Tom Mulhern: Today on the show, I get the amazing opportunity to facilitate a conversation between Gary Cohen, the CEO of Cova, and our co-founder and CEO, Tommy Truong. And you know, this is gonna be one of our longest episodes yet because they both had so much insight and so much to share about their experience of working in cannabis.
Cova being probably the number one point of sales system in North America. Gary had tons of really great thoughts about how cannabis retailers can develop their brand and how they can stand out in the industry. You're gonna have to buckle up. Hopefully you've got a, a long commute for this one.
We're gonna, we're gonna go a bit longer than we usually do, but I want to just encourage you all to take the time to listen to this conversation between Tommy Truong and myself and Gary Cohen, the CEO of Cova. So let's jump right into the show.
Tom Mulhern: Gary Cohen is the CEO of the most trusted award-winning POS brand in North America. He's met with nearly 2000 dispensary operators from coast to coast and leverage expert knowledge to provide cannabis retailers the support they need to get a license, pass inspection, launch a store, and improve operations.
Gary frequently leads seminars on retail technology compliance, business operations, and cannabis banking laws at some of the industry's largest events, including NCIA and MjBizCon. Cova software has been the fastest growing software solutions company in the history of legal cannabis and is now the number one cannabis POS in North America.
Since launching commercially less than four years ago, they've surpassed over 50 point of sales systems to become the tech choice for ambitious and enterprise level cannabis retailers. I first met Gary at a conference in Albuquerque, and you know, I know that Gary's got tons of stories that he's gonna share.
He's a, a great down to earth person, and we also have Tommy on the show as well. Tommy's the co-founder and CEO of Kaya Push. So Gary, Tommy, welcome to the show. It's so great to have you both here.
Gary Cohen: It's good to see you, Tom.
Tom Mulhern: hey,
Gary, why don't we kick it off. Tell me a bit about your background. I know you have a long background in tech and how did you end up in cannabis?
Gary Cohen: Well, it, it's kind of a, a unique story in that I sold the very first cell phone in Colorado in 1986, and pretty much wrote that industry from day one all the way till I left it six years ago to start Cova. So I was in the, the tech side of things for 30 straight years. And then when we were trying to think about, where to enter the cannabis industry, we looked at the retail side of point of sale or what happens in a retail dispensary and like the wireless industry, it's incredibly complex.
So taking that skillset and DNA that we had in highly complex retail looking at a high growth industry like cellular was from day one. You know, I'm this unique guy who's, at the start of two high growth, brand new industries with a lot of risk and uncertainty in them. So that's how I got here.
Tom Mulhern: That's how you got here. And were you familiar with cannabis before? Were you a cannabis user? Had you ever, you know, what was your experience like?
Gary Cohen: I can't help but smile. Yeah. I've been a cannabis savvy person since my teens. but you know, what I, think is such a funny story is the first time I went in a dispensary, you know, I was probably in my fifties.
And a bud tender asked me, what are you looking for? How could we help you? And I felt like an idiot because I only knew in my past experience, I only had two questions. Do you have any, how much is it? You know, And here they are looking for terpene profiles and effects and flavors and you name it. And there's a giant gap in knowledge from before and then entering the industry.
Tom Mulhern: Where did Cova grow out of that? Did you guys, you know, you saw this need for a point of sale solution, and how did Cova grow?
Gary Cohen: Well, what happened was I was business partners with this company in Canada called IQ Metrics and I was working on Wall Street running, um, research and analytics company focused on the tele, the telecom technology space. They were a business partner of mine and they are North America's largest point of sale system for cellular stores, wireless stores.
And I'd always tell my wife, you know, if I ever need a plan B, there's these great guys in Canada and I'd love to go work with them. And it was really in discussions about, where can they take this, this dominant, highly sophisticated solution into a new vertical. And the conversations led to the cannabis industry.
If you really take a step back and look at the early entrepreneurs, they're unbelievably similar. know, Think about the risk of starting at a cellular store, when the, the earliest adopters were only wealthy people , phones were $3,000 and 60 cents a minute to make a phone call and you know, what's the market?
