Latest / Leaders In Payments / Artie Minson, President & CEO of LeafLink | Episode 365

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Artie Minson, President & CEO of LeafLink | Episode 365 · Leaders In Payments

• 0:01
  Intro Speaker: Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape.
• 0:06
  Intro Speaker: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  Intro Speaker: We will also hear stories from our guests about their journeys to the top.
• 0:18
  Greg Myers: Hello everyone and welcome to the Leaders in Payments podcast.
• 0:20
  Greg Myers: I'm your host, Greg Myers, and today's special guest is Artie Minson, the president and CEO of LeafLink.
• 0:26
  Greg Myers: So, Artie, thank you so much for being here and welcome to the show.
• 0:29
  Greg Myers: Thank you for having me.
• 0:30
  Greg Myers: So let's go ahead and dive right in.
• 0:34
  Greg Myers: If you don't mind, Tell our audience a little bit about yourself, maybe where you grew up, where you went to school, where you currently live, a few things like that.
• 0:39
  Artie Minson: Sure Lifelong New Yorker Grew up in Queens, new York, a town called the Rockaways, went to high school in Manhattan.
• 0:49
  Artie Minson: It's a funny story because actually the founder of LeafLink and I attended the same small high school in New York, although about 20 years apart, but it has a very tight alumni network, so that's a little bit how we got connected.
• 1:03
  Artie Minson: Post high school went to Georgetown where I met my wife and actually we have three sons who all attended Georgetown, so that's been fun.
• 1:13
  Artie Minson: And then got my MBA at Columbia and spent most of my career in, really, the media and tech industries.
• 1:22
  Artie Minson: It's interesting.
• 1:24
  Artie Minson: Cannabis is such a unique sort of state-by-state market and I spent a lot of time in the cable industry, which was obviously very locally and federally regulated, obviously a lot less regulated than cannabis, but had very state-by-state dynamics, and so I think when the LeafLink board and management team were looking for someone to come in, I think some of my prior experience on tech industries with a regulatory overlay and state-by-state dynamics were something that attracted them to me.
• 2:04
  Artie Minson: Currently I live out on Long Island.
• 2:07
  Artie Minson: We've always spent our summers out here.
• 2:09
  Artie Minson: When our youngest guy went off to college we moved here full time.
• 2:12
  Artie Minson: Part of that.
• 2:13
  Artie Minson: We sort of did it back and forth between Connecticut and Long Island, so that's a little bit about me.
• 2:20
  Greg Myers: Awesome, thanks for sharing that.
• 2:21
  Greg Myers: So let's discuss LeafLink.
• 2:23
  Greg Myers: So tell our audience what LeafLink does.
• 2:26
  Artie Minson: Yeah, so LeafLink is one of the leading tech providers in the cannabis sector and we focus on the B2B side of the industry.
• 2:36
  Artie Minson: So we connect licensed brands and licensed retailers to each other.
• 2:41
  Artie Minson: So, for example, order management integrating with your accounting systems, providing data and analytics tools, providing B2B advertising capabilities, and we process about 50% of the licensed cannabis orders in the US.
• 3:01
  Artie Minson: So we do a little over $5 billion of orders annually on the platform.
• 3:06
  Artie Minson: And then over the last year we've done a couple of things we're really excited about on the banking and the payment side.
• 3:14
  Artie Minson: One is we've integrated into our core marketplace, offering a number of payment solutions that basically allow brands and retailers to settle transactions on LeafLink, which is obviously normal to a lot of other e-commerce categories, but the cannabis industry, which is still very cash-heavy in the way business is done.
• 3:40
  Artie Minson: This allows us to be again just sort of a much more normalized e-commerce marketplace.
• 3:45
  Artie Minson: And then we have launched, through an acquisition, a banking solution where we basically can offer a banking product to our customers again, who are generally pretty underbanked given the federal issues of banking the cannabis sector.
• 4:07
  Artie Minson: So we now can offer folks a fully integrated banking solution on our platform.
