Lemonis my name is marcus lemonis. On my show, the profit, i invest my own money in all kinds of companies. Everythings going to change. Everything. And help turn their fortunes around. Marijuana isnt my thing. Ive never even considered investing. Is the business easy for you . Andrea hell no. Theres nothing easy about this industry at all. Lemonis but the market here could reach 6 billion, and thats impossible to ignore. Adam we have this opportunity to create onceinalifetime, multigenerational wealth. Lemonis the risks are huge. Youre in a room filled with what the federal government considers illegal. Jeanette thats what makes it more exciting. Lemonis but so are the returns. Whats the end goal for you . Dan selling my company for 120 million. Lemonis im here to take you on a journey and show you where the profit is in pot. Im here in Desert Hot Springs, california. Now, many of you have probably never even heard of it. Its the forgotten son, the neighbor, to palm springs, where the golf courses are big, the night life is big, but not around here. What youll see are plenty of signs that say sorry, were closed. Back in 2001, the town went bankrupt, and came close again in 2014. Tired of money troubles, people here took a chance. Desert hot springs became the first place in Southern California to allow industrialscale indoor pot farming. A oncedying town is dying no more thanks to recreational pot and people like adrian sedland. Adrian, nice to meet you adrian likewise. Lemonis is this your business . Adrian yes, it is. Welcome to canndescent. Lemonis i mean, youre literally in the middle of the desert. Adrian theres no better place to grow cannabis. Lemonis ive never smoked pot. In fact, id never even seen pot. Adrian come on in. Lemonis i walked into canndescent and suddenly found myself surrounded by it. Very fragrant. Adrian yes. Lemonis how much inventory is in this room right now . Adrian we want to get to 65 pounds of dried flower. Lemonis per harvest . Adrian per harvest, and we harvest the room every 10 days. Lemonis 65 pounds. Adrian of finished flower. Lemonis uhhuh. So, 195,000. Adrian you got it. So, were pulling down a room every 10 days. It runs at 600,000 a month. Its not a bad business. Lemonis its not a bad business . Its a great business. Armed with a harvard mba, adrian is part of the new money behind californias exploding marijuana industry, which is still considered criminal under federal law. Are you the first drug dealer to ever graduate from harvard . Adrian no. Theres plenty of them in biotech. Go talk to the guys in amgen and pfizer. Theyre dealing stuff percocet, all that highly addictive xanax. That stuff will mess up your life. This wont. Lemonis in Desert Hot Springs, they seem to agree and have issued permits for more than 3 million square feet of construction to more than 30 growers. Good for business, but i wondered if the towns reputation would be hurt. Are you originally from this town . Scott born and raised. Lemonis scott matas is the mayor of Desert Hot Springs, a selfdescribed conservative. Scott i was a no on marijuana use in our community in 2007. Lemonis what happened . Scott the economy went bad. We needed to find another revenue. Lemonis when they put it to a vote, more than 70 of the residents here said yes to growing recreational pot. Mayor matas doesnt smoke, but the side effects of weed are saving his town. Job creation . Scott job creation its taxation. Lemonis think about this. It costs 15 million a year to run Desert Hot Springs. The town could eventually collect 50 million a year from pot taxes alone. Goodbye, budget crisis. Hello, cash flow. And what has happened to the prices of the land out there . Scott well, let me give you an example. The city bought a piece of property in 1980 for 5,000, one acre. We just went into contract to sell that for 378,000. Adrian we have two buildings. We call them brad and chad. Lemonis okay. Adrian theyre named after the guys who built them in the 120degree heat. Lemonis if you grow pot outdoors, you get two harvests a year. But indoors, a hightech climatecontrolled environment can triple that. Adrian says canndescent will soon be selling about 75 million worth of weed annually. Photographer thats gorgeous. Nice, nice. Your smiles great. Go for it. Lemonis with a slick advertising campaign, hes pitching his pot as a luxury brand. Woman 2 with us, you and the flower will always come first. We are canndescent. Adrian call us the courvoisier of cannabis, or mayors of cannabis. Were going after that highend adult use. Lemonis well, thats just packaging. Look. Packaging is one thing, but price is another. Adrian charges hundreds more per pound than the market rate. To me, thats a very risky strategy. You said to me you can get 3,000 a pound. Adrian correct. Lemonis how do you actually differentiate your product to get an extra 1,000 . Is it the packaging . Adrian packaging is one piece. The quality of our weed, the quality of our cannabis. Lemonis what is quality of our weed . Youve got to give me more than just quality of our weed. Adrian okay. Smell the nose. Youd recognize that our nose doesnt have any chemical burn. Youd recognize that the cure on our product is perfect, that when you break it, it has a perfect snap, which means its going to be a perfect smoke. Lemonis is there Quality Control . Adrian theres huge Quality Control. Lemonis does that mean that you throw a lot away . Adrian whats that . Lemonis you throw a lot away . Adrian absolutely. Lemonis and hes dropped the usual stoner labels you see in dispensaries. Canndescent comes in just five varieties, named for the feelings or moods theyre supposed to create. Adrian weve moved to a brand