Bud+Breakfast™ CEO interviewed for CEOCFO Magazine

Joel C. Schneider

President & CEO

On February 22, 2014, Mr. Schneider became the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and sole Director. Mr. Schneider was admitted to the New York State Bar in 1984. He earned a Bachelor of Arts Degree in Political Science in 1981 at State University in New York at Buffalo. He received a Juris Doctor degree from California Western School of Law in San Diego, California in 1984. Mr. Schneider has been in the private practice of law from 1984 to 1989 and from 1995 to the present. From 1990 to 1995, Mr. Schneider was the Chairman of the Board and Chief Executive Officer of E.S.C. Industries, Inc. and Economy Fasteners, both companies which specialize in the distribution of fastening and anchoring devices. From 1990 to 1991, Mr. Schneider was Chairman of the Board of Protective Apparel Corporation of America, a manufacturer of bullet resistant vests. During his years of practicing law, Mr. Schneider has represented many public companies as a corporate and securities counsel. Since 2011, Mr. Schneider has consulted with several cannabis related companies in various aspects of the marijuana industry. 

Interview conducted by:
Lynn Fosse, Senior Editor, CEOCFO Magazine, 
Published – October 27, 2014

CEOCFO: Mr. Schneider, what is the concept for The MaryJane Group?
Mr. Schneider: The concept of the company is simple: we want to entertain people who come to Colorado to buy cannabis, which is now recreationally legal in this state. Our main mission is to provide them lodging, tours, and cannabis-friendly events, and to give our guests a safe place to enjoy the product they purchase out here.

CEOCFO: Where did you get the idea? 
Mr. Schneider: I have been following the cannabis industry since 2011. I had been to Colorado when vertical integration was coming into place, and dispensaries were lining up with grow operations to become a single, whole business. I saw that recreational marijuana was in the forefront and it was just a matter of time until the bubble burst. When I came out here in early 2014, I came to either lend money to growers who needed funding to turn recreational, or to provide lounges and safe havens for customers who had purchased marijuana and had no place to use it. While I was out here, every week, I was literally sitting in a hotel by myself and stuffing a towel under my door, just so I could enjoy the product I had bought. It made absolutely no sense to me. Marijuana is social; it has always been about being with people and passing a joint around. So my idea was simple: we needed our own hotel. And thus the Bud and Breakfast was born, a totally cannabis-friendly lodge. Then tours worked well with us because we have a captive audience at a hotel. We have relationships with dispensaries and growers, and of course we have the Bud and Breakfast. All of these became destination points for our tours. That is really the basis for the concept of my business.

CEOCFO: When somebody is coming to Colorado and they want to take advantage or they are coming because they want to take advantage of what is now legal, is the average person thinking beyond just getting there? How do you get attention?
Mr. Schneider: Absolutely. Most often our guests are not just coming to use marijuana. Denver, and Colorado in general is the only place in the United States where marijuana is recreationally legal. Washington is doing it but they’re taking a totally different approach. When our guests come, they come with full-rounded plans. They want to experience all that the state has to offer. They want to see how marijuana grows. They want to experience mixing marijuana and other activities, like painting or yoga or walking in the park. Obviously, Colorado has an abundance of outdoor recreation available, and that is what we find from our guests. They enjoy our “Wake and Bake” breakfast and all the amenities that we provide them, but they typically already have plans sightsee, hike, etc. within the state of Colorado. Utilizing marijuana is only part of the experience.

CEOCFO: How are you reaching prospective customers?
Mr. Schneider: It has been fairly easy; I must say we have not done a national marketing campaign. We have put out a couple press releases, and we are a public company, so as a result we were required to put out material information. That material information, being the announcement of the Bud and Breakfast, for example, that was just a local Colorado press release that got national and international attraction. We have seen articles as far as China and France and have been interviewed by Australian, Italian and British TV. So as of yet there has not been a campaign to market. Our website, I look every day because it comes to my email, but we get ten or so requests a day for lodging. As the guests check-in, we are able to upsell to our customers the other offerings that we have.

