Transcript of TraceTrust LinkedIn Live with Rhiannon Woo & Merril Gilbert

11/18 TT LinkedIn Live

[00:00:00] Rhiannon: Good morning everyone. Hi, hello and welcome to TraceTrust Live. Here, each month our CEO Merril Gilbert and her guest will hold a 30 minute conversation. Topics are centered around adapting leadership for resiliency, building food systems for a changing future, creating safe and reliable experiences with cannabis and other active ingredients.

[00:00:21] Rhiannon: Merril is known for being a provocative thought leader in the realms of the future of food and cannabis consumable innovations. She has been mentoring entrepreneurs through Slow Money NorCal for the past five years, and joined their board last year. Here on TraceTrust Live, she will be bringing that mentorship energy to the conversation with folks just starting their journey, as well as the industry veterans who have built great organizations.

[00:00:45] Rhiannon: Our guest today is me, Rhiannon Woo. I'm a speaker and trainer in the world of quality and process. I enjoy working with teams as they grow and often can be found with my sleeves rolled up side by side with their line workers, trying to understand their roadblocks so I can work with leadership to build effective and lasting solutions.

[00:01:02] Rhiannon: So with no further ado, welcome to TraceTrust Live. Hey Merril.

[00:01:07] Merril: Hello. I jumped in a little quick earlier, but welcome and yeah, I think you forgot to mention that, you know, we have started this journey of our partnership over almost seven years ago. And that we really are always been adapting and kind of leading the change that we always wanna see happen. And that we always come at things with such a unique way of thinking and talking about it. And then we bring people into the conversation that we usually inspire us and admire us. And you and I sat down one day and said, you know, this would be a really good place for us to expand those conversations. Yeah. So I'm very excited about that.

[00:01:49] Rhiannon: Me too. Well, let's just first get started with a little bit of current events. You just came back from MJ Biz Con. I didn't get to go. How was it?

[00:02:01] Merril: It was so much larger. You would think that that it was the first time. I mean, I think this would've been my fourth time at this conference and I think we first went four years ago together. And it was unbelievable. It was not only the whole south side of the convention center, but it was up on the upper floors. There was continual conversations going on throughout , the convention center, but also throughout the city of Las Vegas, which is normal. There was, you know, of course the after parties. But what was so fantastic was just how many people were in attendance. People were so excited to be back together. They were a lot of deals happening, which was great to see because we see often in the last, you know, several months that people think that investments are starting to dry up. We certainly saw a pullback in the world of cannabis around investing, but we are seeing where, you know, the money's going and then, you know, all the emerging markets that we have that we didn't have. Five years ago, right? So we have all these new states that now have some form of legalization that are really starting to jump in and really understand what it is. So the opportunities to talk about lessons learned and opportunities for the future was everywhere.

[00:03:22] Rhiannon: So when we talk about like lessons learned, was there any like number one message that you were hearing that people were really resonating with?

[00:03:31] Merril: I think there's still the big questions around, one, how to unite this industry to be treated like all other industries. We still, even though there was a hint and murmuring going around that we might actually get banking done before the end of the year with the current Congress. So there's this financial piece that still doesn't exist. There is still testing protocols that don't exist. There's still emphasis put on potency of THC and C B D. There's the whole question about cultivated hemp and where does that fit in as we go forward. So there was that. And then the whole question about, oftentimes we see this particular in these new states about cultivation, cultivation, cultivation, meaning growing, lots of fields and acreage of cannabis. Indoor, outdoor lights. Right? That was still the big, you know, the main manufacturers that you saw on the show floor. The problem is that that continues to lower the price. So now it becomes a commodity. And where does that fit into what we talked about before as a consumable item? Where does it fit in when you have so much raw materials? How does those become finished goods? How do those finished goods stand out in a marketplace? Because we still don't know all we need to know. We're just starting to get research into all the possibilities of what this plant could be used for. And of course, the whole medical side were just, you know, when we started seven years ago, universities wouldn't even talk about cannabis except for, you know, the consumption of their students. But they did not have research and we have a lot of research going on that we don't even have the results of.

