Neil Patel

I hope you enjoy reading this blog post.

If you want help with your fundraising or acquisition, just book a call click here.

Steve White is the founder and CEO of Harvest Health which is a multi-state cannabis operator (MSO) and vertically-integrated cannabis company. The business has raised over $300 million from investors such as Canaccord Genuity Group or Alliance Global Partners.

In this episode you will learn:

  • How Harvest raised over $300M
  • How they’ve raised in hard times and managed without funding
  • The one big mistake they made when they joined the herd
  • Steve White’s top advice for other entrepreneurs


For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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The Ultimate Guide To Pitch Decks

Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Steve White:

Steve White is the Chief Executive Officer of Harvest. Steve White founded the company in 2011 with an understanding that while cannabis can improve lives, there was a lack of trusted and high-quality companies to offer patients access.

With that market potential in mind, Steve White embarked on a mission to build the largest and most trusted cannabis company in the country. As the company’s face and leader, Steve White brings a passion and dedication for driving change for the better with his employees and within the industry while also focusing on Harvest’s exponential growth and continued leadership in the cannabis market.

By winning licenses across the country, optimizing the consumer experience, building a trusted ecosystem that delivers top-quality and safe products, and setting industry-leading operational standards, Steve White has become a leading figure in the cannabis industry who understands how to navigate the complexities of regulations and how to build a large scale, national brand.

Steve White works closely with regulators to influence policy decisions and is an expert on the financial marketplace for cannabis. Steve White understandings of the trends, risks and policy initiatives allow Harvest the opportunity to bring cannabis to the forefront of the CPG market.

After opening Harvest’s first dispensary in Arizona in 2013, Steve White worked there for several months handling day to day operations including fulfilling orders, performing reception duties and consulting with patients.

Through that hands-on approach, Steve White created a company that is rooted in the notion of improving daily lives through cannabis and providing greater access for consumers.

Connect with Steve White:

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Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we’re going to be talking about the cannabis industry, and we’re going to have a lawyer turned founder, just like myself, so a recovering lawyer. Without further ado, let’s welcome our guest today. Steve White, welcome to the show.

Steve White: Thank you very much for having me.

Alejandro: Originally born and raised in Arizona. How was life there?

Steve White: I’m one of a few people that are born and raised in Arizona, but life is good in Arizona except for the summer months.

Alejandro: So, what happens in the summer months? Do you go into a tunnel?

Steve White: The summer months are so hot, that you need to be inside and under air conditioning at all times.

Alejandro: Obviously, you left when it came time to go after your studies. You went to Georgetown. Is that right?

Steve White: I started at Arizona State University, and I went to Georgetown so that I could work on Capitol Hill. I always had an interest in politics, and an opportunity arose to spend a little time at Georgetown. I worked as an intern in Senator John McCain’s office. I jumped at that opportunity. It was a great one.

Alejandro: What got you into politics? Now, indirectly, you’re still dealing with regulatory changes like with the potential impact of politics on your business. What really got you into politics?

Steve White: That’s a great question. I don’t know the answer to it. It’s always been an interest, and it was always an interest of mine until spending too much time working on some campaigns for folks who ended up not being great elected officials. Once you go through that experience, and you feel in any way responsible for something like that, I became a little bit disenchanted with the political process for quite some time. But once I got into the cannabis business, I didn’t really have a choice. It is a political industry just because of the whole constant changing of laws that affect everything that we do at Harvest.

Alejandro: Obviously, when it comes to politics, everyone has their view from reading the press and from the outside, but what are the views when you’re in the inside?

Steve White: One of the things that I’ve learned is, it kind of sucks when you come to the realization that at certain levels, it doesn’t matter what the right thing to do is — that oftentimes, politics and what happens politically is all about the preservation or the capture of power. I’ll give you a great example. We know that the SAFE Banking Act is wildly supported by everybody. We know that it passed in the House overwhelmingly in a bipartisan way. In the Senate, they have the votes. But it’s not politically expedient for that piece of legislation to be voted on. So, you have folks who are playing a game, and that actually affects the public safety, it affects the way that banks conduct their business, and it affects the fastest growing industry in the United States. The reason that’s happening is for political, not real important reasons.

Alejandro: Got it. After this experience, you started looking at law schools. Why going into law?

Steve White: I laugh about it now. At age 13, I had two career paths. Either playing for the Pittsburg Steelers or becoming a practicing lawyer. When the Pittsburg Steeler route didn’t look like it was working out, I was dedicated to practicing law at some point in my life. Everything I did from late in high school through college was dedicated toward getting into law school, and what I knew would eventually be a law practice.

