Spencer Drake Whitehat Distribution Orgin Series Episode 8

Episode Summary

Episode 8 of the Origin Series features Spencer Drake, owner of White Hat Distribution — the company behind Hirochi Robaina's HR cigar brand in the United States. Recorded "after dark" in Deltona while Drake was in Orlando on a family vacation, the conversation opens with a quick look at the cigar in hand: the Cineros, a re-blended line White Hat sat on since 2016 and planned to launch at the end of Q1/beginning of Q2 2018. Drake details the SKUs — Maduro and Habano Claro wrappers in Corona, Robusto, Toro and a 60, with everything box-pressed except the 60, which stays parejo because he dislikes box-pressed 60s.

From there the episode becomes a full career origin story. Drake explains his kinesiology/dietician education, coaching basketball at the University of Houston, and his jump into the Texas mortgage business at 21, eventually founding his own mortgage company and then a real estate brokerage (Varsity Premier Properties) after the crash. Skip Martin of RoManCraft, then his retailer in Galveston, turned him from a casual smoker into a serious cigar guy. While negotiating a lease for his own cigar shop around 2010, Drake smoked a San Lotano Habano, emailed a resume to the company, and was hired by AJ Fernandez — first covering Texas, then roughly eight states, and eventually moving to Miami to manage the sales force before a falling out with AJ's former partner Chris Kacheturian ended the run.

The middle of the interview covers his time as VP of sales at Cubanacan, where he launched what is now the HR Signature Project (originally called "the Original") made at the La Corona factory, and correctly guessed that Hirochi Robaina was the mystery Cuban partner from the vaguest of hints. Commitments that weren't honored led him to leave, followed by consulting work on the Bugatti brand for Egal Harrell (via an introduction from Abe Flores) and a stint building the sales side of Cornelius & Anthony for Steven Bailey and S&M Brands alongside Courtney Smith. When a $75 million countersuit killed the plan to bring HR distribution under Cornelius & Anthony, Hirochi flew Drake to Cuba on a weekend's notice and asked him to do it himself — and White Hat Distribution launched January 16, 2016.

Drake closes with the practical realities of running a small distributor: retailers being threatened with litigation over a copyrighted box, packaging delays that pushed the Blue and Claro lines to November 2016, freezing new accounts to fix backorders, and building inventory to grow from 250 to 500 stores. In the show's standard three questions he picks Ochocinco as his dream cigar companion, cites Henke Kelner's advice that consistency matters above all, names the HR Signature Corona as his favorite cigar and RoMa Craft's Neanderthal Genetic Deformity as his favorite that isn't his, plus a great IPCPR story about making Joe Carroll wear a 75-pound radar sandwich board because their booth was hidden behind the Battleground Cigars tent.

In This Episode

1. 01
   Smoking the new HR Cineros
   Drake previews the re-blended Cineros — Maduro and Habano Claro wrappers, box-pressed Corona, Robusto and Toro plus a parejo 60 — White Hat's first new release in a year and a half.
2. 02
   From kinesiology to mortgages and real estate
   How a personal trainer and University of Houston basketball coach became a Texas loan officer, mortgage company owner, and then a real estate broker after the crash.
3. 03
   Skip Martin and becoming a cigar guy
   RoMa Craft's Skip Martin, his retailer in Galveston, took him from a couple of cigars a week to a serious habit.
4. 04
   Landing at AJ Fernandez via San Lotano
   A San Lotano Habano smoked on a road trip led to an emailed resume, a call from Chris Kacheturian, and eight states of territory before a move to Miami and a falling out.
5. 05
   Cubanacan and launching the HR Signature
   As VP of sales he built a national sales force and brought Hirochi Robaina's La Corona-made $20+ cigar to market before unhonored commitments pushed him out.
6. 06
   Bugatti and Cornelius & Anthony
   Consulting for Egal Harrell on Bugatti, then building the sales side of S&M Brands' Cornelius & Anthony with Steven Bailey and Courtney Smith — until a $75 million countersuit ended the HR distribution deal.
7. 07
   Founding White Hat Distribution
   Hirochi's weekend summons to Cuba, a handshake built on trust rather than capital, and why White Hat controls the HR trademark, packaging and blends rather than just distributing.
8. 08
   Inventory, reps and the three questions
   Fixing backorders to grow from 250 to 500 stores, plus Ochocinco, Henke Kelner's consistency advice, the HR Signature Corona, the Neanderthal Genetic Deformity, and the 75-pound IPCPR sandwich board.

