AACE INTERVIEW: John Yang of TREEZ
John Yang of TREEZ
in 2016 that I felt a generational opportunity to modernize the entire cannabis industry at a time when mainstream software providers were not servicing the cannabis industry.
Go way back, all the way back to 2015, when I first entered the cannabis community with StockPot Images (the only cannabis, hemp, and psilocybin stock imagery company in the world); it was very difficult to curate images because of the illegality and scarcity of cultivators willing to allow us to document their grows. Also, another scarcity was the lack of visible Asian Americans in the cannabis industry; then, I heard about Treez and John Yang (co-founder, Shareef El-Sissi). You could say interviewing John Yang was like Ahab landing Moby Dick, he was swamped launching his Point of Sales system, so I understood he couldn’t stop to do an interview. Now seven later, and with a lot of Ahab patience, I have landed the John Yang interview, and like the quote we often hear, “good things come to those who wait,” we are honored to have John here on AACE in the May month of Asian American Heritage celebrations.
2016 was a big year for cannabis with the launch of many new POS systems for retailers. However, it must have been brewing in your mind for a few years before 2016; what was your first idea to enter the cannabis industry? Was it a POS or something else?
● 2016 was a big year for cannabis, but entering the space was never on my mind until that year. I grew up around tech in the late ’90s, my father owned a computer shop, so I would spend a lot of my time there learning how the internet works, exploring the world of coding, and how it fundamentally changed how businesses operated workflows forever. Although the dot.com boom crashed around this time, it gave birth to modern software as services (saas) also known as the software subscription model and ecommerce. After college, I worked as a consultant for Fortune 500 companies, until I was introduced to the cannabis industry. I met my now co-founder, Shareef El-Sissi who was working in the cannabis space as a retailer at the time, and I saw how he did not have a system in place that runs his business smoothly and efficiently. It was then in 2016 that I felt a generational opportunity to modernize the entire cannabis industry at a time when mainstream software providers were not servicing the cannabis industry. Shareef and I took the opportunity to build a system that would accelerate the growth of his dispensary but also the global cannabis industry.
What is the biggest issue New York retailers have right now?
● The biggest issue New York retailers are experiencing is the slowdown of retail licensing approvals, which impact not only cultivators who are sitting on a mountain of inventory they are unable to move, but also eager adult-use consumers who continue to purchase cannabis from the black market. The continued prevalence of the illicit market impacts licensed retailers' ability to conduct business and become profitable. Although the illicit market will never cease to exist, NY’s current situation is exacerbating the problem with the rise of illicit retail storefronts.
● In addition, another issue plaguing New York retailers is limited supply and higher-than-expected prices. Being in the industry for a little over 6 years, I have seen several state cannabis markets open, thrive, and stumble in the wake of adult-use cannabis becoming available. NY retailers are dealing with a scarcity issue due to the lack of legal dispensaries and licensed products in the state. However, once more dispensaries open and more legally made products become available, retailers will have the ability to curate their selections, enabling a better offering to consumers.
● The backlog and confusion in New York was born out of a desire and promise to create a more equitable cannabis market, but it has led to the slowdown of dispensary openings due to the Dormitory Authority of the State of New York’s (DASNY) challenges in raising startup funding, securing and renovating suitable real estate, and limited state-designated vendors that Conditional Adult-Use Retail Dispensary (CAURD) applicants must use in order to get up and running. The state, the CAURD, and its partners are working together to accelerate the licensing process but one of the biggest issues still facing the industry today is the lack of continuous educational and training resources for new business owners beyond opening day. Treez has partnered with the CAURD to provide educational training and resources on how to run a successful retail dispensary through the use of data and analytics and digital payment technology as well as, how to maximize profit margins and operational efficiencies, which is needed for not only opening day but for years to come.
Treez has one of the best API systems for retailers to work with other software retailers need; why is that? (Staff? Foresight in needs? Ease of use? Partnerships?)
