Successful Dispensary Launch Strategies with Neal Chaudhary (Red Pill Labs)

Best practices, strategies, and finding unique solutions for businesses

Episode Description

Neal Chaudhary is the founder of Red Pill Labs and Irie Systems.

Neil is a consultant with cannabis retailers on best practices, strategies, and finding unique solutions for businesses. To use innovative techniques and technology to make their systems and their retail operations grow.

He is here to help solve those complex business problems all cannabis retailers face. We also talked about Bob Marley, Red Hot Chili Peppers and how to help your budtenders deliver exceptional service.

Be sure to check out Neal and Red Pill Labs

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Episode Transcript

Ep_12_RP Labs

Tom Mulhern: I just wanna welcome you all here to the Kaya Cast podcast and just thank you all for listening to our past episodes. It's been such a blast to really launch this podcast and to hear positive feedback from listeners who are really getting a lot of value out of what we're doing.

It's awesome to be here. And we look forward to more conversations like the one we had today with Neil Chaudhary. He's the founder of Red Pill Labs and Irie Systems. And Neil is a consultant with cannabis retailers on best practices, strategies, and just finding unique solutions for businesses. To use innovative techniques and technology to make their systems and their retail operations grow.

So he is here to help solve those complex business problems. I had a great conversation with them, so let's jump right into it

Tom Mulhern: As an entrepreneur at heart, Neil has a passion for innovation and solving complex business problems. Neil is driven by a thirst to deliver exceptional experiences and has a track record for building high performance teams. Over his career Neil has stewarded several high profile clients through major challenges, leveraging technology, automation and process change.

Neil takes pride in championing mental health and diversity initiative. When he is not in the office, Neil can be found enjoying the outdoors on his mountain bike or his standup paddle board. Irie Systems is a division of Red Pill Labs in combining their unique, digital consulting and technology backgrounds to develop a curated set of offerings for the cannabis sector.

They work with businesses to co-develop strategy and best in class cannabis industry solutions.

Neil. I just want to welcome you here to the Kaya Cast podcast. And I'm really excited to hear your story and to jump right.

Neal Chaudhary: Thank you, Tom. Thank you so much for the invite. Pleasure to be here.

Tom Mulhern: So I gotta start off by asking you a bit about your background. So tell me about your background and how you got involved in the cannabis industry. Cause I know you had a a really successful company that was bought out and there was a interesting story that was, so tell me a bit about how you got to where you are today.

Neal Chaudhary: Background in business and finance ended up doing a lot of technology consulting and then started up a a boutique consulting firm which was Tacit Management Consulting back in 2012. Ran that for five years. And the focus of that firm was agnostic technology solutions.

So we didn't actually have any solutions in our back pocket. Everything we did was a hundred agnostic a hundred percent, whatever the customer needed.


that concept was relatively new to the market at that point. And after a slow start, the business took off in, at the end of year, one, year, two and three were really good.

And then, by the time we got into year four we were getting noticed and at the end of year five, we ended up selling it to one of the big four companies which was quite exciting, cuz we took something from. Nothing from an idea coming up with a name, just being very entrepreneurial.

Tom Mulhern: That's the key of being an entrepreneur is really just seeing your idea go from this little bud of an idea to growing to this giant flower. So it's cool to hear, the success that you had there. So you were bought out by one of the big four and then what happened?

Neal Chaudhary: Once you get into the big four it's a big machine and it's all, it's great. So you learn a lot, you meet a lot of interesting people. I've heard people say it's crack for your brain. Cause there's just so many smart people you're surrounded by amazing people.

And, you're always being challenged and you get the best clients and customers and industry professionals. So it was a fantastic experience. And I did that for five years, but I actually missed working with up and coming companies and the smaller companies and, and that's what cannabis is to me as well.

It's a brand new industry, relatively new now. And it really felt like all the business acumen, all the technology, marketing acumen that, you of develop over the years. It's nice to be able to take that and port it over.

