This is the second cover story we’ve done on the Cannabis Industry. The first profiled Bob Groesbeck an attorney and businessman who dared to navigate the regulatory waters to enter what is now considered the fastest growing industry on our planet, so much so that state governments are embracing Cannabis at such unprecedented rates to satisfy their insatiable appetites for tax revenue.
The naysayers of the past have become the new disciples of the creditable for the industry, and PHD’s and MBA’s have replaced the Pot hippies. Yes, this new Marijuana industry’s credibility has soared to the heavens…sure it still has its detractors but its supporters count among Governors, Congressional members to United State Senators.
From a business prospective the changing of this paradigm has mesmerized us. A few short years ago, this industry was in the shadows and viewed as a criminal enterprise now its considered the utopia of change.
If history shows us anything, it takes creative genius to change the landscape of how an industry is perceived, and like any revolution the Cannabis Industry is no different. The American influence on changing of paradigms from the industrial age of 1760 to the technological age of the 1950’s are just two examples of how the American Genius has changed the world.
Meet Larry Scheffler, like the Vegas mavericks before him, Stephen Wynn, Bill Weidner and Michael Gaughan. Scheffler is an American Entrepreneur who is hell bent on changing the paradigm and the perception on how the Cannabis Industry is viewed throughout world.
Scheffler is often compared to Wynn because of his creative prowess, Weidner because of organizational skills and Gaughan for his marketing genius. When Wynn created the Mirage in 1989 people laughed at him saying it would be impossible to generate a million dollars a day in revenue, he proved everyone wrong.
When Weidner announced the1.3 billion dollar Venetian resort everyone said he didn’t have the managerial depth to pull off the venture, Weidner used his organizational skills and put together one of best managerial teams in gaming history lead by, Rob Goldstein, Brad Stone and David Friedman.
And when the quiet, giant of the strip Michael Gaughan, who is known for his marketing genius, changed the Casino Industry by understanding he was in the Adult Day Care business, Gaughan became one of the most successful gaming entrepreneurs in the industry, hell it was Gaughan who coined the phrase “Cash is King” and it took his competitors years to realize what impact that phrase had on their marketing programs.
The similarity of all these men and Scheffler gives him a leg up in an industry that is too young to claim success, but Schefflers’ box of tools will ensure his company is in the forefront.
Recently, we sat down with Scheffler and asked him to share his thoughts on the industry, how he became involved, what the future of the industry was going to bring and where he thought his company would be in five years.
How did you come up with the name, “Planet 13”?
Larry: I grew up Barnesville Minnesota, I had just finished high school, and was going into the Air Force, but I was still working at the local gas station, I got offered my first Marijuana cigarette from a friend of mine, who just got back from California. If you bought the joint, which I did, he gave you a sticker with a 13 on it.
He said, “Larry, put it on your dad’s station wagon’s rear windshield, and all your buddies will think you’re cool, ’cause you smoking marijuana.”
I said, what’s the 13 mean?” He said, “It’s the 13th letter of the alphabet, the M. which stood for Marijuana. So when you drive around town, your buddies will say, “Hey, look at Larry, he’s smokes pot too” At Seventeen, it was cool to be in a secret society that your parents knew nothing about.
Let’s fast forward to 2015 where you entered the Medical Marijuana, there were 100’s of guys growing pot. When you started your integrated grow program and dispensary how did you think that you were going to be able to compete? You didn’t have any grow experience?
Larry: Yes, I have zero grow experience and my partner Bob has zero grow experience. So, we thought, “We’ll find a grower, it can’t be too hard.” We started interviewing growers it was either the seventh or eight who said, “hey dude, I can grow you some good shit, man.” I looked at Bob and said this guy is so stoned he can’t look me in the eyes. That point was frustrating us and we were thinking, “boy this is a lot harder than we thought.”
I’m sure you were concerned that you put all this money into this project and you didn’t have a grower. What did you do next?
