Maintaining A Balanced Accounts Receivable Sheet In Cannabis: CEO Of Gold Flora Shares Her Secret

Zinger Key Points
  • Gold Flora CEO provided tips on how to succeed in New Jersey at the recent Benzinga Cannabis Market Spotlight.
  • In addition to tackling market dynamics between West and East Coasts, the CEO shared the secret to maintaining accounts receivables.

"For us, everything starts with cultivation," Laurie Holcomb founder and CEO of Gold Flora GRAM told the crowd gathered at the recent Benzinga cannabis event –Cannabis Market Spotlight on Monday in New Jersey. "We’ve got 107,000 square feet of canopy. It’s all indoor. So we’re one of the largest indoor cultivators in California.”

This seed-to-sale publicly traded cannabis company is the third in terms of retail footprint and eighth in the California market in terms of shelf space. And that's not all, the company has about million dollars of accounts receivable (AR), which is a "phenomenal statistic, given the size of Gold Flora," according to Tom Zuber, a managing partner at Zuber Lawler, which represents top cannabis companies and Fortune 500 clients.

In this exclusive chat, Holcomb shared the company's secret sauce to this success while also tackling the hot topic of challenges and opportunities associated with East cannabis companies going out West and more.

Finding The Right Partner

Among the biggest challenges is capital, like everywhere in the industry. That's why Holcomb highlighted the importance of finding the right partner and the right licensing agreement as well as having the right law firm. She says that in 2016 when she founded the company it was the "heyday of cannabis," and that "capital was free flowing." Today, there's not much capital out there, she noted. That is why the company had to be vertical, but now looking to bring brands to the East Coast, Holcomb would avoid infrastructure expenses and focus instead on finding the right partners.

Zuber asked, "What are your criteria?"

Holcomb stressed the importance of finding professional growers. "If I want a partner to put my flower or my strains, genetics, into their grow, they have to be a good grower. And believe me, when we started out year one, our grower was ODS, that’s original dog shit. Products don’t sell. Consumers know the difference. So you need to have an excellent grower. You need to understand genetics. You have to have the right partner. That’s your price point. And for us, we want to deliver the highest quality cannabis at the best price, because today, consumers are price conscious because of inflation."

Another important lesson Holcomb shared at Benzinga conference was not to get ahead of packaging. The rules change often so a company needs to stay ahead of the game so as not to end up throwing away a lot money when laws change.

How To Maintain a Good Level Of AR?

AR is a balance of money due to a firm for goods or services delivered or used but not yet paid for by customers. In cannabis, companies often struggle with huge ARs as many dispensaries do not pay up on time, or ever.

See More: Dispensary Owners Caught On Tape Bragging They Don’t Pay Their Vendors: Industry Vet Says Black Market Has More Integrity Than Legal

You’ve got to "have a good supply chain. It’s one of the reasons that we’re vertically integrated in California. We have less of a reliance on third parties," Holcomb said.

It’s not always about vertical integration, however. Another key point to maintaining a good AR is discipline. On Holcomb’s list not to deliver are some 700 dispensaries because they don't pay. "You have to be very disciplined. That also means you’re probably not growing your brand as rapidly as you want. So you have to balance your top-line revenue with do you want to get collections."

"I am hoping that the growth is slower and people pick great partners, they launch their brands, have limited number of cultivators" to avoid overproduction as that doesn't help anybody. "So, I think, slow and steady, is better," Holcomb concluded.

See Also: Growing Weed Is Hard But This Co. Will Help You Do It Properly, CEO Shares Advice At Benzinga NJ Cannabis Event

Photo credit: Corynn Egreczky

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Posted In: CannabisNewsEventsExclusivesInterviewCalifornia cannabisCannaSpotlightLaurie HolcombNew Jersey CannabisTom Zuberzuber lawler
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