[00:05:09] Rhiannon: Right. So one of the things that I've been really curious about is, you know, in the media and on LinkedIn and other places, you see a lot of people who are starting to feel economic angst. So if we think back, like at the beginning of the pandemic, you know, everybody had economic angst there too. But one of the things that we know from looking at like, you know, alcoholsales in tough times is that they kind of go up in tough times because people are looking for comfort in their own home. And we definitely saw that at the beginning of the pandemic where, you know, there was a basically a run on all the dispensaries. People stayed in line for hours because you know, the lockdown was coming in March and you had to have your supplies to get through like that 60 days where literally everything was gonna be closed. I don't think that this coming economic pinch that hopefully it's not long lasting, but I don't think that that's gonna have the same kind of run on the markets. But are you hearing any conversations about how you know, retail dispensaries are preparing for like, the economic hard times that are being protected?

[00:06:23] Merril: Well, I think one of the things we're gonna see, and we're already seeing this, is a lot of mergers and acquisitions. So partly because the cost of operations is, is gone up and the margin to profitability has gone down. So those two things, which is really prevalent across all industries, right? That's what we're seeing. And in the supply chain world, not just, and I wanna bring this around back to food because that is the system that really has and continues to affect inflation and pricing and work and employees, right? So we are seeing this at so many different levels and cannabis has an opportunity to kind of reset and rethink how we go into the marketplaces when we talk about commodities. But right now that that pricing point in new places, you're still getting top dollar cause it's exciting and new. But in established markets, the, you know, that margin level is very challenging

[00:07:37] Rhiannon: That's something that we talk about all the time with all of our entrepreneurs that we work with, is understanding what's your true cost of production, not just your cost of goods sold, but paying yourself, paying your secretary, all the below line costs as well. And are you actually profitable? Not just balance sheet profitable because those are the companies that are going to survive are the ones who are not using up their cash runway back stocking products that aren't actually profitable. And that's one of those hard conversations that we've had to have a lot of times with people is that If at the end of the day you're actually losing a dollar on every unit you sell, maybe this is not the moment in time for your product. How do you, how do you normally, like when I'm not there, how do you normally approach that conversation with somebody to be like, hey, your product is great, but when we're talking about resiliency, resiliency is also being able to read the room and the marketplace and understand where your place is right now, but that doesn't mean what it's like in the future. So how do you communicate with entrepreneurs who are in that tough spot?

[00:08:52] Merril: So it's interesting that you bring that out because one of the events that I attended over the last couple of days was centered around beverages. It's an organization that we know well and the room was filled with many people that produce beverages and that is a part of the market that's just emerging. It's really growing. It's fast, it's a point of entry that destigmatizes the whole thing. But interestingly enough, a lot of these people are not able to get to their second and third productions right now because the costs are too high and the the sales aren't there and it doesn't get better with age sitting in its can or its bottle or it's shot. And so that is where we, you know, when you're not in the room with me and we're having a one-on-one conversation with a particular client on this, this is where you start to see that. And so when you have the conversation with somebody, you're like, so where's these price points? Where's the problem? And getting to profitability is hard because of these first rents. So one of the things that oftentimes when we talk about that is the back of the envelope. What do you want to sell this for? Either above or, or below or equal to your competitors, and what does it really mean? And so when you and I look at all the things that go into it, that's what people don't understand, right? It's not just raw materials and labor and packaging. It is the lights and the insurance and the other labor costs involved. It is the outer packaging, it is the service charges. It's moving it from point A to point B. It's waste. The things that didn't make it into the box or the bottle. And those factors in to that aren't always looked at. And if you have somebody else producing it for you really have to understand those numbers because you're only gonna get a penny, a quarter, a dollar on every unit for yourself. And that has to still be way below what you think it costs to produce it, because everyone along the way, the distributor, the retailer, etc, it's gonna add their markup on that.

[00:11:02] Rhiannon: Yeah, that's definitely one of the things that I see a lot is that people have not calculated their quality control lost and waste into their overall operating cost. And definitely a lot of projects we do, people are like, you know, my product's great, my team is great, but my numbers are not as strong as I want them to be. And why not? And that's what I really enjoy doing is getting out there with the team, following the process end to end, making sure that the SOPs are being followed to the letter. And then noticing all of the little discrepancies and trying to see how they add up.