I knew if we didn’t have a grower we had nothing, so we were very concerned and we knew nothing about growing, we were thinking we might have to pull out and not continue, and then I got a call from my son-in-law Bobby Bridges who is the manager on a paving crew in Las Vegas for the last 25 years, and he said, “hey, I’ve got a guy that wants to grow for you, he works for me at the paving company. I said, no offense Bobby, but all your guys are pretty rough and most of them are ex-cons. I said, “I don’t know if that will work because they’ll have to pass a background check. Bobby said, “oh I understand”.
Two weeks, later Bobby calls me back and say’s “Larry this guy won’t stop emailing me, will you please meet with him as a favor to me, so I can get him off my back?” I said, “Okay, have him come up to my house and we’ll meet with him. The next day Chris Wren knocks on my front door, I open the door and there stands a young man with a suit on, carrying a brief case, he’s clean-shaven, with a short haircut and has no tattoos. I said, “Who the hell are you?” He said, “I’m Chris, Bobby’s friend.” I said, “Are you telling me you work on a paving crew with Bobby? He say’s “Oh, no, I work in the laboratory, we supply the asphalt for Bobby’s jobs.”
I’m thinking, “Bobby you think you could’ve told me this two weeks ago.” So, I invite Chris into the house, he sits down and opens up his brief case, lays out all his wears, opens up one of his jars and the aroma filled the entire house, he says “this is my favorite flower, I named it after my daughter Chloe. I’ve been invited to the World Cannabis Cup in Amsterdam. By invitation only, it’s like the World Series…I’ve been working on Chloe for 10 years. It’s going to take first place.”
After we talked to him for a few hours about how he grows, what he knew, it just dazzled our minds how much this guy knew. After he left the house, Bob and I looked at each other and both said at the same time “I think we found our guy.” Within a month Chris turned into the third leg of our stool – Bob, Chris and myself. In fact, he’s so valuable to us; we gave him part of the company. He’s that valuable to us.
And it turned out, in 2015, Chris took first place in the World Cannabis Cup in Amsterdam with his Chloe Flower, just like he said he would.
You got the grow part of the company resolved, and you had the one strain Chloe. How many different stains are you growing now?
Larry: Chloe was just his favorite, in all Chris brought 19 varieties into the company at its formation. These are now exclusively sold at planet 13/Medizin.
All of the varieties were either found by me in seed or collected by me in clone form during my decade long tenure in the gray market. My father provided and introduction to and inspired me towards cannabis but no genetics were involved. That is an important distinction.
Fast-forward, your dispensary is now open, you’ve got your own strains, but as you said, you didn’t have them all. Do you buy from outside third parties and how do you control the consistency?
Larry: Consistency is the most important part, everything is done through testing and we all have to use independent labs, our customers usually want certain profiles, which our bud tenders test for and Chris test for; first they have the THC levels then it’s the flavor profiles they want. When we first started we were growing so much we were over supplying so, we actually were selling at wholesale for a short time and everybody wanted it, heck our competitors wanted it.
Then after nine months, we were selling everything that we grew and we had to start buying from outside sources and thank goodness for the independent lab testing, we would get samples from the people we wanted to buy from and we’d have Chris and our Bud tenders do the same test for THC and Flavor profiles. For the most part we got great product but sometimes we had to shake hands with the outside source and after testing go back and say we couldn’t use their product.
I’m proud to say that we have the most consistent product in the industry, and I credit Chris for that. As we do other acquisitions, Chris will maintain total control over all the grows, he’s an absolute genius. He and his team are the best! Steven Markel our head of extraction, again another genius whose expertise is in the extraction and vitamin field are in the planning stages for our expansion.
Speaking of the genius of Chris, tell us the story about Chris and the investment banker.
Larry: Well, lets just say Chris really knows his stuff. You think you’ve heard almost everything he knows, and there will be a question from out of left field, and Chris will know the answer. So he’s really good when he talks about something. We had an investment bank from California who wanted to invest, but he wanted to see the site. He asked, “What is the yield per plant or per square foot?” And Chris gave him an answer. The banker said “My guys in Canada are doing eight times that a month.” Well Chris goes, “That’s impossible.” The banker answers, “Well, I’m telling you, I know their numbers, and they’re doing eight times what you’re doing.” Chris said, “It is impossible. There is not a plant on this earth that can produce what you’re saying.”