Actually never knew anything about cannabis growing up. It's strange growing up on the west coast, you think I'd know everything about, cannabis, but I must have been a little bit sheltered. I didn't discover cannabis until I went traveling after high school. I was down in Australia, New Zealand and Fiji. And in Fiji I actually discovered Bob Marley for the first.

Never been exposed to his music. I don't know if you're a big Bob Marley fan Tom at all.

Tom Mulhern: I love Bob Marley and actually Kaya the Kaya Cast. Kaya Push is slang for marijuana. And Bob Marley has an album called Kaya.

Neal Chaudhary: It's a great album.

Tom Mulhern: it's a great album.

Neal Chaudhary: And so I got into this reggae scene and started. Investigating learning about Rastafarianism. And then I became an expert on Jamaican politics because of Bob Marley. So I went down this real rabbit hole all the way down to Hala Salasi, the last emperor of Ethiopia.

And just that culture just really fascinated me. And then when I got back home it was back to school back to life just become a productive member of society. And it was really exciting when you know, all the talk about legalization was happening in Canada at least. And here we are a few years into legalization and yeah, happy to be on your show, Tom.

Tom Mulhern: Oh, that's awesome. So what areas in the cannabis arena have you worked with? Have you met some people in cannabis or have you worked with different. Or what area of the cannabis industry are you mostly focused?

Neal Chaudhary: we're trying to bring our acumen to the entire life cycle the entire chain. But we're starting to work with a few licensed producers already. And our team is actively involved with lot of dispensaries and retailers our company Irie Systems, which is a division of our parenting company, Red Pill Labs is relatively new.

It's maybe about four months old, but we've already been to two conferences. The more we get into the industry, the more we love the culture. The more we love the people and, just a network of other businesses that we've been partnering with. Including, companies like Kaya Push and, Budsense and we're in talks with a few more.

So there's just a real love of the industry. Passion ahead of profits. I know, I know everyone has to make a profit to make it viable. But it's the passion that kind of infects me. And I love that.

Tom Mulhern: Have you met some interesting people along the way in your journey of cannabis.

Neal Chaudhary: I have we were at a conference in Toronto and just, you got the more of the business side on the trade show floor, but all you gotta do is step outside and you see the Cast of characters. And it's amazing because it's bringing what was taboo into the mainstream.

And people still have their views on it and that's okay. The conference in Victoria was very interesting because I got to meet Jim Belushi and I had a really interesting chat with him.

He loves the plant itself. He's got a bunch of videos on YouTube and I think he's even got like a docu series on YouTube as well, do documenting his journey so highly recommend anybody that's interested in cannabis and Jim Belushi check that out.

Tom Mulhern: I've listened to him on a few podcasts actually, and just his passion and knowledge of the plant itself is just amazing. It's amazing. To talk to people who know who are just experts in that field.

Neal Chaudhary: I feel like my knowledge level at this point was probably. 15 to 20% of what some of these experts that have been in the space, pre legalization they know everything inside and out and just being a curious person I'm learning every single day, something new, going down another rabbit hole, trying to figure things out.

Tom Mulhern: So as an entrepreneur, you're working with different cannabis entrepreneurs. What are some of the top challenges or even mistakes that you've seen cannabis entrepreneurs make, and are there ways to avoid some of these pitfalls?

Neal Chaudhary: I think initially, there was a bit of a gold rush mentality when cannabis first became illegalized. And we won't get into what's happening in that side of the industry, but. As you dig deeper, there's real people with real businesses and, betting their betting, their family's fortune on, on, on running a cannabis business.

And there's some really viable businesses out there that I've come across in, my, my journey so far, but there's also folks that we've come across where they have the passion, but they don't have the business acumen. If that makes sense. So they wanna be involved in this industry.

They have the funds or they got investor money. They might not have the proper business training or not surrounding themselves at the right individuals to make themselves successful.