Brands & Cigars Discussed

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Transcript

Every day I'm hustling, hustling, hustling, hustling, hustling, hustling, hustling, hustling, hustling, hustling, hustling, hustling. Every day I'm hustling, every day I'm hustling, every day I'm hustling, every day I'm hustling, every day I'm hustling, every day I'm hustling, every day I'm hustling, every day I'm hustling. Welcome to a Cigar Hustlers Podcast, where we take a closer look at the people of the cigar industry, with your host, Mike and Mike. Hustling, hustling, hustling, hustling, hustling, every day I'm, every day I'm, every day I'm, whole love.

Hi, I'm Mike. And I'm Mike, too. And this is the Cigar Hustlers Podcast. After Dark.

After Dark, yes. A very special interview today with my dear friend, Mr. Spencer Drake of White Hat Distribution Company. Yeah, that's what we're going with right now, White Hat Distribution.

All right, I think that sounds pretty good. You can just take that and run with it. Yep, White Hat. I just stick with White Hat pretty much.

That's how we just run with it until there's comments that make you not want to go with white hat, but you win some, you lose some. So Spencer is a good friend of mine, and that is the only reason why I'm here late doing this interview. He's in town visiting the mouse with the whole fam, the whole damn family. He bailed on me yesterday because my son had the flu, which is very sad, but he's here now.

In our defense, we had the flu as well as a family, and I was sick from like the 2nd of January until like the 20-something of January down in Porzibor, so in our defense, we were already sick, and then he wanted to subject my family to harm. I didn't feel like it was right, I felt like it was selfish, but the texts that kept coming were excessive. I mean, but realistically, there are a couple of the points here that, you know, I think there's two sides to this story, obviously, and at some point, there's the middle ground, and I think for the listeners out there that know me, and know, I shoot from the hip, but I'm an honest guy, it leans my direction. I'm just telling you from the beginning, before any of the bullshit comes out, it leans my direction.

Well, I can assure you that, you know, visiting Epcot today, that you had some form of exposure to some kind of disease. We wear these masks that I've seen some Asian travelers using that seem to be working for them. So they were a little small for our faces, but nonetheless, I think they kept us safe. That's a lie.

So anyways, getting into the subject of the interview, why don't you tell us, tell the viewers or listeners what exactly that... Studio audience. Yeah, the studio audience. We do have a studio audience.

That's 2019. We actually have a studio audience. We do have a studio audience. So what am I telling about what's going on now?

What the hell are we smoking? How about we start there? Well, right now what we're smoking is a product that we had in the market previously, retooled the blend in 2016, and then in the year 2017. So in 2016, we added the Blue Line and the Claro Line.

What is the cigar that we're smoking? Man, I'm long-winded sometimes. I don't know what I get in front. Bring him back in.

Bring him back in. So the cigar we're smoking is the Ceneros that will be launched at the end of the first quarter into the maybe beginning of the second quarter of this year. But it's a cigar that we re-blended in 2016 and have sat on since then to launch this year. It'll be the first release we've had in a year and a half.

Very nice. Okay. Well, I just lit it up and so far, so good. How about you, Mike?

Is it a medium? It's a very good cigar. Very good cigar. Nice and smooth.

Little box press. Easy draw. Box press in everything. Doing two different wrappers, two different blends entirely, but we're doing a Maduro and a Habano Claro, and all of them are going to be in box press format except for the '60s.