How big's this gonna get? Well, and by the way, that was highly regulated. Cuz you're, you're going through all the licensing, zoning, everything to build a cellular network and a lot of fear and pushback about, you know, is this gonna give me radiation poisoning by holding the phone by my head and, there's a tower across the street from my house and is it gonna turn off my grandpa's pacemaker?
You know, all those things are headwinds to get an industry off the ground. Then you look at our industry, And you see the similar paranoia, phobia, misperceptions and at the same time, at the very beginning of the industry, costs are exorbitant to get in and to get going. So I tell people all the time that parallels are unbelievably similar.
And then knowing how that one movie plays out and ends, I know exactly where this industry's going. I know where we're at, how the movie is gonna play, and you know, the three of us are gonna be here 10 years from now going. Can you remember when this was so weird. Funky. People were worried, scared. And I'm not gonna say it's gonna be a commodity, but it's gonna be a part of life.
I think about like, my kids have never known a world where everyone didn't have a phone and this next generation's really not gonna know a world where this was that big of a deal.
The one thing I'll say about this is if it wasn't for the federal legalization issue, this entire thing would be moving at about three times the pace that that moved at, and that industry moved it three times the pace of anything that ever happened before.
Tom Mulhern: So Gary, I guess my question is now that you've, you know, you've built Cova, what kind of makes it unique to the other POS systems in the industry? Cuz there's so many different solutions that are out there. What has made you guys the number one solution uh, in North America?
Gary Cohen: There's a couple of things, but they all relate to the same core proposition, which was compliance. you know, If you get back to this origin story of how did, how did we start, we went into this completely honest and transparent with everyone that we're not cannabis experts.
We know retail point of sale really, really well. We knew that the secret to the parent company's success was simplifying the complexity within a, a wireless store operation. We had a belief that we would bring those software principles of UI and ux, could we make it easy to use and easy to learn and create the interfaces that anybody could interact with. So those were fundamental. But then I went out on the road right when we started Cova.
I met with about 30 dispensary owners in Washington, California, and Colorado. And I had this whole talk about how we're spinning out of this big company and it's going to be this world class infrastructure based on Microsoft Azure and blah blah blah. And we're well funded. And I had this whole story and 30 out of 30 said, we don't care about any of that.
If you don't understand compliance and especially what we had to go through to get this license. I don't need to talk to you and I don't wanna talk to you. Well, after 30 people tell you the same thing, I'm not a genius, but I went back and said, Hey Cova, we need to be all about compliance
And you know, it was as simple as that. So then as we started building it out, and what makes Cova unique is that's the hard thing about opening a dispensary. Is that every state and every province has some sort of unique set of regulations and methodology for operating in their jurisdiction. And we help people understand that.
So not just how do you set up the technology to run your store, but the why's, like why is there traceability in the US or what's behind these monthly reports that we have to do to Health Canada and to the provinces? And I think that orientation to, let's not just sell you some software, but let's help you understand what's necessary to be a successful retailer and make that investment in you and your future success through education and the software.
Tommy Truong: You know, that's so big. There's news recently that a dispensary in Detroit just got fined $75,000 for not being compliant. And it's such a, you know, it doesn't happen often, but when it does happen, it can destroy a business.
Gary Cohen: Well, you know, one of the examples I always give about Colorado was this chain that we had here called Sweet Leaf that in Colorado you could only buy one ounce at a time. But then there's this thing in our industry called looping where you buy something, you go out to your car, you come back, you buy more, you go back, or you go store to store, buy some, go to the next store, buy some, and then, you know, typically drive back to Kansas or or wherever it's not legal. Well, anyhow, Sweet Leaf is the poster child of what not to do because, a Colorado marijuana enforcement officer went into a Sweet Leaf, said, I'd like to buy two ounces. And the bud tender said, I can't sell you two. I can only sell you one. And the officer said, God, I really wanna get two.
And he said, well, tell you what. Buy one, go out to your car. Wait 15 minutes and then come back in and I'll sell you another one. So the officer goes, and does it, and, and that would be bad. You know, you have a bad bud who's not following the law, not following the eggs and all that, but they went to another sweet leaf and the exact same thing happened, same verbiage, same everything.