architecture where its just calm, cruise, create, connect, and charge. Its making it accessible. Its giving people analogies in their life. Your purchase becomes a reflection of who you are. When cannabis starts doing that, its not about being sexy. Its about being relatable. And thats where cannabis is going. Lemonis i give adrian a lot of credit for simplifying the approach to marketing the product from a naming standpoint. I think the name is interesting. I thought the packaging was fantastic. And to simplify things like calm, create, charge those are words that, i guess, yoga enthusiasts can relate to. It has a whole foodsesque packaging to it. The future seems promising in Desert Hot Springs, but dont forget the feds could still shut it all down. If the Current Administration decides to change its perspective and enforce the laws that they say this is illegal, what happens to the town . Scott if we were to allow them to build all that out there and then the federal government comes in and says, you cant do this, this would kill a small city. Lemonis adrian and his investors, well, they dont seem worried. Hes raised nearly 15 million in just 18 months. Adrian we pay our taxes. Were good corporate citizens. We conform to california law. Lemonis yeah. And youre employing people. Adrian and guess what. Im going to be employing 280 people within 18 months. Lemonis it surprised me, the level of sophistication that is being put in here, the amount of money thats being invested, and the steps in the process. Im a process guy. But im not fooled by sexy packaging and sexy marketing. And maybe not to him, but to most people, marijuana may be a commodity for now. And so, price will matter. Margin will matter. Whole foods, you know youre getting a superior product. Is the product really superior here . I dont know. Coming up, a house call. Four wheels, two guys, and one huge order of pot. And you could eat this whole bag . Megan yeah, i could eat that whole bag. Lemonis and not even be fazed . Megan not even be fazed. Lemonis but first, dont try this at home. I mean, if somebody drank this, theyd be. Cindy oh, unhunh. Lemonis unhunh. Cindy you dont even want to take a finger. Your friend just marea. You like her. Shes really good at social media. She buys stocks in companies that stand for something. You like her. Shes always up on the latest trends. She got in early on the whole goat yoga thing. And her sunsets are always nofilter. You like her. But youd like her better if you made more money than she does. Dont get mad at just marea. Get eatrade. Like you do sometimes, grandpa . And puffed. Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. If you cant afford your medication, astrazeneca may be able to help. Lemonis my trip to the california desert was eyeopening, and it helped me get my head around just how big the pot industry was becoming. But not everyone is ready for the big time. And thats what brought me here to a quiet neighborhood in orange county, not a marijuana plant in sight. [ knock on door ] leani hi lemonis hi. Leani im leani. Lemonis im marcus. Leani nice to meet you. Cindy hi, marcus. Lemonis nice to meet you. Cindy im cindy. Lemonis im excited to see what you guys are working on. Cindy we are so happy to have you here. Were very excited. Leani cindy pinzon and leani posad are best friends. They think theyve cooked up the next big thing in edible pot with their company, treat yourself. Cindy we make healthy edibles that happen to have cannabis in them. Lemonis vegan, glutenfree tarts very california. Okay. So, can i open this . Cindy yeah definitely. Lemonis okay. All right. So, its literally a little pop tart. Cindy yeah. Hi, there. Would you like to try a strawberry rose . Theyre vegan and glutenfree. Lemonis hoping to attract firsttime users, theyve kept their tarts low in thc and cbd, the two main ingredients in pot. Cindy for the minis, its 10 milligrams cbd, 10 milligrams of thc. Lemonis it doesnt get any more startup than this. They do everything packaging, deliveries, and all the baking out of this very tiny kitchen. Cindy so, weve already premeasured. Lemonis its time to channel my inner chef. The cops arent going to show up, are they . Leani hopefully not. Lemonis okay, good. Cindy i cant guarantee it, but. Leani yeah. Lemonis oh, thats good. They start with a mixture of coconut oil and cannabis extract. A little goes a long way, seriously. You didnt put a lot in there, cause its so clear. Leani mmhmm. Cindy its very concentrated. Lemonis i mean, if somebody drank this, theyd be. Cindy oh, unhunh. Lemonis unhunh. Cindy you dont even want to take a finger. Lemonis next, we add maple syrup, chia seeds, almond extract. Smells good. Cindy mmhmm. Lemonis . And flour. Speed it up . Leani do you do a lot of baking . Lemonis i do. A little secret nobody knows. But my baking doesnt have any of, uh. Cindy right. Leani not yet, anyway. Lemonis each tart costs about 1. 