Grupo Flor operates a chain of marijuana stores. But it got its start in real estate. Company exec Mike Bitar explains why and how its business evolved.
Grupo Flor operates a chain of marijuana stores. But it got its start in real estate. Company exec Mike Bitar explains why and how its business evolved.
As part of my series about the “How To Create A Fantastic Retail Experience That Keeps Bringing Customers Back For More”, I had the pleasure of interviewing Michael Bitar, co-founder and VP of Retail for the Grupo Flor group of cannabis businesses. He has emerged as a leader in the cannabis industry through advocating for sound policy that strikes a balance between a thriving business environment and safe communities. Mike has worked closely with local policy makers to help guide the industry forward. In addition to the development of commercial cannabis real estate, he has provided assistance in drafting language for several of the local ordinances and is helping to ensure that Monterey County, CA, continues to be an agricultural leader in this newly emerging industry. Prior to entering real estate and cannabis, Mike owned and operated several restaurants, and continues his love of cooking today. His family emigrated from Jordan in 1952. Mike lives in Pacific Grove, CA, where he and his wife Ola raise their six children. Mike speaks English, Spanish, and Arabic.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Before I entered the cannabis space in 2014, I was a commercial real estate broker for a little over a decade. Prior to that, I managed our family’s fast food restaurants throughout Northern CA. When I entered the cannabis industry, my initial goal was to help cannabis cultivators find legal places to grow. In 2015, no one did that; it was very rare. The more I got involved, the more I discovered that cannabis regulations were in a very grey area, and not clearly defined in Monterey County. I saw an opportunity to advocate for clearer regulations, so I spoke with politicians to help create ordinances that made sense for the county and local businesses alike.
As I moved further into cannabis, I started meeting all of these salt-of-the-earth people. There’s something more powerful about this plant than just real estate. I’m conservative by nature and cannabis — known in Arabic as hashih — is not a very flattering word in my family’s language, but today they take the credit for my transformation into the industry.
I became particularly interested in opening cannabis retail stores after I entered a Prop. 215 shop for the first time at the end of 2014. Over the following few months, my partners and I visited a thousand locations across six states. To be frank, we felt intimidated and rushed when entering the majority of these establishments. As a person new to cannabis at the time, I felt judged for my ignorance on the product types and I was scared to ask a stupid question. I was afraid. I realized there are many people like me who are new to this and weren’t comfortable with the ‘headshop feeling’ in dispensaries at the time. That’s when I had an ‘Eureka’ moment and realized I wanted to lift up, to elevate, the experience of purchasing cannabis.
When we designed our first dispensary, I was thinking of my mom and grandmother. Could they walk in and feel comfortable here? That’s the problem I was working to solve. When you come into our locations, you see everybody there — your mom, your doctor, your neighbor. We’ve had 77,000 unique visitors since we opened East of Eden in Salinas in 2018, but there’s only 440,000 people in our county, total. It’s like Main Street now: one in four residents have visited us.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
To be honest, I was naive and innocent when it came to cannabis. Coming from a conservative background, I definitely felt a stigma around it being a dangerous drug. In 2014, I thought that smoking cannabis meant smoking the leaves. I didn’t know there was a flower. You only see pictures of the leaves. I didn’t see a plant until the end of that year and I had wondered what all the hoopla was. I was very fortunate to really have a basis before I tried it, my friend Gavin — who is now my partner — would throw mixers and we would converse about cannabis. I’ve learned from friends, family, colleagues, and consumers about the benefits of cannabis.
At least once a week a customer will come into our dispensaries with a bag of prescription pills they’re on, saying, ‘How do I get off of this stuff for pain management?’ It feels like we are making the world a little bit better with every sale. A customer is leaving with pain relief, a better way of life that they can cope with. To relieve the pain or anxiety of the consumer, is in my eyes, priceless.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I’ve been fortunate to have a lot of mentors and colleagues throughout my life. But what has really helped me is the core group of our company and its founders. We come from a diverse background, and we each bring something special to the table.
My brother, Omar, has been in the industry for 20 years and understands cannabis culture probably more than anybody. He keeps us ahead of the pulse when it comes to consumer and brand trends.
My business partner, Kaz, helped me connect with different politicians and government officials who helped us draft the ordinances and legislations in the cities that we operate.
Our COO and business partner, Darren, started his first cannabis retail store five years ago. We learned a lot from his successes and pitfalls in the industry. Thanks to his guidance, we were able to avoid common mistakes because he lived through them.
