Imagine the good old days and all the perks that came with a 30+ year corporate career; including a regular paycheck, savings, a solid retirement plan and someone to share it with… not to mention bi-weekly massages. Oh, and I forgot to mention, your masseuse is a canna-preneur who became one of the first Medical Marijuana Infused Product Manufacturer (MIP) licensees in Colorado’s new medical marijuana business in 2009.
That is a brief intro to Peggy Moore, CEO of Love’s Oven, a Colorado-based MMIPM that is currently operating in its seventh year after generating over $2.5 million in revenue in 2015 from the baked goods that it distributes throughout the state to over 300 medical and recreational dispensaries.
Moore’s entry into the new industry really did begin with her massage therapist who was baking goods out of her house back in the early days of the industry. As rules began to take shape, the business required investment to build a dedicated commercial kitchen that complied with the evolving regulations. It was during one of Peggy’s bi-weekly massages that she was asked by her massage therapist to help value the start-up business.
Peggy and her husband, a home builder who used marijuana to help with back pain from the physically demanding years of the trade, had a conversation about the business and decided it would be a good investment. They became financial partners for the business and financed the lease of a 1,700 sq. ft. office/commercial space in 2011 that would eventually become a bona-fide, compliant commercial MIP kitchen operating by the summer of 2012.
As Amendment 64 was making its way onto the ballot in 2012 and was ultimately approved by 55% of the state’s voters, Peggy and her partner (a mother of three who had much on her plate!) negotiated a buyout and she took control of the company. While maintaining her day job, Peggy hired a baker and got to work with running Love’s Oven.
In August 2013, Peggy applied for and was approved for (at the time) the only recreational baked goods manufacturing license issued by the state. The company spent the next several months preparing for January 1, 2014, the first day that legal adult-use marijuana would be available in the US and ended the year with $50,000 in annual revenues.
Love’s Oven experienced a “Holy Toledo” moment in January 2014 by matching the previous year’s revenue total. They could have doubled that if they had the capacity to produce more. With only eight employees at the time, they couldn’t keep up with the recreational market demand that the 25 medical and recreational dispensaries that carried their products placed on their production capabilities. During the first 6 months of 2014, Peggy told CBE that they fielded daily calls to bring everything they have to their customers and they sold out of products every day.
In the early days, branding and packaging was an afterthought. Love’s Oven baked goods were initially distributed in clear clamshell child resistant packages and there was only one supplier that produced American Society for Testing and Materials (ASTM) standard, MIP compliant bags, PacTech. It was also in early 2014 that a couple of highly publicized events including the death of an under-aged cannabis consumer who jumped to his death from a balcony and the infamous Maureen Dowd edible eating experiment that went awry occurred. These events pressured regulators to place new packaging and dose identification markers on edibles. These regulatory changes forced bakers like Love’s Oven to create 10mg cookies.
During this growth period, Love’s Oven leased an 8,500 sq. ft. facility in Denver and invested in a build out that would create a 2,000 sq. ft. extraction lab, a 2,500 packaging and staging area to distribute each day’s baked goods, a larger kitchen, and a conference room. They financed the build-out out of their new expanded revenue base and began staffing to meet demand.
One last curve ball that came their way involved the previous landlord who decided to end the original lease two months early. The City and State regulators allowed Love’s Oven to move into the conference room at the new facility. Peggy made a crucial decision at that point and decided to cover the cost of operating her business and the staff of 20-25 people by dipping into her 401k to pay all of their wages for the next two months until the new facility was complete. Regardless of this setback, Love’s Oven finished 2014 with $1.2 million in sales and an ever-expanding network of dispensaries carrying the products in Colorado.
Fortunately for Peggy, the company had key personnel in place that played a major role in surviving the early year challenges that the new industry presented. Her son, Josh Nettles, joined the company in 2012 as head of marketing and sales and led the efforts to create a consistent and compliant product mix and distribution expansion that now includes over 320 total locations in Colorado.
Her other son, Walter Nettles—the family’s resident cannabis expert, joined Love’s Oven in late-2013 before the business took off. He led the company’s automation efforts and was key in designing the cannabis butter extraction process that brings technology from the cider processing business to create canna-butter, the key ingredient in their baked goods.
Rounding out the family team is Peggy’s younger sister, Teresa Walz, who is the company’s, Chief Financial Officer. Today, Love’s Oven has a staff of over 30. The team continued its remarkable growth with 2015 revenues doubling to $2.5 million. Peggy tells me that they expect to do more than $4 million this year.
In 2016, the company is expanding its product line to include waxes, oils, shatters and chocolates and candies. They formed an alliance with a Colorado dispensary owner who is planning to open a dispensary in Nevada and has an eye on the California market. Peggy, ever the pragmatist, believes in dating before getting married; so this year represents a key moment in the family business’s future. Time will tell if Love’s Oven and their “All in the Family” management team adds additional members and increases its footprint in new markets.
Company Name: Love’s Oven, LLC
Year Founded: 2009 (4th Medical Marijuana Business License Issued in Colorado)
Ownership structure/operating entities: Peggy Moore is the CEO and primary
owner of Love’s Oven. There are 3 minority share owners, including Peggy’s sister and two of her sons.
Peggy Moore – Chief Executive Officer
Joshua Nettles – Chief Marketing Officer
Walter Nettles – Chief Operating Officer
Teresa Walz – Chief Financial Officer
Hope Mathews – Executive Chef
Joshua Flores – Packaging Manager
Jada Burgess – Fulfillment Manager
Headquarters: Denver, CO
Industry Segment: Infused Products Manufacturer of Edibles and Concentrates
Current Markets/States Served: Colorado
Current Number of employees: 34
Market Strategy/Goal: Continue to maximize market share for infused products in Colorado and expand to other states—one new state being targeted in 2016 and at least two more in 2017.
2014 Revenues: $1.2M
2015 Revenues: $2.5M
2016 Projected Revenues: $4.1M
$3.6M – Infused edible products
$500K – Concentrates (manufacturing just began)
Expansion Plans: Adding infused chocolates and candies to the product mix in late-2016 to increase market share and dispensary penetration. Current facility supports growth for the foreseeable future.
Financing: Self-financed to date.