We're doing Coronas, Robustos, Toros, and '60s, and we kept the '60 on a Parejo just because that's my preference when it comes to '60s. I don't really like box press '60s. Very nice. Not my support.

Well, that's the shameless plug that you're going to get, and that's going to be the only shameless plug you're going to get, because this interview is not actually about cigars. It's more about the people of the cigar industry. I love talking shit about the people of the cigar industry. Which is fantastic.

We're just going to talk about you. Oh, wow. Oh, wow. Is this an intervention?

Yes. It can be, if you need it to be, you know. I probably could use a little intervention. Yeah, I don't see the harm in it, you know, it'd be a good, build-you-down kind of… Can I get a drink?

What kind of drink? Just a Chardonnay. Yeah, a Chardonnay to go with his sparkling water. A Spritzer would be really refreshing.

I'm starting to get cotton out here. Unfortunately, you had that opportunity and you opted in for the Pellegrino, so you're kind of stuck now. A half-spread for, if you will. You know, the problem is that if we did that, we'd have to walk out, there'd be sound, all types of other shit, you know.

He can edit, he's a producer. He's a producer. He's not that good at editing. Not that good at editing.

But we're working on it. All right, I feel like I'm part of something that's happening here. Which is fantastic. Right, it is what it is.

I mean, we've consumed five minutes and we've talked about nothing. 110 percent. I'm telling you, I'm bringing my eight games. I'm taking it one day at a time.

All right, so... No ends, ends, or ifs, about it. So before you got into the cigar industry, you... It's all said and done.

Let's go. So before you were in the cigar industry, you were at Varsity Premier Properties, correct? Now is that something you owned or is that somebody you worked for? Okay, so what is Varsity Premier Properties?

So my education was actually in kinesiology and I was a dietician-ish as well, which most people giggle when I say that. Oh, but that was my education and I was a personal trainer. All right, sometimes we should have video. And then I coached basketball for a little while at the University of Houston and when I was there I had a gentleman that was in the mortgage business that I was taking some real estate classes.

He came in and talked at one of the classes and asked the teacher there who of the students might be interested in being a mortgage guy. And so the teacher sent him over to me, and he explained to me the mortgage business a little bit, and I was 21 years old at the time, 22 years old, and got my start in the mortgage business. Started off as a mortgage processor first, just kind of learning the business, and then over the course of six months or so got out into the field as just an outside sales representative for a mortgage company, a loan officer in the state of Texas. So that's how it all started and then as I built up that business as a loan officer for somebody else, decided in 2014 to start my own company.

So I started my own mortgage company with a partner and then luckily got out of that business right before the crash. And then when the crash happened I had a two-year non-compete, couldn't get back in the mortgage business, and so I started a real estate company. I had been doing some real estate investment prior to that, but it was all on a personal level kind of investment stuff. It wasn't any active brokerage.

And then did that for a couple of years. And during that time, I was a cigar consumer. During the time as a loan officer, I was smoking a lot of cigars. Skip Martin from Romacraft was my retailer in Galveston, Texas, when I was a loan officer down there and when I had the mortgage company.

And I spent a lot of time working out of his shop, and he's kind of the guy that got me from smoking a couple of cigars a week to smoking, you know, a bunch of cigars. He has that influence on people? Yeah. He does.

J. Fernandez. So how do you make that leap? So, after doing residential real estate for a couple of years, I just decided it wasn't something that I really wanted to do long term, I really enjoyed the mortgage business, I enjoyed professional sales, I enjoyed going out and playing golf with a builder, a developer, a realtor, some sort of referral network person that was going to help drive business to me.