● What sets our API system apart is that we are not a one-stop shop, which might resonate with new operators for ease of use, however, it’s not built to scale as retailers continue to grow. Instead, we offer an open API platform that lets retail partners keep the solutions that work for them or integrate with the best-of-breed e-commerce, delivery, CRM, cashless payments, and data analytics solutions across our partner ecosystems. Also, the data gathered from customer purchases is not sold to competing dispensaries but instead used to help our retail partner make informed marketing decisions based on our customer spending habits. Our responsibility is to the retailer and providing them with not only point-of-sale services but also the most modern and up-to-date saas solutions to help their businesses grow.
Do you see federal legislation on banking happening in the next presidential cycle?
● SAFE Banking has gained a lot of momentum over the last several years and it will continue to do so. The Treez team is hopeful and is looking forward to the day SAFE Banking passes. However, it would be premature to predict any movement in federal legalization within the next presidential cycle. In recent news, U.S. lawmakers filed a bipartisan bill to prepare for federal cannabis legalization. The Preparing Regulators Effectively for a Post-Prohibition Adult Use Regulated Environment (PREPARE) Act, if passed would bring together a group of experts to examine the cannabis industry, resulting in a report within 12 months providing lawmakers with the information needed to establish a comprehensive federal regulatory system. Although it would not have an immediate impact on the industry, it is a positive step toward federal legalization.
How do you think retailers can be more efficient with streamlining their operating software? (From Alpine IG, Happy Cabbage, Springbig, etc.)
● Picking the right point-of-sale provider will set the foundation for operating successful retail. With a trusted POS provider, retailers will have insight into data to make informed decisions for the growth of the business. Once retailers have a core foundation in place, an open API platform will allow retailers to integrate with the best-of-breed technology solutions to build the perfect tech stack. An open API platform can reduce overhead and labor costs, facilitate a best-in-class consumer experience, and increase sales and efficiency. Be wary of a sales pitch that promises to address every single problem by keeping you inside a closed ecosystem. Despite what might be promised, no one company can create and maintain products that are the best in every category. Instead of falling for one-stop-shop claims, the best advice is to consider each potential system against your business plan and evaluate it for its overall capabilities and performance.
● We recommend looking for tools that work around the clock. High–grade business technology works seamlessly, does not stall or stop you from transacting, and does not interfere with your customer experience. Best-in-class tools provide consumer satisfaction with personalization and insights capabilities.
● Your operating software should always keep you compliant and be able to respond to rapid regulatory changes. Data is what powers today’s business decisions, the best in technology tools offer accessible insights, not another report to compile, export, and forget.
● Lastly, your software systems should be built to grow and be able to scale with your business.
With retail reeling from the post-Covid days in sales, how does Treez help retailers keep the lights on? (Many stores are on notice with distributors with COD or no sales at all)
● Treez provides invaluable data, software capabilities, and resources to help retailers succeed in times of economic downturns. A couple of ways we do this is by increasing revenue with a focus on driving the average order value. We do this by providing data on the consumer looking at their favorite product purchases, history, and habits. We ensure products that resonate with consumers are always in stock through our inventory management capabilities. As a retailer, when you offer consumers a smart mix of cannabis products, you will generate more sales, and increase your margins. It is paramount for retailers to zero in on restocking the products that customers are looking for before they run out. We recommend using key metrics like sellable velocity that shows units sold per day on days in which there were units available in sellable inventory locations. By focusing on that metric, you can then prioritize the right SKUs and products to replenish and reduce inventory overhead. With Retail Analytics, you can harness the power of the numbers you encounter every day to make wise business choices, increase sales and customer loyalty, and improve your overall strategy. You can stock your shelves with the right product, in the right assortment, and purchase that product from suppliers at the right price. In addition, we empower stakeholders, which include everyone from the budtender to executives with data to improve sales performance, reduce biases and increase margins.
● Our cashless payment solutions help retailers succeed by increasing your average order value, generating higher sales overall, and reducing your reliance on cash. Data shows that about 40% of your potential customers might choose to drive the short distance to a dispensary that takes cards rather than carry cash. The most successful dispensaries provide their customers with multiple avenues for secure, convenient, integrated cashless payment solutions. As a TreezPay client, you will see an average increase in monthly revenue by 25% or more, a reduction in on-site cash by up to 30%, and a reduction in your average ticket time by up to 15%.
If you had a strain named after Treez what would it be? (And no, your answer cannot be Treez….)
● YG
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