• 4:14
  Greg Myers: Okay, so if you don't mind, let's dive a little deeper into the payment side.
• 4:19
  Greg Myers: You know, obviously, payments in and of itself is heavily regulated, and then you add the heavy regulation of cannabis on top of that.
• 4:27
  Greg Myers: How did you guys decide to do that and maybe what was the thought process in adding payments?
• 4:35
  Artie Minson: Yeah.
• 4:36
  Artie Minson: So if you look at the industry today, one of the biggest challenges the industry has is generally on the bad debt side, and often that is.
• 4:50
  Artie Minson: I would say that retailers often are again sort of living hand to mouth in the industry, because there are a number of burdensome tax regs on the industry that effectively result in cannabis plant touching companies being taxed on effectively their gross profit.
• 5:16
  Artie Minson: And so retailers are living hand to mouth and, as a result, so are the brands, and so the tool we have developed over the last year is what we call post or pay on sell-through, which is effectively for a brand, it guarantees that when their product is sold they will get paid, and for the retailer, what it allows is for a lot less inventory to be tied up in working capital.
• 5:44
  Artie Minson: So a retailer can effectively take the product on consignment and then what they will do is, once that product is sold, will basically do weekly settlement.
• 6:00
  Artie Minson: The seller, the brand, doesn't have to worry about collections anymore.
• 6:05
  Artie Minson: The retailer can basically put product on their shelves without tying lots of money up and working capital.
• 6:12
  Artie Minson: It's been a win-win for both sides of the industry.
• 6:16
  Artie Minson: We've begun to roll this out in a couple of states, so far in Michigan, colorado and Mississippi and we're seeing really, really healthy adoption on both sides of the marketplace, which we're super excited about.
• 6:32
  Greg Myers: Okay, and those payments?
• 6:33
  Greg Myers: How are they made?
• 6:34
  Greg Myers: Are they typically like ACH type payments, or how is the money flow?
• 6:39
  Artie Minson: Correct, correct.
• 6:40
  Artie Minson: So the money is basically what we can do, is we effectively can link into the retailer's bank account.
• 6:47
  Artie Minson: Again, we have now a banking solution we can offer and we can go in and effectively take that money out of the bank account when the product is sold.
• 6:59
  Greg Myers: Okay, and so you don't touch the retail side.
• 7:02
  Greg Myers: So the retail like you see the strip malls and you have the cannabis store and they're selling to consumers.
• 7:08
  Artie Minson: You're not playing in that space but we provide software to both the brands and the retailers for them to run their businesses more efficiently.
• 7:28
  Artie Minson: So if you are a brand, you want to list your brand on our marketplace and retailers can then come in and when they're doing their monthly purchasing or biweekly purchasing, your brand is listed, they can place orders and they can integrate that in with their accounting systems.
• 7:46
  Artie Minson: They can see frankly from our data tools which products of theirs are selling relative to other products and if they want to target purchasing managers through B2B advertising, they can do all of that.
• 8:01
  Artie Minson: On the retail side again, we can provide advanced inventory analytics and tooling so that retailers are making sure they're putting the right inventory in their stores and they're pricing it correctly.
• 8:15
  Artie Minson: We only obviously deal with the regulated market.
• 8:20
  Artie Minson: In a lot of states you still have a pretty material unlicensed market and obviously we only deal with licensed brands and retailers on our marketplace.
• 8:33
  Artie Minson: But effectively, as I said, about 50% of the regulated cannabis orders B2B orders in the market.
• 8:44
  Artie Minson: They occur on the LeafLink platform.
• 8:47
  Greg Myers: Okay.
• 8:48
  Greg Myers: So, without going too deep into this, because I think we could probably talk hours about the compliance and regulatory side of things, maybe just give us the high level, sort of like how does the industry work?
• 8:59
  Greg Myers: Because I think it'd be interesting for our audience to kind of know.