So, I enjoyed that part of the business and I played a whole lot of golf and then when I got, when I became a real estate agent I just found myself at parties like handing out business cards and transitioning conversations into where do you live and oh yeah I sold a house over there and oh you're a realtor, yeah oh here's my card and then I'm like angry when I find out in six months they bought a house with somebody else so I just, I didn't want to be that guy and I loved cigars so I decided, I told my wife I said, we're gonna start a cigar. So we started looking at cigar shops or starting a cigar shop in like 2010 and then I did a little tour around the country and saw a bunch of other shops and kind of how they did business and came across a cigar on the way back down to Houston that was the San Latino Habano. Okay. And I smoked that cigar in the cigar shop there, looked online to see where I could get it and who I needed to contact for my shop, which at the time, I was in kind of the final negotiations of the lease, like we were discussing, billed out allowance, we were to that point, and I smoked that cigar, I looked online and saw that there was 70-ish retailers in California, and there was several in Florida, and there was two in Texas.

" And that was it, huh? And then I got started doing the state of Texas for them, and then over the course of time, that grew to, in reality, about eight states. I was servicing a couple of extra, but they didn't require a lot of time, and mostly phone work, and then they wanted to move to Miami to start managing the sales force, and they hadn't really had anybody active in that role specifically for like two and a half years. I think I was the longest tenured employee at AJ when I left.

So you actually packed up all your shit and you went to Miami? Ish, ish. So you left the family in Texas? Yeah, I had the family still in Texas, I had the wife getting the house ready for market, and we got it on the market, had it actually under contract, and then during that time, me and AJ's former partner weren't really seeing eye to eye, and it was kind of a volatile relationship, to be honest, and so I decided that I needed to do something else.

And so that's something else, kind of, I was sitting at a bar, hammered, I mean hammered, on Tito's and soda. So it was like a Monday then? Yeah, there's really no telling when it was. And I ran into Lawrence Miltonberger, who at the time worked for Cubonicon.

Okay. And I had known him through the industry when he had worked with Terrazona previously and just had, you know, interactions with him here and there. over the course of a few years and I told him kind of what the situation was that I was leaving AJ and he said I got somebody I want you to meet and so I ended up meeting his boss and joining their team at that point as vice president of sales for Kibonicon which at the time had very little distribution some regional stuff in the southeast and mid-atlantic but for For the most part, nationally, it wasn't a known brand. Okay, so let me stop you and let me back up a little bit.

Sure. So, you're a national sales manager at AJ Fernandez. You're in Miami. Your family's in Texas.

Obviously, you weren't seeing eye-to-eye with Chris. So, what happened? Did you just pack up your shit? Were you told, you know, you're done?

No, what happened was, I mean, it's a big, hairy mess, but what it came down to was there was somebody that was hired. And when they were hired to take over the office, I guess the compensation agreement that they felt like they agreed to and the one they received happened to be two very different things. And this was a good friend of mine that I had recommended for the position and it caused enough of a rift where I just didn't feel like moving forward anymore. Gotcha.

I still, you know, I'm friends with AJ, I'm still, I still go down and see that factory most of the times when I'm in Nicaragua, and I still believe he creates some really good product, it's just, at that time, it was just a really interesting company to be, to be working for, and it's, you know, and then they've had some transitions subsequent to that, that I think have given them some difficulties, but at the end of the day, they're behind what they're doing, and I think, I think you're gonna see good things out of that company. Right. And they've grown a lot. Well, yeah, I mean, AJ's a great blender, and he definitely has some access to some great tobacco, so, you know.

All right, so, you hook up, and you become, so you become the vice president of Cubonicon Cigars. And right after that, we find out, and I already knew about it, but it wasn't signed, sealed, and delivered. But I already knew about the fact that it was more than likely that there was going to be, Hirochi was going to be involved with Cubonicon. When I took the job, I was certain without knowing specifically, but I was pretty, pretty certain.

They told me it's somebody in Cuba, that everybody's going to recognize, and it's a brand that's not on the market in the United States, and that takes you about, I mean, if you're a cigar guy and you know anything about Cuba, it takes you about five seconds to go. " It starts with an H, and you know, he's Cuban. He comes in, their project at the time, the HR Signature Project is what we call it now, it was originally called the Original. That cigar had been in the works for some, at that point, like four, four and a half years.

