Acquisitions Anonymous - #1 for business buying, selling and operating - Should we buy this Pot Business Credit Card Processor? - Acquisitions Anonymous episode 151

Episode Date: December 21, 2022

Want to receive this listing in your inbox? Signup for our weekly newsletter:https://www.getrevue.co/profile/acquanon-----Michael Girdley (@Girdley) and Bill D’Alessandro (@Bill) talk about an online medical marijuana card processor. We discuss how this business operates and why the margins are so big. We guess that this business is underperforming, and we explain how we’d go about scaling it up.Similar to the general licensing requirements, the requirements for obtaining a business license for cannabis are highly variable from one state to the next and even between municipalities. We also talk about the potential risks that would make this business worth zero dollars overnight.-----Thanks to our sponsors!CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.-----Show Notes:(00:00) - Introduction(00:34) - Our Sponsor is Cloudbookkeeping(02:01) - Deal & financials: Medical Marijuana Card Processor(09:43) - How does this business work?(10:30) - What do we like about this business?(12:36) - What are the two things that can happen to this business?(13:20) - Did the pandemic affect this business?(14:02) - How big do we think this business is?(14:41) - Where do the high margins come from?(15:45) - Where is the value in the revenue structure?(18:25) - What is a cool strategy competitors can do in this line of business?(23:16) - What does this business remind Bill?(24:44) - How do entrepreneurs take advantage of stupid regulations?(26:43) - What’s the story behind “A dollar for a dollar”?(32:24) - We like this deal. Who could be a fit as a buyer?-----Additional episodes you might enjoy:#149 - Is this car spinner business a good side hustle?#148 - Growth Marketing explained: Shopify Superfood Greens Brand with 40% subscription rate w/ Baller Jesse Pujji#147 - $9.6M EBITDA Florida Armored ATM Services Business#141 - A very profitable B2B Internet Business in the Petcare Vertical#140 - Let’s SBA the heck out of this deal - with Special Guest Heather Endresen-----Subscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Hey, everyone, it's Bill. Welcome back to another episode of Acquisitions Anonymous. I'm excited for this one because this is a deal we actually like. On the podcast today, we have a business that issues medical marijuana cards online in a really automated way with incredible margins. So I think you're going to like this one. Before we get into it, I like to ask, if you are enjoying this podcast, please hop on Apple or anchor wherever your podcasts are distributed. And please leave us a review. if you love the podcast, we would really appreciate that. So without further ado, let's get into today's episode. Hey, Michael here, want to talk to you about today's sponsor for the episode,

which is cloudbookkeeping.com. So cloud bookkeeping is actually run by my neighbor, Charlie. So I've met him in person and can attest that he's a real human being and a good person. And what cloud bookkeeping does is offer a full suite of bookkeeping services all in the cloud for you around QuickBooks and other technologies that you're using as a small business owner. So if you're interested in getting the bookkeeping part of running a business off of your plate and focusing on running your business, Charlie and his team are one to call. They can put together a bunch of other stuff in terms of helping you manage and grow your business

besides just bookkeeping, sophisticated reporting, definitely helping you get your QuickBooks online set up in the right way and a number of things around payroll as well. So definitely know them and recommend them. If you want to find out more about Cloud Bookkeeping, you can go to their website at cloudbookkeeping.com. Reach out to Charlie. I know many of you have and see if he can help you, make running your business easier and more fun by letting them help with a lot of the bookkeeping solutions. And when you call, mention this podcast.

it would help us and help Charlie know that we're supporting him as well. So thanks a bunch and cloudbookkeeping.com as the sponsor for today's episode. All right. So we've got a really interesting deal this week. And I like this one because it's specialty, but it's also emblematic of an entire category of businesses. So Michael, let me throw it over you to read us this episode. Oh, no.

This has to be scared. Okay, let me pull it up. This one is from website closers, which, by the way, continues to have the best kind of funky graphics of any website. This orange thing is very unique in a world of stuff. And also, Bill, before we start, I'd like to thank you for not making fun of my hat. But, you know, I'm hit now. I did that before we got on.

I think you look like a Boy Scout leader. You know, I'm trying to be hip for the kids. You know, that's how this got to work. So, okay, so here's the deal. It's off of websiteclosers.com. it is an online medical marijuana card processor with over 6,000 patients, massive year-over-year growth, and a $300 average lifetime value of a customer active in 15 states. So let's see.