• 9:01
  Greg Myers: Like everyone knows, there's sort of the federal laws and state laws and sort of maybe how is all that playing out?
• 9:09
  Artie Minson: Yeah, it's really interesting and it really is very much state by state dynamics, and so you will have some states that, frankly, retail stores own brands and there may be, frankly, caps on the amount of stores or it may be uncapped on the amount of stores, and so you have some markets that are very fragmented and highly competitive.
• 9:38
  Artie Minson: And then you have other markets that there's very much a concentration of brands and retailers who can control that market, and so, for us, we can have markets where we, frankly, have hundreds of brands on our platform and we can have others where we have less than 50 brands on our platform, but it's a highly concentrated marketplace, and so what we want to do is really make sure that the brands and the retailers have the tools that they need to run their business, and there are many things that are difficult being a cannabis brand and retailer.
• 10:24
  Artie Minson: Some are that, frankly, because of the fact that it's still federally illegal there are often just companies that work with cannabis providers that these companies use has had to been homegrown to the industry, and often they are swivel-chairing, I would say, between five to seven different systems, and so what we wanted to do is really have, as best you could, an end-to-end technology stack where someone can come and run, like you would on another website, total end-to-end e-commerce solution.
• 11:07
  Artie Minson: And that obviously includes payments, because there was really limits on banks working with cannabis providers.
• 11:17
  Artie Minson: The industry grew up in such a way that it was really cash was still a lot of how business was done, so folks paid COD or when they did pay, they still paid in cash because it was difficult to even have bank accounts.
• 11:34
  Artie Minson: Now, with us having again banking partnerships that we can offer to our customers and having payment tooling so that you know you will get paid when your product sells, that can make the industry much more.
• 11:51
  Artie Minson: What I would say is normal modern e-commerce.
• 11:55
  Artie Minson: As opposed to there aren't other websites.
• 11:58
  Artie Minson: You go where you place an order and you don't pay for it on that website.
• 12:02
  Artie Minson: That has historically been, unfortunately, how cannabis dealt with.
• 12:06
  Artie Minson: Ordering was.
• 12:07
  Artie Minson: The payment side of it was completely separated from the order side.
• 12:12
  Artie Minson: We've now integrated those together and so we think going forward.
• 12:17
  Artie Minson: That creates really massive efficiency on both sides, for both the brands and retailers to run their operations more efficiently.
• 12:27
  Greg Myers: Okay, so it sounds like having that kind of one-stop solution for all things to operate your business and then having payments definitely sound like differentiators.
• 12:38
  Greg Myers: But what else do you feel like differentiates your company from your competitors like differentiators?
• 12:44
  Artie Minson: but what else do you feel like differentiates your company from your competitors?
• 12:47
  Artie Minson: I think that in our industry I think what happened again cannabis had the federal legalization has taken longer to happen and there was a lot of money raised in the industry.
• 13:02
  Artie Minson: That gave companies the ability to develop a number of different technology solutions.
• 13:11
  Artie Minson: But as it has taken longer for federal legalization, frankly new capital into the industry has been difficult to come by.
• 13:19
  Artie Minson: We were fortunate.
• 13:20
  Artie Minson: We did a $125 million equity raise about 18 months ago.
• 13:26
  Artie Minson: That allowed us to do a couple of things.
• 13:28
  Artie Minson: It allowed us to continue to invest in this end-to-end technology platform.
• 13:34
  Artie Minson: It allowed us also to begin to consolidate the tech stack for the industry.
• 13:41
  Artie Minson: So today, as I said, there's just too many different providers providing what I would call point solutions that in another industry would be sort of integrated end-to-end.
• 13:51
  Artie Minson: So I think a differentiator for us are a couple of things.
• 13:55
  Artie Minson: I think we start from a place of 50% share of the marketplace business.
• 14:03
  Artie Minson: That gives us the ability to add a number of solutions that we think our customers, based on conversations with them, are clamoring to have in an end-to-end solution.
• 14:14
  Artie Minson: So we have had the ability to organically invest.
