Light shines for Lift and Store, thanks to cannabis business
This article, written by Neal St. Anthony, was originally published on September 7, 2020 in the Star Tribune.
Little more than a year ago, Chris Benyo, CEO of Lift and Store, was talking to his dog in the warehouse office about whether the company was going to make it.
Benyo, 59, a veteran executive, led a small group that bought the company three years ago from its founder.
Lift and Store supplies retailers such as Target and REI with automated racks to hold merchandise in warehouses and the backrooms of stores. Over 28 years, the Ramsey-based firm had done more than 11,000 such installations.
But traditional retail was in decline. And Lift and Store was burning through cash faster than it was generating new revenue.
But then a Canadian cannabis company called to ask if Lift and Store could make equipment to hoist lights automatically for cannabis plants.
“If that call from Canada hadn’t come through I think I would have shut down the company,” Benyo recalled the other day. “We had a few things in the pipeline, but at some point we weren’t going to have enough money to get there. And then, out of the blue, the phone rang.”
Cannabis is largely grown indoors to meet strict specifications for medical use, which is legal in Canada and parts of the United States, and to avoid insects and disease.
“Of course we said yes,” said George Johnson, 67, an investor and chief marketing officer. “We developed a machine to lift [up to] 72 grow lights in increments as small as one millimeter. And from that beginning, we created a vision for a new division to focus on cannabis.”
The firm started a marketing campaign for the new division, called Lift and Grow, and sales have taken off even during the pandemic.
It sold its first 40-foot automated light platform for about $100,000. Its largest array is priced around $150,000. All the products are made in Minnesota.
With the market expansion, Lift and Store is likely to double its annual revenue this year to $4 million. The company has added several employees to 16, plus contractors and sales reps in several states.
“The incremental growth is all cannabis,” Benyo said.
In Minnesota, marijuana is legal for medical purposes but not for recreational use. There’s also hemp, a once-popular state crop for its use in rope, clothing and oils, that is growing once again in popularity thanks to CBD gels, extracts and oils.
Cannabis, or marijuana, can be smoked or found in topical oils, edibles, tinctures, capsules and more. Medical-marijuana growers largely raise it indoors and it’s important to achieve consistency to meet state standards in its quality and potency.
Minnesota’s major medical-marijuana distributors are Vireo Health and LeafLine Labs, which also do business in other states. The industry has boomed, although there’s still a shakeout underway among multiple growers and dispensaries, who operate under myriad state laws.
“In the last month, our sale pipeline grew by $2 million,” Johnson said. “In March, it was $200,000. Folks are still trying to figure out how to scale in cannabis. And we’re building the Lift and Grow lights at scale for them.”
The lifts can hold up to 400 pounds of equipment. As importantly, the lifts replace the need to put employees on ladders to manually adjust lighting above cannabis plants, sometimes 40 feet or more above the ground.
And the Lift and Grow division has expanded into an equally critical line of “drying-room lifts.”
“I like to say that … we’re going to be a three-year, ‘overnight’ success,” Johnson said.
He said the company has a customer in Southern California who reports a return on investment from the Lift and Grow lighting system in four months. “One winter season to pay for it,” Johnson said.
Mohamed Noor, 21, a senior mechanical-engineering student at the University of Minnesota, joined the company as an intern this year and has been critical to recent success. That popular program is sponsored by MinnTech and the state economic-development department. It places up to 200 science and tech college interns with area small businesses and matches employer wages up to $2,500.
Benyo, a veteran software and technology manager who joined Lift and Store four years ago, said he has also hired young talent from nearby Anoka Technical College.
“Right now, we’re alone in this market,” Benyo said. “We are either incredibly brilliant or stupid. It could go either way. We’ll find out.
“My aspiration is to build this. This is a company where I enjoy the work and the people. I’ve worked at places before I didn’t like. We believe in this vision. We want to have a company that makes money and a product that is made in America. You could do a lot worse.”
Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at [email protected].