Well, they found out this was just a policy. Well, they shut down all 11 sweetleaf dispensaries. Their grow, they confiscated everything. Millions of dollars of cash closed down everything, destroyed all their product. The principles went to jail. I share that because there's no other industry where if you don't, if you really don't wanna play ball and in, in the US especially, the penalties are so harsh because the states are trying to do everything they can to show that they've got it under control.
We're legitimizing this and we're doing it. Also, the federal government doesn't say, we knew you couldn't manage this, so we'll close it down. So you're in this very weird dynamic. And, especially for like a company like ours where if we make a mistake, like we get it wrong, your inventory's wrong or your accounts are off, or the reports don't show up on time.
In any other industry, you could get fined or owe some money, but you won't lose your business. And in this industry, that's grounds for game over. You lose your business, which is what those 30 dispensary owners told me. Gary, understand this and there's your key to building a business here.
Tommy Truong: It's stories like that keep you up at night, you know, you know, this industry is, so we came from the restaurant industry, right? And in the restaurant industry, restaurants have been around for, since the beginning of time, right? Since beginning of civilization. And it's fascinating how fast the infancy of the cannabis industry, how fast the industry is maturing and how fast it's changing.
Where do you see this industry heading? And, you know, and Covas part in kind of the direction of where the industry is going.
Gary Cohen: I tell everyone this industry is right out of an econ textbook. If you remember the economics classes you took with supply and demand, and then what's the effect on price?
And then as time goes on, competition heats up and what I see happening is consolidation. It will happen at a faster and faster rate, and it'll happen in all areas of the supply chain, but it happens at a market level. You know, that's the unique thing about our industry is that even if the US has federal legalization, it'll still be managed at the state level.
Just like tobacco, alcohol, and firearms. Cannabis will be a controlled industry or regulated industry. The states will have the authority to say, This is how many licenses or this is where, you know, you can opt out or opt in of whether you wanna participate in the cannabis industry. So that consolidation might not be on a national basis any other industry as quickly because of these reasons.
And we're seeing it in Canada, you know, we're not seeing, the consolidators like Value buds or Canna Cabana or High Fire just buying everything across the country. They tend to still focus provincially. But in the cannabis tech side, which is where we live your company and mine, what I see happening is the efficiency of the supply chain. It's gonna be based on how many services do I have to contract with? And over time, I don't wanna write 20 checks a month to a menu board, company, a CRM and loyalty delivery, pos, e-commerce, scheduling, and payroll. Like why can't someone just bundle it all together?
I can use one customer service number. They all are integrated. So ultimately they all talk to each other. Why can't it all be in one place? So what I see happening over the next 18 to 24 months is there's gonna be three or four tech companies, and they're gonna bundle this whole set of services. Now what's gonna differentiate them is their orientation to the market.
So some are gonna be oriented towards owning the relationship with the customer, the end users. So they will become a B to C model. And then others are gonna be supportive of the industry itself. So they might just be retailer focused. And I see that as the differentiators is what market are they really trying to support and own?
Tommy Truong: I see that happening in the restaurant industry too. It's funny that you mentioned that, and it's interesting that you mentioned that tech companies will be either B2C or B2B. Where's Cova headed and what's the vision that you have with Cova in this industry?
Gary Cohen: Well, it is 100% B2B, and I'll tell you why. The biggest piece of the cannabis industry is gonna be retail. So in the long run, there'll be more retailers than there'll be growers or brands that manufacture. There's gonna be a long, long future of retail and we're positioning ourselves against the people who wanna be B2C, and that's primarily the marketplaces.
So Cova will not be a marketplace, and I view them as wanting to get in the middle of the relationship of the licensed seller and the retailer versus Cova wants to create services that further enable and enhance the relationship between the retailer and the consumer. And that's both online and in store.
So this is like a religious divide on the online world of where's it gonna go and how is the cannabis consumer gonna find what they want, purchase it, and then get it in their hands? So that's where we're heading. We're very clear on that's gonna be our differentiator is we're supporting retailer success in the long run versus other models.