27 to make. They wholesale them for twice that amount. Not too bad. Cindy the medicated version has a onetoone ratio of cbd to thc. Lemonis cindy used to be an actress. Leani was a police dispatcher. Avoiding pot was part of her job. Leani it was a very educated decision for me to actually try it for the first time. I had, for many years, had a very strong stance against it. I was one of those people who would roll my eyes when people would say cannabis is good for you. That was my reaction. Lemonis right, yeah. Sure it is. Now, its a labor of love. And i mean labor. Cindy and then we head over and we start rolling. Lemonis it takes them an hour to make just 30 tarts. And at that rate, theres no way for them to compete in californias booming edibles market. And thats not the only obstacle. I love the vegan, glutenfree, soyfree, refinedsugarfree. I love this idea. I love the name. I love the logo. So you have me on this side of the package. Cindy yes. Lemonis but on the other side, i see a problem. Great for menstrual cramps, relaxation and inflammation. Cindy yes. Lemonis why did you choose to alienate men from the product . Cindy we just wanted to make something that was femalefriendly. Lemonis femalefriendly, or totally femaledirected . Cindy femalefriendly. Lemonis by the way, every product in the world should be femalefriendly since more than half of the people that buy things are females. Leani yes. Lemonis so, lets start with that. But i feel like with some of the vernacular, is almost like saying if you are a man, put it down. Cindy mmhmm. Lemonis i love the enthusiasm that the ladies have in trying to craft something where they think theres a hole in the market. Theres clearly a void. I worry about small entrepreneurs like this in california who think this green rush is going to solve all of their problems. If theyre wrong and they miscalculate, whats the backup plan . Woman 3 is it glutenfree . Cindy mmhmm. Woman 3 theyre all glutenfree . Lemonis they have their work cut out for them. Edibles and concentrates make up a third of the market, and there are hundreds of products on the shelves. Competition is fierce. So to see just what the ladies are up against, i headed to one of the largest makers of marijuana edibles in the country, kiva confections. Theyre headquartered in oakland. Think willy wonka for weed. Chocolate everywhere, bars, blueberries, espresso beans. How long have you been in business . Kristi since 2010. Lemonis Kristi Knoblich runs this edibles empire. Kristi thats our tangerine darkchocolate bar. Currently, we offer products to about 960 dispensaries throughout the state. Lemonis 85 employees crank out over 1,000 pounds of potinfused chocolate a day. It would take cindy and leani eight months to make that many tarts. And all that takes a ton of this. I want to be like santa claus. Kristi yeah, these are about 40 pounds. Lemonis i may not get pot, but i cant ignore the numbers. Kivas already a multimilliondollar company. And next year, once recreational sales begin, theyre expecting their revenue to double. Cindy we have cherry almond, which is the other flavor that has a higher. Lemonis . A giant compared to treat yourself. You know, its clear that you guys have a great idea. You are passionate about what you do. Its still small, right . Cindy yes. Leani mmhmm. Lemonis are you too late to the party . Cindy we dont think so. There are bigger companies, but theyre not creating the products were creating. Lemonis what is your ultimate goal in this whole process . Cindy oh, man. Like, big dreams . Like, skys the limit . Lemonis big dreams, the biggest you can come up with. Cindy we want to be a global brand. We want to be everywhere. Lemonis i think these bakers could make some serious dough. Lets do the math. Nearly 8 Million People voted to legalize recreational pot in california. Lets suppose a third of them buy edibles. Thats a potential market of more than 2. 6 million customers. If just 1 of them bought one treat yourself tart every week for a year. You would do 3,461,000 in business. Leani yep. Thats exciting. Lemonis yall better get. Leani yeah cindy awesome, right . Thats good, right . Lemonis their first step . Start selling. Todays a big day. Cindy and leani are pitching their product to one of l. A. s top dispensaries. And im going to drop in. What could go wrong . Josh these are going to be a little bit of a struggle. Lemonis plenty. Thats coming up. But first kid in a candy store . Not quite, but i was impressed. Do i call that a pot store or Marijuana Store . Adam you can call it whatever you want. I call it the future. Lemonis wow, this place is cool i no wondering, what if . Uncertainties of hep c. I let go of all those feelings. Because i am cured with harvoni. Harvoni is a revolutionary treatment for the most common type of chronic hepatitis c. Its been prescribed to more than a quarter Million People. And is proven to cure up to 99 of patients whove have had no prior treatment with 12 weeks. Certain patients can be cured with just 8 weeks of harvoni. Before starting harvoni, your doctor will test to see if youve ever had hepatitis b, which may flare up and cause serious liver problems during and after harvoni treatment. Tell your doctor if youve ever had hepatitis b, a liver transplant, other liver or kidney problems, hiv or any other medical conditions and about all the medicines you take including herbal supplements. Taking amiodarone with harvoni can cause a serious slowing of your heart rate. Common side effects of harvoni include tiredness, headache and weakness. Ready to let go of hep c . Ask your hep c specialist about harvoni. Lemonis in california, there may be no easier place to buy weed than los angeles. With more than 1,000 pot dispensaries, the city of angels has a devilish side. I came here because after seeing how marijuana is grown and turned into edible treats, i wanted to know more about how its bought and sold. Ive never been in a pot store, ever. And im honestly a little nervous. Man 2 why . Lemonis i dont know if i want anybody to see me going in. Look, i dont judge people for using marijuana. Thats a personal preference. But at the end of this journey, what i want to decide is do i want my money in here, and more importantly, is it a good investment for other people . Is there really an Investment Opportunity here, or is it all a big risk . I chose a dispensary on santa monica boulevard, a place called medmen. How are you . Adam good morning. Lemonis im marcus. Adam adam. Lemonis nice to meet you. Adam welcome to medmen West Hollywood. Lemonis adam bierman is medmens cofounder and c. E. O. Do i call that a pot store or Marijuana Store . Adam you can call it whatever you want. I call it the future. Lemonis wow, this place is cool it was definitely not what i expected. Medmen was open, airy, and modern nothing seedy about it. Adam theres no bars on the windows. Theres no guy with a gun at the front. Youre walking in, were open to the community. Lemonis i like the design. There were ipads everywhere loaded with information right next to gizmos that let you see and smell before you buy. Adam this allows the consumer to actually see it through a magnifying glass, to smell it through a little door that slides open there. Lemonis this door right here . Adam yeah. So, you would actually stick your nose in there. Lemonis i caught a whiff of madmens strategy more style, less stigma. Was it just window dressing, or would it entice customers to actually pay more . Have you ever been in a Cannabis Store before . Crystal i have, but not one as nice as this. Lemonis what do you think of it . Crystal its amazing. Yeah, its really cool. Lemonis crystal jane says she started using medical marijuana three years ago. Crystal this is my dog, by the way. Lemonis oh, hey, dog how are you . Would you expect the pricing in here to be higher or lower based on the environment . Crystal based on the environment, i would say this is, like, a very highclass kind of joint. Lemonis so, how much do you normally buy . Just to get a comparison. Crystal yeah. Maybe i think that the term is called, like, an eighth. Lemonis an eighth, okay. What would you normally pay for an eighth . Crystal like, 40 bucks. Lemonis 40, okay. How much is an eighth here, on average . 65. Crystal okay. So its nicer. Lemonis yeah. Crystal higher quality. Lemonis i guess that window dressing works. Adam so, this renovation was completed about nine months ago. In those nine months, we have doubled our average customer count on a daily basis. Up to 180 people a day are walking through this store right now. Lemonis the medmen formula is adding up. Bierman says those 180 customers spend an average of 85 each per visit, meaning this one store pulls in more than 15,000 each day. How many locations do you have . Adam so, theres five in Southern California, four in new york. Lemonis they look just like this . Adam so, they all will, ultimately, look like this. Lemonis but theres more to madmen than just a pretty face. It has its own capital fund. Theyve already raised 60 million from investors, and theyre looking for more. Adam think of us as the four seasons. Lemonis okay. Adam and imagine if the four seasons had a private equity arm that also bought hotels. Lemonis and then converted them . Adam and then signed a Management Contract with the four seasons to run them. So, our private equity firm will, essentially, go out and buy Something Like this. Lemonis okay. Adam . And then turn around and sign a Management Contract with our management company. Lemonis who wouldve thought a pot company would be that complex . This is the new world of cannabis in california. So if i get a license, i should call you . Adam you should. Lemonis when it comes to its bottom line, medmen have another big idea cut out the middleman. How are you . Im marcus. Damian marcus, im damian solomon. Nice to meet you. Lemonis nice to meet you. What do you do here . Damian im the director of cultivation for medmen. Lemonis dispensaries usually pay from 1,500 to 3,000 a pound to outside suppliers. But medmen can grow its own for under 1,000 a pound. Do i need to get dressed like you . Damian yes. You have stuff here ready for you. And its just part of our Quality Assurance and Quality Control. Lemonis yeah, yeah, yeah. Damian these are the different strains. So, you can see theres a strain sour banana, green crack, tangie dream, euthanasia. Lemonis yeah, that ones probably pretty mild. Its a balancing act cultivating strains and catering to customers. How do you measure demand . Damian being tied to retail dispensaries, were able to then get that data very quickly. Were able to analyze the metrics that we get from the retail side for the point of sale. Lemonis is it that sophisticated . Damian its getting that sophisticated, yes. Im going to get the feedback from the consumer that says, i really want this taste. I really want this flavor. And therefore, we have to then change our production cycles to meet the market needs. This is just like any other business. Lemonis i had one final question for adam. If pot is so lucrative, why isnt the big money investing . How many traditional private equity firms would love to be in this space, but cant stomach the repercussions of getting in this space . Adam most of them. Lemonis and why is that . Adam because their hands are tied, because theyre running legacy funds that have vice clauses in their fund that disallow them from doing it. Lemonis because pot is still illegal under federal law, big pharma, tobacco, and other giants theyre sitting on the sidelines. For now. Adam you dont have many people competing. Its the most inefficient market of our lifetime. Lemonis because people see the risk of the federal government not really allowing it, and wondering if theyre going to flip flop. Adam i welcome the perception of that risk because it allows me to run as far and as fast as i can. Lemonis i thought adam was a very smart guy, very sophisticated. He understands his business. I wouldve never imagined that the retailing of marijuana would ever be this slick, this wellmerchandised, and this lucrative. Prior to going