Are pictures of you not seeing this on YouTube? There's some fun stuff on here. Bill, did you notice this thing on the picture? It basically says pending next to the picture. They have a basically, for those if you can't see, the listing has a lady with a stethoscope who appears to be a stock photo and above her forehead it says pending for some reason for the stock photo. So like somebody put it in here is pending and then never updated it.

Well, I actually, I think website closers does this when it's under LLI. I think they flag it. I think that means this listing is under LLI now. Wait, why do they put it over the picture? I have no idea. I also don't know why they do that because it just tells you not to inquire. Like, why don't they let you inquire and then like save you in case the deal falls through? I don't understand.

Why are we even doing this deal? We can't even buy it. We can't even buy it. I got a checkbook. I can't even do anything. Okay, here we go. But this deal is instructive, and it is still pending, so it hasn't closed. But this deal is instructive.

I see a lot of businesses like this that are for sale. I'm going to put my hat on backwards, so everybody knows this business time. Okay. There we go. So website closers presents a telemedicine company that through its website provides customers with the necessary certificates for medical cannabis cards that needed for treatment. Can I just stop right here? Like, there is zero excuse for having two type of.

in the first sentence of your listing. Like, what is going on here? There's not supposed to be a comma here, Bill. Like, you heard me pause on that. And then the sentence is not correct. It's not grammatically correct. Hey, it's written by a VA overseas, Michael. You got to give them a break.

It would be interesting to see if you could give, like, business details to, like, GPT3, like the AI thing and see what kind of stuff came out of it. Like, invent me a business for sale. We should do that once. Just have a business that we try and see what happens. Okay. All right. This company is riding the wave in the escalating field of medical marijuana treatment that is showing now signs of slowing. Oh, showing nose lines of slowing. My God, this is good. I'm going to kill myself, Bill. This business is now a leader in the

field of industry that surpassed 61 billion in 2020 and is projected to grow by an additional 18 percent in 2027. The industry is increasingly booming to the increased need for online patient management and telecommunications networks that can help reduce health care costs. Two more typos. The owner started the business after having a bad experience with another company. He believes a big driver success that he does an investment at world-class customer services. So let me pause there. So what do these guys do exactly? It's not really clear. If you want medical marijuana, you in many states need like a card or essentially a prescription. Normally, this is, I lived in Colorado when medical marijuana was illegalized and it was really

hilarious because you had all these these marijuana shops that popped up. And in order to get in, you had to have a medical marijuana card. They had a second door where like, if you didn't have a card, they're like, oh, do you need to see the doctor? And then you go over to the attached doctor's office and they let you in. The doctor's like, sir, what's wrong with you? And you're like, you know, I have three heads. And he's like, do you know what it sounds like you need? Some medical marijuana. Everyone gets prescribed medical marijuana, like no matter what their problem is. And then you leave and you walk back in the other door and you're like, here's my card and it'll let you buy whatever you want. It's like a complete farce. So these guys take the farce even further and just do it online.

The optometrists do this game too, where it's like you go to the automators and they just happen to be right next door. There's a place you can go to get your glasses and buy $12 glasses for $600. It's like, this is why automatrists are so smart. Okay. Okay. So this is if you need a medical marijuana card and you don't even want to speak to somebody, you can do it from the comfort of your own home. Yeah, fascinating. And I guess there's 100%, like 100% you get your medical marijuana card. Like, I wonder if they ever tell you now. Or your money back, I bet. Yeah, it's interesting. Okay. So it says here, a big driver's success is due to the investment

of world-class customer service. They're also more affordable and they offer better prices. Oh, wait, better prices are offered than other groups and discounts for renewals, encourage repeat business. If a client has limited income, they will be accommodated where possible. possible. Wow. Okay. Additionally, the service is incredibly convenient. Same day appointments are usually available and customers can get certified in 15 minutes or less. The business will even do the paperwork for patients, which many have praised. Furthermore, many of the medical providers are medical marijuana patients themselves. They have extensive knowledge of the substance, its health benefits, and what is best for each patient. Bill, not only are we a user of hair club

for men. We are also customers. It literally says we are getting high on our own supply in the business listing. You know, it's kind of one of those things where you, you sometimes like, I think you and I play in the straight up normal business world. Like you sell above board products. There's no scamy supplements, any of that kind of stuff. But occasionally you like run in just inadvertently into this world where stuff like this is going on, like what these people are doing, this kind of gray area. thing. And you just kind of, it reminds you that this stuff exists. And sometimes people make a lot of money kind of not only as it exists. Most of it makes boatloads of money. It's nauseating. Yeah. I mean, it's it's kind of that joke they always talk about like people are kind of like amazed

