Todd Morrow is devoted to bringing more “green” into the lives of Americans. But, not the type of green you’ll see on St. Patrick’s Day! Morrow is the CEO of HempMeds, the first pipeline to make products containing CBD hemp oil legally available across the United States.
The company sells CBD-based products like raw oils and skincare solutions direct to consumers and through retailers and wholesalers. Morrow says the business has grown through word of mouth, even within his family. He shared, “When I first started with this company, my grandmother was so concerned that I was going to work for a hemp company. She’s from a small town in the Midwest. Now, she’s calling me up because she wants to get CBD for the ladies in her choir!”
Why did you start the company?
I’ve held executive-level roles for many different types of companies, but my career has primarily been rooted in retailing. Prior to HempMeds, I held many roles for companies like Petco, Pirch, Charlotte Russe, and LEGO. HempMeds is a subsidiary of Medical Marijuana, Inc. I was chosen to lead the company because I had experience and exposure leading big retail companies.
How was the business funded at the start?
HempMeds was the first of Medical Marijuana, Inc.’s portfolio companies established in 2012. The business was founded on direct-to-consumer sales. We’ve really built the business by being ahead of the curve in creating relationships with our customers and providing them with enough information so they would have successful results with the product.
Running the Business
How do you manage cash flow?
We really watch cash flow very closely. We keep our inventory really tight. It’s almost a “just-in-time” model, so we don’t tie up a ton of money in inventory. We are laser-focused on sales forecasting and are producing inventory just in time for when customers are going to be requiring the inventory.
We are also very diligent about keeping our expense structure in line. We do a lot from an organic marketing perspective. It’s more about word-of-mouth versus big fancy marketing campaigns that are very costly.
What’s the most challenging thing about running the business?
The competitive landscape continues to evolve. CBD is a buzzword. It’s the “green rush” right now. Everyone’s considering trying it. There’s a tremendous upside to this market. And there’s very little going on from a regulatory perspective. So, you’ve got a lot of inferior products in the marketplace. It’s very confusing for customers.
What some companies say is in the bottle is not actually what’s in the bottle. Even if it is, it’s often not efficacious enough to solicit the response the customer is looking for. Our challenge is really cutting through and helping our customer make a decision about what’s important and what the best CBD product is so they get the desired results.
What’s the most rewarding thing about running the business?
The numerous calls we get every day related to the benefits of our product. Folks call in and talk about how much our product has helped them live a better, healthier life. At the end of the day, being part of something that helps people live longer, stronger lives, there’s no price tag you can put on that.
What I’ve Learned
What’s the biggest mistake you made at the start?
We thought that we could grow our business just working direct to consumer. We lost sight of partnering with big strategic retailers and wholesalers. We made a tremendous amount of progress working direct to consumer, but we reached a point where to grow the business, we needed to put more effort on getting more placement on retail shelves nationwide. We did diversify our customer mix enough so we’re in a position now to put a full court press on expansion with retailers and wholesalers.
What’s the smartest thing you did at the start?
We really managed the conversation with the customer. We were laser-focused on organically growing the business. We have always been rooted in the best, highest-quality product. We protected our brand and made sure our customers were getting what they needed to be successful with the product, so the business grew by word of mouth.
What advice would you give to a new entrepreneur?
Have resilience, drive, and a desire to do what’s right. Don’t load up your expense pipeline too fast. There are going to be setbacks that you face along the way that might bring you to your knees. But, every day is a fresh new day to get back after it.
Think about all the resources you have within you own Rolodex. Leverage those resources and don’t try to do it all on your own. Be thoughtful about what you take on yourself versus what you hand off to others.
What’s next for HempMeds?
We’ve got a lot of new product development that’s underway. We’re also very proud to be one of the first companies that has The U.S. Hemp Authority Seal of Approval on all of our products going forward. And, we recently announced that we are the first CBD product to be listed in the Physicians’ Digital Reference.