• 14:17
  Artie Minson: We also, with our balance sheet, have had the ability to continue to be acquisitive on the M&A front, either to again add market share or add functionality, like our acquisition of Dama, which added the full banking platform to our customer base, and that's something again I think we will continue to do.
• 14:38
  Artie Minson: We take the view of, if it makes sense for our customers, that all of these things can come together under one roof.
• 14:44
  Artie Minson: We will continue to either sort of organically or look at acquisition opportunities just to make our customers' lives easier.
• 14:53
  Greg Myers: Okay, well, you can answer this obviously from the lens of your industry.
• 14:58
  Greg Myers: But where to you?
• 14:58
  Artie Minson: but we have lived in a world as I said, where it has been much more a cash world than a normalized payments world, and so our overall goal is to sort of normalize that commerce in cannabis happens just like it does in any other industry, and so what I would like to see is, effectively you know today, where you have sort of you know, single digit percentages of commerce transactions include a payments component.
• 15:51
  Artie Minson: I expect that again over the next few years, a hundred percent of commerce transactions include a payments component.
• 16:00
  Artie Minson: There may be different forms of how that transaction on the payment side happens, but it will happen on platform.
• 16:10
  Greg Myers: Well, let's switch gears a little bit and talk about you.
• 16:13
  Greg Myers: You talked a little bit about your professional background earlier, but maybe talk to us a little bit more about that how you started, maybe how you got into this industry and then sort of how you got to your role there.
• 16:25
  Artie Minson: Yeah.
• 16:25
  Artie Minson: So, as I said, I kind of came up the ranks as a finance person CFO path.
• 16:30
  Artie Minson: I was CFO of a few publicly traded media and technology companies AOL, and then Time Warner Cable, and after we sold Time Warner Cable I got, I would say, the itch to do some more startups.
• 16:49
  Artie Minson: I went to WeWork.
• 16:50
  Artie Minson: I was the president, was the chief operating officer and ultimately actually became the co-CEO there.
• 16:58
  Artie Minson: And that was an amazing ride with a lot of twists and turns and we could probably fill up a few podcasts with that story.
• 17:07
  Artie Minson: But then, you know, post, I left WeWork right at the time the pandemic was beginning and it was a very difficult time.
• 17:19
  Artie Minson: During the pandemic I felt to sort of step back into something you know, to try to run something you know, coming in as a CEO during the pandemic.
• 17:28
  Artie Minson: And so I sort of waited until the pandemic was over and again still had this startup itch and Ryan Smith, who was the founder of LeafLink.
• 17:38
  Artie Minson: He and I, as I said, we had attended the same high school in New York.
• 17:42
  Artie Minson: We knew of each other through the alumni network.
• 17:46
  Artie Minson: Ryan had built this company with amazing market share and effectively one of the fastest growing categories in the US, and I thought you know what this could be super interesting.
• 17:59
  Artie Minson: It's bringing together a lot of different skills that I had had from different jobs and thought it would be fun to help be on cutting edge of actually defining what an industry could look like.
• 18:14
  Artie Minson: So many startups are going in and trying to disrupt an existing industry, whereas this, when you think about it, we're a startup, all our customers are startup, the regulators are startups and we're all working together to define what this industry should look like 10, 15 years from now.
• 18:36
  Artie Minson: It has been, as you can imagine, it's been, a pretty interesting journey so far.
• 18:41
  Artie Minson: But I would say that the team and I are really really excited about the future of the company and we think that when you think about software providers who super serve these of software providers who you know super serve vertical, these sort of vertical software providers, payments has become sort of such a key aspect of their business and we are really no different in wanting to own sort of a full end-to-end tech stack that embeds payments in it to super serve this industry.
• 19:18
  Artie Minson: So we have this industry by the end of the decade is probably a $60 billion plus retail industry, it's probably a $30 billion plus wholesale industry, and those payments need to sort of be processed like any other industries, and so we think that there's a massive opportunity in that going forward.