how much money like only fans makes. I mean, you've seen their revenue numbers and stuff. Seen their revenue numbers. Have you seen the the screenshots of the, the girls post made like $50 million last year. It's crazy. Oh, I could use your advice on this. Or maybe the listeners have advice too. So it does seem like, you know, I'm an internet guru now. I'm selling a course. Are you familiar with this? I am familiar with this. I can't wait to take it. So I'm selling a course, but it seems like most of the other gurus, my big thing has been like, I just tell everybody you have a course. And if you want to buy it, that's great. But all the other gurus talk about how much money they're making doing their courses, which is how they promote their course.

So, like, do I need to do that too? Is that how I become, like, true guru status or? Oh, yeah. Yeah, well, it starts with your hip hat, so you're on the way. No 47-year-old should wear this hat. That's what I think. This thing goes on to say they've got an emergency or a EMR, electronic medical records system. So, like, I mean, they might actually be like doing this to the letter of the law. Just because the law is stupid doesn't mean that they're not following it, right? Yeah, yeah, 100%. Well, and I think, okay, so let's see how the thing works here.

The clinicians will see patients after receiving automated alerts from the schedule. Usually this happens like clockwork. The EMR has support staff that gets people where they need to be without any involvement from the owner. They also save records, give patients, consent forms, and store records for the company. A contractor handles PPC advertising and SEO, and SEO has been incredibly successful and cost-effective with an enormous return on investment. And then they have a bunch of stuff here about how they lead gen, business, updated pages, traffic, all that kind of stuff. And they do analytics. And it looks like the contractor takes care of all that for the owner, which made so far, at least the way this business is described.

This guy has created a repeatable process, hired people to do each step of that and like appears to just run a very like slick operation. And despite the, despite kind of the challenges of this gray area of the market and what they're doing, like, it seems like a really well put together business. I think it does. I mean, what basically has happened here is that governments have put up like process hurdles. It's like if you want to buy medical marijuana, you got to like see a doctor, say the right incantation, the doctor has got to write you a prescription and the doctor has to keep record of your prescription. And then you can go get as high as you want is basically how it works. And so this guy has systematized working the system, essentially, right? It seems like he's got a lot of process. He's matching people who are willing to write medical marijuana prescriptions to anybody

who shows up on their Zoom screen with people who want medical marijuana prescriptions. And it seems like he keeps all the records in a really nice software system. You got to kind of hand it to him. I'm impressed. Okay. So they, interestingly enough, the buyer does not need a medical background to operate this company, and the current owner has made it easy to transfer, even though I think they hinted earlier that the current owner is a doctor and does see people and give them prescriptions for

medical marijuana. And basically, it's turnkey and ready to come over to the new owner, which I think is pretty cool. The other thing that I like is that they've started to partner with the dispensaries as a lead generation source for them, right? Like it differentiates off of kind of the SEO, no PPC stuff, which, you know, has volatility with it if somebody wants to outbid you. And it does appear that some of that is basically affected. It has different states and localities have different rules about direct recommendations. But keeping a good relationship with the shops has always been helpful. You know, I guess what you want is you want the guy behind the counter to be like, hey,

you know, you need to go do this, right? Go try these guys because I think it's really good. Here's a card. Go outside, do it on your phone and come back in 30 minutes later after your same day appointment. I mean, 100%. How many of these are, it says many of them are same day. It'd be very interesting to see how much of it would be instant. So here's the question I have, though, Bill. So in Colorado, for example, it's like the Wow, Wild West. Like, I've gone into some of those shops and the people are like, what would you like? And there's like that proverbial, like, just cornucopia of different

marijuana products. And you just walk out. Like, it's just like going to a liquor store. Is that a danger for this business? Like, is this going to get so liberalized that you don't need these medical marijuana, you know, things? I mean, it's possible. Like, if marijuana becomes federally legal, I would think this business might be toast overnight, right? Because I think that would obviate all the state hoop jumping.

But it's also possible, by the way, that the way it becomes federally legal is medically, in which case, this is a freaking bonanza. 100%. So another question I have about this. How much do you think is COVID boom? It's a good question. Is like, do people get more high during COVID? Is this like a marijuana bump?

