Into The Cannabis Wild West with A Proper High’s Mike France

Ambiguity, uncertainty, and the wild west.

The cannabis industry has existed for several millennia, just not quite as a mainstream business. In the words of Mike France, founder of Proper, the next stages of cannabis are full of question marks. While some refuse to enter a space with uncertainty due to the risks associated, France was drawn to the space for that exact reason. Proper is hard to cleanly describe. It’s a cannabis company that’s part media, part retail and part delivery. No one element can succeed without the other. Its ultimate goal is to provide users with the necessary information and insight to choose “a proper high.” Whether it’s a night in by yourself, or a celebration with friends, different products result in different outcomes. It achieves this by a combining market research and data analysis, brick & mortar shopping and merchandising research and finally, consumer trials which they carefully maintain with their Proper rating committee. The ultimate goal is to be the definitive source for finding the best products.

Prior to the launch of Proper, the space was woefully complex and disorganized. The Proper team aimed to come in and help organize and structure a service that can bring maximum value to consumers as well as shape the future of the space through accelerating the product development cycle and improve on the quality of releases. Proper’s underlying puzzle pieces is what makes it such a fascinating concept as it has the ability to touch a large part of the industry.

We spoke with France as he introduced his outlook on the space and how his background in big data isn’t by any means an enemy to an industry that is just as much art as it is science.

Can you give me an intro about yourself and your start at Proper?

I started at Duke University where I studied computer science and philosophy. I was uniquely interested in both of those but in my sophomore year, I quickly fell in love with artificial intelligence and what became big data. I graduated and worked for IBM research for a couple years and I was doing optimization and simulation work and solving abstract problems with data and algorithms. I enjoyed being hands on in the real world as opposed to just simulating things on the computer. After I decade, I ended up going into private equity and venture capital. I would work alongside deal teams and look at investments and help them evaluate it.

I would dive in and work with the companies and my role of operating professional in finance didn’t exist in private equity or venture capital really until when I got into that industry. The industry just started creating those types of teams. I got to work with tens of companies probably like 50 companies over ten years very closely at every stage of company and across a full range of industries. I worked with the leading dumpster manufacturer in the world on making their dumpsters cost less, standardizing them, and making them more efficient. I worked with the largest porta potty company in the world at the same time. I worked with a Vegas hotel casino on gaming and running their quantitative marketing group.

How did your previous cannabis experiences inform the role you wanted to play?

When I started in high school, weed was weed. It was a single product and it was flower. Nobody was even talking about strains at that time. Like many people, cannabis is a product that really resonated with me. It’s something that my body likes, and it enhances certain things that I want to enhance. When I started having these different experiences and seeing all these different types of products, I wanted to figure out all of it. What do these products do and can we actually use them for the best outcomes. It can be very powerful, but it also can be very distracting if you don’t have the right product.

Returning back to your background, having seen so many businesses, if you strip away the core product, what are you left with that you think is relevant across the board?

I was going to say value proposition although, I think that’s right but it’s not right for every company. Some companies can see an opportunity and seize it and finding the best interest of consumers. You’ll see this particularly in more highly regulated industries with a small number of players. There’s something interesting in the cannabis space right now. When you look at some of the markets and states in the U.S., as they regulate cannabis, 10 people are going to get licenses and then those 10 businesses control everything that makes it on the shelves.

And that’s not going to be great for consumers. Also for California and markets where there’s a really diverse and large product set and a whole history there, there’s a different set of problems. I tend to think and respond best to businesses that are driven by consumers and the value proposition is the key. Are you solving for or creating a benefit for consumers? Can you deliver that to them efficiently?

What interests you about the whole world of cannabis as a business?

The thing that I fell in love with experience were there’s these ideas of ambiguity and uncertainty. They’re two very different things. We solve uncertainty problems through optimization, math, and algorithms. You know the variables that matter but you don’t know the values that will work. So, profit is a key variable. And to maximize profit, in a well-established industry that’s math and optimization. Ambiguities are when you don’t know the variables that matter, and you must figure it out. In fact, in most of those scenarios it’s a pure creative spark. Let’s say it’s a wide-open market or the Wild West.

