John Manlove, CEO and Founder of Apex Trading, joined us for a chat about the journey that he has been on in the world of developing business management software for the cannabis industry. Headquartered in Portland, Oregon, Apex Trading was founded in 2018 and specializes in providing wholesale cannabis businesses with tools that make managing selling and buying easier.
In October 2019 they successfully raised over $2.2 million in seed funding and are growing rapidly, developing new features for their platform, and establishing themselves in the industry. As a CEO and Founder, Manlove is hands on and says he wears ‘a lot of hats’ on a day-to-day basis.
“We just launched our hemp platform that we've been building for the last year. I am heading up a lot of the sales and initial market development for Bushel44, which is our enterprise ERP solution that we believe has the potential to become the industry’s standard for wholesale business management. Outside of running Bushel and overseeing Apex, I am also responsible as the product owner for both platforms and for the raising of capital. We have done two previous fundraisers, a small friends & family, and then a seed round, and we'll be getting into our Series A in the later part of this year. Further, I'm responsible for overseeing the building out of the deck, putting together financial forecasts, as well as pitching and meeting with various investors.”
Working in an emerging market, the opportunity for innovation and growth are what drives Manlove. While he acknowledges the ‘stigma’ around the cannabis industry there is no doubt that the market is evolving both in the US and in Canada. He says he enjoys being at the ‘forefront of the market’ but appreciates that with, as with any new industry, working on a new frontier can be a steep learning curve.
"In terms of cannabis, so many business owners have taken on a lot of risks getting into this space, whether that was prior to or after prohibition. Our clients, they're always innovating, and I think they have so much passion about what they do around the plant and seeing their businesses grow. We are excited and it's so much fun getting to both work within the space and be around the people. But ,we’re also championing this plant, so much more than from just the consumption standpoint, and also including hemp and all it can do for our planet. It could be the next big industrial revolution - just think about the potential within the food, fiber and grain industries. So just getting to be in part of that is always really exciting.”
The route to founding Apex Trading took Manlove on a journey with some unexpected stops along the way. Following graduation from college he went to work for an environmental firm in Portland, with a passion for the environment and law he saw a career as an environmental lawyer as the obvious path. There he learned the process behind environmentally friendly business practices and worked as a consultant helping companies to find innovative waste mitigation processes and recycling.
This all changed in 2014, when Manlove’s friends from college approached him with the idea they had had of creating the ‘Amazon of cannabis’.
“They knew that I could develop markets and create SOPs around sales and market development. They brought me on, and that company was called Tradiv. We launched in Colorado in 2014 after going through a small business incubator. After wrapping up the incubator we went out and raised some capital and we built it. We were on this road as a success as the first mover and pioneer within cannabis. But we ran across some bumpy roads. There was a sexual harassment lawsuit that was filed by an employee who was carrying on a relationship with one of the founders of the company. And then there's another well-publicized part - when the other founder had a religious awakening and decided to leave the company. We had built the staff up to about 35 people around late 2016, early 2017, when both of those events occurred, which created ripples throughout the company. The board decided ultimately to shut Tradiv down in late 2017.”
As a first mover in the space, Manlove and Tradiv were instrumental in developing the markets, they were operating a distribution company out of California, building relationships with businesses in the supply chain and growing out the platform. Understanding the industry at the ground level and every step along the way gave Manlove and his fellow founders at Apex Trading, Rob Fess and Willy Wheeler, an insight into how the market worked, the problems they faced, and what an ideal solution would look like.
“We had invested a lot of time and energy and literally blood, sweat, and tears into this thing. We decided to start with a new development team and a new vision of what we're going to do within the space. We created Apex Trading under a new model and a new vision. July  will be our two-year anniversary of having our cannabis platform live. We've scaled up, we're in 11 States and working with over 2000 licensed companies, from your biggest, like Curaleaf all the way down to your smallest little Mom and Pops. It's been exciting to see where we started in 2014 to where we are today in a new company and what we've been able to achieve.”
The cannabis industry has seen many changes in the years since Tradiv was launched. They have encountered almost weekly changes in the law around regulations on packaging, and swings in both supply and demand within the markets. The period has seen a marked increase in traditional business entering the space, where in 2014 the market was largely restricted to companies operating in the medical and recreational markets.
“The early operators had the cannabis sense to produce a really high-quality product and maybe what they were lacking was some of the operations sense. What we have seen over the last six years is much more maturation from an ownership and management standpoint. Now some of that could be due to some of the stigmas around the market starting to go away and therefore more traditional business operators or managers are obviously compelled more to jump into this space. The other thing is it is just an evolution of business. We've seen more and more technology from growing to extraction to just what we're doing.”