So, so interestingly enough, it turns out people do really weird stuff during the pandemic. You know, me personally, I got really big into Twitter and started this wonderful podcast with you. It turns out one of my buddies decided to get fluent in Spanish and spent 18 months getting fluent in Spanish. It was pretty cool. I only know about it because he emailed me about it. But yeah, you got to figure people are sitting at their house. They're like, you know what I need to do? I need to smoke some weed.

other people just got really high the whole time. Yeah, I just totally do that. Okay, so here's a bit more about the deal. Okay, based on how I've described all of this, how big would you think this business is? I don't know how big it is, but I bet the margins are amazing. Like, okay, let me, let's do, let's do the bill guess? Do you think it's, do you think it's above $5 million a year in revenue? Do you think it's above $2 million a year in revenue?

Do you think it's above $1 million of revenue? Or do you think it's above $100,000 a year? in revenue. It is in the millions of dollars of revenue. This thing is going to trade for a banana's multiple. And because it is sitting on here with typos in the description, I think it's got to be smaller. Otherwise, it would have been, it would have flown off the shelf. Smaller than a million. Yeah. Here's what it is. Asking price is 500 grand. Cash flow is $202,000. Revenue is $507,000. It is three years old with two employees and a bunch of contractors. So 40% net margin.

500K of revenue, 200k of gross profit. I think that's sick. I think that's sickly awesome. But it's also like, oh, like I was hoping it was bigger. I was hoping it was a little bit bigger. My question would be, I wonder how to make this bigger. Like you can't run Google ads for this. You know, you can't, it's marijuana, right?

So there's all your paid options are off the table. It's also not a physical product. So like you can't sell it on Amazon. you know, all your kind of traditional e-com options are off the table. I think what's left for you here is affiliate marketing, SEO, and kind of word of mouth, and trying to become partners. Yeah. Well, and he talked about that here.

He's like discounts or offer for people that refer, that friends refer and many customers come from word about interactions. So I guess that's a real deal. The other thing about this is you only have to get this diagnosis once, right? And you have your card forever? No, you have to. renew it every so often. They're all renewals.

Reoccurring revenue, you say. Yes. It does get a marketing plan. What's cool about this is it sounds like he's got a software engine in place, which would probably be scalable. And also, and there's another thing that's cool about it, we skipped a whole paragraph about how a contractor handles all their SEO and PPC advertising. Anytime I see that, especially in a small business like this one, I assume the contractors

is absolute dog shit, and this is a major opportunity. Because all small bit, like, they cheap out. They're like, oh, like, I would never pay $10,000 a month for an outsource marketing agency. Well, guess what? The best ones cost $30,000 a month. So this guy is, this contractor is probably some overseas moron. No offense, overseas people, but there's moron than the United States also.

But this is probably some moron that doesn't know how to do anything, right? And it's probably vastly under-scaling this business. I had to guess. I've seen it a lot. So funny, before this call, I was on a call with some two young men recently out of business school with their talking about a business thing. I'll be that nondescriptive, but they asked me what the biggest problem was for our situation. I actually told them it was young men in their late 20s who recently graduated business school going out telling telling business owners really dumb things. They thought that was funny.

But it's funny because, you know, I'm at this point in the age now. We're all be talking to people and doing business with them. And I'm like 20 years older than them. And it's like, wow. Like, I remember when I was you. Like, it's totally different, totally different type of thing to them, right? It's like, I remember when I was 27, talking to some griseled 47 year old who's just like, uh, whatever.

It seems like they've actually, so in the paragraph it says they've got state specific landing pages, which is good. So I think, I bet the PPC is really under optimize it, but the SEO is not bad. based on reading this. Each state has an individual landing page, and they're trying to rank, because the searches are probably right, medical marijuana card Colorado or North Carolina or Texas or whatever, right? So they've created individual pages on their site to rank for those terms, which is probably going well. I mean, I would just love to dig into their Google Analytics and their rank and plug this into SEM Rush or HRAFs or one of these SEO tools and actually see what

they're ranking for, what the volumes are, and if there's opportunity to do better. Wow. I just Googled, Google the competition. I pulled it up here for New Mexico. And I think this is, by the way, we do this like every show, but I think this is just such a powerful way to do a first level understanding of a business is like, go pretend you're kind of a customer and see what the experience looks like. How many options do you have? Who shows up? What sort of language seems to work well for them? And like, you and I have done this over and over again just very naturally. But I don't think we've ever really talked about it as being like, oh, like, if you want to truly understand a business, like go start with the top of their funnel

