Customer Relationships Inspire Innovation and Advocacy

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No hesitation. Saying yes without hesitation can sometimes get you into trouble, but for John Hartsell, it’s a value at the center of his cannabis packaging company – DIZPOT. Co-founded with Jeff Scrabeck, DIZPOT prioritizes customer relationships in producing customized packaging for cannabis brands.

Focusing on customer needs led DIZPOT team members to accomplish something few have done — receiving a U.S. patent for a cannabis-facing product. Their biodegradable paper jar with a recyclable plastic lid is the first of its kind. Lightweight, food-safe, child-resistant, and customizable, more than a dozen brands now use this jar to package their gummies, flower, and pre-rolls.

The DIZPOT team are active participants in the grand mission of their customers. Working to prioritize collaboration and community to further elevate the entire cannabis industry, they are members of multiple advocacy organizations across the country.

Founded in 2017, DIZPOT has grown to produce about 130 million individual packages per year for cannabis brands, and they aren’t planning to slow down any time soon. Maintaining their old-school service mindset, operating by the golden rule, and doing the right thing when it needs to be done will continue to push their business and the industry forward in the years to come.

Hartsell sat with The Green Letter to share how prioritizing customer relationships elevated DIZPOT to revolutionary product innovation and fueling advocacy efforts. This interview has been edited for length and clarity.

Where did the idea for a custom cannabis packaging company come from, and how did it come to fruition?

A little more than eight years ago, I had been on the political side of things – lobbying and campaign politics around this industry. I made a number of really strong contacts with the new licensees in Arizona, and I had a business that I sold. I no longer had a means to really leverage all of my relationships and contacts, so my partner Jeff Scrabeck and I were on a boy’s trip to San Diego to see a band called X. During that weekend, I commiserated with him that I wasn’t able to monetize my relationships, and he flippantly said, “Let’s start a distribution company.” 

He had a really strong understanding of distribution and I had a really strong understanding of the industry and the compliance and legalities of it, so we combined those two bits of experience into what was supposed to be a distribution company. Ultimately, we turned into a custom packaging company very early. We had a customer, then Swell Pharmacy, that needed a cartridge box and they were unable to source that. I said we can have it to them in three to four weeks. Jeff kicked me firmly under the table and said, “How the F are we going to do that?” 

I told him we’d figure it out, and sure enough, we did. They got their boxes and we were off to the races, transitioned directly into a custom packaging company, and we’ve been serving the industry in that area and others for eight years now. We’ve made a whole business out of saying yes and figuring it out. We’ve grown a team of incredibly talented and intelligent people who make it easy for us to say yes every day.

How were you able to leverage your network to build DIZPOT’s client base at the start?

I had become a trusted source from a political standpoint and was able to get meetings with legislators and the regulators, and really help those licensees understand their compliance rules. I did quite a lot of work at a local level supporting dispensaries that were needing to get the Board of Adjustment to rezone their property into the setbacks required for their locations. Through those relationships, I was able to get meetings and have conversations.

I was also a trusted source. People had spent money with me in the past and gotten the results they were looking for, so the transition was fairly easy. The long-term approach to advocacy being our bleeding edge as an organization has proved to be fruitful for us. We don’t just engage in politics in our backyard; we have engaged in the politics of the industry throughout the United States. I’ve spoken in front of many regulatory boards, state legislatures, and governors, and I’ve taken it very seriously to be on the side of our industry because commercialization of cannabis is one of the most important defenses against criminal activity we could have in the U.S.

It has proven time and time again that not only are we implementing a program that is gaining tax monies being used for roads and schools and other infrastructure needs, but it’s also mitigating the significant cost of incarcerating people for non-violent crimes. The overall approach of commercializing cannabis throughout our political system is really a huge benefit not only to our industry, but to our consumers, and that makes us a very recognizable entity across the industry.

Does your legal expertise affect how your packaging and branding are designed?

It does. At the end of the day, making a package that is beautiful and appealing to the consumer and the target audience is incredibly important, but we have customers doing business in multiple states that have disparate compliance regulations. Enabling them to have consistent packaging across those states with the right compliance information is huge, whether it be a sticker, a logo with a cannabis leaf, a statement for consumption safety, ensuring fonts are big enough, and doing all of those things in a food-safe package. 