They've been working on that project with the La Corona factory, which used to be called Los Cherutos. And Kubanikam was the exclusive distributor of that product, or was the distributor of that product in the United States. So I helped launch that with them. I helped build their sales force mixture of kind of in-house and independent reps throughout the country, but we had boots on the ground pretty much in every part of the country.

So what year was that, what year was that IPCPR where he came out and you were representing him? I believe that was 2013. It was either 2013 or 2014. Because that was the first year that we actually met in person.

It is. That was when I saw your beautiful face for the first time. I mean we had correspondence prior to that. We did.

But, you know, we actually finally met in person at that IBCPR end. And that was the one before New Orleans. Was it? I don't remember.

They're all the same to me at this point. No, it was the one before New Orleans, wherever that one was. Whatever year that was. It was either 2014.

Was that the one in Orlando? I think it was in... I think it was in Vegas. I think it was in Vegas.

Yeah. The majority of them are in Vegas. It was Orlando the year before, then Vegas. Right.

Then back to... New Orleans. New Orleans, then Vegas. Vegas for everyone.

Okay, so you're repping Cubonicon. Ish. Ish. I'm managing a sales force, basically.

Right. And don't have much control over a lot of the internals involved with the company in terms of operations, in terms of blends, in terms of the communication with the factory. Just really working on the stateside piece, getting distribution out, and managing the sales force. Right.

So that in itself is difficult, right? If you're trying to manage and handle all the sales, the sales force, and then you have other people that are kind of directing, have their own visions, and then you have your vision, it's just a recipe for disaster, right? I don't think necessarily if everybody kind of knows what their position is, and if you're really good at managing sales forces and you're really good at that side of the business, And on the side of the business, there's no issue, you know, with you being focused on that and having somebody that's more of the creative, and you kind of let them do their thing, I don't think really any of that was the issue. The issues more were just that certain commitments were made that weren't honored, and when that happens over the course of several months into a year, then you just, you decide you want to go a different direction.

Right. And so I decided to leave that company based on the fact that some of the commitments that were made weren't honored. Right. And then after I left within, I want to say, a month, I had already heard that everybody else was leaving.

The factory that was manufacturing cigars for them, the HR product specifically, they were leaving and that Hirochi was leaving and going to separate themselves from that organization. Alright, so, I mean, unfortunately this is already kind of like a dark interview in comparison to what we normally do, but, you know, you're just a sad, broken man and I just, you know, I want to tell your story. No, I think it's time to get it out. It's been a long time, it's been festering.

We're going to have a, we'll have a priest outside after this. It could be, it could be that or all that German food. Right. Something's festering right now.

Right. And as much cabbage as I had. Right. Gentlemen, this is a confined space.

And a full day of Epcot. With some lit objects, so I'm just saying I'm not sure how safe this is. Well, I appreciate the warning. That's very nice of you.

So you leave Cubonicon. Now, at that point, do you transition out of it? Does it get worse? No, it's going to get happy, because he's a happy guy.

He's a happy guy. I think we'll get there. I think we'll get there. There's going to be some ebbs and some flows, a lot of ebbs right now.

There may be. There may be some hugging. A little cuppage, if possible. The downfall of being out in the sun all day is that, you know, you're very vulnerable.

Well, you better wake the fuck up and bring your A-game, goddammit. I already said A-game, 110%. All right. This is 110%.

I just wanted that confirmed. I'm gonna go with as many metaphors moving forward as possible. Fantastic. All right, so.

At the end of the day. At the end of the day. So you leave CubanaCon, then you leave the tobacco industry, the cigar industry completely? Yeah, so my intentions leaving the CubanaCon thing, it was, you know, two opportunities that I saw in front of me, being the AJ opportunity, moving into the national sales position there, and the position of that company at the time, and what a sleeping giant it was, it was like an incredibly exciting opportunity.