Listening to both Chris and the banker I said, “Hold on, there’s got to be something wrong here, something is mixed up. Are those numbers Monthly?, Quarterly? Annually? What are we missing?” And the banker says, “Annually.” Chris says, “You said monthly.” “Ah, I’m sorry. I meant annually.” Chris goes, “Oh, okay. Well we do 30% over your Canadian partners.”
As we left Chris, the banker turned to me and said, “I’ll tell you what Larry, I’ve got a lot of respect for Chris. Not many people challenge me, I a big investor, I don’t get challenged a lot, Chris not only challenged me, he stood by his guns. He knew what he heard, and he knew he was right. I give him a lot of credit for that.”
How did you decide on the new site for Planet 13? You’re basically 500 yards from the front door of the Wynn Hotel, was that in your mind when you picked the site?
Larry: When we first started going for our license back in 2014, I knew we had to be outside the gaming corridor, to even be considered for licensing. I was on my computer, looking at the zoning areas and noticed there was a donut hole about 800 feet from where I started my first company way back in 1978. I took it as a sign of good luck. So I went on a drive and saw the old Shetakis Foodservice building was for sale. I inquired about the building with a Realtor and decided the eight million dollar asking price was way past our budget. So, I let it go by, Funny thing is that Reef Dispensary ended up buying my dream building. We ended up with a much smaller scale dispensary three miles away on the corner of Sunset and Decatur, which drove us crazy because we knew we had to be closer to the Las Vegas Strip, so we continued looking.
Why did you want to be so close to the Las Vegas Strip?
Larry: Because out of the 47 dispensaries in Southern Nevada, only Reef Dispensary was going after 55 million visitors coming to Las Vegas. The rest of us, those other 46 were fighting for the 2.3 million locals. And that fight, is a daily fight about being more cost conscious. Some guys will drive across town to save a buck on a gram; not realizing it costs them three or four dollars for gas. I knew if we were going to be the industry leader, we had to capture the tourist crowd, meaning folks that were on vacation and had a lot of discretionary income to spend. When someone is on vacation on the Las Vegas Strip, they don’t want to get into an Uber and drive 3 miles to purchase their party favors…That’s why I knew we had to be next to the Las Vegas Strip.
So I drove around the area again, I happened to see a sign that just got put up on the offices of the old Coors distributing building; which by happenstance, is literally across the street from my old location of business. I got out of the car and knocked on the door, and nobody answered, and nobody answered the phone when I called.
So I went to the next building and, knocked on the door, introduced myself and said, “Hey, do you know what’s going on with the building next door? I’m thinking of maybe renting it.”
“Oh yeah,” he said, “It’s actually, my lease and I’m going to give it up. I was using it for storage, but now downsizing. “I said Oh really?”
I asked him more and more questions and he wouldn’t give me the name of the landlord. I tried to search for the landlord, the building was listed as a trust in Arizona, and I couldn’t get a good phone number for the trust. So, I kept driving by the building until a couple days later I noticed his car wasn’t there, I went back inside, to the same receptionist that I was talking to a few days earlier and I said, “understand you guys are thinking of downsizing, I’d like to get on the list with the landlord. Do you have his address or number so I call him up to get on the list if you guys decide to move?”
She said “Oh yeah, it’s right here.” She gives me the name and the number, I call the guy in Phoenix, tell him that I want to create the largest Cannabis Entertainment Center in the World and that I understood his current tenant was wanting to downsize and would he be interested in leasing to me, he said “Yes, we’re very interested.” We set up a meeting and the rest is history except that was in 2016. It took us almost a year to get everything negotiated and closed, but we finally got the building and we have started on construction.
Now that’s persistence! Ok, you’re under construction and it’s my understanding that you are creating a 112,000 square foot, Cannabis Entertainment Complex, is that correct?
Larry: Yes that’s right.
Some people might think you’ve lost your marbles, I mean the average dispensary in the state of Nevada is between 1,600 to 2,300 square feet, and you woke up on a day and said “I’m gonna build 112,000 square foot Cannabis Entertainment Complex?
