Byline: Courtney Aura Freeman
Living in New York City, a finance degree under his belt and a secure job with Northwestern Mutual, Luke Johnson was living the life he had worked hard to achieve. The world of finance had been a strong draw as long as he could remember. As a financial advisor-in-Training, his Wall Street experience entailed cold calling potential investors by day and then studying late into the night. He was dedicated to this journey and enjoying the ride.
In early 2014, the then-22-year-old paid a visit to his mother Colleen and brother Erik in Colorado. Recreational cannabis stores had just opened, and needless to say, there was a lot of excitement. Johnson had previously been interested in the cannabis movement in Colorado, but it was during that pivotal visit that the green glimmer of cannabis really caught Luke’s eye. “I thought, ‘I should check this out.’ Having never grown a plant before, I was inspired to take a grow class. I stayed late one night talking with the course professors Keith and Steve about cannabis startups. That’s when the potential of the industry really started to set in for me,” recalls Johnson.
By July 2014, Luke was resolute. He quit his job, sold his belongings, and moved to Pueblo, Colorado – a town about 100 miles south of Denver. His interest at the time was primarily in the recreational license. An opportunity to invest in a grow operation arose, and so, he put down a deposit. After months of planning, the financing fell through and the whole operation collapsed. Without a 2 year Colorado residency, Johnson couldn’t secure a license on his own.
Further research uncovered a more viable solution – hemp. In Colorado, the license fee was $500 for hemp instead of $25000 for cannabis. Hemp crops were not restricted to a maximum plant crop either. Luke decided that CBD would be the focus for Cloud CO. Farms, his new company. “We soon after met breeders with the necessary code-compliant genetics – less than .3% THC content,” he explains. This is the only factor that distinguishes hemp from cannabis according to the statutes.
Luke advises consumers against purchasing CBD from China or Europe. The plants at Cloud CO. Farms are not for industrial purpose as one might find in the aforementioned markets. Johnson specifies, “This is pharmaceutical grade plant material intended for medicinal application.”
Johnson attributes his intention to help people as part of his impetus for the foray into CBD products. “The idea of helping people was persistent in my mind. All of my grandparents had some form of cancer, and the treatment options were inadequate. Back in New York, my desire to have a positive impact in people’s lives made me reconsider my role in finance. I had always believed in the market, but at the time, I thought we were heading into a recession,” he asserts. “I felt then and still feel now a need to firmly believe in the products that I’m selling. With CBD, I know that people benefit, myself included.” Luke shared that he takes his own CBD oil daily as both an antioxidant supplement and a pain management tool. “We are doing some laborious tasks here on the farm. I’ve always had some back pain from muscle spasms; the CBD really helps.”
Luke auditioned for The Marijuana Show realizing he needed more capital and exposure of his company. Wendy Robbins, Director states, “He was on his way to NY when he called me and was unsure if he should go for it or not. I loved his passion to heal others, and his family story and thought he would have a great opportunity for investors so I encouraged him to audition. The rest is history”.
When asked about his experience on the show, Johnson expresses, “Everybody was nervous; there was not one person who wasn’t. It’s nerve-racking because of the small time frame, and you’re standing in front of someone pitching with everyone watching.” While Johnson had high hopes, he didn’t win on the Marijuana show; the investment came later.
Karen Paull, Executive producer states, “ Luke took a while to perfect his pitch and unfortunately he didn’t nail it on the show, but we worked with him and introduced him to our lead investor on the show, “Bob”. This fortuitous introduction to Bob, an investor whose name is protected for reasons of privacy, turned Luke’s dream into a reality! He was able to raise over half a Million dollars with The Marijuana Show Investor.
Robbins states, “Not everything can happen in TV time, and although we provide 6-9 months of ramp up time from pitch to investment, not everyone is ready or convinces the investors in real time”. Continues Paull, “That’s why we continue to work with every company that auditions. In addition to excellent production, we are also a consulting and marketing company for all Ganjprenuer’s”
After the show, Bob invited Luke to a retreat of sorts. Over the course of a weekend, they discussed the minute details of the plan and how Luke’s team would execute. “In the end, Bob invested 575,000.” Luke continues, “Bob is family at this point.”
Cloud CO. Farms did an initial angel round of 310,000 in funding through friends and family, including Luke’s parents Mark and Colleen. Friends and family also pitched in labor to build the greenhouses – a generosity for which Johnson expresses gratitude.
“There have been a lot of obstacles, but we’ve overcome them together. We built a great team, partnered with great growers that had this important genetic. My manager Denis is a very smart person, and he had grow experience paired with the ability apply new information quickly. I was coming into this pretty raw, not much experience, which is an obstacle in itself. We knew we had to come in at a significant scale to compete with some of the larger organizations. Within 15 months we made it happen.”
This robust team now supports what has become the family CBD farm, complete with their beloved dogs Charlie, Carter, and Brooke. The farm’s processing lab is up and running and their new digital store front launches next month. “Bob was instrumental in making this possible,” Luke says emphatically. “Fundraising is never easy. The prep part is difficult, then being in the room and convincing them that you have what it takes to make it in this industry… You have to have a ‘can’t quit’ mentality.”
When asked about his team’s long-term goals for the business, one can hear the excitement in Luke’s voice. “We want to have the opportunity to work with people who are willing to accept our help. We’d like to build relationships with the people who purchase our products. We are focused on partnering with anyone who can facilitate that goal – physical therapists, doctors, and researchers. Ultimately, our aim is to have the best prices on the market in conjunction with incredible quality. Ethical pricing is necessary to support patients with severe needs when insurance subsidies are unfortunately not available.”
In closing, Johnson proclaims, “We would not have come across our primary investor Bob had it not been for the Marijuana show. We would and will definitely recommend the show to other cannabis startups. I have great admiration for Wendy and Karen and the work they do, for the time and energy they have invested in us.”
Audition here: http://www.themarijuanashow.com/auditions-2/
Watch Luke Johnson, as featured on Season Two of The Marijuana Show on Amazon Prime!
Click here: Watch Luke on Season Two!