[00:11:51] Rhiannon: I did not get to go to MJ Bicon, but I have been also attending some webinar type events over the last few days. I actually went to an event yesterday that was about technology and sustainability and all these different approaches to ensuring that materials are used more efficiently. And there was this company that was presenting and they had, like, they've been around a little while I just had never heard of them. And what they have is something really cool. They have a trash can that, well, it's your trash can, but they have a scale that goes under your trash can, but they also have this machine vision camera that goes over the trash can. And so every time you put your food waste into this trash can, it's calculating and quantifying the dollar value of your waste. And you and I know that nothing would change, like seeing what it costs right there. I'm like, oh my gosh, this is amazing. And they're obviously not widespread yet because otherwise we'd be seeing this everywhere. But they've done a few pilot programs and they did, on their website, they did a pilot program for this IKEA in the Netherlands. And you know, IKEA is one of those really good test cases because their portions are identical, every single store, everything. They're very regimented on how they portion and how they measure things and they learn things about their consumer, like their consumer didn't like the soup. They were throwing away tons of soup. They're like, we shouldn't be making soup because you know this, nobody likes it. This is one of those things I'm very passionate about is food waste. Is not just food waste. The greenhouse gas emission creating entity of food waste. It's also labor waste. People made that soup. People grew those vegetables, people transported them from point A to point B. So the waste has actually compounded so much. It's not just the physical soup that has to go to the landfill, which is like such a terrible outcome for food in the first place. We just crossed that mark into 8 billion people and it's been said for the last 25 years that we don't have a food problem. The planet produces enough food. We a food distribution problem, and even much more in the last 10 years, we've started to realize we have a food waste problem. We are taking food that could be feeding people and we are putting it into the landfill where it's just creating green gases and creating a worse and worse climate situation. So not as exciting as going into MJ Bicon, but I thought it was really cool. It really combines a lot of the interests that I've been developing over the past few years. I'm from the world of agriculture and farm management and I didn't think that machine learning and computer vision were gonna be a part of my career, ever. But just over the last few years I've just started to see how that dispassionate eye of the computer saying like, oh, I just saw that you threw away, you know, 37 cents worth of soup. Not only that, but you've thrown away that 37 cents worth of soup. How many times over how many days did it added up to be $50,000 worth of soup? And so like, yeah, nobody cares when it's 37 cents, but when it's $50,000, all of a sudden you're like, wait a minute, why don't we just put less soup into the bowl?

[00:15:18] Merril: Or if there's that much of it going in there, clearly they don't like it and it needs to go away.

[00:15:24] Rhiannon: Exactly. Yeah. So it was, it was really, one of the things that I always feel like you can tell when you're on your path when your streams start to converge and like I'm in this moment, as we've talked about in our own business development conversations, where a lot of my streams are converging, where the worlds of machine learning and computer vision and quality management and helping entrepreneurs build the future that they want are all really just coming together into these moments. And I feel really well aligned on my personal path. So Merril, do you also feel well aligned on your personal path right now?

[00:16:03] Merril: Oh, yeah. Because we have such deep conversations around this. People think, oh, oftentimes, you know, where am I in my partnerships and my relationships with my business associates? And one of the things that for us and and our evolution over these years together is the having some of these bigger conversations about what do we personally want and how does that transfer into the type of work we want to be doing? And you just really tied this conversation together with the theme that we want to be doing over the next several months with our leaders. And that is one of the things that we often hear about is data metrics and technology and actual people doing the work day in and day out. And you just gave such a clear example of how they interact with each other so clearly. And that the journey from point A to the consumer purchase, it's extremely large. Doesn't matter what service you're creating, whether it's a food product or it's a, you know, you're an insurance agent. Whatever you do, these things are continual and they're evolving and we have tools. We have all these great tools, but if you don't know how to use them, if you don't know how to link them to your actual work, to your actual business and to your actual life, then you're not getting the full benefit of all the things that are possible. And so that is a great way to think about this. And , the soup is such a perfect journey of explaining that. Right. I got so excited because these are the kinds of conversations, these are kind of the people we're gonna be talking to over the next several months and it just, it tells that story, right? And so when I mentioned what's the economic world that we're in and why is it so tenuous right now? And it's because of these same things universally when we talk about where does the source of some product come from and what is it really cost to get it into the marketplace and replicate that, or choose not to, but how that each piece of that, that ripple, I always like to use, you know, the stone in the water because it's so much bigger. And so one of those things that we see that's hurting things now is the cheap cost of food, and to keep using food as example, it's not just, the water, the labor resources to grow something, but then you have to process it. Then it needs to go from that first process into the next point of distribution, into the next point of distribution, and all of those things continually add up. But if you don't equate it from the beginning and you're only worried about the profit on the end, then that's where we see these broken economic systems that are affecting us worldwide.