into the store, i wouldve never contemplated investing in this concept. But after seeing the frozen goods, the beverages, the consumerables, this is a real business a real business with a real retail footprint. You may not like it morally, but you definitely have to Pay Attention to it. Up next, chasing their dream one edible at a time. If this doesnt work, youve lost the money and you have no income. Cindy right. The world is not flat. You cant just pinch it, swipe it, or scroll it. Sure, youve seen the mediterranean. But have you . How warm is brazil in february . What color is dusk in San Francisco . Theres a whole world out there and no other card lets you experience it like the platinum card. Backed by the service and security of american express. Having mplaque psoriasise is not always easy. Its a longdistance run. And you have the determination to keep going. Humira has a proven track record of being prescribed for nearly 10 years. Humira works inside the body to target and help block a specific source of inflammation that contributes to symptoms. In clinical trials, most adults taking humira were clear or almost clear and many saw 75 and even 90 clearance in just four months. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal, infections and cancers, including lymphoma have happened as have blood, liver, and nervous system problems, serious allergic reactions, and new or worsening heart failure. Before treatment, get tested for tb. Tell your doctor if youve been to areas where certain fungal infections are common, and if youve had tb, hepatitis b, are prone to infections, or have flulike symptoms, or sores. Dont start humira if you have an infection. Join over 250,000 people who have chosen humira. Ask about the 1 prescribed biologic by dermatologists. Humira go. Tcan lead toof plenty of questions. Fortunately, theres a place to get the answers, for them and for you. Find articles, tips and tools from experts and others who have been in your place. The Caregiving Resource Center at aarp. Org caregiving. Best friends cindy pinzon and leani posad are working around the clock. The duo behind treat yourself is preparing to pitch their marijuanainfused tart. The hustle is real. And so is the risk. How much have you put in . Cindy around 15,000. Lemonis its pretty much everything you guys have. Leani everything we have, yeah. Cindy yeah, yeah. Lemonis if this doesnt work, youve lost the money and you have no income. Cindy right. Lemonis well, you better get to work. Cindy yeah. And then, i did pack some unmedicated in case they want to try. Leani thats a good idea. Cindy should we bring that . Yeah, okay. Lemonis theyre leaving their tiny home kitchen for the big city, hoping to sell their tarts to medmen, the popular dispensary chain in los angeles. Theyre barely breaking even. They need this. Whos excited . Leani were excited lemonis im no pot expert, but i know a good pitch. So i caught up with them outside the store in West Hollywood for one last pep talk. What i wanted to do is just come for moral support, because i understand the stakes that you guys have and how enthusiastic you guys are. Do you feel prepared . Leani yeah. Cindy yes. Lemonis what did you change about your presentation from before you met me to now . Cindy the main thing is to really hone in on letting them know one of our main goals is to increase their margins on our products. Lemonis all right. Leani all right lemonis kick ass. Lets go. Leani thank you. Lemonis high five. Cindy and leani are meeting with medmens head buyer. Cindy hi josh hey, hows it going . Im josh. Cindy so nice to meet you. Leani leani. Josh nice to meet you. You guys want to come back, and well. Cindy yeah lemonis its a big deal just to be here. Josh is flooded with as many as 40 pitches every day, but only 3 of those products make it to medmens shelves. The way you kick off this pitch . Give him a sample. No pot, of course. Hes on the clock. Josh its delicious. Cindy thank you. Josh you couldve blindfolded me. I wouldve thought this was, like, some kind of regular pop tart. Lemonis so far, so good. Cindy one of our main goals for you guys is to create larger margins for you compared to. Lemonis margins, packaging, product quality i like what im hearing. But i saw this one coming. Cindy on our packaging, we wrote that are products are good for menstrual cramps. Josh sure. Cindy im sure you read that. Is that going to make some male consumers shy away from it . Josh yes. No men are going for that. You might be able to find more delicate words. Cindy and honestly, part of it was a shock factor. Its because we, at the time, felt so underrepresented. Lemonis okay. I know i said i was just here to listen, but i have to step in. Thats part of your sales pitch, that it was a shock factor . Cindy i mean, its real i dont know. Lemonis it could be on there, just not the first one. Im not convinced hes buying what theyre selling. Josh what are the whats, like, the next steps look like . Like, when do you think youre going to maybe have a few more employees . Cindy i would say in the next four weeks. Josh okay. Cindy yeah. Josh i mean, you know, its hard for me to say off the top like, i know setting this on my counter downstairs, it will draw attention. Cindy yeah. Josh but thats not enough anymore, you know what i mean . So i kind of have to just dig a little bit deeper. Cindy yeah, definitely. Lemonis for now, its wait and see. But in my mind, they missed some opportunities. I never heard you say, were already prepared. We know about the regulations, and we can scale. You didnt really objection, response, objection, response. Cindy okay. Lemonis whether this is the cannabis industry or the cookie business, it shouldnt matter. The business has to. They need to keep their eyes on the prize the 3. 