All told, Medicine Man Farms and Truck Stop would employ 60 to 70 people. At the greenhouse site, there would be heavy security, armored cars transporting product daily to Denver and an outdoor fire pit for employee parties.
All did not go as planned.
As Medicine Man considered Pueblo County, the city of Aurora was laying the groundwork for recreational sales in Colorado’s third-largest city.
It doesn’t take a business degree to know which market is more lucrative. And by summer, Medicine Man was sitting on 7,000 pounds of excess marijuana after doubling the size of its grow warehouse in Denver.
Pueblo West pot shop owner: “80 percent of our customers come from out of state”
Selling it wholesale is not as profitable and — as Andy points out — helps supply Medicine Man’s competitors.
The business needed a second store.
Aurora would be the next frontier.
The truck stop idea was abandoned. The greenhouse was put on hold. Medicine Man is no longer working with Toews.
“He got impatient,” Andy says, “which I understand.”
Toews says he purchased the Pueblo County land and is moving forward with another partner on a wholesale greenhouse grow.
“I see (Medicine Man) as one of the top-tier companies in this thing, and we’ve always had a great relationship with those guys,” Toews says. “It’s just they are prioritizing and we need to keep going.”
There were no guarantees in Aurora. The city said it would accept 24 recreational stores. Competition would be fierce to gain a toehold in a city that prohibits medical marijuana dispensaries. To even get consideration, Medicine Man would need to lock up property.
The Williamses hired three real estate agents to hunt for a location. None succeeded. So Andy and Sally Vander Meer — Medicine Man’s controller and Pete and Andy’s sister — started cold-calling property owners.
They reached one, the owner of a building that housed an Arby’s, then a Mexican restaurant, at South Havana Street and East Jewell Avenue.
“I’ve told 30 of you guys no,” the owner said, according to Andy.
But the owner admitted that he had been thinking about it. Andy says there was no doubt the limited liability company that, records show, bought the property last year was well-positioned to extract handsome terms.
“God bless him for wanting to make money,” Andy says.
On the last possible day, Medicine Man signed a lease, beating out others vying for the property. Then it applied to the city.
“We thought, ‘Are we being so cocky that we think we are going to get this license?’ ” Sally says. “What’s our backup plan?’ We had no backup plan.”
In late August, Medicine Man learned it was among the chosen.
Andy says the company has since spent $650,000 on the property, including repairing the parking lot, replacing a sewer line, decking out the exterior in reclaimed barn wood and installing that bulletproof glass. The alternative was bars on the windows.
The glass is frosted for now — blinds are on order — because, under city rules, marijuana cannot be visible from the street.
“There are going to be 21 beautiful buildings in the city of Aurora,” Andy says. “And they’re all going to be selling marijuana.”
Revenue projections
For running a company that looks to Costco as its model, you can’t get much less corporate than disclosing revenue projections and sharing details about your divorce, hospitalizations due to stress-related fainting spells and family fights, as Andy has.
Tripp Keber, the owner of marijuana-infused products company Dixie Elixirs, said he admires the family bonds that hold Medicine Man together but can’t believe they talk so much.
“It’s his business,” Keber said. “But on the front page of The Denver Post, you had your photographer taking pictures of duffel bags full of cash at their business. I have concern that someone is not knocking on that door but knocking that door down.”
The Williamses had a goal in mind — to show the lengths marijuana companies must go to find banks willing to take their business.
After paying state taxes and contractors with cash over the past few months, Sally says Medicine Man is close to opening a new account with a banker in Pueblo willing to take the risk.
Map: Colorado recreational marijuana shops and medical dispensaries
A willingness to bare all, financially and personally, has worked for Medicine Man, said Troy Dayton, CEO of the ArcView Group. Dayton’s firm, which connects investors with marijuana startups, has spotlighted Medicine Man in materials touting the industry.
“I consider it to be a great asset, to be that vulnerable,” Dayton said. “Especially for an industry that is coming out of the shadows and into the light, we need leaders who are really willing to be fully transparent.”
Few Colorado marijuana companies court publicity as Medicine Man does. And no one is a bigger believer in the power of exposure than Pete Williams, a high school dropout turned master marijuana grower who dresses up like Willy Wonka to hand out joints at the Cannabis Cup.
Along with a role in the MSNBC series “Pot Barons,” Medicine Man is to star in a planned reality show on the truTV cable network.
“Everyone else is hush-hush,” Pete says. “We scream from the top of the building. That is what has gotten us called the biggest and the best. There may be people out there way bigger and way better than us. But they are being so secretive, they are going to miss the train when it comes.”
The train may have arrived.
Three investment groups recently approached Medicine Man seeking to buy a majority stake. The Williamses settled on one — they won’t say who is involved — and are closing in on a deal. Another investor expressed interest in a buyout earlier this year, but negotiations broke down.
The plan calls for Andy and Pete retaining minority ownership and staying on for at least a year to help shape the company.
“We are the biggest golden egg right now,” Pete says. “If we don’t sell, they’ll buy our biggest competitor and put the power of that company behind our competitor and then we’ll be outpaced. So it’s a matter of you’ve got to know when to hold them and know when to fold them.”
Weed on TV
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Some advisers, including Keber of Dixie Elixirs, believe the family should wait until the company is worth more.
“I don’t need my company to be worth $1 billion before I sell it,” Andy says. “I’m fine taking money that will supply me with a good living for the rest of my life. I don’t need enough to last three or four lives.”
Andy continues to build Medicine Man’s consulting business, Medicine Man Technologies. The company has done work in Illinois, New York, Florida, Alaska, Oregon, Nevada and Arizona. By summer, Andy plans to take the business public as an over-the-counter stock.
Selling the main business is attractive for a number of reasons. Andy and Pete would give up control but retain influence, at least initially. The greater investment would, in theory, drive production costs and customer prices down while keeping profits high.
There would be no more hustling for investments, no more mortgaging the future, not as many never-ending days and long nights. This would mark the beginning of a new chapter in Colorado’s marijuana story — the original risk-takers giving way to deeper-pocketed investors who may or may not be of like mind.
“We really are pioneers,” Sally says. “I knew that was true. But then you see the number of people reaching out to me as an expert in this area, and it’s like, ‘Wait a minute, I am an expert.’ This is the great American industry, and we are at the forefront with a lot of cool people.”
Eric Gorski: 303-954-1971, egorski@denverpost.com or twitter.com/egorski
More from the series
Part I: Family-owned pot shop in Denver seeks to become national player
Part II: Family bonds holding marijuana business together showing strains
Part III: Reluctance of banks leaves pot shops looking for secure practices