And my partner Gavin has really helped cultivate our company to be something special. Having a cannabis law background, he has helped us build a foundation and maintain a defined structure. My family and I always operated our own business without living in a corporate world, so Gavin’s insight has been invaluable.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
For the last 15 years, I’ve read every book written on Elon Musk, Jeff Bezos, Steve Jobs, and Bernard Arnault. I have a routine every day, either while working out or on my drives, to listen to one hour of stories of great individuals who started off as normal people, yet they were able to create something incredible.
Today, for example, I listened to a story about why Starbucks failed in Australia and why KFC failed three times in Israel and why they’re trying for a fourth time. Business is business except with cannabis — then it’s the culture, too. A lot of Wall Street guys think they can figure it out. At Grupo Flor, we started out with a lot of those kinds of executives and thought we should stack our team with them but, looking back, we were too premature in hiring those guys. It is about customer service, value, and a value add — so that’s what we focus on.
A value add for us is something we say in Arabic — it doesn’t have to be monetary, it can be a smile. Jordanians are known to be very hospitable people, it’s in our nature. When a consumer comes into our location, we want them to feel that it’s normal. We have a lot of first-timers. We have 50 people each day who have never been to a cannabis retailer before. To counter that, sometimes they visit other stores and are amazed at how forward-looking we are. A lot of our competitors have not evolved yet. We’re constantly innovating and raising the bar.
We are shaping and creating an industry not just through legislation and regulations and product development, but also the aesthetics of our retail establishments. We are here to make cannabis the new normal, when it’s been demonized for the better part of the last century.
What do you think makes your company stand out? Can you share a story?
I think what stands out is our people. I know it’s cliche, but anybody with the right amount of money can purchase a license. Anyone can buy a building or get a location. But the fabric of our DNA is the people and the leaders who are running the day-to-day operations in the stores.
A story that resonates with me occurred at Thanksgiving. We were open that day, since we’re open 365 days a year. We pay double time on holidays, so our employees make $32 an hour. At 6pm, we closed up the shop, brought food in for everyone and were eating together. I thanked an employee named Maggie for working that day and believing in our company, and she said, “No, thank you.”
At that moment I realized we were creating opportunities and careers, which was one of the main goals we had when we started Grupo Flor. Two years ago, before her time at East of Eden, Maggie was an agricultural worker cutting lettuce in the fields of Salinas. Now, due to her excellent leadership, she’s the General Manager of our store in Salinas.
Every time we go into a community, we post jobs at all the local places. We’ll go to the local restaurants and coffee houses and watch the customer service, looking for excellence. We’ll recruit baristas and servers. Maggie had heard about us from someone who was already working with us.
When we first sat down to start Grupo Flor, we had asked ourselves, ‘What’s important to us?’ Something that resonated with all of us, being Salinas boys, was that we haven’t seen any innovative jobs coming to the Salinas Valley. None of us had friends who worked at Google, Facebook, or Apple — which are just 45 miles away. They feel like they’re 10,000 miles away. Those jobs and opportunities are not given to our area and we wanted to build something that could create careers.
A lot of people aren’t given opportunities, but in this business we create opportunities to not just have a job, but have a career and do something you believe in. When you can create opportunity for someone, they will surprise you. That’s what is important to me.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Listen. Listen to your customers, listen to your coworkers, listen to your staff. If you are able to listen to and fulfill their needs, you’ll be successful and you’ll have less pushback. One key core of our business is listening and being proactive.
Also, very simple, three words: don’t give up. Because you are going to have sleepless nights or wake up at 3 o’clock in a cold sweat. When we started, there were still police raids on businesses — we have come a long way in seven years. But if there’s something you truly believe in, you have to keep going. You have no choice but to continue. We’re not afraid of putting in the hard work to achieve our dreams.
Ok super. Now let’s jump to the main questions of our interview. The so-called “Retail Apocalypse” has been going on for about a decade. The Pandemic only made things much worse for retailers in general. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
There’s a reason some retailers are thriving and others fall by the wayside. You’ve got to keep innovating and thinking ahead. Innovation kills complacency. I can give you countless examples — take Pizza Hut and Dominos. Dominos pivoted to a retail component that was very technology-based. They developed and adapted technologies within stores and externally, while Pizza Hut stayed the course that’s served it for decades, but which suddenly doesn’t work as well.