Alejandro: What kind of law practice was that?

Steve White: I’ve practiced a variety of different things, and I’ve done things from the really fun: trials and things like that, which I really enjoyed, and I had some bites on some things that were less fun like doing analysis to determine whether or not an event was covered by an insurance policy. I fully respect the lawyers who do that, but all day long, that is so boring.

Alejandro: I hear you. Then, after five or six years of being in law and having your own practice, then you start to question yourself, “Is this what I want to do?” and things took a different turn. What happened?

Steve White: I went from practicing in different firm environments to thinking that my unhappiness with that process had to do with the structure of the law firm environment. With a partner, I started my own firm. We stopped and analyzed what a law firm really needs to have to provide clients with the best service possible. We did things that were very different at the time. For a while, that was fulfilling. We had done something unique. We had done something novel. We were providing services to clients at a cheaper rate, and we were doing better even as a result. When you’re a lawyer and you think about real success as a lawyer, what happens when you have done something that makes a name for yourself is generally you’ve won a case that you shouldn’t have won. If you do really well as a litigator, justice was not served. I have a handful of cases that I look back on and say, “I did a great job for my client, and I got a great result for the client.” If you think about, in the human event, your contribution to society, you start questioning whether or not the profession of law is really as dignified as I thought as a 13-year-old. I became a bit disenchanted with it. It was not fulfilling, and I started looking at other opportunities, and cannabis was one of those opportunities in 2011.

Alejandro: Tell us how you came across cannabis.

Steve White: It was on the ballot in Arizona in 2010, and my phone was ringing. I had clients, and referrals from clients, and friends asking me how they could get involved in the business. I was trying to figure out as a lawyer — it was new, and it was exciting. As somebody who had been practicing law at that point for about 10 to 12 years, your practice starts to get a little bit stale. It was something that was interesting — a new subject area. But I ultimately determined that because of the way that they were allocating licenses, I could only effectively represent one client. So of all the people that sought services from me, I had to choose one. I ended up choosing a couple of friends who owned a design-build construction company. Largely, I did it because they were very successful in construction, and they were really fun to work with. Knowing that starting a business is quite challenging, I thought that second element of being people that I really liked was critically important, and it turns out, that was true.

Alejandro: What happened next?

Steve White: I chose them. We sat down, and one of the guys asked me what I was going to charge. I said, “This is my hourly rate, and it depends on what you want me to do.” He gave me a list about a mile long of things that he wanted from me, and I said, “Over the next two years, that’s somewhere between a half a million and two million bucks probably. It’s going to be a lot of work.” He looks at me, and he said, “Do you want to be partners?” That was the moment, for me, the first time I considered it, and my answer was immediately, “Yes.” Then we ultimately went into business together, and that was how Harvest got started.

Alejandro: I know that at the beginning, you guys took a look at the potential returns, and you had a preliminary judgment that now, looking back, you probably would have thought about it differently. Why is that the case?

Steve White: It’s a unique opportunity. You’re sitting in a state where you know people are consuming marijuana, and they’re doing it, in some instances, at high rates. This state and the people have decided that they want that industry to be a regulated industry, one that’s regulated and taxed rather than one that’s run mainly by criminals. You’re looking at a business that already has demand. For us, we couldn’t think of anything that was like that where they were going to say, “You’ve got an industry that right now you’re not permitted to participate in. We’re going to change that fact, and we’re going to limit the number of people that can participate in it because we want to carefully regulate the activity.” When you sit down, and you pull out an Excel spreadsheet, and you do that in 2010 or 2011, you look at the entire cannabis market, and you say, “Okay. You divide the entire cannabis market in the state of Arizona amongst 130 players.” And you think, “Wow! That’s a really big business for each of those businesses,” but there’s a lot you don’t consider, which is that the unregulated market is going to continue to exist, and it’s going to be very difficult to transition people from the unregulated market to the regulated one. There are going to be all sorts of challenges with your business because you’re federally illegal, so you don’t have access to traditional banking services. You get taxed at a higher rate. You can’t transport product across state lines. There are all of these restrictions that make life a lot more difficult than you would have imagined. When you originally do your calculations, you think it’s going to be an incredibly profitable business, and then you dive into it, and some of the realities start slapping you across the face.