CEOCFO: Tell us a little about the international component. Are many people coming from outside the US?
Mr. Schneider: We have had guests from the country of Georgia, all over South America, Australia and Europe. As you know, Europe basically takes the summer off, so I think they are just starting to come to Denver right now. We have definitely seen a large influence, but our customer base has really been all over the country from Florida to Washington and California all through the Midwest. We expect a great deal of European guests at our Silverthorne location this winter. They want to take advantage of both of Colorado’s tourist attractions, skiing and cannabis. Our new Bud and Breakfast is a centrally located hub, only minutes from 7 different ski resorts. 

CEOCFO: What is the demographic?
Mr. Schneider: I think you would actually be surprised. During the summer, we had a BBQ over at The Adagio and most of the guests were in their 50s and 60s, around my age. From that standpoint, we are offering a higher end experience, but what we have encountered is the baby boomers. Some younger guests, but mostly in the 50 to 65 range and even older. They have the money, but it is not only that. What I have come to realize is there are people who have taken 30-40 years off because of work, raising children or whatever that may be. They have not smoked marijuana since college, and now they come out here with this wide-eyed curiosity to try it again. They come back to it, and they come back and are enamored by it. They love it. A former soldier who served two terms in Baghdad, had post-traumatic stress syndrome and had never smoked before. The first day he went out on his own and didn’t have a great experience. We brought in a consultant and by day three he was comfortable, happy, and sleeping better than he had ever slept. He hugged us as he left. When we hear that feedback, we understand the positives of what we are doing here and what marijuana has to offer. It is rewarding and we see it. 

CEOCFO: Would you tell us a little bit about the consulting aspect of what you are offering?
Mr. Schneider: Our staff are experts within the marijuana space more so than I am. They understand the various levels of THC and cannabinoids and whether a specific strain is an Indica strain, Sativa strain or Hybrid. They know how to administer edibles and concentrates. When they interview a potential patient or customer, they ask about their life history and what they are looking for. If they are someone who is slow moving and needs help picking up, they may be interested in trying an uplifting Sativa. If someone has trouble sleeping, maybe they want a euphoric, mellowing Indica. Maybe someone does not really enjoy the smoking aspect, so edibles or concentrates are recommended. People have studied the industry, the products and the combinations of THC and CBDs to determine which products are suitable for which people. I cannot talk much on the scientific aspect of marijuana, but I certainly have seen the positive results, and I think it is responsible from our standpoint to have trained consultants. We don’t want people just to jump into something they don’t know about. You would not have somebody jump into a bottle of tequila, you would consult them first and make sure they understand what they are doing, what their intake should be, and what results they can expect. 

CEOCFO: What surprised you since you started to develop this whole program and concept?
Mr. Schneider: There are many surprises any time you start a new business regarding relationships internally, what businesses work, and the demographics of our customer base. I cannot say that I have any surprises other than that I think this is the beginning. We are at the first inning of a baseball game and we have no idea what we are going to encounter. The biggest surprise is the banks and banking systems, credit card systems and the ability to process money within this space. That is what I find to be incredibly difficult. Growers and sellers of marijuana, and even ancillary businesses like us have all been impacted by the banking systems and the credit card systems. We have had to install a cash only or check only program for payment from our guests, and we are just like any other hotel The only difference is that we allow marijuana smoking in the facility. We do not allow it in the rooms, we allow it in the common areas, and it provides the social aspect. The surprise has been the negativity from the federal government as it relates to the banking systems and the credit card processing systems. We are having difficulties dealing with them on an almost day-to-day basis.

