the processing. It’s renovated, hardwood floors, it’s painted. It’s nice.

Jacob Goldstein (08:10):

Tell me about the plants.

Raft Hollingsworth (08:11):

They’re living, breathing beings. They are very much alive. And at one point in time, we’ll have 2,100 plants. Alive, growing. And it’s like, it’s a symphony. It’s beautiful.

Joy Hollingsworth (08:26):

And they’re very resilient too. A plant could look a hot mess one week, give it a little nutrient, a little sunlight, and figure out what’s wrong and it looks like a million dollars the next week. So they bounce back really fast. And like RAF said, they’re actually living and breathing organisms. We play them music.

Jacob Goldstein (08:43):

What music do you play the plants?

Joy Hollingsworth (08:44):

It was like two straight weeks he was playing gospel music. And I was like, oh, he’s going through something right now. That’s-

Raft Hollingsworth (08:50):

Oh, please.

Joy Hollingsworth (08:52):

You okay, [inaudible 00:08:53]? And then the next week he’s playing just some neo soul music. Now he’s good. So it just really depends.

Jacob Goldstein (08:59):

Okay. Are you okay raft? You came through it okay?

Raft Hollingsworth (09:04):

Yeah. I’m [inaudible 00:09:05]. That’s accurate.

Jacob Goldstein (09:09):

How is the business doing? Is your dad’s life savings safe?

Raft Hollingsworth (09:12):

Yeah, when we started our first order was for $2,000, and it took us, Joy, what it take us three weeks to…

Joy Hollingsworth (09:18):

Yeah, it was three weeks to process it.

Jacob Goldstein (09:21):

That’s not a living.

Raft Hollingsworth (09:22):

Between four people.

Jacob Goldstein (09:23):

You’re not going to make a living that way.

Raft Hollingsworth (09:25):

No.

Jacob Goldstein (09:25):

So how about now?

Raft Hollingsworth (09:27):

We could probably get a $2,000 order out in like a day, maybe less. Probably the same day.

Jacob Goldstein (09:32):

Annually, more or less, how much do you sell?

Raft Hollingsworth (09:34):

I about five to $600,000 wholesale.

Jacob Goldstein (09:38):

Okay.

Raft Hollingsworth (09:38):

In marijuana, which equates to like 1200 pounds of marijuana grown and sold.

Jacob Goldstein (09:43):

That’s the gross, right? So that minus your cost is your profit.

Raft Hollingsworth (09:47):

Exactly.

Jacob Goldstein (09:48):

And so, I mean, there are people in Washington who sell millions of dollars a year, certainly, right?

Raft Hollingsworth (09:54):

Million dollars a month. Yeah.

Jacob Goldstein (09:55):

Oh, wow. Okay. So how do you compete? I mean, I feel like this is like small business lessons here. Like how do you compete against a business that’s more than 10 times your size?

Raft Hollingsworth (10:04):

Joy, how do we compete with business? Like we really have to focus on our brand, what we do better than anyone else.

Jacob Goldstein (10:11):

You asked Joy, but then you answered. Joy, how do you compete?

Joy Hollingsworth (10:15):

There’s a demographic and people, they want cheap weed. People like going to Walmart and Costco. But there are people that really value knowing who grew their weed. Who grew their weed, how did they grow it? And then when you can connect to the consumer with that via Instagram, online, story, connecting, building relationships, then they feel like, you know what? I want to be connected to them and I want to support them. I want to support this black business, this family owned and operated business. And a lot of people have told us, they see their family in us. Every time they look at us, they’re like, you remind me of my sister or my mom is, or I love your mom. She’s smoked. She’s really funny. Or your grandmother, she’s 101. I love her. We connect people on that family piece, and that’s really huge.

Jacob Goldstein (11:02):

You mentioned your mom and your 101 year old grandmother. Are they part of the business?

Raft Hollingsworth (11:07):

They certainly consume part of the business. And my mom-

Jacob Goldstein (11:10):

They’re part of the cost side, not the revenue side.

