For decades, 44-year old Ruddy Santana, a Black, Dominican- American founder of cannabis start-up, Holyoke Leaf Inc., in Holyoke, MA, was too ashamed to speak of the discrimination he endured that crushed his plans for a career in either military intelligence or finance.
For the first time in an interview with American Legal News (ALN), Ruddy strayed from his usual upbeat spin and gave voice to how he was forced to shelve his military intelligence career after the NYPD fined him for smoking a joint; how he tumbled into homelessness after being fired from one of the Big Four accounting firms in New York City; and how as an indomitable entrepreneur, Ruddy is leveraging his Big Four and private equity experience to expand Holyoke Leaf into a nationally-known premium cigar brand.
Initially, Ruddy plans to sell flower, edibles, and cartridges to Massachusetts’ dispensaries; then to roll out A-List Holyoke Leaf cannabis cigar lounges in Cambridge, MA; and in then in New York and New Jersey, when pot becomes legal in the two states.
New York Delivery Service and Phillip Morris
Ruddy has spoken to New York’s Cannabis Bureau Social Equity Program directors–led by African American Assembly member, Crystal Peoples-Stokes (D)—whose staff members have assured him that his $200,000 Manhattan cannabis delivery business–including flower, cartridges, and edibles—will be considered a legal asset when he applies for his social equity license in New York’s potentially $3 billion blockbuster industry.
Finally, when cannabis is Federally legalized, Ruddy anticipates rolling out Holyoke Leaf premium cigars internationally to compete with the likes of Altria, owner of Phillip Morris, which recently bought a 45 percent stake in Canadian cannabis start-up, Cronos, for $1.8 billion.
The Muslim Swine Allowance
Ruddy says although he earned several degrees from Fordham University in Manhattan–including a BS in Finance; an MBA in Professional Accounting; and a Masters in Taxation; as well as the distinction of graduating 1st in his Fordham ROTC program with a minor in Military Intelligence—he’s endured such racism that even as a devout Muslim who thinks of alcohol and pot as “the devils”, he had no choice but to enter the cannabis market or become homeless.
“Anything that clouds the mind is prohibited in Islam,” says Ruddy.
“My only defense for entering the cannabis industry as a Muslim is what I call ‘the swine allowance’ meaning that in the event of starvation or injustice, Muslims are allowed to eat swine. (Quran 2:173).
“Similarly, I argue that because I’m driven by necessity, neither craving nor transgressing, there will be no sin upon me. “
“Meanwhile, I pray for an exit strategy: a buyout from either cannabis investor, Acreage Holdings or Privateer Holdings, which together with other investors, have infused $881 million into the global cannabis space, per the Pitchbook Platform,” Ruddy reports.
Fired from ‘Big Four’ Accounting
Although the PriceWaterhouseCoopers (PWC) partners assured him he was a rising star, two middle-managers, who have since become partners, advised Ruddy he was too old to become partner himself, and suggested he become either a rapper or artist.
He was terminated from his job in PWC Transfer Pricing Group, although he vehemently objected, as he had reached a 90% chargeability record (billable hours) with the firm.
Ruddy believes he was really fired after confiding in the Human Resource Manager that he was overwhelmed by the death of his beloved grandfather and the re-incarceration of his younger brother, whom during the Rudy Giuliani era as NYC’s Mayor from 1993-2001, had received a 9-year sentence for a cocaine charge when he was 16 years old.
Cannabis Conviction Required
Now, in 2019, in a twist of fate whose surprise ending is worthy of an O’Henry story, the Massachusetts Cannabis Control Commission requires applicants to have suffered the very injustices that cost Ruddy his intended careers.
The Commission’s regulations require:
- A past drug conviction and residence in Massachusetts for at least the preceding 12 months. (Ruddy meets both criteria.)
- Married to or the child of a person with a drug conviction and residence in Massachusetts for at least the preceding 12 months.
Holyoke Growing Space Secured
Ruddy had already won preliminary acceptance to the Massachusetts’ Cannabis Social Equity Program to both farm and manufacture cannabis for wholesale distribution when he first spoke to ALN in May.