Tom Mulhern: Is there a way for some of those entrepreneurs or people that are looking to grow or scale their business, is there, is, are there symptoms that they should be looking for within their own companies about. Reaching out and getting that professional guidance, they may not have the business acumen, like you said.

So when should they start looking out and being like, Hey Neil, I need some help.

Neal Chaudhary: Yeah. Great question, Tom. I'll give you two or three that popped into my head top of mind. Uh, Definitely manual processes and procedures. Getting bogged down in paperwork having to enter everything manually into Excel or, you know, write things down.

Very old school is number one, in, in today's day and age I even question why we have paper in the first place, right? I'm not gonna go down on down rabbit hole there, but definitely it's hard to scale when everything's manual, right? If you open up a dispensary and you can run one, maybe very old school and manual, but if you do want to get to two or three, you're gonna have to invest in some technology.

Number two is just scalability. Just talking to a prospect a couple weeks ago they're just questioning us on how they can actually scale their business, cuz they feel like every time they wanna bring in an additional revenue source there's additional costs associated with that.

And the net isn't very attractive. So how do you actually scale a business. Grow your top line, but at the same time, grow your bottom line. And if anyone's struggling with that I definitely suggest he gets some outside.

Tom Mulhern: Have you seen uh, businesses that are trying to scale choosing this correct software transforming the growth of that, that retail business? You're saying like automating as much as possible, get away from spreadsheets and paper. How has choosing that correct software really transformed the growth of a business that you've seen.

Neal Chaudhary: I think, just from a front end perspective, if you go through and think about the customer experience I'm sure you've been through a point of sale terminal where it's super slow. The, the person behind the counter, makes a mistake or can't find things, or it's very clunky.

Then they gotta go and manually punch it into the credit card terminal so from a customer experience standpoint, technology does play a factor. We've walked into dispensaries in, three or four different states and here in British Columbia and in Ontario, and, they're all a little bit different because of, regulations in each jurisdiction.

The thing is every jurisdiction's a level playing field. So if you can actually have technology that makes it easy for you to actually get what you want, get out of the store pretty quickly. That's great. And it's also great because you can actually turn more customers over in a given day.

But also from the back end, like if you're dealing with your employees, there's a lot of turnover in the industry. People expect technology, people expect automation.  

Tom Mulhern: And I think that leads to that turnover, like you said, when there's so many manual processes and you're able to step in this is what you guys do, right? This is what you're best at is stepping in and helping give effective business strategies to two retailers. That's what you do.

That's the Red Pill way.

Neal Chaudhary: Exactly. That's our bread and butter is, have a strategy. and then our specialty is picking software solutions. Our teams, over the last 10 years have done probably three to 400 different software selection engagements anywhere from, E R P systems to accounting systems, point of sale eCommerce.

And lately a lot of marketing, a lot of marketing automation, a lot of customer relationship management. So how do you get customers in the door? Not only, not only just making your back office efficient, but how you actually grow the top line as well.

Tom Mulhern: And have you seen trends in some of that? Marketing automation and CRM, like trends that make it easier for cannabis retailers to do their job. I've spoken with this with other people it's so hard to market to clients. So have you seen things that are like almost like ways to get in there and bypass the system?

That work well.

Neal Chaudhary: Yeah. There's, different things you can get away with in, in different jurisdictions. I know here in British Columbia, it's pretty, pretty controlled in terms of, it's hard to have product differentiation in the stores. All the packaging basically looks the same, so it's, unless you really are loyal to a brand.

And that retailer carries that brand and, that makes it a little bit easier. Irie Systems actually has a cannabis advertising tool which basically navigates through all the red tape and all the different jurisdictions.

So it basically ensures that you're a hundred percent compliant. In the us specifically there's other fines and, penalties for, having your product or your advertising show up, on, on someone who's 18 years old. Cause you have to be over 21. So our tool ensures that anywhere that you ad shows up it's for the appropriate audience.