• 19:42
  Greg Myers: So what are some things you're passionate about?
• 19:45
  Artie Minson: Maybe one work-related passion and one personal passion, I think for me professionally, I've always been drawn to big challenges, and as I got into cable, when it was sort of disrupting broadcast, I got into WeWork, which was obviously rethinking how real estate was going to be used by companies sort of going forward as a tool to make employees' experiences better, and just some other investments that I have on my own, whether it's in the education space, whether it is in the technology space.
• 20:27
  Artie Minson: It's just how are they using technology to disrupt existing industries?
• 20:34
  Artie Minson: And so, for me, what I'm passionate about is is it a big problem that needs to be solved?
• 20:42
  Artie Minson: Can technology help solve that at scale?
• 20:46
  Artie Minson: Is this something that will be a huge opportunity for our employees and our shareholders and our customers if we can get this right?
• 20:57
  Artie Minson: Those are the things that sort of attract me to a challenge and what attracted me to LeafLink.
• 21:04
  Artie Minson: And, on the personal front, look obviously very passionate about my family three boys all in their 20s.
• 21:14
  Artie Minson: The whole family is our Georgetown Hoyas.
• 21:18
  Artie Minson: We'd love to see the basketball team have a great year this year.
• 21:21
  Artie Minson: We're rooting hard for them, and if the New York Giants could be a little bit better, we'd love that as well.
• 21:26
  Artie Minson: But those are the areas that I'm really passionate about Awesome.
• 21:30
  Greg Myers: Thanks for sharing that.
• 21:31
  Greg Myers: If someone came to you and they were interested in a career, maybe in the spaces that you've been successful in and including maybe payments in that, as you've learned how to embed payments and they came to you for some career advice and they wanted to have a successful career, say in payments, what would you tell them they should do to be successful?
• 21:54
  Artie Minson: I think for me, my career has always been about like working with people and companies that.
• 22:04
  Artie Minson: Working with companies that have really, really smart people in them in it that I felt I could learn from, and that would be, you know, my first is go get your payments experience, your initial payments experience, in some of the companies that have really been on the cutting edge of solving big industry problems.
• 22:29
  Artie Minson: Get that experience and then go off from there if you want to do something on your own or you want to do something that's more entrepreneurial, but get that base level of experience in one of the iconic companies in the space and then go from there.
• 22:48
  Greg Myers: Okay, great.
• 22:48
  Greg Myers: So obviously we've covered a lot of ground and hopefully the audience has a better idea of LeafLink and what you guys do and how you've embedded payments.
• 22:56
  Greg Myers: Is there anything else you'd like to add before we wrap up the show?
• 23:00
  Artie Minson: You know just that we're look, we're super excited about where this industry is going to go.
• 23:08
  Artie Minson: You know we've gone from, really, if you think of, in 10 years we went from no state legalization to now there are programs, whether recreational or medical, in about 40 states.
• 23:24
  Artie Minson: At this point it's a $30 billion industry.
• 23:27
  Artie Minson: That, again, it's going to double over the next several years and there are a lot of interesting businesses and technologies that are going to come out of this and we're super excited about the future and being a part of it for the industry.
• 23:44
  Greg Myers: Well, we'll have you on again in maybe nine months.
• 23:47
  Greg Myers: 9, 12 months.
• 23:48
  Artie Minson: That would be great.
• 23:49
  Greg Myers: Yeah, we'll get a good update.
• 23:50
  Greg Myers: So, artie, thank you so much for being on the show today.
• 23:52
  Greg Myers: I know your time is very valuable, so I really appreciate you being here.
• 23:55
  Greg Myers: Thank you, Great to be with you and to all you listeners out there.
• 23:59
  Greg Myers: I thank you for your time as well, and until the next story.
• 24:07
  Intro Speaker: Thank you for joining us this week on the Leaders in Payments podcast.
• 24:08
  Intro Speaker: Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes.
• 24:13
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