Tommy Truong: So what should retailers know then? If you know, knowing what you know and where the industry is headed, what should a retailer know before putting all of their resources into kind of an area or into a direction?
Gary Cohen: I think they need to understand what they're getting into. You've gotta realize most people in cannabis retail either didn't have retail experience, a lot of 'em might not even have business experience and none of 'em had cannabis experience. So when someone comes along and says, Hey, we'll give you a free online website, we'll build it all, it'll, it'll suck up your inventory, but it's gonna live in our marketplace or our world.
And when people search for banana cush, they might, you might have it, but they're not gonna find your banana cush. They're gonna find us, and then we'll figure out where you can go get banana cush. And you gave away that, that relationship with the customer. And when you look at other industries like the restaurant industry, and you think about GrubHub and DoorDash, well over time when I'm hungry, I go to DoorDash and I don't know what I'm gonna get.
But I'm sure not thinking about that restaurant across, you know, down the street that has Italian food. And I love, I'm going to DoorDash, I'm going, Hmm, I'm in the mood for Italian food. And the fact that restaurant pays DoorDash money doesn't mean they're gonna get the business. They could be the closest, the cheapest, the highest rated, and that disintermediates the restaurant.
So I could go into the world of SEO and how you find, how do you make your dispensary searchable? You know, what, is it unique about you or your products? You know that I type in banana cush and it goes right to Gary's dispensary because it's the closest one and Google's smart enough to connect those dots and go right there. But I think under, that's part one. Understand what exactly you're giving away for free or low cost, online visibility.
And then I think secondarily and I hate to say this cuz this is so cliche, but, but what happens to your data? So when I go and I place an order through one of these marketplaces, they know Gary, they know what I bought, they know where I live.
They might even have my payment information. And guess what? They're going to, they have Gary's data, they can market to Gary. The dispensary doesn't have any of it. They don't know anything. They can't hold me as a customer. So when I say you give away your access to your customer base, that's how you give it away.
Now, if you take it one step further, you know, GrubHub's, building commissaries around the country to make pizzas because people go in and go, I just want a pepperoni pizza. I don't care if it's pizza hut, dominoes, blackjack. And they're like, guess what? Price, convenience. We'll deliver your pizza and we don't need restaurants. We can do it.
If you think about Amazon it was originally stores, it wasn't Amazon. It was them representing different retailers. Then they just bought from, the wholesalers have their own warehouses. And you don't buy from a store, you buy from Amazon. So our industry's no different.
We will go in that same trajectory. It just will kill, it'll crush the retailer in the long run.
Tom Mulhern: I was gonna say, I think one of the unique things about the cannabis industry is that the product that retailers are selling is all about quality. So when I buy something off of Amazon and I get it and I'm like, what is this? It's almost, you know, you order that thing that looks so good. It's whether it's like a cable or something and it comes and you're like, this is not what I thought I was gonna get.
Now if I was a, you know, a customer looking for banana cush or whatever it is, and I went to a marketplace and I got a inferior product, like I, I'm not gonna go back to that marketplace, even if the price is right, because the quality of the product I'm buying matters. And so it's encouraging to hear you supporting retailers who are trying to, you know, sell a superior product, and it's hard out there.
Gary Cohen: Well, you know, one of the things I talk to retailers a lot about is. What's your brand and what's your brand about? And your brand doesn't have to be quality. It could be selection, it could be the convenience of our store. It could be some differentiator about, merchandise, but realize that cannabis for the most part is still a novel set of products in the ways that you can consume it, the different form factors.
Every market's at a different stage of development. At the earliest stage quality isn't what it's about. Cuz people don't know, they don't even know, am I gonna be a person who likes cartridges or vapes or do I like, I didn't even know there were alternatives to flower.