Providing an excellent customer experience is instrumental at each one of our locations. Today, a customer can order from the comfort of their home via delivery or visit one of our friendly establishments.
But why else should customers choose us? We have many things to offer. Our stores have the widest selection in the cannabis space. That doesn’t mean just different product types but, diversity within each subcategory. For example within edibles, we carry cookies, gummies, chocolates, brownies, and more. With flower, we carry 80–100 strains. The cannabis consumer is still evolving, so the consumer experience should always be evolving.
It’s all about having a facility that is welcoming and inviting and offers education, with a diversity in products that are relatable to consumer lifestyles.
Our employees range in age from 21 to people in their 60s and 70s. There’s a reason — we represent the neighborhoods that work in and we hire 100% from those communities. Because of this, we think of ourselves as more of a Trader Joe’s than a Target.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
It comes to customer experience. Put customers first. Customers are ultimately never satisfied. You have to be constantly innovating and impressing. If you look at companies that succeed, they are rolling out new features to up one another.
The Best Buys and Targets of the world did this by innovating and coming up with out-of-the-box thinking. That’s what will separate you from the competitors. Competition is healthy and makes for better products and a better customer experience at the end of the day.
Retail is a cutthroat business. If you’re not trying to constantly innovate, you’re not going to make it.
What are the most common mistakes you have seen CEOs & founders make when they start a retail business? What can be done to avoid those errors?
They’re not involved day-to-day. In my opinion, a founder has to get his or her hands dirty. How can you understand the consumer when there is a barrier between you and the consumer? You have to be engaged with the customer to truly understand them. Only then can you make the right decisions for the business.
You can’t just hope an executive will do your job for you. A lot of the companies in this space initially thought they could just hire the talent. Some of the talent have impressive resumes, but the founder is always going to be hungrier than anyone you hire if they have the right passion.
At the end of the day, passion is everything. If you don’t have the passion, you won’t be able to withstand the downturns and the droughts of the industry. Passion keeps you going even when no one else in their right mind would continue.
This might be intuitive, but I think it’s helpful to specifically articulate it. In your words, can you share a few reasons why great customer service and a great customer experience is essential for success in business in general and for retail in particular?
Retail and being a host runs through my family for generations. My family immigrated from Jordan in 1952 and owned many restaurants throughout the Central Valley. Jordanians are very hospitable people by nature and culture. In any of our businesses, whether it be fast food or commercial real estate, it was all about service and the experience for the people. The priority was making our guests and clients feel welcomed and at home.
In cannabis, my partners and I visited 1,000 locations in six states before we opened here. We learned quickly what to do and what not to do. For example, we don’t call our locations ‘dispensaries,’ we call them ‘retail stores’ because that’s the term used no matter what you sell in the retail space, whether it’s clothing, food, or cosmetics — it’s all retail.
We wanted to establish a place where a mother or grandmother could walk in and feel comfortable, and not feel like they’re doing something wrong. We incorporated a lot of natural light, ease of selection, and diverse products to make the experience less intimidating.
Customers vote every time with their feet, fingertips, and dollars. Competition, over time, becomes more competitive. Cannabis is no different. Any industry starts with a few players, and as time goes by many enter the space. Then there’s a bell curve and many fall off. Those who are not innovating, proactive, and engaged with customers will become irrelevant — this is true for any industry.
For example, we started our curbside pickup program in January 2020. Ironically, we never thought it would be very successful. When we launched, we processed about 15 transactions per day. Since the pandemic hit, it accounts for up to 40% of all our transactions.
East of Eden in Salinas was one of the first cannabis retailers that had an open floor plan where consultants walked around with an iPad to take orders directly from the customer. We were one of the first in the space to allow customers to order online and pick up in the store. For our menus, we were one of the first to use a software called Dutchie, which now serves over 3,000 retailers. We are constantly looking for the next new thing and trying things out.
Currently we are working on unique gift cards that are sold in our stores and third-party retailers. A consumer could go to a local gas station, mini-mart, or grocer and see a gift card there for our establishments. What we are trying to do is remove the stigma that cannabis is different from an Apple Store or a CVS.
We have all had times either in a store, or online, when we’ve had a very poor experience as a customer or user. If the importance of a good customer experience is so intuitive, and apparent, where is the disconnect? How is it that so many companies do not make this a priority?
