Sher Joudeh, Co-Founder and Chief Financial Officer for Social Dispensary – Interview Series

Except for Washington, no state-legal cannabis market has as much operational and regulatory experience under its belt as Colorado. With nearly a decade more experience than most East Coast markets—and even a few more years of adult-use experience than California—Colorado businesses, operators, and regulators have had years to perfect their processes.

However, just like younger markets, nothing is 100 percent perfect in Colorado’s industry. Issues of all varieties persist across every sector. For a deeper look into the state of the industry, the challenges of expanding across a state with numerous anti-cannabis counties, and the importance of corporate philanthropy, mycannabis.com spoke with Sher Joudeh, Co-Founder and Chief Financial Officer of Social Dispensary.

So what subjects did you study in school, and how did those studies later become useful throughout your duties with Social Dispensary?

Probably the most beneficial subject was my time at UCLA, studying accounting. Understanding financial statements and GAAP compliance is crucial for tracking inventory turnover, maintaining audit readiness, and mitigating risk in a heavily regulated industry. 

It also helped put disciplined systems in place to manage the fact that Social Dispensary and the cannabis industry is still a cash-heavy business. Tracking every penny is how we’ve kept a healthy P&L (Profit & Loss) and balance sheet. Thankfully, we’ve built a lasting banking relationship that has taken most of that cash off our hands. 

 What experiences and roles in the Colorado cannabis industry did you have before becoming a co-founder of Social Dispensary? What were some professionally defining experiences you had during your first few years in the industry?

Before co-founding Social Dispensary, I was VP of Finance with Star Buds from 2014 to 2022. Joining the industry in 2014 was eye-opening for me. Unlike many other pioneers in the industry, I was not a consumer. I didn’t even know the difference between an indica and a sativa. I had no idea what I was walking into. 

At that point, the business was operating mostly with cash. No banking relationship, no payment processing and a loosely defined set of controls. It was my job to make sure the company’s finances were protected and managed efficiently. Talk about the wild, wild west. I remember having to take sales tax payments directly to the Department of Revenue and the City of Denver. Yes, bags full of cash to make tax deposits. 

It was in those early years that I learned an invaluable lesson: things change so quickly that in order to survive, you have to adapt quickly. 

Another reality was that in a male-dominated industry, I had to learn to find my voice. My experience before Social Dispensary has given me the confidence to contribute and make decisions that impact the business in meaningful ways. 

What both professionally and personally inspired you to co-found Social Dispensary? Did you have any initial concerns about owning a cannabis business and the entire application process?

After eight years at Star Buds, I knew exactly what I wanted to do differently. Co-founding Social Dispensary was the chance to take what worked, fix what didn’t, and build it the way I thought it should be built. It hasn’t been easy. Lots of sleepless nights and chaotic days, but we’re proud of what we’re building.

Being an owner, there’s always the fear of what could happen. We put everything on the line to create Social, and despite our successes, there’s always the reality that things could change. Rescheduling is a good example. Medical cannabis has already moved to Schedule III, which is real 280E relief for medical operators. The bigger question for a retailer like us is adult-use, and that’s still working its way through the process. Any relief and a little legitimacy is encouraging, but it isn’t a done deal, and there’s no clear picture yet of how it all shakes out. Every day in this business is a surprise, and I don’t expect that to change. But I’ve learned to roll with the punches.

What were the most costly and problematic issues from Colorado regulators that you faced during both the licensing process and opening the first Social Dispensary store?

It’s interesting. The licensing process changes from jurisdiction to jurisdiction. Some jurisdictions are easier than others, but they all require significant investment. Time, money, and experience are all part of the equation. 

One of the craziest things about opening a dispensary is the time it takes to secure the necessary permits. Waiting six months for a change-of-use permit is not only inefficient, but it’s costly. 

The one constant is that there isn’t anyone at the State or local level dedicated to helping usher these applications and licenses through. We’ve been frustrated so many times just being unable to call someone and get answers. There is a real lack of coordination, even with social equity applicants. Time is money, and licensing takes WAY too long. 

How was applying for a Colorado social equity license in particular different from other license application processes? Do you believe that the application process is both accessible and affordable for true social equity applicants?