Raft Hollingsworth (11:14):

Yeah. My mom’s a designated tester. We have name tags for everybody and that’s her title.

Jacob Goldstein (11:19):

My kids want to grow up to be ice cream testers. I feel like your mom really hit the jackpot on that one.

Raft Hollingsworth (11:23):

Yeah. She knows too.

Jacob Goldstein (11:29):

After the break, the problem Joy and Raft are working on now. How do you help more black people get into the weed business?

Jacob Goldstein (11:42):

That’s the end of the ads, now we’re going back to the show.

Jacob Goldstein (11:45):

Back before weed was legal or quasi-legal, whatever it is now in America, black people made up a disproportionate share of the people arrested on marijuana related charges. Now that weed is legal, or quasi-legal, black people are underrepresented in the marijuana industry. And this is a problem that Joy and Raft are working on now.

Joy Hollingsworth (12:05):

We wanted to use our platform of being one of the only black farmers in the state of Washington, not the only, but one of the few, to use our platform to help bring attention and awareness to that.

Jacob Goldstein (12:16):

Did I read Raft that you were on some kind of a state committee that recently changed a rule that was keeping people out of the legal weed business?

Raft Hollingsworth (12:25):

Yeah. One of the things that we talked about amongst a million other things was this rule that the liquor and cannabis board had that would disqualify you from owning a marijuana business, essentially, if you had a non-violent drug offense, conviction, or charge in your past. And they changed that rule, finally, which is a step in the right direction, but it is not enough.

Jacob Goldstein (12:48):

And you’ve also worked on this Washington State law that’s addressing some of these social issues, right?

Joy Hollingsworth (12:54):

We helped draft the bill, connect with people, help lobby the bill. We were out there testifying. It was a big, heavy lift.

Jacob Goldstein (13:03):

And it passed.

Joy Hollingsworth (13:04):

Yeah, we can’t take all the credit for it. It was definitely a community push. And the biggest piece is Washington brings in over, they’ve brought in over the last two years, over a billion dollars in tax revenue. And so, a lot of those funds, we have been using our platform to try to get those back into neighborhoods, which is important. And how amazing would it be that these neighborhoods that were torn up by the war on drugs, affected poverty, homelessness, could go back into those communities from cannabis tax dollars and continue to repair those communities with those tax dollars that were generated. I think that is really the goal.

Raft Hollingsworth (13:49):

And Jacob, I just want to give a shout out because yesterday the governor came out with his proposed budget and he had allocated $125 million for disproportionately impacted groups of community reinvestment from the cannabis tax dollars. I mean, the effects of the bill are going to be felt for generations.

Jacob Goldstein (14:10):

Great. So people are sort of talking about this idea that marijuana might be legalized at the federal level, right? Right now, clearly you’re operating under all these state rules, what would it mean for your business if weed were just legal in America?

Raft Hollingsworth (14:28):

Oh my goodness. What would it mean? It would be amazing. Right now we grow 1200 pounds to 1500 pounds, depending on the weather, of marijuana. Street, if that was marijuana that we could sell directly to the consumer, can’t imagine. I mean, look, a thousand pounds, convention has kind of put that at $10 a gram, one pound is 454 grams. You’re talking about $4,500 a pound. If we could produce four to five million dollars in marijuana, actually six million dollars in marijuana every year, it would change dramatically.

Jacob Goldstein (15:06):

Would it also mean you would have to compete against these giant, even in some cases, publicly traded weed companies that have been kind of building up in Canada and waiting to like sweep into the US when marijuana is legalized here?

Raft Hollingsworth (15:21):

Yeah, I think we would, but at the end of the day, everyone has to grow the plant. We focus on efficiency in growing it for environmentally friendly impact. We grow for $9 a day in power, and I don’t think anybody really can compete with that in terms of price in economies of scale. Now, obviously people can produce more marijuana, but I think what we offer that those other companies don’t is just that authentic lovingly produced product that corporate marijuana really can’t replicate at that scale.