They just don’t listen. They put their own needs before the needs of the customer. This can be seen in almost every retailer that has failed. They either don’t want to spend the money for the technology, or they don’t want to listen to their coworkers and colleagues.
The people who we hire score higher on the hospitality scale. We need them, by their nature, to want to serve and to help. It’s a very unique type of person. We’re looking for individuals who want to be hospitable. That’s a key metric that we look for in the individuals that we hire.
Our company is not run by executives. The innovation and ideas come primarily from our customers and coworkers on the frontlines. I attribute it to how a good general listens to the boots on the ground. He’s fighting with them side by side on the battlefield versus giving marching orders from an ivory tower.
Even though we have more than 250 current employees, almost all of them have the cell numbers and email addresses of our C-suite. Even though we have the normal HR processes in place, employees know they can feel comfortable contacting us if need be. Being accessible is important to us.
Can you share with us a story from your experience about a customer who was “Wowed” by the experience you provided?
So many customers and those we invite to tour our facilities, such as spiritual leaders and politicians, are wowed by the Spanish speaking element in our locations, as well as the upscale experience. Once people spend time and connect with our staff and see our footprint, any stereotypes of the traditional dispensary experience are dissipated.
We closed on Sundays out of respect for our community for the entire first year. We started bringing in priests and leaders from the Muslim community and they were shocked because they had nothing to relate their experience of cannabis to, and their perspective changed.
Residents and business owners in Moss Landing, people who had been here 30–40 years, were proud that we opened an upscale retail experience that they never thought would be there. We strive to elevate the retail experience in communities.
Did that Wow! experience have any long term ripple effects? Can you share the story?
It’s affecting us day by day. It’s affecting us year after year, month after month. The trajectory has been increasing — we’ve never had a down month at any of our locations. Even amidst a pandemic and retail apocalypse, our retail stores are still doing well. The proof is in the pudding.
A fantastic retail experience isn’t just one specific thing. It can be a composite of many different subtle elements fused together. Can you help us break down and identify the different ingredients that come together to create a “fantastic retail experience”?
It’s an entourage effect. It’s not one silver bullet. It’s things that compound to make it even better. The customer experience has evolved with each store we have opened. One crucial component is having the product well lit and easily viewed by the consumer. Our products are segregated by category, and each store has a vegan and sugar-free section to serve different dietary needs.
A lot of new cannabis consumers don’t have the background of buying flower, grinding it, and rolling it. This is a large reason why pre-rolls have been one of the fastest growing in the space. They’re so easily used, and people want the experience of smoking a joint. When we noticed this trend, we began carrying more SKUs because we’re listening to the customer. Most retailers may have 10–20 SKUs of pre-rolls, but we carry over 100 or 150 SKUs of pre-rolls. The convenience and selection elevates the customer experience.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
I’ll give you four: The Bezos Model. We obsessively focus on the customer experience through the selection, ease of use, low prices, and more information to make better purchasing decisions.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
The next biggest movement really should be around hemp. I believe that hemp will eventually revolutionize the world. Not just by replacing paper, but by being incorporated into textiles, plastic, and other renewables, such as building materials.
I believe that hemp has a place but that California land is too expensive and valuable for hemp. For the same reasons that you don’t have sugar cane or massive corn production in California. There are other parts of the world that could be better served by growing it.
The best places to grow it are the same places that you grow sugar cane: Columbia, among them. Once you’re able to have tens of thousands of acres of hemp, you’ll be able to bring the costs down so low you can compete with the International Paper Co. but it takes them 20 years to grow their trees; we could replicate it with hemp in three to six months. Hemp is the next wave, it’s going to happen, that’s the future.
How can our readers further follow your work?
We are fortunate to have a newsletter out that is from our company. You can sign up for our monthly newsletter at grupoflor.com.
This was very inspiring. Thank you so much for the time you spent with this!
Thank you for having me!
About The Interviewer: Orlando Zayas is the CEO of Katapult, an award-winning omnichannel payment platform. Zayas is known for his revenue growth strategies and visionary leadership in the eCommerce and retail space. His future-forward expertise has led companies such as GE Capital, Safe-Guard Products International, and DRB Capital. Zayas is also highly committed to providing educational opportunities to underprivileged communities through his philanthropic endeavors. Zayas’ business insights are regularly featured in publications such as Forbes, Entrepreneur Magazine, Retail Insights, and more.
This post was originally published by Authority Magazine via Medium, which you can read here.