Right. And then to have that go South really was tough because I saw what was in front of me there and so that was tough and then the Cubonicon thing again, we had so much growth in the first year, we did so well with the product, there was some rough edges to say the least, especially with the amount of growth we were having in penetrating a market that's really a different market. Right. Trying to take your first real cigar to market at 20 plus dollars and compete in that space is a difficult thing and I think we had a whole lot of success with it.

For sure, that's a great cigar. Initially. And then, so, with that opportunity, again, not working out as I wished it had, it was two tough things in a row for an industry that I really liked. And to be honest, the money that I made in the mortgage business or the real estate business was quite different than the money I was making in the cigar industry.

" And getting back in the game or not, that sort of thing. So there was some opportunity there to get back in and so that was my plan. And then I got brought in by, you don't have this in your notes, there's so much, so many layers. You're doing a great job, by the way, of the interview and as well as...

I'm a narcissist, I can talk about myself. No, but, I mean, just keeping the cigar lit, like, kind of being attentive to it, because it is difficult, right, to do an interview and then keep smoking the cigar. It is, but I'm a committed man. You are, you are.

You speak cigar! So, after leaving CubanaCon, I was ready to get out of the industry, and then I got a phone call from Abe Flores, who hooked me in with somebody that was starting a brand called Bugatti that had previously been distributed by... Prodomo? Prodomo.

And they were repackaging it, using a new manufacturer, and so he got me in touch with that guy, Egal Harrell, who's a really good dude. I had a great experience with him, but I worked basically as a consultant for him and went down to the DR and helped him with some stuff down there. So it didn't come with a car or anything? Nothing like that.

That would have been amazing. Right. But after that I got hooked in again by Abe with Stephen Bailey, who was starting a new project out of S&M Brands called Cornelius & Anthony, which was going to be their premium cigar offering. It was kind of really for the first time in the market.

They had had some other stuff in, but it wasn't very successful, and it wasn't done the right way, and he wanted to bring in some veterans, I guess, and me on the sales side of it at that point, and Courtney Smith, who had helped build La Polina on the kind of internal side of it and visionary side of it in terms of the packaging and the type of blends bringing to market, and obviously they let me take a big part in that, too. It was a really good opportunity. So you got to work on your own blends, you got to work on packaging too, to some degree? To some degree, absolutely.

She was definitely the one spearheading all the packaging stuff, but she was absolutely open to a lot of dialogue and correspondence. Did you also get to assemble your own sales force? Yeah, we got to start doing that. It was pretty early on.

The problem we had was, by the time we got two cigars ready for market, We were trying to get Hirochi Robina's distribution underneath Cornelius and Anthony. Gotcha. Hirochi had reached out to me, wanted to work with me again, and I had this opportunity with Cornelius and Anthony going on, and it seemed like an absolute perfect fit. I mean, you had two different guys, both, you know, multi-generational tobacco people, while in different parts of the tobacco world, both have, you know, their roots in tobacco.

Right. And we just felt like it was a perfect marriage, but there was a lawsuit that was in place with the previous distributor at the time where they countersued for like $75 million. It was ridiculous. As soon as that happened, Stephen Bailey just stomped on the brakes, and that deal was off.

Gotcha. And so Hirochi was, at this point, probably, shoot, it had to be like nine months, really, without any real representation in the marketplace. Right. And having the market, the cigars almost pulled off the market and was at the point where he had to get something back into the market.

So before you get into that, so you're doing real estate and you decide, because Abe calls you, you decide to get back into that? No, no, I hadn't even started really doing the real estate again. I had my license, but I didn't do a single transaction in that off time. Right.

Nothing outside of selling a rental house that I own myself. Right. So your license is still current, right? No, no, I let my license lapse last year.

Jason's laps last year. No shit. Yeah, on August 31st of 2016. That means you gotta do the chorus all over again?

I'll never have to deal with it again, so let's really hope. Depends on how this scenario goes. Right. Alright, so, so what happens, so how do you become the owner of White Hat and start working with Hiroshi by yourself?