and then start to work your way through it a little bit and see kind of what that feeling's like. And it will tell you a ton about your market dynamic. And in this case, I googled medical marijuana New Mexico online. And yeah, we went through one, two, three, four, five, six, looks like five, six medical marijuana card people that this group is competing with. And some shops, piece cannabis cards, card service, all this kind of stuff. So yeah, so SEO appears to be a real deal for these guys. So what I want to point out, and I know that our listeners are not seeing this SERP, but it's worth describing. Some of these appear to be, so he searched for medical marijuana in New Mexico online.

Some of these appear to be like just a business in New Mexico that does it. I see basically three or four sophisticated competitors on this page. And they're the ones like this one is veryheel.com slash new Mexico. There's another one that says marijuana doctors.com slash nm. There's another one at the top leaf something slash cards slash New Mexico. These are the guys that have figured out that you need state specific landing pages to rank. And they're ranking much better. And they're probably national businesses.

is they probably was one of the one of those results is probably this business if I had to bet that's done the state specific landing pages. So that I would say, okay, I probably got some bit players in each market, but like here are my three big competitors, the guys, and I would search every state, Florida, Texas, you know, whatever, all the way. And I would say, who's showing up on all these pages with state specific landing pages? This is my competition. And then try to understand all of them, pricing, all that stuff.

Yeah, 100%. Oh, Michael, I love what you just clicked on. So one of the results is veryheel.com slash New Mexico. The next one is Marijuana Doctors.com slash New Mexico. And when you click on Marijuana Doctors.com slash New Mexico, it says in small print at the bottom, powered by VeriHeel. So the guys at Veri Hill own both domains and are trying to monopolize the SERP. So it's all them, which is pretty cool.

My buddy, my buddy here in St. Antonio got involved in marijuana production in, in Arizona, or no, New Mexico, sorry, New Mexico. And it is the, the stories he has are the craziest things. Like, they're like, there was this like, there's this father's son team that like tried to to help him after the first group that he was working with when he invested in this like medical, like basically to step back, like supposedly the rules in New Mexico, if you want to have a marijuana shop, you also, or you want to produce marijuana, you also have to have a shop. and there's a limited number of shops.

So, like, basically, like, limits the number of producers. And so, like, the first group he, like, partnered with, like, tried to rob them and then, like, went crazy and he had to fire them and, like, bring in these new people and he invested in the deal. Then those people tried to steal from them. And now he's, like, on his fourth group. And the problem with hiring people to work in your marijuana production plant is it's out in the middle of nowhere, right? Like, and they're high all the time. It's like, oh, this kid goes. This kid, this is like two strikes you're out.

So anyway, I just think it's totally fascinating. And guess what he did before he got it to medical marijuana? Something equally prestigious, I'm sure. They were an oil field supply company, as they did. Isn't that what everybody in Texas has to do or in the Southwest America has to do for a couple years? Well, I was like, I mean, he's from Midland. He's here in San Antonio. And I was like, why are you?

signed up to be in, you know, bum-f New Mexico to deal with these crazy people. Like, isn't there something different you want to do? It's just a just totally nuts deal. So, anyhow, that was my, that was my story about that. So what, I mean, I like about this business, it's zero cogs. I imagine, like your cogs here are basically your providers, like your people who are able to write a prescription. It seems like you're facilitating a video call and just keeping really good records. So I really, and I assume probably the reason the margins isn't 100% is, is he's doing some sort of rev share to these people. Like you got to pay them, you know, per, per visit or whatever.

Yeah, he's paying the doctors. This business reminds me of another business that is in some ways even worse than this one and in some ways better. So as you guys know, I'm in the pet industry and there have been a lot of people who have bought pets recently. There have been all these businesses that have cropped up that will issue you a service dog license for your pet so you can fly with it on a. airplane. And so you can take your dog in places that dogs are not supposed to be because now they

are a licensed service dog. So you can go like service dog permit.com or whatever. And they charge you $99. This business, marijuana business, you need to speak with a provider and get a prescription. That one just generates a PDF. It's just like, here you go, licensed service. Like you answer a couple questions and it's like, you qualify a licensed service dog because what is a licensed service dog? like a medical controlled thing. And it prints you out a little license PDF that you can show to the flight attendant when they try to say you can't bring your dog on here. And then your giant golden retrievers trying to sit in your lap and bothering everybody

out of flight. And it's 100% margin. I've seen some big ones, like millions of dollars in EBDA. That's insane. Well, it's kind of like if you want to go marry your, you know, you want to preside over the marriage or one of your friends, you just go get ordained. You ever seen that? You just go get, there's like online churches.