At an early part of a market supply is, is skimpy. So I could say I'm holding out for the highest quality weed I can get. Well, you might not get your hands on it for a year ? So all of these factors get back to the relationship with the retailer. A good retailer is gonna understand where their market's at and then supply their store with what they wanna buy. And I think the whole online blind thing, it won't kick in, you know, until a decade later when people know what they like, how they like it, how they like to consume it. They might have brands and brand preference. Maybe 10 years is too far down the road, but I'd say within five to eight then everyone's dialed in and now I'll just, it's a commodity to me. I know what I want. If I can get it online or at a store, doesn't matter.
Tommy Truong: So retailers really have an opportunity to create an online presence for themselves and kind of own their, their future.
Gary Cohen: Well, I think COVID changed everything. So when you've got provinces like Toronto that said, you can't even go through the threshold of a store, you can only get it outside on the curb. Curbside pickup. Now the concept of the whole cannabis industry of all under surveillance, all under cameras. We wanna know where all the pot is at all times, and you've got people walking the cannabis out to the parking lot to put it in someone's car.
You know, it's, mind blowing that we went from super conservative lockdown control, the point of distribution and then you get to curbside or delivery, you know, to me, delivery is that next frontier of you don't really have a whole lot of control about what's going on with this driver.
The vehicle where they drive, where they stop. Could they be going to the junior high? And again, if you look at the adaptability of jurisdictions to allow delivery when six months or a year earlier, it was out of the question, we're not even gonna try to think of the rules to allow it.
That's a step too far. And then bang, COVID essential industry, which by the way, I wouldn't have, I would've never betted nickel that we were gonna be an essential industry. That's the surprise of my life. And we've actually bought some third party research that says the revenues for cannabis technology around delivery will be over double what it is for point of sale.
So Cova will be in the delivery technology space because it's the future.
Tom Mulhern: Do you have a solution right now for delivery or is that something you guys are working on?
Gary Cohen: We have a, like a very rudimentary part of Cova that we built for California way back when, but it's nowhere near fully baked for full regulatory compliant delivery. So right now we have a really good partner called Web Joint. And when people are in a regulated market that needs very sophisticated compliance. I'll give you some of the examples of what they write into the law. Things like tracking the vehicle, retaining that routing or sometimes they have, it's gotta be auto-generated routes, so they're not gonna leave it to the driver to get from A to B cuz they're gonna route in the software around schools. Don't put 'em in a park because they're just gonna take away that element.
There's things like, how are you gonna check IDs when you get to the door of the delivery address? There's destination based taxes. So some jurisdictions want the tax, not based on where the cannabis came from the store, but to where it was delivered, because that's where the transaction truly takes place of an exchange of goods, the layers of complexity. And then the, there's vehicle things like cameras on the driver. Is the cannabis physically separated from where the driver is? So is it caged in a van or a truck behind where, so he can't reach around and get to it? Think about insuring a car full of marijuana, so it's a target.
It's got product or cash or both. Do you just let some dude in his old civic drive around? Whereas some places say No, we're gonna mandate the type of vehicle that can take cannabis. And then getting back to Cova, you know, we're all about compliance, so we need to build all that capability either through a partner and integrate all those elements into the tracking within Cova. that's some hard stuff that's not just inventory management. Oh wait, and there's one last thing. Then there's, you got me on a roll. There's two ways the delivery's done. There's the pizza model and there's the ice cream truck model. So the pizza model's where you go to the dispensary and you have four or five orders.
You pick up your four or five orders, and then you go deliver 'em and come back and get four or five more and come back. And the ice cream truck, you basically have a store on wheels. So you, you might stock it with $5,000 worth of inventory or whatever is allowable. But then the consumer needs to have visibility to the inventory in that car because the car doesn't have everything that the store has, and then it's depleting its inventory as the hours go by.
Like eventually people, you know, will, narrow down what they like and what they want and a car could have the most popular things.
Tom Mulhern: What would the song be that the ice cream truck the weed ice cream truck is playing as it's going around the neighborhood. Some Bob Marley, maybe Kaya, you know, that's all I can think of is this ice cream truck selling weed with some, you know, reggae happening or something.