CEOCFO: Are there activities you have tried that have not gone over as well as you thought and are there some that surprised you in how well they were received?
Mr. Schneider: Absolutely. When I first took over, I took over a warehouse that was going to be used as a social cannabis-friendly smoking lounge. We thought we could bring people in there and have movie nights, game nights and other events with the warehouse acting as a safe haven for marijuana smokers. We were not able to properly promote that aspect of our business. I thought that would have been something people would have run after and come to, but I was wrong. We discontinued trying to push that and moved out of the warehouse space and into a more traditional office space. We closed both of our warehouses and exited the glass manufacturing business. We discontinued our newspaper and radio station because we lost in the shuffle of many. There are several magazines and newspapers in this space, like Culture and Westword, that had already captured the market for the cannabis advertiser. We were probably the smallest of the bunch, so we had to suspend the operations. Those are a few things that have not worked. I find that we do not need to have vehicles for our tours. We have contracts with limousine companies and we find that runs much smoother than when we had our own vehicles. It limits the liability for us, and we have licensed limousine drivers as opposed to employees. We have licensed limousine vans that are literally licensed through the state, so we have adapted accordingly to our business needs while reducing our exposure financially. 

CEOCFO: Are you funded for the steps you would like to take or will you be seeking additional investment or funding?
Mr. Schneider: We will definitely be seeking additional funding once we start moving forward with additional lodging facilities. We have raised money over the first six months of the business, and now we are at the point where we have cut out some of the losing businesses and some of the dead weight. We are going to raise additional dollars when the time is right. I would think within the next three to six months, we will be raising a substantial amount of capital to really move us forward. If you read my prior press release, The Adagio was a pilot program for Bud and Breakfast, and that has been a very successful pilot. It is something we certainly see as one of the key aspects of our business going forward, and I think it is proving successful. The idea now is to look for additional facilities, and whether we lease them or purchase them is subject to each particular property. To that end, we have opened our second Bud and Breakfast in Silverthorne, Colorado, which provides us a lodging facility in the mountains as we gear up for the Colorado ski season.

CEOCFO: Is the stigma gone?
Mr. Schneider: Like I said earlier, I do not know if the stigma is gone federally, specifically with the banks and credit card systems. The consensus of the country from what I have read is that over 50% of Americans would like to see marijuana legalized. I think the stigma does not come from popular opinion, but it comes from the government. We are still fighting an uphill battle going against the lobbies of big tobacco, big alcohol and big pharmaceutical, all of which are very well organized groups and businesses that are able to have their say and their way to a certain extent at the federal level. The marijuana industry and marijuana lobbyists, NORML to name one, just does not have that strength. But there is no doubt in my mind that if somehow this was put on a national ballot, it would pass.

CEOCFO: Put it all together for our readers. Why take notice of The MaryJane Group
Mr. Schneider: Because we believe we are located in the “Silicon Valley” of Marijuana. We are at the beginning of a new industry. The momentum is going forward, it is not going backwards. Six more states are going to have it on ballots for recreational use. This is an industry that, if it is done correct and legal and we provide our guests with the proper cannabis entertainment offerings, we like to say we are going to be the Disney World of the industry. This is the beginning. If we go back to the internet companies and social networking companies, and if someone had asked me if I thought Twitter or Facebook or any of these companies would be where they are today, I would say what are you talking about? Just being able to send out “x” amount of words from Twitter or using the social networking of Facebook, I would have looked at you like you had three heads. We are sitting here in Denver, Colorado, and this product marijuana will become a national product. It will be used in different forms everywhere, from the recreational side to the medicinal side to the nutraceutical side. People should pay attention. This industry is here, it is here to stay, and The MaryJane Group wants to be a powerhouse in this. We want to become a brand that everyone knows within this space, so I think you should keep your eye on it. It is just going to continue to grow and grow correctly. I feel like this company has the correct manner and the correct way of approaching this business. We are not a bunch of stoners; we are business men trying to push a business forward. Pay attention and watch what happens out here. Watch what happens in other states. There is expansion available for companies like us because we are not going to go into another state to grow or dispense. We are going to go into other states to provide cannabis friendly lodging and entertainment to the marijuana tourists.