You pay 20 bucks. They give you a certificate. You're like, I'm a minister of whatever, the church of whatever it's supposed to be. Yep. So this category of business, I'm like, you know, expose as stupid government regulations, right? Yeah. Like, oh, like, here comes private enterprise. Like, oh, you think you've put up some hurdles.

We're going to streamline the crap out of this. Here we go. 100%. Well, and I mean, that's a theme I see and I think a source where people go find business inspiration. You know, I recently looked at a business that I can't talk about it because I sign an NDA. But literally it runs at 80% profit margins in the single digit millions bill. Like just an insane business. And basically the whole business exists because they found something that everyone has to do in the United States.

And they figured out a way to insert themselves and make it slightly easier for the customers and basically double the price of it. So if you were going to pay, say, $500 to the government, they charge you $1,000 for it. and they go and they do it on your behalf, right? So what's, what was cool about it is when you have a business like that, this is a super fun thing, you can put your,

you start to put all those government charges on the, on your credit card. So you rack up like 12 million miles in a year. Like basically you could just call up United and be like, I would like, I would like to fly to London and they'd be like, which seat would you like? You're like, no, I'd like the entire plane. I'll take the entire plane and pick me up at my house here and then we're going to London.

That's how many miles you have. This is one of, I mean, broadly though, Michael, like this is one of the huge unadvertised perks of owning a small business. 100% is you can run a ton of money through a credit card and you fly first class everywhere on points. You know, you spend a ton of money on advertising, on shipping, you know, in e-commerce, those are the two big categories, right? I pay Facebook millions of dollars a year on a credit card.

And then I pay FedEx millions of dollars of year. And those are usually the point multiplier categories too. So it's like millions of points a year. A huge perk. Were you around when the U.S. Mint started selling dollars for a dollar? Yes, I remember that. That was huge. So for those of you to know, okay, so here's the story.

So, you know, America wants to be very progressive on everything, right? So we decided that, first of all, we wanted to save money. Before we were progressive, we want to save money. So what we decided to do is we tried to replace the $1 bill with $1 coins because it's much cheaper for the mint to produce dollar coins than it is bills, right? They last forever. Okay. Then America, we decided we needed to put more of a statement out there. And at first, all of our $1 coins were presidential coins. So we put all the U.S. presidents on there. But then somebody passed a bill that made it so they had for every president coin they produced, they had to produce one Sakajua coin, who's a famous. famous Native American hero. So suddenly, after several years, the mint was trying to save all this money by producing these coins. And this happened like 18 years ago, 15 years ago. And so they were producing all these coins. But because they, because nobody wanted the coins, the mint started to have like millions of dollars, hundreds of millions of dollars of these coins sitting in warehouses in

Washington, D.C. They'd print them and nobody wanted a saccajuwea coin. Truckloads. Truckloads of coins. Like imagine huge warehouses just full of coins. And so the U.S. Mint decided to, well, here's what we need to do. We want to push these out into the marketplace. So what we're going to do is we're going to allow people to buy them online. And then we will ship them free of charge to their house and we'll charge you a dollar to send you a dollar. Right. So, Bill, this sounds pretty good, right?

They're selling a dollar for a dollar. What could go wrong? Well, also, like, where, you know, what's the scam? What's the scheme here, right? How do you make money? So, okay, so they're sending you a dollar for a dollar. That's, well, you're not going to win there. But what some people figured out that was really smart was if you bought the dollar for a dollar with a credit card, the U.S. government paid the fee. So you would get the points for free for buying a dollar. So what people figured out is they would go buy like $20,000 worth of coins and then they would get all the points from buying those coins. They would then take the money. and then take it straight to their bank account, and then they would pay off their credit card bill. So they would just do that over and over again, getting points for free. So people got

hundreds of thousands, millions of points from doing this. And guess who did it? He's on this podcast and he's wearing a hat. This guy. Michael Gurley, how many, like truckloads of coins, you take them in the bank and you're like, I'd like to make a deposit? Truckloads of coins. I used to have truckloads of coins delivered to my house for months, months, months, months, months. So here's some stuff about coins, though. They're, like, super heavy. So, like, the UPS guy would show up, and he'd be like, what's in these things? I'm like, I didn't want to tell them.