Gary Cohen: Well, you know, this summer I spent a bunch of time in New York City and you've got these gray market. Pop up, like Winnebago size things with the, with the side opening up like a food truck. And they're playing music and they're selling weed right on the corner in downtown, you know, in Manhattan.
And they are playing Bob Marley, just to your point. They're playing Reggae, you know, and they got a theme going.
Tommy Truong: So we have delivery and, and you spoke about how that is the future. How is Cova helping dispensaries with e-commerce? You guys coming out with something that uh, kind of helping the dispensaries own, kinda the client?
Gary Cohen: We'll be announcing soon, Cova eCommerce, and when I say soon, like super soon, and I think the thing is, is it's right back to what I was talking about, it's enabling the retailer to, to, get that audience in visibility. And then if we do a really good job at it, which we, we will, that that's our commitment.
You bring all those elements that are not only compliant, but assist in good operations of a dispensary. So for example, can you pull all the purchase limit data into the onsite ordering process? So one of the things we find in our industry right now is that there's dozens of e-commerce or online sites for dispensaries, and I can just keep putting whatever I want in that basket.
And it doesn't mean that when I get to the store, that's what they're going to give me. Then the store is upset because when the person shows up and they want their four ounces of equivalent stuff, I wanted, 10 drinks and two ounces, and you know, 20 disposable vapes and.
And the store has to deal with a customer and explain to 'em, yeah, I know you put that order in, you drove all the way over here, but we can't fulfill that. Or what happens is they put things in a basket that when the people get to the store, it's not there anymore. It was there when you place the order.
But we don't happen to, we didn't take your order, fill it, put a bag with your name aside, and there's a disconnect between, the timing of everything. So when you can solve those kinds of things, it's a better customer experience, which is ultimately better for the retailer. So that's how Cova's gonna help is, those solutions that don't just solve the, I can place an order online, but take all of the friction out of this process, which exists now.
Tom Mulhern: well, In supporting those small businesses, those small retailers, those dispensaries you know, I talk to so many people that are, I say, what's the biggest tip you can have for a dispensary owner? And they say, think about your in-store experience, your digital in-store experience like, It's all about having that in store experience.
But if it's this marketplace where they're lost in Amazon style marketplace, they're not gonna get customers in store because it's just going out into that, you know, the big wide open.
Gary Cohen: In the undifferentiated world, that's what it is. You're just undifferentiated. Why is it that one dispensary fails that the guy across the street doesn't, you're both small business owners and the guy who fails and has to close his store and calls Cova and says, man, it's just too tough. There's just too many dispensaries in this neighborhood. But the other guy didn't, he's not calling.
He's our customer too, and he's not failing. What is the difference? And by the way, no one ever says it was me. They never say I was an absentee owner. I never went in. I don't know what's going on. But when I get to why did they survive and you didn't, the number one tip is did you develop your brand and then did you manage that brand message of what do we stand for?
What are we about? And it gets me back to those brand promises. Is it convenience, selection, price, quality, security. You know, we're in a new market, people are scared to go into dispensary and if we could just differentiate ourselves by this is the safest place to buy cannabis, and then here's the bullets.
Everything's under surveillance. Our parking lot is monitored 24 by seven. We have cameras outside. We don't allow guns in the store or whatever. And you know what? There's your differentiator. And people go, they deliver on it. It's consistent. They weren't this way, month one and a year later that they, the cameras don't work. There's no guard. The parking lot's a disaster and it's dark and it's scary. I can't emphasize enough If you can figure out what you're about and then manage it, don't just assume that everyone's just going to do it. They read your mind and manager after manager and bud tender after bud tender.
They all know the story. No, it's up to you to manage, reinforce, and train on what we're about. If you can maintain that, then the last thing you ever need to do is discount. I think what winds up happening is our sales are down, things are tougher, we'll compete, you know, it's with, we've said in retail for a thousand since Roman times.
You know, if you live by price, you die by price. So this whole concept of being a good retailer, a good operator, which follows your brand under your brand promise. And then lastly, and then I'll stop ranting, is that in that textbook, that econ textbook, it'll talk about good, efficient operators survive and the bad ones go broke or get a get acquired.