The progression towards a Federal legalization is something that Manlove and his team anticipates in the coming years. As states like Colorado and Nevada have seen companies take the lead at a corporate level, he predicts that dispensaries will be much more commonplace, and cannabis could be sold alongside tobacco products in grocery stores and gas stations. Though he concedes that the industry will have to adapt and introduce new product lines, saying ‘the products that you see today on the shelves in 10, 15 years probably won't be the same products.
Being in a frontier industry the challenges Manlove has faced leading a team have been considerable, and particularly the task of emerging as a new company with a new vision after the storied demise of the company he had previously helped start.
“To have a founder call you out of the blue and say, 'hey, John I went to Alaska and I dropped a bunch of acid and I think I'm the next coming of Jesus’. That was a shocking thing to go through. From a personal level, this is someone I care about, I thought,’ how can I help them there?’ But also, the impact that this is going to have upon our employees and the impact that it can have upon our shareholders. The first thing is you have to look out for the individual and ensure that their mental health is the most important thing. I think that allowed me to grow as a leader, to get a dialogue open with a member of the board and voice my concerns and start trying to help the board navigate this situation looking at what's best for the company.”
Dealing with the human element of being a leader was a learning experience for Manlove, which may have come in unusual circumstances, but provided him the opportunity to develop skills he did not know he had. While the company acknowledged the importance of mental health amongst their employees, the practical side of rebuilding and managing the business also had to be addressed.
“When I jumped into cannabis in 2014, I joined two guys with a dream and none of us had actually been in startups before. We raised almost four and a half million dollars in the previous company, and with that money came responsibilities that some individuals didn’t necessarily adhere to. Learning to incentivize people outside of monetary payments or salaries, because you have to manage that burn. I think that was one of the more important lessons - being very fiscally conservative and budget conscious, ensuring that you are spending the money you need to spend, but you're also tracking their ROI."
"As a startup, especially in cannabis, we don't have access to unlimited funds. The capital we raised, we need to ensure that that is put towards the maximizing of our shareholder value and ultimately leading toward the profitability of the company. The other thing is just really understanding what you must build, doing the due diligence, and tasks prior to spending all the time to develop something and it potentially falling flat.”
Life was not always so fast-paced for Manlove, as his career started out working in a law firm during his time at Drury University in his native Missouri. His role at the firm while balancing being a full-time college student, and also his time working for the Prosecuting Attorney in Stone County was an experience that Manlove says was valuable in exposing him to the ‘day to day hustle’ in a law office. He ultimately made the difficult decision to pursue his passion for the environment over a career as a lawyer. The ability to combine his interests with a solid understanding of the law gave him a foundation to explore new opportunities but also the ability to be able to adapt to a new business environment.
“The environmental lawyers I worked with just didn't have the passion they started out with; they had lost it. I was good at sales and all of that when ultimately cannabis just found me. I still like laws, but I don't personally think I'll ever be that lawyer. I will probably always stay in the tech side or creative side of building things. I liked being in these nascent fragmented, unique industries where there's a lot of problem solving to be done. It was a cool space to get in and something unique to grow into. I like figuring out what problem exists within a market and trying to solve for those, whether it's in the product or service that we're providing or finding a partner or building it your own.”
Apex Trading has been quick to look for partners and opportunities to collaborate with other businesses in the wider Cascadia Innovation Corridor. Manlove was excited to tell us all about their latest partnership, with Seattle-based digital marketing firm PrograMetrix. With much of the market pivoting to a virtual conferencing and placing more focus on their online interactions with customers, digital advertising is more relevant than ever, he says ‘we're excited about bringing that into the forefront for our clients to leverage that service’. Finding the right partners that will provide the right services for their clients within the region - from local growers to tech and data technology companies - is an ongoing challenge for Manlove and his team.
“Headset, based out of Seattle, is a consumer analytics company. They have some cool technology called their bridge. One that allows brands to gain insights into what's happening on a consumer level with their products. I think that's a compelling thing. If we can allow our brands to get more in tune with what's happening on a retail level, they're going to be able to curate the right products for their retailers and react based on changing consumer purchasing or demographics. Trym out of Northern California also provides cultivation-focused technology solutions that are really valuable. .”
Having been on such an extraordinary journey in his short time as a company founder and CEO, we asked Manlove what advice he would give other budding entrepreneurs out there that are just starting out:
“I think one piece of advice is stick to your gut. There is so much going on within a startup and you're going to get pulled in a lot of different directions and you’re going to have to make hard decisions. If something feels off or it doesn't feel right, then trust your gut.”
"Do the best you can to try and build a diverse company with lots of different perspectives. Surround yourself with really talented people that are smarter than you, that you can trust and share your core ethics and values.”
You can find out more about Apex Trading here: https://www.apextrading.com/