It's like, it's $9,000 worth of coins. You just delivered $9,000. So eventually the whole thing got to a point where that was all fine. The government started to figure out what everybody's doing because these banks would send the coins right back to the mint, unopened. So they figured out what was going on. So eventually the whole deal got to a point where the U.S. government made you sign a statement before you took the money, before you took the coins, that you were going to put them into circulation

and made you promise that you're going to do that. So, of course, that made me, I mean, I'm not going to lie to the government. Like, who would lie to the government bill? It's not a good idea. I don't do that. I just don't like to lie. So anyway, I said, okay, well, here's what I'm going to do. I'm actually put these things into circulation. So, like, all the employee checks, I would cash them. They would come in with like a $900 check and I give them 14 pounds of coins in rolls. But then when it, it got to where I couldn't get rid of them all. That was the problem. So one time I took all the coins and I put them in a bag and I decided to fly to Vegas and I was going to gamble the coins. And so I called Southwest Airlines and I said, okay, Southwest Airlines, is there a limit to the weight I can have on a carry-on?

Because I know I can only have so heavy of a check bag, but a carry-on. And like, they put me on hold. and they came back, they're like, okay, you're asking how heavy can your carry-on be? I'm like, yeah, I'm going to have like a 190-pound carry-on. So I took 190-pound carry-on of all these coins, and I took them to Vegas, and I turned them in $100 bills. I gambled them on blackjack, and then I cashed them out. That was it. So that's why I put them in circulation. But yeah, so I get on the Southwest Airlines flight, I have 190-pound carry-on full of coins.

And by the way, this is post 9-11. So, like, security was like, what the hell is going on with this bag when it went through the thing? But I roll into the Southwest Airlines flight, and this little tiny grandma flight attendant offers to put my bag up into the overhead. What do you think I did? Did you let her try? Definitely not. Definitely not. I don't lie.

I also don't disrespect my elders. So I did it myself, and the thing went up. But the whole time I'm writing, I'm like, man, I just put 400 pounds, you know, 190 pounds plus myself on one side of this plane. Like, how do I even this out? Like, not impede our flying ability. But anyway. So, also you got a bunch of credit card points. Oh, yeah.

I have like, I had like two million points at the time on American. I almost, I have lifetime gold. I almost made lifetime platinum. So, so bring it back to the deal because we're almost out of time. Oh, yeah. Do you like this deal? I think I kind of like this one. I think it's not bad.

For the right person, I think it's totally interesting. It's priced right. If you want to do this stuff, I think it's totally reasonable. $500,000 asking price for $200,000 in cash flow. It's got to be pretty steady. The stuff isn't going anywhere. You've got some growth opportunities, especially if you know something about this SEO PPC space.

I like it a lot. I mean, maybe you own an agency, you know, like our friend Barrett, who does this stuff. Like, if you're really good at this, put your money where your mouth is. Like, own the other side of this and capture both sides of the value. Like, I like it a lot. Yeah, yeah, I think so too. I would want to understand where the leads came from because the nice thing about SEO is it's free marketing.

The bad thing about SEO is Google can make one algorithm to update and boom, all the oxygen's out of the room. Your business is basically over. So I would want to understand, is it all coming from SEO? If so, that's a risk. I want to understand, you know, how many dispensaries I actually have, you know, with cards out there sending me more patients. I want to understand the recurring revenue part of it. How many people actually renew with me after a year?

I mean, the business has been around since 2019, so you should have a sense. You should be able to cohort that out. But if I can see that people are renewing and I can see that people are finding it not just purely through SEO, I'd also be worried a little bit if a huge portion of it was PPC because if they're doing PPC, it's probably technically not terms of service compliant PPC, I would think, or there's some risks there. So I want to make sure that there was a robust customer acquisition, diversified customer acquisition engine,

but the margins are great, and especially if I thought I could scale it, this is pretty cool. I dig it, yeah. I dig it for sure, which it was bigger. Yeah. It's a lot of work for this size, but this may not be, you know,

the right buyer may not have that kind of challenge that I do. So that's a good one. It's a good one. See, we like deals sometimes. Just not this one. All right. All right. Well, that wraps it up for another episode of Acquisitions and Ott of us. We're all going to get our medical marijuana cards now. We'll see you guys next time.