Jacob Goldstein (15:59):

It’s like craft beer, your craft weed.

Raft Hollingsworth (16:01):

That’s exactly right. We don’t produce a lot of it, but what we do produce, we produce it with love, and attention, and dedication, and service. And we really care about what you experience when you use our product, because we put our name on.

Jacob Goldstein (16:15):

So basically you can’t wait until weed is just legal in America.

Raft Hollingsworth (16:20):

Me and everybody else.

Jacob Goldstein (16:24):

In a minute, the lightning round, including Joy and Raft’s favorite things to do when they smoke, and the best and worst things about working with your family.

Jacob Goldstein (16:38):

Okay, let’s get back to the show. We’re going to close with the lightning round. Are you ready? I want you guys both to answer.

Joy Hollingsworth (16:44):

We’re ready.

Jacob Goldstein (16:44):

You can interrupt each other. You can talk over each other, but I want everybody on this one. What’s your favorite thing about working with your family?

Joy Hollingsworth (16:54):

You can’t get fired.

Raft Hollingsworth (16:59):

Spending time with my dad, and my sister, and my mom.

Jacob Goldstein (17:01):

What’s your least favorite thing about working with your family?

Raft Hollingsworth (17:04):

Same answer.

Jacob Goldstein (17:05):

Joy?

Joy Hollingsworth (17:05):

Yeah, the same an, I can’t fire Raft. If we have a problem, I can’t fire him. Same answer.

Jacob Goldstein (17:13):

I don’t want to presume that you guys smoke weed, but if you do smoke weed, what’s your favorite thing to do when you smoke?

Raft Hollingsworth (17:19):

I smoke before I go to bed. My favorite thing to do is to sleep.

Joy Hollingsworth (17:24):

I don’t smoke, I’ll take some edibles, and then I like to do design stuff. So like, some high level stuff, because it makes me super creative. So it might be the website, might be some cool pictures, might be a label design. Might be some inspiration, that type of thing.

Jacob Goldstein (17:40):

So your answer is work, Joy. Your favorite thing to do when you get high is work.

Joy Hollingsworth (17:44):

Yeah. Isn’t that crazy?

Jacob Goldstein (17:45):

It’s okay. No, it’s great. If you have just like a 10 minute break in the middle of the day, what do you do to relax?

Raft Hollingsworth (17:52):

I watch unintentional ASMR videos on YouTube, especially the medical variety. It’s my favorite.

Jacob Goldstein (17:58):

Well like doctors just sort of like rustling little like plastic wrappers as they’re doing a surgery or something?

Joy Hollingsworth (18:05):

Yeah, yeah.

Raft Hollingsworth (18:06):

Oh, you know, my favorite thing is the lymph node check. I’ll watch a compilation of that all day. They just like gently touch your lymph nodes around your neck and clavicle.

Jacob Goldstein (18:14):

Do you guys think you’ll work on the farm forever?

Raft Hollingsworth (18:20):

No, probably not.

Jacob Goldstein (18:22):

How will you know when it’s time to go do something else?

Raft Hollingsworth (18:24):

When I do not love going to grow plants. There’s still that just pure amazement at the growth week over week where I’m just, I’m enthralled like a little kid.

Jacob Goldstein (18:37):

Great. Thanks so much to both of you for your time. Thanks for talking to me.

Raft Hollingsworth (18:44):

Thank you guys so much for thinking of us.

Jacob Goldstein (18:47):

Really, it was great.

Joy Hollingsworth (18:47):

Thank you. Thank you. Thank you guys.

Jacob Goldstein (18:48):

Joy and Raft Hollingsworth run the Hollingsworth Cannabis Company, THC Co. Today’s show was produced by Edith Rousselot. It was edited by Robert Smith and Kate Parkinson-Morgan and engineered by Amanda K. Wong. I’m Jacob Goldstein and I’ll be back next week with another episode of What’s Your Problem.