I fell in love with scenarios because they’re ambiguous where you don’t even know what variables mattered. You have to figure that out and then create an offering, product or a service around us to connect with people who want it. Cannabis immediately attracted me for those reasons, and I a first look into the consumers and the business through Leafly where I spent a couple of weeks with a team there. It was a market that both has high uncertainty and really high ambiguity. What business models will win? Which consumers will dominate the new cannabis landscape? What brands and products will speak to them? These are all open question marks. To me it seemed like the wild west of ambiguity and that really excited me from a problem-solving perspective.

How does your perspective coming from a different industry fresh eyes enable you to make an impact? Especially given your operational and start-up expertise?

As we created Proper there was definitely is a strong data foundation and mindset that excited me. We can source and combine data and then package it in a way consumers can take advantage of it without worrying about the complexities of it. That really excites me. The way you package it is an inherently creative process where you have to think about consumers.

You have to get in their minds and experiences to find not just what’s valuable to them but for other consumers out there. We want to be able to leverage data for consumers in a way where the market really needs it. It’s an information-poor market with all these products. We do believe there’s a proper high for every part of the day and we help make that happen through being the best way to find and shop for the perfect cannabis product for you.

When you first started, what was the idea behind Proper versus what it is now?

It’s definitely matured and evolved as does anything that starts engaging with the outside world. In this case it’s brands. When you create a brand, it can mean something to us and our team. But when you talk about it with others, you then discover what it means to other people based on how they’ve engaged with it and its often different things in different cases. As we’ve engaged with brands, retailers, and consumers, we’ve started to understand what Proper can mean or do for them. But from the beginning I think it’s actually has been pretty clear, we put a lot of work into both understanding the industry and understanding what brands and consumers would really want.

How would you describe the current relationship between brands and consumers?

Brands and consumers are doing a dance right now in the cannabis market. Consumers are driving brands, but brands are also getting ahead of consumers anticipating what they want. We’re in a creative time and cycle and brands are starting to use a feedback loop that’s driving them to create really quickly.

What does the cannabis space look like with Proper, full steam ahead and what does a world look like if Proper doesn’t exist? What effect do you wish to have?

Proper should be the product authority across the industry and for consumers. That means several things. We want to be a part of the conversation of shaping what brands actual create and flavor for consumers. The products they’re creating, how they’re creating those products, and particularly with consumer feedback. Ideally, we want consumers to be able to trust cannabis and understand it because as more people try it, you can easily have bad experiences. You’ll have a fantastic and helpful experience with cannabis, if you know what you’re doing and you have that guide. So hopefully for consumers, we are increasingly a force that is both helping educate consumers helping them find the perfect product for them and helping them understand what cannabis can be for. And for brands, we’d like to help brands create the best products for consumers given their needs.

So there’s a two-sided opportunity there.

Hopefully we’re this communication and connectivity layer between brands and consumers to help influence the creation of products that consumers most want and that will be most helpful and valuable in the market. I mean, I certainly believe our consumer trials program is the core of this. We want to start implementing new testing standards. And we think that consumers and brands will respond to those things and it can become increasingly adopted across the supply chain over time.

Could we potentially do a retail chain like MedMen? We’re very interested in that. We think that the service model and the information being provided to consumers in industry right now doesn’t work for consumers. When you walk into a dispensary, typically as a consumer you’re not having an experience that you would actually want. The experience is designed to move products off the shelves and there’s very little in the way of recommendation and curation for the consumer.

Could you talk a little bit about your Proper Cannabis Committee?

We’re at almost 15,000 hours of product testing across our 120 raters in the four major markets. That’s more than 5,000 rating sessions with a lot of consumer feedback. We’ve been doing our consumer trials for almost a year now and we’re significantly ramping that up. We capture at least 50 data points per session. So we’re in the hundreds of thousands of data points already in our dataset after starting this almost a year ago.

But the idea was to find people who understand and who are familiar with cannabis space so they have the experience base they can reference from. When they look at flower or prepare it for a bowl or roll it into a joint, they have all the reference points and experience in their head they can pull from. They can confidently say “This is among the most pungent flower I’ve ever smelled… This is among the best flour I’ve ever smoked.”