Larry: Yes, but we haven’t lost our marbles, I’m just following the path of other great business people, I’ve spent the majority of my adult life in Las Vegas and I’ve witnessed not one but two of the greatest building booms in American history, the first was Steve Wynn and his creation of the Mirage Hotel & Casino, and remember everyone said that he lost his marbles and look how that turned out. Wynn is an absolute genius.
I consider myself an astute businessman, meaning I know genius when I see it and I learn from others geniuses.
Between you and Reef Dispensary, and they have a massive building across the street from your building, but they only have 4,000 square feet dedicated to retail space. What makes you feel you’re right and they are wrong?
Larry: It’s not about being right or wrong, I don’t even view Reef as competition, I’m creating an experience, something that when my customer comes through the door they get the WOW factor. When my customer leaves I want them going back home and telling everyone “You’ve got to see Planet 13” We have two simple goals and that is to give our customers the best quality product and the best experience!
Our building is 112,000 square feet, the floor space will be 40,000 square feet in the first phase with 16,200 square feet of retail space, we will have 42 cash registers and we operate 24/7 and our goal is to service two thousand people a day which we believe will only be reaching 1.8 percent of the 55 million visitors…with those numbers the upside is mind boggling. We really don’t know what we can generate because no one has ever created a super complex imagine walking into a building that has a grand hallway, you cross over a 10 x 16 foot floor that interacts with every step you take, upon crossing the floor you look to your right and see a 20 foot glass wall and a 16,000 + square foot dispensary and to the left a coffee shop and further down the grand hallway to the left retail souvenirs from shirts and hats to key chains, all topped with even more interactive attractions from flying orbs to a 24 foot by 160 foot outdoor laser interactive graffiti wall.
I give you my word this will be epic!
Pardon the pun, but this is a big gamble. How much revenue do think you can generate?
Larry: We believe we can generate millions of dollars in revenue a year with what we have in the first phase, based on 2,000 customers a day. In phase two we are planning for a consumption lounge, right now we are waiting to see what the County Government is going to do regarding the lounges. Our plan is to create a Vegas Style nightclub consumption lounge and add a edibles chocolate store and a brew pub. We are very optimistic that the revenue streams can increase two fold.
How do you feel about people comparing you to Steve Wynn?
Larry: it’s a very nice compliment, but I’m just learning from what he did with his hotels, he thought outside of the box and knew if he could build something that people would be awed by, he would be successful. His trailblazing is where our inspiration comes from. Wynn is just such a genius at what he does.
In the thought process of how you’re developing and designing this 112,000 square foot cannabis entertainment center. We had a discussion the other day, and you were laughing at me, saying, “Hey, on the strip, it’s the only place I know, probably in the world, and no one argues, and they pay $12 for a beer or $20 for a drink.” And you said that’s what clicked in your head when you came up with this.
Larry: our plan was to create a destination in a location that connects us to the most famous street in the world, which is exactly what we’ve done. We’ve, in essence, become part of it because our close proximity, 500 feet from Trump Towers, 2500 feet from Wynn’s front door. The only walkway, which we didn’t know when we first got it, the only pedestrian walkway going west of the strip from Sahara to the Tropicana. It just happened to be the old Desert Inn road that goes past us, hits the freeway and dead ends, but it’s still in existence, and again, the only walkway.
So, yes we are going to cater to the tourist crowd, the folks who spend $12 on a beer and 20 bucks on a mixed drink because it’s part of the Las Vegas entertainment experience they don’t want to travel 8 miles off the strip to get their party favors, they are on the strip, they’re having fun and the attitude is don’t worry, we’re on vacation.
It’s estimated that 55 million people visit the Las Vegas Strip every year, but won’t you still be competing with every other Dispensary?
Larry: There are 47 licenses in Southern Nevada. The Reef, our neighbor to the south and ourselves will also be vying for those 55 million visitors. If each of us reaches 2,000 people a day that’s 3.6% of the strips visitors, that means the other 45 dispensaries will be competing for the 2.3 million locals. That’s the difference.