4 million that treat yourself could generate in a year. Thats the possibility if you do an average job and you can produce. Cindy right. Lemonis you need to keep that number in your mind, okay . Cindy okay. Leani i like it, yes. Lemonis deal . Cindy yeah, deal. Lemonis okay. Ill see you guys. Good luck. Leani thank you. Cindy thank you so much. Lemonis i left the women from treat yourself and headed up to berkeley. For a glimpse at the future of pot, if only i could find it. Andrea hi lemonis hi. Im marcus. Andrea Andrea Unsworth. Lemonis how are you . Andrea welcome. Im well. Lemonis nice to meet you. Customers dont have to worry about coming here. This is a Delivery Service called stashtwist. It brings medicinal and soon, maybe recreational, pot right to your door as easy as ordering a pizza. Woman 4 your order. Thank you. Man 3 awesome. Thank you so much. Lemonis and the menu is vast. Andrea concentrates of all variety, from tinctures to dabs of shatter, rosin, hash kind of keep it oldschool. Lemonis yeah. Andrea prerolls are a big one as well. Lemonis whats a preroll . Is that also known as a joint . Andrea yes. Lemonis okay. Well just call it a joint. Prerolls like some mba word. Its a joint. Lets just call it a joint. Andrea unsworth has an mba and used to be an analyst at moodys, the big creditrating agency. She feels strongly that her presence as a woman is essential in an industry thats dominated by men. And how hard is it being a woman in this business . Andrea id say id say its an advantage here to be a woman, honestly. Lemonis you do . Why . Andrea yeah. Andrea i think its just a natural you know, were healers. You go to mom when youre sick. Lemonis i agree with that. Andrea so, weve got an order here going out to megan. Shes got our flour. Shes actually got a really good mix here. Lemonis 135. Andrea oh, yeah. Lemonis whats the averagesize order . Andrea 150, id say, is. Lemonis and so, what do you do on your website to try to drive that average sale . Do you think about the size of their cart . Andrea our photos have to be on point. Thats a big deal. Lemonis so, whats your answer . What do you do to grow the average size of the cart . Andrea a lot of advertising, so our newsletters huge. Lemonis you know im going to press you. Andrea i know. I know youre looking for something very specific. Lemonis no, im looking to see if youre doing it. So, do you have suggestive selling in your checkout cart . Andrea we are were working on that, cause we need some tech help. Lemonis so theres clearly room for improvement online. But now, i wanted to find out how the delivery side worked. Andrea okay. I believe matt is going to take you. Matts getting ready over here. Lemonis youre going to take me on a delivery . Matt i guess so. Lemonis are you excited . Matt yeah. Lemonis all right, lets do it andrea all right lemonis i never thought id end up delivering pot, but i wanted to find out whos on the other end of that order, so i joined matt for a 10mile ride north of berkeley. How many runs do you make a day . Matt oh, anywhere between 5 and 20. Lemonis wow matt yeah. Lemonis she got a lot in that box. Matt yep. She usually has big orders. Lemonis how many times a month do you come to this delivery . Matt like, twice a week, id say. Lemonis twice a week . Matt yeah. Megan hi, matt matt hi megan how are you . Matt hows it going . Lemonis how are you . Im marcus. Megan hi, marcus. Its a pleasure to meet you. Lemonis nice to meet you. Matt here you go. Megan thank you so much. Lemonis why do you choose delivery as opposed to going to a dispensary . Megan i choose it for convenience. Im a parent. I cant always go to a dispensary. If a kids with me, thats impossible. Lemonis right. Megan i also like the fact that its discreet if it needs to be. Lemonis Megan Dooley Fisher told me she uses cannabis to treat the pain she suffers from her autoimmune disease. And she uses a lot. How long will this last you . Megan okay. Well, im probably a far heavier user than almost anybody out there. Lemonis okay. Megan this is 250 milligrams. I could eat this right now and go on with my day. You would never know anything. Lemonis 250 milligrams . Megan ill eat that whole bag. Lemonis okay. So, ive never used. How much could i have . Megan i would say that you wouldnt even have one of these. You would have to start with a 2. 5 milligram. Lemonis and you could eat this whole bag . Megan yeah, i could eat that whole bag. Lemonis and not even be fazed . Megan not even be fazed. Lemonis megan spends a ton of money on her orders, but how much does Andrea Unsworth make on those deliveries . Its 135. For this discussion, well say its got a 60 margin. Andrea okay. Lemonis so well call it 75. Andrea yeah. Lemonis what are the expenses that you have to pay for out of the 75 . Andrea right. Lemonis lets start with what it costs to deliver. Andrea so, lets say average around 20 bucks an hour is the average wage for folks in the industry. Lemonis if andreas margin is 60 or about 75 bucks on this order and she aims for 15 deliveries a day, she grosses about 1,125. After she pays her driver 160, she clears 965. Thats almost 7 grand for a 7dayaweek business. Thats not bad. Andrea yeah. Lemonis and if the rents 2,000 a month. Andrea yeah. Lemonis . Youre doing okay. Andrea doing okay. Lemonis i havent been able to get my head around the repercussions of putting money in an industry that still isnt federally legal. Andrea had a poise about her and a confidence about her and a knowledge about her that i would invest in her in any business. But not this one. Up next, the desert