[00:18:55] Rhiannon: Yeah. Maybe this is a little bit off topic, but it may brought this to my mind. The previous world before the pandemic, a lot of businesses were focusing on being as lean as they could be, you know, not carrying excess inventory, shrinking their warehouse footprint as small as possible. We were contracting from earlier, like earlier incarnations of the business world where having a big, fully stocked warehouse was kind of that status symbol. Like you have all of this available inventory to go out into the market and then the financial market had shifted and cash was so much more valuable in hand than already pre-con converted into product. And so people were holding their cash longer and not building inventory. And so the last two years with the major supply chain disruptions across all industries, I think a lot of people have learned a new balancing act where yes, cash is, like I worked with a guy who's like, cash is king. You're never gonna find a better use for cash than just letting it be cash because you could always use cash for whatever you need in the next moment. And I'm like, yes, you're right. Cash is king, but you know what else? If you've already bought some inventory and you have it on hand later when there's no amount of cash in the world that can get a boat through the Suez Canal, you are gonna be the only one with inventory and no one else is. So you know, like that sunny skies disaster planning was different. Always having cash because cash could solve every problem was a different world that we used to live in versus now where, yeah, the happy path, we always wanna be on the happy path, but now people, you know, when we work with people, we are always encouraging them, like what happens if you miss one shipment? Are you completely out of business if you miss one delivery of your key ingredient, and how do you insulate yourself against the problems and the rest of the supply chain? So that really just came to my mind when you were talking about that aspect of resiliency, which is, of course, our personal number one topic over the last two years was just about resiliency and infusing resiliency into the people we work with. Showcasing people who have exhibited resiliency. That's our keyword that's there on our vision board. Resiliency.

[00:21:27] Merril: And that's where people are, right? We've moved through so many different emotions during this time, and now that we're starting to get out and about again and be in front of people we've also learned that guess what? Not everything needs to be in person too. We can get lots of things done the way you and I are conversing right now. I mean, we had gone, I don't know, over a year before we were face to face. I can't even remember, and we only live, you know, 50 miles away from each other.

[00:21:58] Merril: Resiliency is our main theme because it really takes into so many different aspects. And so I love that we're exploring these conversations and I look forward to the leaders that we're going to be having on that come from so many varied backgrounds and industries to talk about this subject.

[00:22:20] Rhiannon: This is a good point for me to put on my I also produce this show hat . If you are interested in having a conversation with Merril live here on LinkedIn, live on TraceTrust live, please feel free to reach out to either one of us on our LinkedIn. We also are accepting connection requests if you would like to connect with us or you could email us at [email protected]. And you can let us know if we're not already connected, how you would love to connect with us. Typically we'd like to meet you first before we put you live on on the broadcast tier. So let's meet up, get to know each other a little bit, and we would love to have that conversation with you. Again, really the purpose of this is for us to help these conversations get a wider audience because we really believe that the work that everyone is doing to build a more resilient future for our industry and for everyone is important information that deserves to be shared. All right, Merril, any parting words for our watchers?

[00:23:26] Merril: One, I I'm very excited that we've created this space because these conversations have always been foundational. They've been incredibly honest and we see the results when we are in conversation with others so that when we can bring this forward, we really feel like that is going to assist other people as they navigate what their future is, what their personal future, what their company's future is, what their products future is. And I think that they're going to find that we will be touching on things that aren't necessarily readily available that you don't always think of. And I think that we thread things together because of the way we look at it that oftentimes give people the moment to take a pause and go, wait a second. Now that's a way to think about something that I did't consider. And we see that a lot and that's the work that we do. We don't just make stuff .

[00:24:25] Rhiannon: No, we we prefer to help you make stuff.

[00:24:29] Merril: Yes.

[00:24:29] Rhiannon: How can folks find you, Merril?

[00:24:32] Merril: So obviously, here at LinkedIn both through our TraceTrust and through Merril Gilbert, you can also reach me at Merril, m e r r i l, @tracetrust.com. There are many different ways in which we interact.

[00:24:50] Rhiannon: Well, it has been a great first LinkedIn live. This was fun for me as our producer. New skill I could put there on my resume. Now I am a LinkedIn live broadcast producer. Love talking with you as always, Merril and looking forward to sitting back in the producer's chair for the next conversation, which will be in one month. We are doing this on the third Friday of every month. So next month will be on Friday, December 16th. And look in our LinkedIn feeds for the announcement on who that guest will be. Looking forward to talking to everyone then. Bye.

[00:25:27] Merril: Thank you. Goodbye.