The only noticeable difference for the social equity licensing application in Colorado is that you have to be approved as a social equity owner before you can apply for a business license. That process was fairly straightforward, requiring us to provide verified documents that established our eligibility for the social equity program. Other than having to dig up documents from the past, it was easy enough. 

I believe the application process in general is technical and complicated, whether it’s social equity or a “normal” application. For anyone looking at these for the first time, it can feel overwhelming, especially the local license. Having a site locked in, designing a floor plan with a security overlay, and preparing for a Needs and Desires Hearing all require a degree of specialization. Lucky for us, we had a lot of exposure to this in our previous roles at Star Buds.

Regarding cost, Denver and Colorado have both done a good job subsidizing some social equity applicants. We were fortunate to qualify for a State grant that helped cover some of the costs of opening. But the reality is that reduced fees and limited grant access aren’t nearly enough to open a dispensary or any cannabis business. That’s always puzzled me. Where does the state expect social equity applicants to find the capital and experience to succeed? It’s one thing to open up licensing and provide the opportunity. It’s another thing entirely to expect someone who qualifies as social equity to automatically have the experience and resources to make it work. 

What have been the most exciting and worthwhile parts about operating Social Dispensary? What are some momentous accomplishments and milestones that the dispensaries have achieved since its founding?

This is an easy answer. It’s the people we meet, employ, work with in the industry. It’s the people we get to help every year with our Be.Social Community program.  Helping employees achieve their goals, helping people in our communities is both exciting and worthwhile. We have donated over $140K to different charities and it’s extremely gratifying to meet people and hear their stories.  It’s something we are very proud of.

What would you say are the most difficult aspects of expanding into nine different stores across Colorado? With over half of Colorado counties essentially being the equivalent of dry counties for cannabis sales, how did those counties’ strictness limit where Social Dispensary could expand to?

The most difficult part is always finding a viable, compliant location. It’s crazy that there are still so many cities/counties in Colorado that don’t allow recreational cannabis. It is very limiting, especially in today’s hyper-competitive market. The best options for a new retail location aren’t always available and we’re very particular about where we expand and commit our resources. 

Our newest Social Dispensary location in Reunion, in Commerce City, is a perfect example. Everything was there. Great real estate, a willing landlord, a real need from the community. But Commerce City’s outdated land development code meant the zoning across all of Reunion prohibited cannabis. It took our team two years of community outreach and work with the city to secure a variance, and we had to overcome some very outdated beliefs to get there. That’s the kind of time and money it costs just to open a door in this state.

What are some of the most meaningful initiatives and organizations that Be.Social Community Program works with and donates to? Beyond just for PR “stigma-breaking” reasons, why is it so crucial that cannabis companies are involved in charity and philanthropy work?

The Be.Social Community Program was part of our story from the beginning. We created it because we wanted to help people and organizations make a positive impact in the communities we serve. We’ve donated to food banks, groups that support the elderly, cancer charities, veteran organizations, and breast cancer awareness. Parker’s Platoon was one of my favorites. They help veterans transition back to civilian life. Cannabis or not, I believe more companies should be involved in this kind of giving back.

What were the most stark differences between expanding operations within the state of Colorado and expanding across the country to New Jersey? What were the most troublesome parts of expanding out to The Garden State?

From my perspective, the most challenging part of expanding out of Colorado is the distance between our NJ team and us. Hiring, development and managing a staff become more difficult. I am still very hands-on with the day-to-day operations when it comes to HR, so not having that direct access means we have to find new ways to make sure we don’t lose that touch. Thankfully, we have good operating partners in NJ, but that doesn’t completely alleviate the challenges of opening in a new market. 

What will the next few years possess for both Social Dispensary and the greater Colorado industry? Also, how do you predict that federal cannabis reform will impact both the Colorado and New Jersey industries?

In Colorado, our plan is to keep expanding responsibly. We are at that point where scalability is the real issue. We’ve proven we can be successful, but ensuring we have the right infrastructure and that we keep checking ourselves is key. Growing too fast, just because we can, is dangerous. 

Federal reform is the elephant in the room. Right now there are more questions than answers, so we’re doing the best we can to stay informed and connected to what might change. But this is the cannabis industry, so we’re bracing for anything and everything. 

Thank you for joining us, Sher! For more information on Social Dispensary, please visit its website.