town goes boom. You paid 1 million an acre. Dan yes. Lemonis is that a lot for this . Dan thats way over. Thats a lot. Lemonis are you just not good at real estate . Your new brotherinlaw. You like him. Hes one of those guys who always smells good. His 5 oclock shadow is always at 5 oclock. You like him. Your mom says hes done really well for himself. He has stocks and bonds your dad wants to go fishing with him. Your dad doesnt even like fishing. You like your brotherinlaw. But youd like him better if you made more money than he does. Dont get mad at your brotherinlaw. Get e trade man 4 so, this is our approach to making cannabis more approachable. Lemonis call it a sign of the times. Greta okay, a toast to Desert Hot Springs and our future. Lemonis . A dinner party unlike any ive ever seen. All you can eat, drink, and smoke. Man 5 peer pressure . Is that what it is . Dan yes. Everybodys doing it. Lemonis enough highgrade pot for a grateful dead tour. The men and women here are owners and operators of the huge indoor marijuana farms in Desert Hot Springs. They say federal laws that criminalize pot are out of step with the times. Greta im a republican, and ive been a republican my whole life. This is not me being a radical. This is having my eyes open. Lemonis greta carter is building a 30,000squarefoot facility, hoping that washington stays out of her way. Greta we all know. The people know. Theyre smarter than what our politics are at right now. But we know that this is the time is coming. Lemonis the growers here face the threat of a crackdown. But its not slowing them down. Dan my facilitys going to be 170,000 square feet of indoor medical marijuana. Lemonis dan osbourne is the owner of clc brand labs. I met up with him at his growhouse. And how much money have you invested in the business so far . Dan about 6 million. Lemonis 6 million . Dan and this year, were going to spend 10 million. Lemonis spend an additional 10 million, so youll have 16 million total invested . Dan yes. Lemonis included in his spending spree, 3. 8 million for just 3. 8 acres of land. You dont need a calculator for this one. You paid 1 million an acre. Dan yes. Lemonis is that a lot for this . Dan thats way over. Thats a lot. Thats a lot. Lemonis are you just not good at real estate, or. . Dan no, im good at investment. Lemonis that philosophy isnt new. Sometimes youve got to spend money to make money. And you project that youll do 22 million in 2018, then . Dan yes. Lemonis is there that much demand . Dan there is, especially when it becomes legal, recreational. Theres going to be a lot of demand. Its going to shoot through the roof. Lemonis big money requires bright lights. At clc, sunglasses are required. Dan heres your safety sunglasses. Lemonis okay. Dan . cause the light is very intense in these rooms. Lemonis okay. I feel like im ready to go, like, on a safari with you. Dan yeah, all day long. Its fun. Lemonis lets do it. For dan, cultivating pot is all about the tlc. Dan well, im more of a handson. Youve got to feel the plant, look at it. Youve got to water it by hand. It takes quite a bit of personal attention. Lemonis so, how much inventory is in here . Dan about 400,000 worth. Lemonis holy [bleep] wow. Just another day at the office for dans lead grower, jeanette. You realize youre in a room filled with what the federal government considers illegal . Jeanette yeah. And i think thats what makes it more exciting. Lemonis it does . Jeanette yes. Lemonis do you know, its funny, people that dont know the industry like me. Jeanette mmhmm. Lemonis . I used to think that the marijuana was actually this. Jeanette you know, thats what everyone thinks, too. Lemonis i didnt know it was this. Jeanette yeah, the bud. Dan gently touch them, and then touch your fingers. Lemonis ooh, its sappy. Dan yeah. Lemonis is that how you know . Dan uhhuh. Thats good. And ill show you what gives you this. Lemonis ooh, strong a pot user in high school, dan says he gave it up for nearly a decade. How come . Dan i was a minister for eight years, and i was raising kids. Lemonis you were a minister of a church . Dan mmhmm. Lemonis do people from your church know you do this now . Dan no. No. Lemonis what do you think theyd say . Dan they would be really surprised, i think. Lemonis then it was my turn to be surprised. Dan i voted against recreational use. Lemonis you did . Dan yes. Lemonis you voted against prop 64 . Dan right. Lemonis tell me more about that. Dan you know, im a dad and a grandpa, so weve got a responsibility. I dont want my grandkids or my kids, you know, just walking into a store and buying medical marijuana and getting high. Then, we have our 45,000squarefoot building. Lemonis when his buildings are completed, dan expects to net at least 30 million a year. But his success is coming at a great personal cost. Dan my soninlaw wont even talk to me because im in this business. Hes a pharmacist in utah. And hes so against this, so. Lemonis well, that makes for an interesting thanksgiving. Dan well, i dont see them during thanksgiving. Lemonis because of this . Dan uhhuh, because of this. Lemonis and you have grandkids . Dan uhhuh. Lemonis and so you dont see your grandkids, either . Dan no, i cant see them, either. Lemonis he wont let you . Dan no. Lemonis how hard is that . Dan thats tough. But when their kids grow up and they find out that their grandpa is in the medical marijuana business, theyll like it. Lemonis oh, theyre going to love you just the same. Dan yeah, absolutely. Lemonis do you ever think about stopping . Dan no, no. Im going to ride this business out until i sell it. Lemonis whats the end goal for you . Dan selling my company for 120 million. Lemonis