How do you create that educational base for reviewers?

Number one try to find people with experience and particularly understand what their experience set is. If this is an industry professional who really knows concentrates, then give them that to rate. We also educate them through an onboarding process where we familiarize them with Proper and how and why we do things, what problems we’re trying to solve and our mission. But then the third part of that is the app that we created that our readers use and it’s a really mindful process. We hear this from our readers all the time.

Our app is actually a live education of how to think about that product and how to think about how it’s impacting you and affecting you and your experience in total. And, we really focus on “what is this product good for?” Is this an 8am kickstarter product? Or is this a product for a first date? It’s important to educate them and get them all to a common place where we’re all speaking the same language and have the same expectations. And then in and of itself though I think our app is a guide and an education.

Is there a chance that data holds too much power and influence, almost like voting rights, within this industry? Is there a chance we lose that balance between creativity and data?

That’s a great point. I’ll say at least personally; data and algorithms are always in control of humans. I’m never in the camp of people who say, “oh it’s the algorithm,” or “oh it’s the data.” We determine what data we collect. We determine how we use that data and we determine everything that that goes into. We’re making choices along the way. We’re not hands off. We also don’t think there’s some universal answer here. What we’re trying to do is to understand both how consumers think about and use cannabis as well as what we think the potential is. We then want to bridge that gap through the type of data we’re collecting. I guess the short answer is this exists through the creativity of how you package the data.

Subsequently, if you remove the packaged experience to the consumer out of the equation, we don’t think we have anything at all. The data is merely a servant to that. What we’re trying to do simultaneously is figure out how consumers evaluate and make choices between cannabis products already, and continue to do it in a way that is controlled and measurable. But then also where do we think the limitations of that are and where we think we can improve, how a consumer thinks about cannabis. If we can marry those two things better, we’ve actually both created an experience, service, and offering that is true to cannabis consumers but also improves how they’re taking products and how they’re experiencing cannabis. So hopefully someone says who’s really experienced has one of those moments where everything through data and experience is improved.

How would you describe the current cannabis shopping experience?

It’s an intimidating experience to shop for cannabis. It’s pretty overwhelming even if you’re a longtime consumer of it unless you sort of taken a crash course or are pretty hardcore about it due to the amount of information available. You can call it a couple of different things but there’s still fear missing out. I can only buy so many things and I can only get so many things as a cannabis consumer. I want to try the best things. If we can lead people to better products for them, then we’ve accomplished our job. We should be your buyer’s guide.

If you have 250 dollars you want to spend on cannabis this month, spend it on this. But then for the people who are intimidated or aren’t sure about cannabis hopefully we’re the reason they jump in the pool. And we believe it’s something they want to jump into and they have a good experience. If we can deliver better first-time experiences for consumers, I think we’re doing our job right now.

How would you describe this “creative side” to cannabis?

For me it starts with the product itself and it doesn’t need to be an engineered a product, it could be flower and the different types of genetics to make things more reliable and better. But I think creativity relates to the intentionality coming into cannabis products right now. Consumers are increasingly responding to and demanding to know what is this cannabis product about and what is it for, even if it’s flower.

Yes, packaging is important, it’s a draw when consumers enter the store, but here’s this storytelling and experience mechanism that’s missing. When people open that package it’s just the middle of the experience. We need somebody who’s engaging with those consumers and translating their experience to improve future purchases. We believe Proper plays in that whole creative chain and ecosystem for consumers and brands.

You’re seeing this shift from the “Day Oners” to more established players with a structured and professional approach enter the space. What do you think happens when you lose some of the grassroots nature of the culture?

I mean there’s the potential for it to be lost. Cannabis is not yet science. And I don’t know if it will ever simply be science. And even though we’re big originators and users of data, this is heavy art and science. Those two must come together in this space. I think in particular because of cannabis lineage and what it is best for, cannabis will always be so closely connected to arts and the creative field. I don’t think you’d ever want to lose that. But I think more importantly directly to what you’re asking, here’s an easy scenario where it would get lost.