However, he still needed to secure one all-important prerequisite before Massachusetts could finalize his microbusiness license: a lease with specific language indicating the landlord granted consent to cultivate.
“As my landlord is related to Alex B. Morse, the cannabis business-friendly Mayor of Holyoke, consent was no problem,” says Ruddy.
What’s more, on June 1st, Ruddy attended the Cannabis Control Commission’s Social Equity Program orientation at the Blackstone Heritage Center in Wooster, MA.
“Among the benefits of this six-month program is the incredible access to licensed market leaders and funding to help us succeed as minority enterprises,” Ruddy reported.
The Guerrillas of Humboldt County
Ruddy Santana has secured his first $70,000 in equity financing from a “private investor”, he writes in his Holyoke Leaf prospectus.
The private investor, Ruddy discloses, is a farming collective of older hippies and cannabis entrepreneurs, known as the Guerrillas of Humboldt County, California, as they dominate the American cannabis Industry.
Ruddy anticipates raising the remaining $330,000 on CannaFundr.com, a cannabis-oriented investment platform, before submitting his final application on June 30th.
At that point, Holyoke Leaf’s valuation will climb to $100 million based on cannabis industry-specific multiples, and the participation of the Guerillas, who value 10 shares of Holyoke Leaf at $10 million.
Before renting Holyoke Leaf’s growing space, The Guerillas provided Ruddy with $50,000 of start-up capital.
Since Ruddy inked the Jackson Street growing space, the Guerillas gave him an additional $20,000, as Holyoke Leaf is considered a less risky investment now that the company has secured growing space and a physical address to back it up.
Dispensary and Consumption Licenses
The immediate plan for Holyoke Leaf, Inc., is a Microbusiness License, allowing the company to both grow and manufacture boutique cigars, concentrates, and edibles, Ruddy writes in his prospectus.
Next, he’ll pursue dispensary and consumption licenses for the company’s cigar lounges and dispensaries.
To obtain these higher-tier dispensary and consumption licenses and a 100,000 square feet growing space, Holyoke Leaf must sell 85 percent of its 5,000 square-foot harvest, according to Massachusetts Cannabis Control Commission regulations.
Phillip Morris: A Fierce Competitor
“The big news in tobacco over the past year has been the announcement that Altria, the world’s largest tobacco company and owners of Phillip Morris, invested $1.8 billion in Canadian cannabis producer, Cronos, for 45 percent of the company,” Ruddy writes in his prospectus.
The deal comes with warrants for Altria to provide an additional $1.05 billion for a 55 percent stake in Cronos.
“In a fiercely-competitive market, including Phillip Morris, you can only survive by creating an exclusive brand,” says Ruddy, citing BDS Analytics’ projection that the cannabis market will skyrocket to $40 billion by 2021, a 150 percent increase from the $16 billion revenue the cannabis industry reported in 2017.
That growth comes as the legalization of cannabis spreads across North America.
Enough to Medicate
“We plan to make both CBD cigars and THC cigars,” Ruddy says.
“Some consumers need to medicate so the THC content in our cigars would be about 33 to 35 percent.
“The THC will either be sativa-laced for an energy boost or CBD –laced for a calming, restful effect”, Ruddy says.
Each box contains 8 cigars and an ounce of herb.
Holyoke Leaf expects to sell the boxes to the dispensaries for $250 to $280, who then retail it for $500.
Ruddy expects that intensive growing will yield increased economies of scale.
With anticipated wholesale prices for Holyoke Leaf’s cigar box line ranging between $250 and $300, each grow pot unit can generate between $1.8 million and $2.7 million in revenue from each 10-week harvest cycle.
CBD Cigars: ASAP
As the Massachusetts Cannabis Control Commission could take until January 2020, to finalize Holyoke Leaf’s cultivation and manufacturing micro-license for THC-infused cannabis, Ruddy is primed and ready with his newly-acquired growing space, and website, Holyokeleaf.com, to produce and market premium CBD cigars–currently legal in all 50 states.