At the end of the day, paying attention to the embellishments on that package to make it unique so your local customer can find you in the dispensaries where they’re shopping is also incredibly important. Some states limit you to two colors on the package. Other states say there can be no cartoon figures or characters on your package, but that can be up to the eye of the beholder. The regulator can tell you whether or not they believe it to be a cartoon caricature, and we are paying attention to all of these things. We’ve become students of compliance regulations in each state. We don’t like to use the word ‘expert’ because compliance rules change around the country every day, so we remain students and try to understand how we can help protect our customers. We’re not attorneys, so we recommend everybody spend a little time with their attorney ensuring they are compliant, and they produce a package that is going to remain protected in the marketplace.

Is your knowledge different from that of other cannabis packaging companies?

Our competitors are out there doing the best they can to also service the same clientele. There are tens of thousands of cannabis businesses out there, and not every one of them is going to be our customer. We work collaboratively with a lot of our competitors because some of them produce things that we don’t and vice versa. There’s plenty of space in our industry to be competitive in a kind way, so we never diminish the value and the opportunity our competitors have. We think fondly of a lot of them. We see each other out in the world. We’re on panels together. We booth side by side at conventions together. We’re all in this industry for a similar reason. There’s opportunity for sure, but a lot of us are incredibly passionate about the plant, and that makes for a really honest and fair competition out here.

Does your longstanding set of relationships make the brand different?

Yes, and I would say our three core values — old-school service, no hesitation, and the golden rule — are the reason we have great relationships with our customers. We host events that are customer-related and specific. We show up in the marketplace where they are. When there are events that are customer-facing, we’re invested in them. Simply hosting dinners and happy hours … We just took a group of customers to Bisbee, Arizona for a burner event, and those are the kinds of things we do that build lasting long-term relationships on top of being consistent. Enabling our customers to understand their supply chain would not be disrupted as a result of our business and what we’re doing with them means there’s an intimacy in our relationships because of our friendships in those organizations, and there's also a lot of trust in our relationships because we’re honest, direct, and transparent.

Problems exist and challenges arise, and when they do, we get honest real quick and start solving those problems right away. We are never in the game of hiding things or trying to walk away from something when it becomes hard. In fact, around our place, something we say quite often is to find the fun in the challenge. If you can’t find the fun in the challenges, then you’re probably in the wrong industry altogether because this industry is built on challenges.

How did your customer relationships lead to the development of a unique and newly-patented product?

That was really a fantastic project because it started with a customer and one of our account executives – Charlie Dains – who understood the problem. He got with one of our creative team members – AJ Keller – and they started talking about an option. The customer wanted something sustainable that was part of the brand. It had to be food-grade, child-resistant, and ASM-certified, so we started looking into it by trying to outsource something that was in this category, and there was nothing out there. We immediately knew we had something that could be patented.

As my partner Jeff and I became involved, we started making molds and creating the packaging device. It’s a fully-biodegradable paper jar with a recyclable plastic lid. We have been one of the very few companies since commercial legalization has happened state-by-state – though federally cannabis remains a Schedule I substance – that has had a patent issued for a product specifically facing the cannabis industry. That patent is now not just pending — it has been issued.

We are so proud to say that we are mitigating our footprint in the industry by having a fully-sustainable paper jar that people use for gummies and other edibles, flower, and pre-roll packs. The jar itself can scale in size, so it’s really been a unique project. I love the fact that two of our team members now have their names on a U.S.-patented product, and I’m very proud to say that our organization is mitigating its carbon footprint in this way. We produce about 130 million individual packages a year, so as many of those as we can produce that are recyclable or biodegradable or sustainable in some other way — like being made from ocean plastics — helps do our part as an industry leader in sustainable packaging.

What was the development and prototyping process like?

It’s actually really interesting — because we have created so many new products, we have a keen understanding of materials and the formation of those into a packaging form. It really did not take long — a couple of months for us to have the proper form and material. Within four months, we had our initial product in the marketplace. 

The patenting process took about 24 months from beginning to end. Once I sent the email with the product specifications to my business partner and said, “Let’s patent this,” we officially became patent-pending because we’d started the paper trail. From that point to patent-in-hand was about 24 months. It cost tens of thousands of dollars in R&D and probably something close to that in legal expenses, but the value that comes from having that patent just from a credibility standpoint, from an ingenuity standpoint, what people think of our organization, and having that be a part of our story has opened the door for more conversations than you can imagine. With team members like Sadie out there telling our story and inviting people to the conversation, it really helps to have a strong message that really connects to our brand and connects us to the brands we want to work with.

How many brands are you working with that are using this new paper jar?