In those markets where literally 10 licenses are being created in a state, they’re going to vertically integrated companies. You have a small number of companies that are winning these licenses mostly through political processes. They’re then raising a lot of money to bring that to the market, in a lot of cases those executives are saying in the media, “well I don’t even use cannabis,” or “I don’t even like cannabis in some cases.” I think it’s easy to imagine on one end of the extreme, that there are cases where you’ll have people who don’t use the product or don’t know about it and who been connected with it before. But they’ll create products for consumers who haven’t used it before or who haven’t but need it.

What’s the balance there between these types of people entering the space?

Certainly if you’re hiring people from pharma with good product relations, they’re going to do some important and innovative things. I would say we should welcome as an industry people from pharmaceuticals coming in and people from other fields coming into the extent that it creates new ideas. It creates new products. It creates new ways of thinking and connecting with consumers and delivering for it for consumers ultimately. But it is not clear to me that at least now that’s what’s happening in every market. So I think there definitely is the potential for individual markets individual states to get it wrong because they aren’t representing the bigger picture.

And they also don’t have the people who are creating these businesses and creating the products you want to have. You need to have a range of those perspectives. We can make better cannabis products, but you can only do it by embracing both art and science. How many Wall Street guys do I know who got grow licenses and then three years later they’ve burned millions of dollars and haven’t produced a good crop yet. You know that from a business perspective you can view cannabis as a commodity. And that is where it’s going in certain ways. But this product is very special. And the more that scientists and the more that business people come in and start experiencing it the more they’re realizing it.

And I think the best market will be created by the best combination of treating cannabis in both an artful way and in a scientific way. In that sense you’ll see cannabis more like wine. There’s the brands and the companies that are treating it like they’re talking about terroir and they’re solving to that. But there’s also cannabis that similar to pharmaceuticals. There’s also cannabis done like distilled spirits which is very different from wine. We’re dealing with a plant and a product in an industry that is similar to other industries in some major ways. But to me I’ve never seen an industry and a plant that actually is so different and so resonant in so many mainstream categories.

Who do you think will influence the culture of cannabis going forward and obviously culture is a very sort of loose sort fluid thing. Users, legislation, product, brands, media etc., who will influence the industry?

Clearly regulators and the keepers of the markets themselves they have to be very influential in the culture because literally they’re setting the regulations. This includes what type of packaging? How can you advertise? So that’s going to have a very outsized influence on each market. But you’re also seeing there is a massive groundswell and engagement from the cannabis industry from the last generation. This group is looking at social equity programs as well as really promoting and making sure that there’s a fair chance that licenses and product creation from every walk of life are represented. You’re seeing a heavy push for this and those voices are being listened to very clearly by the regulators as well as being prioritized by the industry itself. I think this industry is embracing its historical context and it’s saying look we want to get this right. We want to do this the right way and we’re actually creating an industry in an age that is different now. We want to honor and bring the best of the past into today and give everyone a chance.

The industry and the social community around that passion has a very significant voice right now that is actually getting a lot of things done and influencing how the industry goes out. I think the third constituency which is critical is our brands. They translate products and categories to the mainstream. They both listen to consumers as well as try to anticipate what consumers want and through that process, they end up creating a market and the type of consumer behavior that we see today and that we’ll see in the future around cannabis. I think the last major one is media, marketing, and advertising and a lot of this is closed off to the cannabis industry at large now. But the media clearly has a plan. Mainstream media has a platform to bring cannabis into the mainstream. So, the more that cannabis companies can tell stories and reach consumers through mainstream platforms and channels, the more of an outsized impact we’ll have due to reach?

Can you walk me through the Proper business model and how you’re looking at all the opportunities?

We make money by taking a cut out of the retailers and brands. They’re selling that product in exchange for delivering the consumers and the customers to them. Very practically what we do is a home delivery program in a special way that’s the best end-to-end direct-to-consumer experience. But it is not special in our mission which is to find the best products for consumers in every market. Every time they buy it, we take a cut of that transaction from the party where there’s a clear quid pro quo or value proposition, it’s more transactions, and they’re willing to pay us for that consumer. That is a perfect exchange in our world between the three consumer, the retailer, and us.

Are there any foreseeable challenges with content and objectivity?

