Exclusive Interview with Sweet Flower CEO Tim Dodd
Sweet Flower has six licenses in the Los Angeles County area, and the California cannabis retailer has plans to continue growing its regional footprint. CEO Tim Dodd spoke with New Cannabis Ventures about his company’s commitment to providing a high-end CPG retail experience and competing in the California market. The audio of the entire conversation is available at the end of this written summary.
Building a Lean Team
Dodd comes with experience in media and entertainment, previously working at companies like Warner Bros. and Time Warner. He brings financial acumen, knowledge of raising capital and compliance experience to his role as CEO.
Sweet Flower has small corporate functions considering its revenue scale, according to Dodd. Though lean, the company’s team has attracted talent from both within and outside of the cannabis business. Kiana Anvaripour recently joined the company as Chief Marketing Officer. Previously, she was a marketing executive with Beboe Brands. She leads a marketing team with experience in fashion, beauty, lifestyle and health and wellness.
Vice President of Operations Justin Jones recently joined the company, previously working with MedMen and Target. Jones has been building out the company’s team of store managers.
A Southern California Footprint
Sweet Flower, in operation since June 2018, has four licenses in Los Angeles: Studio City, Melrose, Downtown LA Arts District and Westwood. The company’s downtown microbusiness license also includes manufacturing, distribution and cultivation.
Additionally, the company has won competitive licenses in Culver City and Pasadena. In Culver City, Sweet Flower was the highest-scoring applicant, and it won one of six spots sought after by more than 100 applicants in Pasadena. The company will be launching its Westwood and Culver City retail locations this year, with the timing taking into consideration current events.
Organic Growth
The company has a strong track record of winning licenses, and Dodd sees more organic growth in the company’s future. Winning licenses in Southern California markets coming online adjacent to Sweet Flower’s existing footprint is of particular interest. The company’s team also has strong M&A experience–opportunistic acquisitions may be selectively considered.
Sweet Flower has built a strong regional footprint, and there are plenty of opportunities to grow within its current Southern California market. While this region remains the company’s focus, a market in Northern California and one outside the state may be a consideration, according to Dodd.
Working with Brands
Anvaripour and the marketing team are essential to the company’s brand relationships. Additionally, Senior Buyer Michelle Mendoza has played an integral role in curating a wide selection of branded products for the Sweet Flower customer base.
The company works closely with its brand partners, launching brands out of its stores. For example, Airgraft launched out of the Melrose retail location last year. Sweet Flower works with its brand partners to build an audience and awareness, according to Dodd.
When considering brand partners, Sweet Flower evaluates not only brand position and marketing but the strength of the management team as well. Dodd highlighted Kiva, Airgraft, A Golden State, Sonder and Sundae School as some of the company’s brand partners with a strong product and company profile.
The Competition
Knowing your customers is a large part of finding success in the competitive California market, according to Dodd. While many dispensaries focus on the male and regular user demographic, Sweet Flower sees much of its customer base as first-time users looking for a cannabis experience to help manage wellness, sleep, pain and anxiety. The brand is designed to be approachable to all, but the Sweet Flower customer is likely a professional woman. Sweet Flower is there to provide a high-end retail experience to its customers.
As a part of that positioning, the company has premium retail locations. For example, its Melrose retail location is a part of a shopping corridor near West Hollywood.
While Sweet Flower understands its demographic and geographic footprint in the competitive legal market, illicit operators play a factor. Legitimate brands and dispensaries still find themselves competing with counterfeit material and operators working outside the legal regulatory structure. Regulators have made moves to shut down this kind of activity, and Sweet Flower is seeing people move away from the illicit market. Dodd acknowledges this is still an issue, but he anticipates that it will diminish over time.
Business During the Pandemic
Uncertainty is a given in the cannabis industry, and the COVID-19 outbreak has added another layer of complexity to day-to-day operations. Sweet Flower has cancelled all of its events, and it is working with its staff to maintain cleaning protocols and to practice social distancing.
While the pandemic situation is rapidly evolving, the company has seen an increased demand for its delivery services. Sweet Flower will also be offering curbside pickup. In addition to these steps, the company is developing some other digital initiatives to minimize social interaction and help customers get the products they need, according to Dodd.
Funding and Continued Execution
Sweet Flower has largely been funded by its founders, with some light bootstrapping, since its inception, raising tens of millions of dollar thus far. Recently, it closed its first friends and family round of funding. The company has the funds to get it through the year to profitability, according to Dodd.
In 2020, the company will be launching its Westwood and Culver City stores, bringing it to a total of five operational stores. It will also be considering other markets for potential application wins. As the company continues to execute, it will be tracking traditional CPG metrics, such as EBITDA and revenue per store. Sweet Flower will also be focusing on its earnings and operating as a profitable business, according to Dodd.
While the uncertainty remains a constant theme in the industry, Dodd is bullish on Sweet Flower’s prospects in 2020 and 2021.
To learn more, visit the Sweet Flower website. Listen to the entire interview:
