The Godfather’s Family Business: New Mexicann

One of the things I like about New Yorkers (that includes residents of the five boroughs and the surrounding commuter population) is that they are very direct, they tell it like they see it, and they tend to be pretty thick skinned. Jokes and criticism as well as derogatory remarks tend to bounce right off the good natured and not so good natured one’s backs, and its sort of a test to see if you are worth their while! I just call New York home after spending my first 14 years, and 15 years of my publishing career, in the Big Apple.

Len Goodman, founder of New Mexicann along with his wife and partner Susan, was one of the first winners of the state’s Producer licenses (2009) and now operates one of the largest operations as full Medical Retail operator, Cultivator and Processor headquartered in Santa Fe, New Mexico.  Originally from Brooklyn, he moved to the state back in the late 60’s, and after a short stint back east, settled permanently in Santa Se in 1971. He was his own man, a civil rights activist, highly educated with a good sense of humor, and an adventurer. The New Mexican high desert and hippy and artistic community around Santa Fe, the state capital, was a good fit for him and his artist first wife. Len was from the counter culture generation where pot was just there in his life. He never thought too much about it but consumed it recreationally.

He was not shy about creating work opportunities, and Len and his wife parlayed her work with decorative craft tiles into a full-time job. They designed and manufactured hand crafted decorative tiles and murals with their own retail stores in Santa Fe, New Orleans and Scottsdale. He sold the business in 1977 only to buy it back in 1981 and expanded to Boston and Washington DC, before eventually selling the retail stores. Over the years, Len saw the customer based evolve and change from wanting crafted American Arts for gifts and decorative purposes, to architectural design for tile based murals for non-profits and other businesses.

During those years between operating the tile company, Len also started doing business appraisals, brokerage and consulting to generate additional income, and he also produced shows and music events. His mantra was to look for things that he could be passionate about doing, learn it and do it well ,and in early 2009, his antenna was up as he was again looking for just that type of gig. One day he picked up a copy of the local Santa Fe Reporter (an artsy newspaper) during a visit to the john and read an article about the first license issued in New Mexico for medical marijuana. After several trips to the potty, Len began doing research about New Mexico’s fledgling regulated medical marijuana laws (in 2007, New Mexico was the first state to pass a bill regulating the production and distribution of cannabis by the Department of Health to provide to registered patients. There was just one producer in New Mexico,(ironically located in Santa Fe, servicing 600 patients across the state (the original regulations were established by the Advisory Board and didn’t allow for a retail location).

In the meantime, Len used the skill set he had built over the previous 30 years and learned how to grow by getting input from friends. He began studying the state licensing procedures and evolving regulations and started a business plan complete with a cost analysis (which he admits he terribly underestimated!) before applying for a producer’s license with plans to distribute to registered patients statewide. After getting denied by FedEx and UPS, he set up a relationship with an in-state parcel delivery company and astutely decided to maintain a local office in Santa Fe to educate and sign-up patients, to handle local orders for pick-up, and to run their business in his application. He needed at least three registered patients on his board and found willing participants from a Craigslist ad (many of whom were looking for relief from PTSD and pain), and felt that he also had not only a great business opportunity but a cause that he would enjoy supporting.

New Mexicann received a license in late 2009 when Democratic Gov. Bill Richardson was overseeing the new state regulated model before the current, anti- cannabis Republican administration of current Gov. Susan Martinez (a former DEA prosecutor) won the election a year later. After the election In November 2010, Richardson ordered the Sec. of Health to issue 21 new Licenses to bring the total up from the five that then existed to that protect the Medical Cannabis Program and its growing Patient base knowing that the new administration would try to kill the statute and the program before leaving office in January of 2010.

Len and Susan began growing in soil in 2010. Their first grow was allowed 95 plants and their team set-up a rotational system with a one month offset to be able to deal with anticipated monthly demand. They also set up separate rooms for the different strains that they would produce and Len became a regular at policy state policy meetings to lobby for an increased plant count. In light of registered patient count growth and lack of a large enough plant count to meet demand, the state raised the plant count to 150, and in 2015, raised it again to 450 per license.

By July 2010, New Mexicann realized it needed more space and they moved to a new office location in Santa Fe. What they didn’t know at the time was that phone and internet access at the new location would be delayed, so Len appealed to the state to allow patients to visit the office facility to walk-in and purchase rather than just pick-up pre-ordered cannabis, and fortunately, they approved his request. The original plan in the state did not allow for dispensaries , so Len’s fortuitous decision to include an office as part of the original license set a precedence that ultimately allowed for retail locations in the later amended regs.

Len’s advantage and market driven approach to serving patient needs allowed New Mexicann to grow to the largest revenue generator in the state until just recently when two operations in the much larger Albuquerque market have since surpassed their revenues ,which were $2.25 million by year-end 2014 That’s not bad for a self-financed family run business in Santa Fe, New Mexico. New MexiCann has since opened a second retail location in Taos, NM with a third set to open in Espanola, NM in the coming weeks and a fourth in Las Vegas, NM in late July. The Dept. of Health approved these satellite locations so that Medical Cannabis would be available to Patients in counties with no retail distribution. New MexiCann anticipates that its fourth quarter revenues will annualize to $4.5MM.

As a result of Len’s ability to get things done and changes to happen by working invisibly behind the scene and to be the person NM Producers went to for guidance, support and approval, he earned the nickname and became known as “The Godfather” amongst New Mexico’s Medical Cannabis Producers.

The management team consists of Len and Susan Goodman, who runs the administrative and accounting side of the business;  Susan’s daughter Jennifer Gonzales (master gardener) and son-in-law Carlos Gonzaless,  who runs the cultivation operation and facility; and his son Eli Goodman who handles distribution and manufacturing of their home grown line of edible and infused products. They received one of the first manufacturer licenses in New Mexico to produce edibles from their own commercial kitchen (following FDA guidelines) where they can only produce infused goods.

As a result of the state shortfall of 3 million grams in 2014 (needed to meet demand), the state agreed to allow New Mexicann to get another cultivation site and they are currently expanding to increase from 150 to 450 plants, keeping the current 7,000 sf. warehouse grow while adding a 6,000 sf. all season greenhouse, and, a 4,500 sf cold frame hoop house. They have also received approval for the three additional retail stores that are in process, with possible additional stores to enter into the greater Albuquerque market in 2016.

Len and the family have financed the entire operation out of pocket and through operations, and will continue to do so as they continue to pursue their mission to provide access to patients in all counties in north central New Mexico via satellite retail locations, and to become recognized as THE state of New Mexico medical (and at some point in the future, recreation) cannabis brand. Not bad for a few years work for “The Godfather” and his family of consiglieres!

Company Name: New Mexicann

Year Founded: November 2009

Ownership Structure: NonProfit New Mexico Corporation

Management Team: Len Goodman, Executive Director; Susan Goodman, Administrative/Accounting Director; Carlos Gonzales, Cultivation/Facilities Director; Eli Goodman, Distribution/Manufacturing Director.

Headquarters: 1592 San Mateo Lane, Santa Fe, New Mexico

Website: http://newmexicann.org/

Industry Segment/Category: Medical Cultivator/Manufacture/Retailer

Current Markets/States Served: New Mexico

Current Number of employees: 36

Market Strategy/Goal: To provide access to patients in all counties in north central New Mexico via satellite retail locations. To become recognized as THE State of New Mexico brand.

# Of Potential Customers: Current patient count for New Mexico is 14,500 with a current growth rate estimated to be 3,000 annually With new rule change tripling their plant count, allowing multiple retail outlets per license, and the easing of difficulties in obtaining New Mexico MCP registry care, it is anticipated that patient base will reach 25,000 within 30 months – more if new conditions are added that have high potential for registration (e.g. Diabetes, dementia/Alzheimer’s).

2014 Revenues: $2.25 million. Current `2015 annualized = $3.25 million. Current Retail Product Mix: Flower, Pre-rolls, Concentrates (BHO, RSO, Vape Oil, Kief, pressed Kief), tinctures, spray, salves, edibles (baked goods, candies, chocolates, drink), suppositories

Expansion Plans: Increase from 150 to 450 plants; keep current 7,000 sq.ft. Warehouse grow but add 6,000 sq.ft. all season greenhouse; 4,500 sq.ft. cold frame hoop house; two additional stores approved and in process; two additional stores approved by year end; entrance into greater Albuquerque market in 2016, plus implementation of late 2015 approved stores; approval for four (4) additional satellite locations.

Financing strategy: To date from operations and seed capital. Original seed money, $75,000 from loan by Len and Susan Goodman . Additional private local loans totaling $250,000 ($175,000 paid back). Over $750,000 in capital provided by operating profits. If needed, local private loans for additional capital needs.