Read More: Oren Zaslansky On Launching His First Startup With $1,000 And Raising $70 Million For His Latest Business

Alejandro: With the business, what were the early days like?

Steve White: The early days were interesting just trying to find space. For example, convincing a landlord that if you moved into their building, they wouldn’t have the building taken away by the federal government. Just something as basic as that. For every 20 landlords we talked to, we probably got a single yes. That was the rate. Then, on top of that, you look at the municipal zoning ordinances that are enacted, some of which in the state of Arizona actually banned it completely. Others pushed dispensaries into heavy residential areas or things like that. You just have incredible challenges, just getting off the ground. Then you had a governor, at the time, who said, “You know what? I’m not implementing the program. I don’t care what the voters say. I’m not doing it.” So, you have challenges that you never imagined at that point.

Alejandro: What ended up being the business model for the business?

Steve White: What you learn over time is all of those problems are temporary. That municipalities start figuring out that this is a regular retail business that actually is quite complementary for a number of others, and that if you want to promote public safety, you want to shine a light on it. You don’t want to bury it in an industrial area. So landlords started changing their minds. City officials started changing their minds. You had lawsuits that required the government to start a program, and that invalidated certain zoning ordinances that previously prohibited people from locating in areas. Over time, the regulations loosened as people figured out that the cannabis business is not a bad thing for individuals, for kids, for communities. It’s actually quite a positive thing. But that transition is one that takes time. There are a number of people that are why we say, “Facts can’t change their opinion.” You will always have people who will resist at all costs the move to normalcy. 

Alejandro: You guys now have a vertically integrated operation. What does that mean?

Steve White: That means we do everything in a value chain from cultivating marijuana to turning it into product in a manufacturing process to actually retailing it to consumers. In addition to that, we have our own in-house real estate team, legal teams. We do all of our marketing in-house. We actually go and get market access on our own, so we apply for licenses, and win them, and that’s how we get into certain states. For us, vertically integrated is a significant process. It also puts together parts of a business that you don’t see elsewhere. You don’t see other businesses that retail, that farm, and that manufacture. It just doesn’t exist elsewhere.

Alejandro: In this case, how did you guys finance the operation?

Steve White: We struggled is how we did it. We were not a wealthy group. We did what we could with what we had. It was good for us as a growing business to figure out by necessity how to run a successful business because if we weren’t good operators, our business would close. It wasn’t as if we had deep pockets, and we could reach back and raise another million dollars. When we got our first store open, we didn’t even have a million dollars in the entire business. We needed that store to be profitable in order for us to build a cultivation facility. When we developed an appetite for growth, we needed to be able to determine whether a state set of regulations was set up that you could run a profitable business because if we ended up in a state where we were going to lose money for a long period of time, our growth would have come to a stop. We financed it by being cheap, by being efficient, and just by being a gritty group of business operators.

Alejandro: Very cool. Up until now, how much capital has been raised to date?

Steve White: Up until November of 2018, we had total invested capital of under 18 million dollars. In conjunction with our reverse takeover and going public, we raised about 220 million dollars. We then raised another 100 million dollars, and then we have done some incremental financing since then. Times have changed quite a bit. People now talk about Big B, how this market is so capital-constrained. I just want to grab them, shake them, and say, “You have no idea what capital constraint is. Capital constraint is when you’re trying to operate a business, and you’re doing it on credit cards because that’s the only way you have access to capital. Recently, we announced a raise where we took in about 56 million dollars in capital, and we did so in a very challenging environment. We have opportunities to raise more. Fortunately, or unfortunately, for our business, that’s going to be an ongoing part of what we do, raising capital and taking out previous financing with more attractive rates with new opportunities. It is now something we do fulltime.

Alejandro: It’s interesting; in terms of trends, where things were, and where things are now, and where things are going. This used to be an industry where there were drug dealers, and now we’re talking about an industry where there is regulation, publicly-traded companies. What an incredible turnaround and a change?

