14 Jul They Did it Their Way: Good Meds LLC
They did it Their Way: Good Meds LLC
Have you ever met someone who is infectiously determined and committed to her vision of living a balanced, give-back-to-others life, who has the energy of a dynamo, is outgoing, straightforward, honest and transparent, yet also gracious, humble, very capable and admired by her partners, peers, and acquaintances alike?
Well, I met Kristi Kelly last week after pursuing her to let CBE write the Good Meds story, and I can honestly say that I have. As I continue to interview owners, partners, presidents of PPR’s across the country, I was fortunate enough to gain an entree from my friend Andy Williams, who told me what he thought of Kristi and to learn first-hand why he said she should be on the short list of the most important female executives, if not all executives, in the rapidly growing Cannabis Industry.
A few years back, Kristi and her husband Nathan were living in the DC area where Kristi had grown up. At their wedding, Kristi had a brief conversation with Nathan’s childhood friend John Knapp about starting a marijuana business, and the wheels were set in motion for what would become Good Meds.
At the time, Kristi was climbing the professional ladder at various ad agencies, most recently RP3 Agency, in Bethesda, rising through the ranks in account management until ultimately running it. She was also dedicated to social responsibility and global social change, working in a number of volunteer positions for causes and initiatives that matched her respect for the human experience, which she attributes as the most important contributor to her success in business. Nathan, Kristi’s self-acknowledged alter ego and steadying force, was working in association management when they decided it was time to get into the industry.
Their plan was straightforward enough: they would enter into the medical marijuana business in Colorado as the rules for the nascent industry were just being developed (pre-vertical integration). They would finance the venture themselves; and Kristi would continue working on her career at RP3 and her other personal initiatives, paying it forward in the process.
As the rules continued to evolve, so did the need for more hands-on management, and shortly into the venture, John called Kristi and Nathan and asked them to join him to deal with the curve balls being thrown their way.
The original plan was to have a cultivation business (they did in 2009). John would run the grow with Kristi and Nathan financing the majority of it. But vertical integration and HB-1284 passed, forcing the team to rethink their approach, and under severe time constraints, they aligned with three retail partners and another grow partner. The combined entity had three (3) producer licenses, three (3) medical retail licenses & storefronts (two in the Denver metropolitan area and another in a smaller mountain community), and a processing license.
All owners without two years of residency had to be removed from the ownership structure, so John held Kristi’s share until she met the residency requirements. Today, Good Meds has eight (8) owners with John and Kristi having management authority over the venture, John leading cultivation design and product development, Kristi running the business and retail operations, and Nathan running cultivation and workforce development.
But, there were bumps along the way.
They had transitional ownership issues to resolve with differing visions for the business, but John, Kristi and Nathan stuck to their guns and vision of creating a vertically integrated business with a focus on consistent, high-quality product and exemplary service delivered through a medically focused lens.
Kristi told me they don’t worry about doing what others are doing and ultimately have developed their two medical marijuana dispensaries (located outside of the primary Denver trade area) to serve the people who appreciate high quality at an accessible price point. They sold their mountain facility and have been growing and processing their medicine in a 100,000 sf facility in Denver (about two-thirds of it being utilized today, with plenty of room for expansion).
Good Meds broke even in 2013 and generated $4.5 million in revenues in 2014. They are tracking to do over $10.5 million in 2015, putting them in the company of some of the largest revenue generators in the industry. Kristi attributes their success to a few fundamentals and the intersection of her desire to work with others to find solutions and learn her discipline inside and out.
Good Meds has a genetic inventory of over 120 strains to grow which aligns perfectly with their desire to be at the forefront of serving the multiple medical applications of the plant to patient’s today and into the future. This allows for a terrific product mix to be served at retail, and, for R&D to go on behind the scenes that will impact their expansion efforts into other markets.
On the dispensary side, their Cheesecake Factory menu-style test program (aspiring sales associates have to learn the entire menu of offerings), and staff training on compliance issues is standard operating procedure, as is training the staff in the art of the transaction. The grow features a Hamburger University style approach, where staff learns from the ground up. Kristi attributes this to their growth and development of a loyal motivated staff, and Mary Bahr, who has been Good Meds General Manager, has been promoted to head up operations.
Along the way, Kristi found that her entry into the industry was a great way to marry her desire to work in a socially rewarding capacity and to nurture her philanthropic ambitions. She has witnessed Good Meds patients’ lives improving while digging into the possibilities that the science and medical benefits of cannabis may provide.
She has been heavily involved with several industry organizations over the last five years, including:
- Vice Chair and Board Member of the Marijuana Industry Group, which was founded in 2010 to help create Colorado’s medical marijuana regulatory framework;
- Founding Board Member of The Fourth Corner Credit Union, working towards solving the industry’s severe banking crisis
She is also in the process of launching a new non-profit, the CannAbility Foundation, which was founded to provide support, resources, education and access to cannabis for parents of kids living with an illness or disability.
I couldn’t help but hum one of my favorite songs when hearing Kristi’s and the Good Med’s story, which she would change to “We do it our way!” The only difference is that this mid-30s dynamo is just beginning, and Kristi and the Good Meds team have several more verses to write! Take it away Frank!
Company Name: Good Meds LLC
Year Founded: 2009
Ownership Structure: Private Company Incorporated in Colorado
Management Team: Kristi Kelly, Principal & Founder; John Knapp, Principal & Founder; Nathan Kelly, EVP
Headquarters: Denver, Colorado
Industry Segment/Category: Producer, Processor, Retailer
Current Markets/States Served: Colorado
Current Number of employees: 55 (hiring 10-15 in immediate future)
Market Strategy/Goal: Focus on high quality, consistent product and exemplary service delivered through a medically-focused lens. Serve people who appreciate high quality at an accessible price point.
Current Product Mix: Retail flower, Concentrates, Edibles, Infused non edibles, Accessories, Wholesale flower
Expansion Plans: Their plans are specific to their activity within the Colorado market, and they have product development underway that may affect this market as well as other markets. Their cultivation facility is only at about 60 percent capacity, and they will be expanding into the remaining 40 percent to meet market demand, both in flower, concentrates, and other delivery methods. The inter-mix of science, medicine and industrial production will come together in a number of ways. They also have relationships in other states with plans to open in other medical markets, either under the Good Meds brand or other trade names.
Financing strategy: The majority of their capital has been sourced from family and friends. The company has reinvested 100 percent of revenues into expansion so as to minimize the dependence on outside sources of investment. This has allowed them to maintain extraordinary vigilance as it relates to the preservation of what makes them strong.