youve picked that number of 120 million . Dan yeah. Lemonis 120 million sounds like a low number if you get to 35 million in earnings. Dan well, im not a im not a greedy person. Lemonis coming up, the dangers of dealing illegal weed. Were you ever scared for your life . Zack yeah. I mean, you cant not be scared for your life with a gun to the back of your head for 20 minutes as some guy searches your apartment. In your head can you see my skin, my age, my beliefs . Address you imagine this place does where im from change how you see me . When you get to my experience, will you see how qualified i am . My skills . Dont imagine what i might be, see what i can do. Search for greatness. Search indeed. The worlds number 1 job site. Lemonis in california, buying marijuana legally is almost as easy as grabbing a gallon of milk. Man 6 have a good one. Man 7 thank you. Have a good one. Man 6 cheers. Lemonis but theres another side a multibilliondollar underground that continues to thrive. Hidden inside an l. A. Warehouse, a sea of blackmarket pot carefully grown by a man well call zack. Would you call yourself a drug dealer . Zack no. I wouldnt. Lemonis how come . Zack cause its just weed. The word drug dealer makes you immediately think of, like, a violent guy with guns selling cocaine. Lemonis yeah. Zack . When this is more of just a friend who has weed and his friends want weed. Im not, like, on a Street Corner selling it. Lemonis he doesnt need to. Zack has a steady client base hes been cultivating for 12 years, from dispensaries to everyday people. Would it surprise me to know the customers you have today . Zack yeah. Lemonis professionals . Zack yeah. Lemonis white collars . Zack yeah. Lemonis yoga moms, soccer moms, the whole deal . Doctors, lawyers . Zack yeah. Lemonis part of the reason youre facing this way and not towards the camera is that you know that its illegal. Zack yeah. Lemonis right . Zack yeah. Lemonis and now, proposition 64 might put him out of business. Reporter prop 64 has onehandedly legalized. Lemonis so when the law passed, that night, election night, youre watching the tv with the rest of the world, right . Zack yeah. Lemonis whats the first thing that goes through your mind . Zack well, im going to probably have to get a real job soon. Lemonis why . Zack cause you can see it just taking out any kind of blackmarket stuff. The prices have already gone down drastically. Lemonis how many pounds can you produce out of your facility . Zack we do about 16 every two and half months. Lemonis 16 what . Zack pounds. Lemonis six crops, five crops a year . Zack about five crops a year. Lemonis okay, so 5 times 16 pounds is 80 pounds a year . Zack roughly. Lemonis and youre selling it for how much . Zack about 2,000 a poundish. Lemonis so, 160,000 in revenue . Zack gross revenue. Lemonis after expenses, he and a partner net about 60,000 a year each, taxfree. But there are other costs. Have you ever been held up at gunpoint . Zack yeah. I had a home invasion. Two guys came in with guns. Lemonis how much did they take . Zack they took about 3,000. Lemonis were you ever scared for your life . Zack yeah. I mean, you cant not be scared for your life with a gun to the back of your head for 20 minutes as some guy searches your apartment. Lemonis zacks future is a game of wait and see. If taxes push the price of legal weed too high, his business might survive. You can undercut the retailers. Zack yeah. I can already come in 20 lower than the legal shop. Lemonis and so, we can call it whatever we want, but at the end of the day, youre a businessman. Zack exactly. Lemonis is that how you think about it . Zack i think about it like that, yeah. Just making money. Youre trying to just survive, honestly. Lemonis look, i dont like the fact that hes engaging in illegal activity. But what i understand is that hes trying to generate a living for himself in a state thats now legal. Nice to meet you. Zack you, too, brother. Lemonis thank you. Clearly a smart gentleman who understands risk and reward. And he knows where the lines are, what not to cross. But hes also smart enough to know that he needs to be thinking about where his next income streams going to come from. Its a striking turn of events when legalized pot threatens to put a drug dealer out of business. But marijuana isnt like other industries. By 2021, its projected to be worth more than 20 billion. Leani thank you. Good morning. Lemonis for some, its already paying off. Cindy so, thats why we bring our nonmedicated samples, so you can try it and. Lemonis remember cindy and leani . They scored with their sales pitch. Josh thank you, guys. Cindy youre welcome. Josh i think you guys are going to do really well here, and i look forward to seeing you guys in the other stores, too. Cindy awesome. Lemonis treat yourself tarts are now selling at madmens newest store in santa anna. I came to california wary of a business with a criminal past. Im leaving convinced its future is already here. Im marcus lemonis. Lemoniill take you deeppecial epiinto the mountainst, to the marijuana capital of america. Youll meet the pioneers. This was the poorest county in the United States when we came here. Lemonis is the depression of this area the reason that cannabis came to be . Yes. [ indistinct shouting ] the sheriff trying to bust the outlaws. How much organized crime is running through these hills . Theres a lot of it. Anywhere where they can grow and make money, theyre going to come. The growers betting on the future of pot. Alex weve invested everything in this. Your live savings, everything you have. This definitely could be a complete crash and burn. Lemonis its all way up in northern california,