Steve White: When we started this business, there was a group of people who didn’t have cannabis experience, and we were unique to not be a group of people who were turning a marijuana hobby into a business. That was the vast majority of people. We went, and we sought out expertise from other places. Some of the things that we saw were remarkable. I remember groups that would tell us what phenomenal cultivators they were. Then when we asked them to show us, they wouldn’t take us to a facility, or they’d have a requirement like they’d pick you up at some convenience store, put a blindfold on you, drive you around for a while, and lead you into a facility. Not surprisingly, some of those businesses are not in existence anymore. They have run into issues with law enforcement. We’ve made ourselves hirers of people that were transitioning from the unregulated market and thought that this was going to be the same thing. I’ll never forget the dispute we had with somebody that we wanted to hire who was shocked that we were going to report his income to the IRS. He was explaining to us that he doesn’t pay taxes. That’s not how this works. My response was, “Actually, it does work that way now. That’s not how we operate, and we can’t operate that way.” We ultimately cut ties with that individual for that. Then, ultimately, we did find out that cannabis was not the only drug that he was cultivating or manufacturing, and that he was trying to develop infrastructure to continue to do that around our facility. So, we immediately cut ties with that individual. The types of folks that we run into today are so different. We are now working with universities that are producing students with certifications in specialties that directly relate to what we do as a business, not people who were successful underground operators.

Alejandro: One of the things that is occurring to me is, I’ve had the opportunity to speak and do interviews with some of the health guys in the space, including yourself. One thing that’s coming across to me is that most of you guys are trained lawyers. So why is that the case?

Steve White: That probably bods very poorly for the industry. There are two types of people that I’ve seen that lead organizations successfully. One is somebody with a legal background. The reason that’s true is because so much of your business and how you set up your business is directly related to the regulations under which you operate that business. If you’re looking to expand your business into other places, the rules and regulations and laws in that other place are going to be completely different than the one you just came from. So the lawyer’s skill of being able to understand what is permitted in a certain environment is a critical one to navigate through, in some instances, what are otherwise very difficult setups. The other group that I’ve seen do particularly well are folks who come from private equity backgrounds. The reason that’s true is, if you look at cannabis assets for a particular organization, they’re like completely different businesses. Think about what we were talking about before where you have farming, you have manufacturing, you have retail under one umbrella. Now, do it in another state, so it’s a different type of farming, a different type of manufacturing, and a whole different set of rules for retail development. Private equity people have a greater understanding of how to aggregate different businesses that have slightly different focuses and put them together in a way that makes sense. Lawyers and people with private equity backgrounds are overrepresented in cannabis, for sure.

Alejandro: That’s amazing. How big is Harvest to date, the company? 

Steve White: The company, we’re quite large. We have more than 1,000 employees. We have operations across many states. Across the U.S., we have development ongoing and many, many more. We’re one of the largest cannabis companies in the United States. If you’re one of the largest cannabis companies in the United States, that, by necessity, means that you’re one of the largest cannabis companies in the world. There are a handful of well-operated cannabis companies in the United States posed to do great things, and Harvest is one of those.

Alejandro: Very cool. Why would you say that you’re more bullish than ever on the cannabis space?

Steve White: It’s because of the experience, I think. When I look back, and I think about where we came from, and I think back to the point of when I first started, and I really didn’t believe that cannabis truly could be medicine, until I started seeing it. We celebrated the day we saw a poll that said more than 50.1% of people were in favor of medical cannabis. Today, it’s over 90%. In fact, over 60% of people are in favor of legalizing cannabis for recreational use across the country. So few states have followed. We know that the environment or the industry is going to follow popular opinion. Popular opinion has changed. So we have huge opportunities in states that haven’t even decided to implement a medical program and so many more who haven’t implemented a recreational program. The opportunities are boundless, and most importantly, cannabis is actually good for society. There’s not a big problem that’s going to come for the industry that’s going to cut its legs out. The only real issue we have today is the federal government continues to say that it’s illegal, and I think everybody knows that at some point, that’s going to change too. The big things that are going to change over time are only going to be positive for the industry. There’s going to be tons of volatility, and there are going to be little hiccups all over the place. We had a vape crisis that was largely attributable to the unregulated market, but for a while, nobody knew exactly where that was. Today, we have a coronavirus issue, and people get manufactured products from China and are dependent on flying from state to state to conduct operations. All of those things are going to continue to happen, but the underlying fundamentals about cannabis in the United States are all cutting in our favor. That’s why today, I am more bullish on the opportunity than I ever have been.

Alejandro: You were talking about popular opinion, and the way that people have perceived cannabis has been changing, and people see some of the positives in this segment. But I’m sure there are certain triggers that have helped on that transitioning from perceiving the industry from something bad to something that could be good. What do you think are those main triggers?