If we are servicing 2,000 people a day, we should generate millions of dollars in sales per year. You can see the potential of growth we are expecting.
That’s pretty impressive, take a moment and give us the Larry Scheffler tour of Planet 13, from when you arrive by Uber, enter the dispensary. Help our readers visualize what they’re going to see when this takes place.
Larry: When you pull up into the parking lot, you will see an 18-foot sphere with our Planet 13 Logo, water will flow over the sphere into a basin, steam will be coming up from the bottom, red lights simulating fire. Then as you look at the façade of the building, there are six Lotus flowers on the west end and seven Lotus flowers on the east end on the top of the roof, each flower scaling 15 feet, each flower is lit up through multiple LED lights, they will change colors. The Lotus flowers will be the first interactive piece the customer will see, the flowers are connected to touch pads on either side of the globe allowing customers to interact with, and turn the lights off and on to the flow of the music.
As you go inside, you come upon a giant reception area, and as you look down the grand hallway, that when finished will extend 500 feet and be 30 feet wide. Then as you pass the reception area, you’ll walk across an interactive floor. The floor is like a giant iPad, which is 10 feet tall by 16 feet wide, colors and sparks follow your footprints as you walk across the floor, after you step off the floor, it turns blank and turns back into a iPad.
Then you will walk down the grand hallway, to the left, you can go into our coffee shop, then to the right our flagship 16,500 square foot dispensary and further down the grand hallway you can purchase a Planet 13 hat, T-Shirt or keychain as a reminder of your experience at Planet 13.
As you enter the main dispensary floor, you will see floating three foot orbs doing a show every 10 minutes within an hour, high above you below a 25 feet ceiling. The other 50 minutes you will experience a 3D mapping show with differnet special optical effects.
We have many other venues we are planning on opening in 2019, we are in discussions with a craft beer brewery who has interest in infusing beer with THC, we’ll have to see how that works out. We are meeting with a chocolatier from New York City who is interested in developing a Chocolate factory that will be a viewing destination with the customers and we are planning for a consumption lounge and Vegas style nightclub after the local government approval. The last item will be a restaurant that we will announce mid-2019.
Let me just finish by saying, when you make a purchase at Planet 13, whether it be in the coffee shop or memorabilia or dispensary, when you exit and come outside, and you’ll see another thing going on. On the West side of the parking lot, we have a 160-foot long by 24-foot tall wall. Where five stations will be set up so you can do laser graffiti, the laser looks like a spray paint can and you can change the colors by turning the top, you could say, “Jill will you marry me?” then take a picture will all your friends to post on different social media. After they are finished we clear the wall and someone else creates their dream.
As a businessman, and entrepreneur the bottom line is about making money. How do you think your investors are going to look at this? You recently became a publicly traded company.
Larry: I believe our investors are as excited as we are, we take the conservative approach when we are projecting sales. We know our competitor sees approximately 2,500 customers a day, which is why we only projected 2,000 customers per day in our presentation. Again, if we only did 2,000 people a day, that’s only 1.4% of the 55 million visitors coming to Las Vegas. If we can’t surpass that over time, and continue to grow at an accelerated rate, then Bob and I did something very wrong, and that will not happen. Our entire reputation and combined 99 years of residence, and our reputation in the Vegas Valley is on the line.
So with everything we’re talking about, I think our investors are going to be very happy. I think it’s going to be a huge potential for the company, for the public company, and everyone will make a lot of money.
So, when is the world’s largest dispensary expected to open?
Larry: Our V.I.P. grand opening will be October 30, 2018 and our doors open to the public November 1, 2018.
Last question, what do you see as a possibility of two local boys becoming the first “Nevada Grown” Cannabis Billionaires?
Larry: From your lips to God’s ears, and when that happens then all of our investors will make a lot of money. We have a lot of targets that we need to hit for a billion-dollar corporate valuation, but these are achievable goals. Planet 13 is actively pursuing licenses in multiple states, and looking to expand our footprint across branded retail, cultivation, and production platforms. Maybe next year for your 3rd part in this series you can report on your own question.