Tom Mulhern: That's something you guys developed your yourself, this thing that, cause I saw on your website. That you reach consumers through cannabis friendly, 100% compliant advertising networks. And I just thought like how do you even do that?

Neal Chaudhary: Yeah. Unfortunately, I'm not the I'm not the brains behind that one, but I do know how it works, but it wasn't the guy who actually built the tool. They're constantly monitoring cannabis friendly sites and it's not just like cannabis sites. I know MSN is definitely one of the places you can advertise.

Whereas Google you can't and, just navigating that for a regular person who runs a business would be a full-time job. So the tool basically navigates that for you. Making sure once you understand who your audience is, how many impressions you're after and then getting the reporting on what site and what impressions you made uh, is pretty valuable .

Tom Mulhern: And you have to be pretty creative with that. Even with a powerful tool, like what you've created and part of what you guys do too, is you co-develop strategies and solutions with dispensaries. So what does that kind of look like? Do when you go in, are you working with people that already have a strategy or most people starting from scratch and needing your help to develop that strategy to move forward?

Neal Chaudhary: We're working with a lot of companies that already have retail locations, but wanna expand.

But we're also talking to, entrepreneurs that, have the funding and trying to figure out, where's the best location. Just like if you're opening a restaurant, like you gotta have the business fundamentals, location, is it gonna be in the right market?

Who's your demographic, all that sort of stuff. But really. Each conversation's a little bit different, Tom, it's understanding, the vision, it's understanding their aspiration and then working with us to co-develop a strategy on how they're gonna win. And once we have that, we can back into what capabilities they need.

Whether it's marketing backend systems being able to sell through the web e-commerce being able to transfer inventory from one store to the other and you know, all the good things that come with retail. So again, it just depends on the client.

Tom Mulhern: When should a retailer start developing that strategy? Is it too late if they've already launched their dispensary or their retail store or should they start right from the beginning? Or maybe wait to see how things go on? What would your advice be there?

Neal Chaudhary: I, I think it just depends on, how risk averse the entrepreneur is. We've seen people just dive in without doing any planning and strategy and be super successful. We've seen people, have a plan of strategy and not succeed, right? So what's their secret sauce. But I think, ideally if you have one or two locations already in your series about scaling, we can definitely help, guide that conversation and develop that strategy.

And if you're brand new and wanna start something, I think you got a blank. And you can, by talking to some experts or even just talking to your peers you can see a lot of headache and a lot of dollars by, avoiding a lot of those pitfalls that you and I know about.

Tom Mulhern: So for someone that is wanting to launch, do you have any so this is someone with a dream, some money that they've saved up. Do you have any like tips or insights to help them launch that business? Before they launch as an entrepreneur, what tips would you give them?

Neal Chaudhary: I think, if you are brand new to this, you don't have that retail expertise or that business acumen start slow, be cautious try to try to understand the market, try to understand the products understand the consumer.

And then once you gain that, understanding you, like I said earlier, I'm constantly learning and, as a brand new retailer, you're gonna be, drinking from the fire hose. Be patient be smart, but at the same time, think about where you wanna be like, do you wanna be a one store shop and just do it as a bit of a hobby or, is this, is this your thing?

And you want to be. A nationwide chain or do you wanna be regional, like really understanding what the end goal is, and then, working backwards and making sure you got a plan in place.

Tom Mulhern: Yeah that's really good insight of. Thinking through where do I wanna be with this? I've sat in on calls where people are wanting to just open a shop in their local town and that's it, that's, their dream is to retire and have this shop. And then there's some people that are like, I wanna build an empire, and so I think coming up with different strategies to get you where you want to be at the end of it is key.

Neal Chaudhary: Yeah. And I think, location and, your demographic that you're trying to appeal to do you have parking. Is there another store opening up on your block? Is there another store opening up across the street? If there's seven stores within three blocks, then you know, maybe that dream's gonna be a little bit more difficult.

