This Monday’s episode featured Dan Allen, CEO of Colorado-based Blue Line Protection Group ($BLPG). Most companies we cover on this podcast are related to either growing or sell marijuana itself. Blue Line, however, specializes in two services, security, and compliance.
The professional backgrounds of company executives are important for any company, especially in the marijuana industry where many executives are stigmatized with being either a hippy or a crook. Both executives at Blue Line have decades of experiences within their specialty. Before being CEO of Blue Line, Allen was a commercial banker for over 30 years. COO Ricky Bennett has worked for various law enforcement agencies, including a stint as Chief of Police in Aurora, Colorado. The unusual combination of strengths from years in law enforcement and a strong understanding of helping businesses stay compliant create a unique duo that helps propagate their business model.
Threat assessment and security evaluation
Preliminarily, Blue Line provides information to ensure their customer understands the typical security risks associated with the marijuana industry. Much of these risks are related to the marijuana industry being a daunting cash based industry.
Security guards and transportation services
Blue line provides specialty trained security guards, referred to as operators, who perform ID checks when customers enter the premises. They also offer transportation services of both product and cash between growing operations and dispensaries. They also provide cash transportation services to secure destinations.
Blue Line’s employee base is largely made up of ex-law enforcement as well as ex-military. Allen chooses to hire, “Those individuals who have had exposure to tense situations, they have been around weapons, they have familiarity with it.”
Blue Line enforces a 40-hour educational academy prior to every employee’s first job. Blue line also assists their employees in getting appropriate certifications from the state. While 40 educational hours may not seem like enough, it is imperative to remember that these employees already have a strong background in law enforcement. This training is not a one-time event at Blue Line as employees often revamp their skills at yearly training sessions.
Every operator carries a weapon. This raises many questions, but Allen insists that these are used solely as deterrents. He pointed out the fact that there has yet to be a situation where an operator has had to draw his gun. Potential investors may be reassured with the fact that these operators have been able to solve every conflict that has come their way.
Blue Line works with both banks and credit unions on behalf of their clients. These are mainly small – medium sized banks, as the giant banks you may think of (Wells Fargo, Citigroup, etc.) are still unwilling to pursue this industry. The financial institutions main focus in this area is offering a checking and savings account to their customers. In some situations, a bank might offer lending support, primarily for real estate purposes.
Blue Line helps businesses understand what needs to be done to have an account with a bank. Their consulting services include an array of options that help their customers understand bank’s reporting requirements, gain the necessary licenses to operate, as well as what it will take to ensure their businesses is within legal realm. When taking on a new customer, Blue line investigates the business for compliance, creating a report known as a premises investigation. When Blue Line feels a dispensary is compliant, they will also aid in attaining their required licenses. Allen asserted, “we add our stamp to their application… I think it enhances their chances of being approved for the license.”
The services Blue Line provides at startup are not a one-time offer. They continue to stay involved and help the business stay compliant. They also ensure their customer has a good reputation with the state and their financial institution. Blue Line continually checks up on the business’ compliance, generally either quarterly or annually depending on what their particular financial institution or state requires. Allen sums up Blue Line’s compliance value for a client stating, “It’s an insurance cost. We’re ensuring you can contain your licenses, and that’s the most valuable asset they have.”
Blue Line primarily conducts compliance reviews on behalf of their clients. This enables the client to understand fully what they are doing well and what needs to be adjusted in to be compliant with the state. During their compliance investigation, they create a 120-page report that is is given to the financial intuition. From this report, the financial institution makes their assessment on if they want that dispensary or grow facility as a client.
Blue Line has had a positive impact on Colorado’s legalization reform, and Bennett was invited to testify in front of California’s Transportation Board as an expert. He will be giving advice on what regulations California should include ensuring a safe and secure industry.
The company already owns a 12,000 square foot building in Denver which they are going to be renovating in to create a more robust training facility as well as vaulting services for their clients..
When asked about plans to expand to other states, Allen replied, “We’ll evaluate each individual state and determine whether the feasibility is there and do appropriate analysis on a state to make sure there’s adequate opportunity for Blue Line to be successful and profitable in another state.”
Although Blue Line is a ‘Pot Stock,’ they have diversified somewhat beyond the marijuana market. Blue Line currently provides security at other venues, special events, and they also offer celebrity protection services.