About a dozen or more brands are actively using the paper jars. Our organization has worked with thousands of brands; we’ve created about a thousand brands ourselves as our organization goes along through the industry. We’re commonly working with hundreds of brands on more than hundreds of projects at one time. It’s a unique ecosystem of organizations that all live in a competitive environment, but are all leaning on each other for great ideas and to keep our industry propped up as a small-business industry.

We’ve been a small business in this industry for eight years, and the only way we survive is by having good partners and good friends along the way who are also understanding of the value of businesses in our industry staying small. We’re proud to say we’re part of that community, and we stay a part of that community by being involved in local associations across many different states.

What kinds of collaborations and associations is DIZPOT a part of?
We’re members of more than a dozen organizations, like the Missouri Cannabis Association and the ACIA in Arkansas and the KCIA in Kentucky and the MDA in Maryland, all over the United States. These organizations are getting together and causing the community to look each other in the eyeballs; they are competing in the streets for business customers, but when they have advocacy work to do, they’re competing and advocating together and having the right conversations to maintain a strong industry.

Our participation is not just financial — we write the check and put our money where our mouth is — but we also show up. Just recently in Ohio at OHCANN, they wanted to create window clings so when people walk into a dispensary, they know they’re walking into a shop that’s a member of their advocacy organization. We donated those to the organization — not only the time to create and design them, but also to produce and ship them to their locations. That’s the kind of business that we do with all the organizations we’re members of. We also do philanthropic work with organizations like The Redemption Project which fill the commissary accounts of wrongfully incarcerated cannabis inmates. We get together every Veteran’s Day and make sack lunches, and we visit our homeless community in the Phoenix area and hand out lunches and water. These are the things we care about doing because we care about our community, and we enjoy participating in those ways.

What issues are coming up in your advocacy work right now?

The issues coming about in new marketplaces related to potency are very interesting to us. At the end of the day, we understand what legislators are trying to do and accomplish is mitigating the possibility of people consuming more cannabis than is good for them. There’s a lack of understanding about potency and its need for high-potency products in medicinal cannabis, and that’s something we’re very interested in understanding. Obviously the research going on around cannabis is incredibly important, so we participate in a number of organizations doing that.

Frankly, for us right now, one of the most interesting political projects we’re working on is related to psilocybin and understanding its medicinal impact and how the transition of psilocybin to psilocin — an effective process ahead of consumption to make the medicinal properties even stronger. Our focus is firmly on the cannabis industry, but we’re also looking at other Schedule I substances and finding ways for them to be used properly, legally, and effectively from a medicinal standpoint.

How does your participation with advocacy and research organizations help elevate the industry as a whole?

Well, I like to use Oklahoma as an example of where things changed, and changed quickly. Take a state where 90% of the population are in church every Sunday morning. They handed out licenses — not just to anybody, but to everybody. Tens of thousands of licenses were handed out for this new opportunity — this new gold rush — so all these folks who showed up to church on Sunday began talking about cannabis as an opportunity rather than as a gateway drug. 

When you have legislators understanding the value of cannabis, the tax dollars it brings, and the cost mitigations from eliminating non-violent incarcerations, the whole nature of the way people talk about cannabis shifted from viewing it as a problem to talking about it as a commercial opportunity. That elevates the industry in a way that changes communities of thought and the networks of professionals and scientists who are now involved. Those folks are getting in front of our lawmakers and regulators, our Rotary Clubs, the Elks Lodge — all of those places. Having those conversations openly is the best way for us to elevate the status of this industry to something akin to others like restaurants, bars, and you name it. Cannabis is now basically a commonplace industry among the regular workings of daily life.

Where do you see DIZPOT going in the next six months, or in the next five years?

The next six months is so short-term for this industry now, which is insane to say because we used to talk about our industry in dog years. We’re finding a lot of stability in our organization, and finding that we’re evolving in a way that we’re not necessarily being selective, but picking the right customers to work with and identifying ways to do more business with them. We really do value the partnerships and relationships that we have with our customers.

Over the next couple of years, we’re focused on really defining what that looks like and maintaining our approach. We are an old-school service organization; we pick up the phone when it rings. No hesitation — we’re focused on doing the right thing, right now when it needs to be done. The golden rule — it’s a reciprocal way to live your life, and I’m going to treat you the way I want to be treated, and I’m going to do business with people who are treating me the same. Living by those core values is the way we’re going to keep progressing forward and having success in this industry. 

The thing I’m most proud of is the team that we’ve built and all the people behind our organization that not everybody gets to see. We are grateful to those folks and for the folks we do business with as well.

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