Tom Mulhern: So going back to marketing a little bit, what are some creative ways that you've seen cannabis retailers, advertising to consumers? Still saying staying compliant, but.

are there some creative, interesting things that you've seen people doing that kind of work in the cannabis industry.

Neal Chaudhary: Yeah, again, it comes down to the market. I think, I was down in Seattle for the Red Hot Chili Peppers show and, walked into a couple dispensaries there and just to see what they were like. And. I love the fact that, they're able to show packaging and differentiate on, on their product and with some very clever packaging and pyramids and different boxes and, just cuz it's fun.

It's meant to be fun. It's meant to be loose. It's meant to be relaxed. We've seen some very clever product design. We've seen some very clever packaging design and, just even all like with edibles, just seeing some very, very creative flavors being created and co-created and things like that.

And, we've seen posters and, different things like that, but it's tough because it's such a controlled environment.

Tom Mulhern: And a lot of that marketing is when people walk into the store, cuz they don't see oh, you've got like a refreshing lemonade, THC drink and you've got this cool poster. Like it, that's what makes it pretty difficult to market to the customers until they get them in the store.

Neal Chaudhary: Yeah. And I think educating the bud tenderers if you were a producer. And, you don't want your product in a sea of sameness is really educating the bud tender cuz what I've witnessed is recommendations and Hey, I kind of thinking about this and that. What do you recommend?

And those recommendations nine times outta 10 taken, right? So if you can influence the bud tender, if you can get some influence into the retail location, that's huge.

Tom Mulhern: That role of bud tender is such a key, like they're the front line of every dispensary business. And so yeah. Working with your bud tenderers training them. On product on what you need. Cuz at the end of the day, when I walk in there, I'm going up to the bud tender. I'm not going up to the dispensary owner and I'm saying, Hey man, this is what I'm looking for.

This is the experience. How can you help me?

Neal Chaudhary: Exactly right. And you have a good experience. You're going back to that retail. If you don't have a great experience, there's probably another one in your neighborhood that you can check out.

Tom Mulhern: That's right. And it's that experience that makes them stand out. From the other one on the street and then the other one down the block.

Neal Chaudhary: Or if you forget what you bought last time, Hey, this is my, phone number or my email address. Can you look up what I bought last time? Things like that, being able to do that, and it might not be at that location, maybe it was at a different. But can you look it up? Again, technology plays a hand in being able to facilitate that

Tom Mulhern: So if you could tell a new, a newer perspective, dispensary owner, one thing, you've got one thing you've got their ear, you put your arm around their shoulder.

What would that one thing be?

Neal Chaudhary: I think the one tip would be.

It's not all unicorns and roses or whatever that saying is Tom running a business is hard running a business is challenging. I think sometimes we get too carried away with the glamor having your own shop, being your own boss and not understanding the pain and the challenges that go with that and being able to ride it out.

You're gonna come across challenges. You just need to know how to deal with them. If you can anticipate them, you can put a plan in place when those challenges arise and you can just kind of power through cuz it can get overwhelming for folks that are first time business owners.

Tom Mulhern: You would have so much insight as a business owner yourself to, to these businesses you're working with. So that's a really good tip.

Neal Chaudhary: Oh, I appreciate that. And even our business has ups and downs and challenges and, there's so many variables involved in running a successful business. Like I said it's not always. Two steps forward. Sometimes you take a step back where sometimes you take a lateral step, right?

So it's just being able to deal with it and not panic. And apparently we're coming into a recession here in the US. And when the US is in a recession, Canada usually follows, what do you do? So you got all these news. Do you panic? Do you hold, do you scale back.

Or do you put a plan in place and try to power forward?

Tom Mulhern: What sort of a plan do you think is the most effective way to handle the coming future of, whether it's a recession or just a tighter economy any sort of insight there into cuz you've been in business for quite a while. So any insight on how dispensaries can survive the upcoming, whatever it is.