The way we see our role and our business model is maximize value to the consumer through information and content. We’re trying to create content that is most valuable for consumers to help them figure out whether cannabis is right for me and which products are perfect for a desired outcome. There are different biases that can enter but we don’t want to be biased by money and we don’t want to be biased or skewed by our business model. We’ve come about and built Proper at a time where e-commerce is now possible and can be profitable within cannabis. We built this so that we can independently create the highest value content for consumers, as unbiased as we can make it or at least by external forces. We have viewpoint on how to do things and so that’s our bias.

What do you think are your challenges with Proper. What are the things that you see as the uncertainties and ambiguity around whether this thing takes off or it doesn’t?

There are a couple of things and some of the answers are related. But the thing that we think about the most, that we boldly ignore and do nothing with is, are we too early? Do consumers want Proper now or is this maybe something that consumers five years now would be exactly what they want and exactly how they want to buy cannabis? So are we too early is something we’re constantly thinking about but again this is not for us to figure out. We believe in what we’re doing we believe in the value proposition for the industry, supply chain, and for consumers. And so our mission is to create the best version of that, and has the most valuable and impactful for consumers. And we’re making a bet that will work. But external forces looking at us and investors, is Proper too early? I think we’ve generally seen agreement that it is doing the right thing and that it’s something valuable to the industry. But is the timing right? That’s always an investor question. It’s also an industry and consumer question. But what that’s the one that we don’t care about.

We believe in this end and we’re just boldly going down the path for us to be able to really deliver our value proposition for consumers. Partners are then the most important practical consideration for us. Will the industry, and supply chain buy into our mission and work with us to create the best shopping experience for consumers? If we can’t work with retailers, distributors, or brands effectively in a way that adds value, how can we get our value proposition to consumers? If this doesn’t fall into place, in the end we don’t have a model. So getting the partner buy-in and finding those right partners to deliver the value proposition is critical. That’s practically the thing we worry about the most the one we’re most engaged about it.

Prior to starting Proper, what did you think it be like and what has been the reality of it?

Other than that kind of “unknowns” things, I said earlier the biggest reason I got into cannabis was because of that assessment of ambiguity. I gave the same speech to my parents, colleagues and business partners. I walked in saying you know I actually don’t know how this will play out, but this is a once-in-a-lifetime opportunity. I don’t think we’re ever going to see a product like this, a market like this, a consumer base like this, and a value proposition ultimately that is already this big. This thing could be universal and global, and change so many different consumer products while touching so many different industries and consumers. So that excitement about this is very real. It’s so vague and so many things are happening, yet there’s no playbook for it.

Yes, you have MBAs coming in now and applying business model tweaks essentially and not really creating new tech businesses. Those kinds of things that’s always been something in business you know you’ve seen it forever with Warby Parker and Harry’s. All these business are essentially business model tweaks on paper but here we actually don’t know which business models will even work. I expected it to be the Wild West and I hoped for it to be really unclear and really ambiguous. It’s both really exciting but also frustrating. That gets me excited and engages my brain. We knew this was a space where we knew we’d have to be really hands-on as well. You couldn’t just sit behind a computer and look at data and understand things.

What part of the whole journey has been unexpected?

I will say, I thought it would be easier. Whether it’s finding talent and employees and getting them on board or even just using text messages. I never thought about this. We used text messages just like any other apps and any other business like Postmates to check in with our raters every 30 minutes while they’re in session with a product. The text message serves as a prompt to them for the next set of data points. We’ve been shut out because network carriers are saying this is cannabis-related content, which by the way I thought was illegal to censor. I didn’t think you were allowed to control the pipes that way . These are issues we didn’t expect. That’s the frustration. I didn’t know how much stigma around cannabis and how much the legal and regulatory environment would actually disrupt a business like us.

There’s a lot of moments we have every day, every week over the last three years where it’s like you got to be kidding me. This doesn’t even make sense. You know these are things that shouldn’t be obstacles or this hard. So I think actually those practical things have been continually surprising that we haven’t solved just yet. But mostly I’m getting what I hoped for and bought into and that’s this constant discovery experience and a constant set of problems to be solved which is exciting for us.