It's just the way business works. That's exactly what's happening. So the principles of being a good operator. Do you have a compliant system? Does that system provide safeguards to keep everyone doing the right thing in the store?
Does it keep records, books re is the reporting, does it provide reporting to give you the ability to make a better decision? And it seems common sense, but then I'm shocked that I'll go visit our clients and talk about this great reporting that we have and they go, yeah, we, we look at it or use it. And you know, I can go right back and look at their sales and go, I'm looking at three other people around you and they're kicking your ass and I guarantee they're doing those best practices or being a good operator. So when times get tough, that's when the better, more engaged operators persevere and survive and do better.
Tom Mulhern: And you can build this amazing brand, but if you're not staying compliant, then you're not gonna be around, you know? So you have to hold both of those in both hands. So that's important to remember.
Gary Cohen: There's nothing in dispensary management or ownership that is, that has the word easy by it. One of those open a yogurt stand at the beach and it's easy. Just serve yogurt. There is. So again, why did we get into this? There's high complexity.
Tommy Truong: You hit the nail in the head. And when I think about the cannabis industry, I actually think about two industries. I think about a state that's just opening up and it's not saturated yet, and it's, you know, you have some time and it is it's a novelty. So you will get traffic, but eventually things will turn, and you, the most efficient operators are the ones that win.
You know, being an absentee owner probably won't serve you well in the long run. We view Covas one of our longest partners and we pull in so much information through our APIs that I always think about the information that's available to business owners and how they can leverage the platform to, to run and make the stores more efficient.
Can you talk a little bit about what dispensary owners, what they should really think about, or how they should really leverage their pos to run more efficiently and be more competive?
Gary Cohen: Point of sale is kind of the technology heart of a dispensary because it's the thing that's managing your inventory. Inventory turns into sales and it's tracking all of that. And then in our industry, it is the piece that has to report to where the cannabis is and where the cannabis went.
So you have all this data and as, as your business grows and the industry matures and it gets more competitive using that information, that data, turning it into information and then making it actionable. So it's one thing to look at it and say, Hmm, the sales are down. What should we do? But understanding where your sales are down, who your sales are down to from a customer's perspective.
and the more you can drill into understanding what's causing the dynamics in my business will allow you to make better decisions, your business will perform better.
Do you have a POS that has all the information about all the products in your store? And then is it presented in a way that it's easy to access so I can share it with customers, so I can educate customers, which is a value add in any new market? Secondarily, do I have everyone singing from the same book?
So the worst thing is, you know, Tom's been in the, he's been a bud tender for 10 years and a customer comes in and says, you know, I've really been thinking about sativa for energizing me. And Tom says, oh, I know the perfect ones. And he's completely off script. Whereas all your other bud tenders are looking in their Cova pos, looking at a category, looking at the products and going, well, you know, based on lab tests, here's the ones that are gonna help help for that.
So how do you get uniformity and use your POS to get that baseline education level into your employees that can sh be shared externally? I think that's important.
You know, when we built Cova, I had all these dispensary owners say, you know, why doesn't it do this?
Or why don't you do that or build this? And one of 'em was, does your software check IDs? And I said, no. And they go, oh, you gotta do that. And I go, why? I go, you've got this guy at the door, he's got one job, check IDs, you're paying him. And they go, oh, we can't trust him. And I go, well, you can't trust him.
Why do you have him? They go, cause he is six, six and 300 pounds and we need, we need that guy at the door. And eventually, I came to realize, let's build it. Let's build that capability in.
Another thing that happened was like, our original clients were rural more than urban. So when we first launched, we didn't have all this feature functionality that all the other people had.
We had a very basic, reliable solution without a ton of bells and whistles. Well, the people in Colorado or Los Angeles, they'd already had two or three POS' already. So they had a hundred things. Can it do this, this, this, this? No, no, no, no, no. But you went out to, you know, the sticks.
They're like this, this looks great. It's what we need. Well, what happens out there to internet, they have poor or unreliable internet. So we built Cova with this offline mode that if you lose power or you lose the internet, all of your inventory and all of the employee login information is stored on the tablet.