Steve White: The main triggers you see — they have to be heartless to ignore so many times when you see somebody, like a child, who has epilepsy that can’t be treated with traditional medication. They get on some combination of CBD and THC and either reduce the number of seizures in their severity or eliminate them altogether. When you see things like that, whether you’re a lawmaker — it doesn’t matter what Nancy Reagan said in the 80s, you know in your brain and in your heart that you have to permit access to those individuals. When large medical organizations come out and say, “Yeah, the facts actually do support that cannabis can be an effective treatment for chronic pain,” you have to change your mind. While classically-trained doctors don’t get the background on marijuana that they do on opiates, they are starting to change their opinion about what is effective. You’re seeing people use it for pets that have issues that end up living longer and healthier lives than they would have without it. That’s the fundamental piece about cannabis that makes it so you cannot argue with the idea that change is going to be positive over time. It’s fundamentally true that it works, and if it works, you cannot put the genie back in the bottle.

Alejandro: Got it. As an entrepreneur, Steve, you’re always dealing with uncertainty, especially when you’re building and scaling a business. I think that here, you have the added challenge that you also have the uncertainty from the regulatory perspective. So how do you go about tackling both as an entrepreneur?

Steve White: You do it knowing that things are going to be a little bit harder, they’re going to take a little bit longer, and they’re going to be a little bit more expensive than you anticipate they would in a different environment. You’re going to have struggles with regulators. That’s just going to be a part of what happens. But over time, regulators are going to understand that their job is to not catch bad guys, but their job is to run a good program that serves the people that it is intended to serve. Over time, when people start to realize that that is their function, they’re going to get it right. There’s a high degree of patience required in some instances, but over time, everybody is going to get this correct. It’s just, for some, going to take longer than others.

Alejandro: Very cool. One of the questions, Steve, that I typically ask the guests that come on the show is, knowing what you know now — you’ve been at it for a while here and with the ups, the downs, the good, the bad, the ugly, and everything between, if you had that opportunity to go back in time and have a chat with that younger Steve that was starting to question, like, “What’s in it? What’s next for me? Is it law, or should I go into business.” If you had that chance to tell yourself one piece of business advice knowing what you know now, what would you tell your younger self and why?

Steve White: That’s a good question. We, as an industry, a lot of companies went public around the same time. I had never been the CEO of a public traded company. When you go out, and you’re meeting very sophisticated investors, and they are telling you things that you, in your mind, don’t think apply to your business that so many of them keep saying. You need to hire people who are professional corporate managers. You need to spend a lot of time and money developing brands. You need to do all of these things that may be important long-term for a company’s health, but you know that your opportunity, in Illinois, for example, if you cultivate cannabis, you’re going to sell it. You’re going to sell every ounce that you cultivate. If you have one person in your marketing department, or you have 100 in your marketing department, you’re selling every ounce of cannabis for the same price. To me, the lesson that I’ve learned over time is, sometimes, you know more about your subject area than people that you think are smarter than you are and have more experience. It’s true that at some point these companies, you’ll need to have people that are experienced corporate managers operating and running. But today, what you need are people that are going to roll up their sleeves and get dirt under their fingernails, and we’re going to dive into problems and not sit behind a desk, and develop committees, and hire other people to do things. You need people who are actually ready to operate the business. We, as an organization, took a turn in 2019 toward growth because people told us they were going to reward growth. We went away from some of the fundamentals of who we are. One of the things that made us popular when we went public is that fact that I gave you before that we had spent under 18 million dollars to develop one of the largest footprints in U.S. cannabis. Now, all of the sudden, in our minds and everybody else’s, it was, grow at all cost. The answer is, “You know what? That’s not who you are.” As an organization and as individuals, we do certain things really well. For us, it was to operate profitable businesses, and we stopped doing it for an entire year. That’s put us back. That’s been a bit of a setback for us as an organization. It’s certainly one that we’re going to recover from because we made investments that are going to reap benefits long-term. But if I had to get in my time machine and talk to Steve, I wouldn’t go back that far because early on, we made a lot of good decisions. I would only go far enough back to when we went public, and I would say, “Do what you do well. Ignore the noise and run a profitable business, and the rest will take care of itself. So, landgrab and all that other stuff that people talk about, forget it. Do what you do well.”

Alejandro: Very profound, Steve. For the folks that are listening, what is the best way for them to reach out and say hi?

Steve White: We have all sorts of social media platforms: Twitter, Instagram, Facebook. You usually can find us under Harvest House of Cannabis. We are attending all sorts of conferences all across the country all the time. We’re out there, and we’re not that hard to find.

Alejandro: Amazing. Steve, thank you so much for being on the DealMakers show today.

Steve White: It was a pleasure talking to you. Thank you.


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