Oskar Blues founder Dale Katechis made waves this month when he announced he was joining Veritas Fine Cannabis as an equity stakeholder and team member.
The craft beer pioneer told Brewbound the cannabis industry piqued his interest several years ago, but it wasn’t until a friend from childhood who is now an investment banker introduced him to the Veritas team that he was ready to jump.
The following is a conversation with Katechis about his new role with Veritas and his thoughts on the cannabis and craft beer industries. The transcript has been lightly edited for clarity.
Why make this move now, and why Veritas?
“The timing really is related to finding the right opportunity, which was Veritas. I’ve been looking to get into this space for well over a year, probably close to two years, and have become a student of sorts, outside of just the R&D department of cannabis, but learning as much as I can about the industry and meeting with other opportunities and cultivators and businesses in the space. Over that year and a half plus, there was nothing out there that was really exciting.
“I did appreciate and notice the parallels between the cannabis space in the craft beer space … but for the most part, I found a lot of growers and a lot of companies that weren’t businesses and didn’t have the foundation, whether it was culturally or just basic pillars of what a company should be focusing on. And I didn’t really want to start over, or go in and try to have to fix something. Veritas was a different breed. They had a solid foundation, a solid staff — business guys and gals that understood what was important and not just a bunch of stoners growing weed, and that intrigued me.”
On the cannabis industry’s next steps: “It feels like we’re at a crossroads and I think there’s an opportunity for companies to catapult into the next realm of what the space is going to look like, if it’s done properly.”
On cultural similarities between Veritas and Oskar Blues: “They’re not necessarily focusing on profits, even though they’re an extremely profitable company. It was something we never really focused on at Oskar Blues — we focused on what was important to us, the character of our company and our ethos. In my experience growing Oskar Blues, the bottom line always took care of itself. And so you didn’t need to focus on it, which in turn created a culture of people that were drawn to the business and to be there for the right reasons. I saw that immediately in Veritas, so it was kind of a no-brainer.”
On his role at Veritas: “Well, up to this point, I’m the one in the room, being pretty quiet and learning how the day-to-day runs, and how they operate and how they communicate and learning from seed to store how the business works and I’m getting there. Even in the last month, I’ve been able to at least provide some background, because they’re facing a lot of the same issues that we faced growing a business from the ground up, and it’s very similar.”
On growing pains and tough decisions: “It’s easy when you’re growing as fast as they are to want to do everything, but you can’t do everything and they basically run out of product every Monday. There are challenges — which direction to move, going deeper into the Colorado market, or like we’re thinking about expanding into to other markets to try to capitalize on really holding the industry and luxury boutique flower to a standard by racing to the top, and not racing to the bottom, which we see a lot of in this space. We just don’t want it to seem commoditized.
“With Veritas, it’s the polar opposite of wanting to commoditize this thing. It is to continue to get better at what we do, and focus on quality and focus on the things that are important to the staff and keeping price where it should be so that we can operate a sustainable company, and offer the benefits that provide more-than-living-wage jobs for people and all the while changing the way not only state by state, but federally, how the government treats these businesses, and what we can do to make it more sustainable.”
On pioneering in a newly legal industry: “Veritas was the first licensed grower cultivator in the state in 2014. It’s still a very young new business. … You can’t market, and you can’t deduct any of your expenses against your top line.”
“Some of the social equity projects and the opportunity for federal legalization — there are so many things on the horizon now that are in their infancy. This business has been able to build a solid foundation with all of those pressures on them, and it’s remarkable to me.
“If you were to tell me when we started in 1997 and then started brewing in 1999 that I couldn’t market my business and I couldn’t deduct any of my expenses and I had to pay tax on both of those, I don’t even know how I would respond. I don’t know how we would have come out of the gates. These guys have been able to do it, and they’ve done it the right way. So for them, it’s almost a renaissance in the sense that they’re now getting to see this opportunity of doubling, tripling, quadrupling their business.”
On the startup phase: “There are so many things that are just brand new and in their infancy and that’s what I love about it. I love small companies. I love the challenges of people growing as a team and having the experience of having done it through Oskar Blues, I just feel like I might be able to provide a little bit of input, if nothing else, all of the mistakes that we made along the way, maybe keeping them from one of them might be a blessing.”
On leading teams: “It was Oskar Blues’ ego, it wasn’t individual egos that built that business. For the most part of my career, it was trying to keep the pirates running the ship. Everything was done by committee and the committees were fun committees. Egos had to check themselves at the door, and I see all of that at Veritas. From the very first day, it was very obvious that assholes weren’t allowed in the room, and they were having fun doing what they were doing but they also were stewards of the business and they were respecting it, and I just really love that.”
On black market cannabis: “It’s not as prevalent as it is in California, where we’re contemplating the California move, because it’s a very healthy, ripe market, but the black market there is twice the size of the legal market. It’s about an $8 billion black market and about a $4 billion legal market and the black market is growing because of regulation and tax. It’s real, that pain is real. Colorado’s numbers are nothing like that, but it’s still there. We are combating a lot of those issues with maintaining our level of quality and a price that is associated with that, and not flooding the market with a bunch of products, so that they get old.”
On the importance of quality: “A lot of consumers in the craft beer space in the early 2000s, didn’t know what an oxidized IPA was. They just didn’t know; their palate wasn’t educated enough. We don’t want a bunch of dry flower out in the market and everybody thinking that that’s OK. And that was why we took a very strong stance at Oskar Blues regarding the cans of beer. We had to make sure that not only our cans of beer were fresh, but anyone that was coming to us that wanted us to teach them how to can beer so they can do it at their brewery, it was important that we help them maintain their quality.
“It is really helping the industry as a whole, understand what we feel like is important to maintain a long term sustainable entity.”
On patience: “It’s not a gold rush, and through my due diligence of looking at a lot of different cannabis companies over the last 18-20 months, and even pre-COVID, it’s not a gold mine and everybody’s rushing to cannabis because there’s all this new potential for federal legalization. That could be the next three to five years and interstate trade is probably at least going to be that. It’s like anything else.”
On entrepreneurial comparisons: “I would probably liken it to — I grew up in the restaurant business — and for whatever reason, it seemed like everyone I knew wanted to open a restaurant. It was people opening restaurants, cashing in their 401k. For whatever reason, that seemed to be a popular idea, but at the end of the day, you’re just a glorified janitor and it’s really hard work.
“It’s the same with growing a live plant that lives and breathes and has issues. You have to deal with bugs and can’t use pesticides. It’s manufacturing in the sense — a live plant that you need to take care of — so the advice would be, do your homework and really don’t just assume that you can invest money in a cannabis company and you’re going to be living on an island one day. It’s just like anything else: You get out of it what you put in.”