So that you can just go in offline mode and keep transacting and then when the systems come back up, it uploads everything and you're right where you left off.
Well, I had no idea how valuable that would be. And then let's fast forward to Covid. So then here comes Covid and you've got people going out on the street, taking orders, and they're out of their wifi, they're out of their network. So the thing went into offline mode. You can take the order, walk back into the store, syncs it all up, fill the order.
Well, your Pos should be able to keep your business running. You know, one of the very first objections we had was that everyone goes down on four 20. Well that was, we're like, well, we won't go down in four 20 cuz this thing's built for like 20,000 cellular stores. So we have zero dispensaries. I think two 20, a hundred, 500 dispensaries aren't gonna tip the thing over. If I wanna give tips to a dispensary owner, look for those things, you know, look for reliability, stability, backup. Can the thing work? Cuz again, I just had someone ask me the other day about what's the ROI on Cova?
Like if we prevent you from getting one $10,000 violation, we just paid for two years. If your internet goes out for three hours how much business do you do in three hours? $3,000. Okay. Well there you go $3,000.
Tommy Truong: That's really insightful cuz I don't think that business owners think about that when they're starting up. It's only when it happens and you're like, oh my god. So you kind of have to have that foresight and from the get go. I would say the offline mode, though I never heard that before and that is valuable for sure.
Gary Cohen: Yeah. It, we had no idea it was gonna be such a big thing. And then when we moved into cities, you know, you think about like, San Francisco had riots and stores getting broken in and their, you know, and their phone systems were gone. But they could still open up and sell, like we never conceived of these applications.
Tommy Truong: I've been to restaurants before where they could take my order. They had to write it down, cuz the the POS was down. And in a restaurant that's fine, but in a highly regulated industry where you need to know your inventory, you need to know who you sold to and all that stuff, right? That can't happen.
Gary Cohen: In the US where you've gotta turn in your, your traceability report and every single product is batch tracked. And that batch tracking number is 23 letters in and numbers. So imagine if we had a hundred transactions with three cannabis products per transaction, that's 300. And if we've gotta do pencil and paper reporting, You've gotta have the product, the sku, the price, the cost, the tracking number, who's gonna do it and who's gonna do it accurately. Anyhow, it's a big deal.
Tommy Truong: That's the number one. That's uh, I mean, it doesn't happen often. Well, when it does hap happen, the world turns upside down and there you go. That's, you know, It's kind the equivalent to, cause we're a payroll company and it's like, hey, your employees may not be paid that 1% of the time. Your employees may not be. Is that acceptable? That's they need, or, you know, you won't have a business.
Tom Mulhern: Well, Gary, thank you so much for being on the podcast. Hey, how can people find out about what you guys have coming up and they just head over to cova your website. Or what? How do people connect with you?
Gary Cohen: It's covasoftware.com and you would be surprised it's, it's probably 75% educational information and material. We wanna be a resource. So there's tons of information about cannabis, cannabis retailing, and there's all the connect, the ways to connect with us there.
Tom Mulhern: Well, thank you so much for taking the time and Gary, it's always a pleasure to, to speak with you.
Gary Cohen: Uh, I feel the same. It's great to see you guys.
Tom Mulhern: Yeah,
Tommy Truong: like wise.
Tom Mulhern: You know, Gary really hinted at some of the things that are coming from Cova, and I'd encourage you all to go check out covasoftware.com and if you're looking for a POS system for your dispensary, I can't recommend Cova more.
You know, it integrates with Kaya Push and our all in one HR solution platform, but also they're building it from the ground up to help support cannabis retailers like you. So go check it out.
I just want to thank both Gary and Tommy for taking the time to uh, sit down and have this conversation about how dispensaries can build their brand, you know, the future of delivery and really what dispensary owners should be thinking about now to plan for the future as the industry continues to grow.
Make sure that you subscribe to the podcast in your favorite podcast player app. And hey, we've got tons of great episodes out there to help you build your dispensary, launch a dispensary, and connect with us on social media. We love to connect with people who are listening to the show.