Neal Chaudhary: Yeah. I think people like buying from people they like. People like buying from companies they like. So I think, having that relationship with your client. Like I said, making it super easy, super friendly. And then apparently, I've been told cannabis is recession proof.

Hopefully, obviously there'll be a, if there is a full scale recession, there'll be a bit of a dip in dispensable earnings, like disposable learnings, but you. If you see what happens with alcohol sales, don't usually diminish during a recession. So I think we're in a good spot.

Tom Mulhern: We're in a good spot. That's right. It's a good industry to be in, even through COVID you can see dispensaries growing and cannabis industry just exploding.

Neal Chaudhary: With all the legislation and, I think, with a few years behind us now, I think, it's a good time to reflect on what the industry's been through, but at the same time, be excited with the next three to five years holds. Cause there's gonna be a lot coming.

There's gonna be a lot of loosening of regulations. I hope we're already starting to see it in some jurisdictions. And yeah, I think it's, like I said, it's a great industry. It's an amazing plant. It's got, so many, you got the medicinal side, you got the recreational side. So there's a lot there.

And I think if you're in the business, just enjoy yourself, enjoy the experience.

Tom Mulhern: You guys are growing. I've seen that on Linkedin. And you keep putting all these oh, welcome to the team. Welcome to the team. It looks like your team is growing. So that's good. That's good news.

Neal Chaudhary: Yeah, no it's been exciting. Yeah, there's definitely a talent shortage in the market, but we've been pretty lucky in terms of people finding us and wanting to work with us. I think they're intrigued by our approach to consulting. I think the names of the two companies are pretty interesting, Red Pill and Irie.

And that definitely reflects upon our corporate culture, our values. We just don't wanna be another shop. That's again, in a sea of sameness. We value being a little bit unique. Our catchphrase is uncommon and that's something we live and breathe every single.

Tom Mulhern: If people wanna find out more about Irie or Red Pill, is the best place to go your website, or can they reach out to you on LinkedIn or how do they get connected to you?

Neal Chaudhary: So we're in the midst of revamping our website. So we have the parent company, Red Pill Labs, which is probably the most. Active in terms of, blogs and information and postings and activities. We've had a lot of interest in Irie Systems. People just love the name people just, I don't know, it's just a very simple logo.

People love the logo. We're just getting some amazing feedback. Just the love is incredible. And we're thinking we're onto something. So we're in the midst of actually repositioning that website as well. We've got the partnership with Kaya Push. We've got the partnership with Budsense two incredible solutions that, you know if you're a dispensary owner or even thinking about the dispensary, opening the dispensary to perfect solutions, and we're in talks with a few other solutions to make ourselves and Irie Systems a one stop shop.

For a lot of these. So we've got the solutions and the the business advice and the strategy setting and the goal setting and all that comes along with it. Our intention is to be a full service cannabis consulting house. Pretty quickly here

Yeah, I think, the websites get for information, but if you wanna have a quick conversation, LinkedIn is the best way. So just reach out on LinkedIn. I'm very active on LinkedIn.

Tom Mulhern: Well, Hey Neil, I wanna just thank you again for taking the time to share about your history and also just the importance and how hard it is to be in business and, giving insights from an entrepreneur like yourself of. How to get started in this industry is key. So thanks again for being on the podcast.

Neal Chaudhary: And thanks for having me and I'm loving the podcast journey. I know you guys are relatively new at this, but it's amazing at the the lineup of guests that you've had on the podcast. And I wish he continued success.

Tom Mulhern: I want to thank Neil for joining us on the podcast and be sure to go check out his website. And connect with him on LinkedIn. We'll have all of the links in the show notes of this podcast.

So go head over there. You can also check out all of the podcasts at You can find the full transcripts of these podcasts. So if there's something that really stood out that you wanted to find out about, and I was talking too fast, or our guests were, you can go there, you can read the transcripts, you can find the links.

Just really get connected into the community that we're trying to build here with the Kaya Cast.

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