So after Steven decided that because of the current litigation and the fact that he wanted to kind of wait that out, Which, unfortunately, at the time was, it was probably October or November of 2015 when that happened. Right. And, um, and, and the lawsuit wasn't due to go to trial until February of 2017. So, unless there was a settlement prior to it going to trial, then Stephen Bailey was going to have his hands off and Cornelius and Anthony wasn't going to do anything with HR until that time.

Right. Until it was either settled or it had gone to trial and we had won a trial. So, Hirochi was, at that point, had to get his cigars to market, had some opportunities with some other people in the industry that had distribution networks and current sales forces and all that sort of stuff. " So I flew to Cuba and met with him on a Sunday in Cuba and started hashing things out and he said he wanted me to do it and I told him I had a limited amount of capital to get this done and he said I don't care because I knew some of the guys that he was talking with previously had a lot more of a war chest to go to battle with a brand like this and to do what this brand deserves in terms of promotion.

S. market. Right. Alright, so, yeah, I was gonna ask something else, but it just escaped me.

You lost it, huh? Son of a bitch. Normally write it down. That was gonna be really good.

It would've been epic. It would have been epic. So, now when you leave Cornelius and Anthony, I mean, you had a good relationship with Steve, right? Yeah, I mean, I definitely, that was a difficult thing to do, just based on the relationship that I have with Steven and how well Steven had treated me.

So it was definitely a difficult thing to do. He had invested a lot in me over the course of, you know, like six, seven months as we're developing projects to get to market. We finally get some stuff just about ready to land to go to market and I have to let them know that I'm going somewhere else and I'm going somewhere else that happens to be the thing that I tried to land for you for the last several months and so that did cause a bit of an issue. Are you guys friends now?

No, we're absolutely friends now. I have a ton of respect for him. I have no reason not to be his friend. He's got more issues with me, I imagine, than I would ever have with him because he's always been a class dude to me.

But the timing of my leaving wasn't good timing, but it was necessitated by the circumstances that we lived under at the time. Okay, now how long have you been doing a white hat for? So we started it two years ago, as of the 16th of January. I think it was January 16th, 2016, we started.

And you started just with the signature? We started just with a signature, and there was some disagreements at that time because the lawsuit wasn't settled as to who had the rights to that cigar, so it was a kind of tumultuous time to bring that cigar to market. There was threats from the other side saying, you know, threatening our retailers with litigation. If they carried the cigars for copyright infringement, they had copyrighted a box.

It was nuts. It was nuts. Crazy. And so for the first six months, that's really actually, yeah, the first six months, that was the only product we had in the market.

At the 2016 trade show, we launched the Blue and the Claro. Okay. And then we got those cigars really to market to most of our retailers, got their shipments in November of 2016. So they really didn't see that product for some time following the trade show.

Just due to some packaging issues and you live and you learn when you're dealing in Nicaragua. And this was really my first project from kind of seed to cigar and seeing every bit and every side of that industry and you make a few mistakes that cost you a few weeks, cost you a month and you get your product late in that year and so we had retailers that refused the product because it had been so late after the trade show, we had some that have supported us since the day they got the product and we've grown it substantially. And haven't launched a single new product until this Cenaros hits the market at the end of this quarter. This will be the first new product we've brought out in a year and a half.

Very nice. So it's something we're really proud of and we're proud of, I think, the price point that we're able to get this cigar to and the quality of the cigar for the price point that it's at, I think, is going to be just something I expect to be very, very exciting in the market. Very nice. Well, we do have a couple of questions that we ask everybody.

For sure. It's the top three questions that we like to ask. It's just funny to me because your voice is just so much more controlled right now than normal conversations, which is kind of freaking me out a little bit. It's the buttoned up, really tight polo shirt.

You like that? I did turn it on. It's professional. As soon as you FaceTimed me earlier, I saw that shirt and I was like...

Son of a bitch. Something's up. Something's wrong. Something's wrong.

And here we are. So, what do you want me to do to get out of control? I just want to know, this is like an everyday thing now for me. Really?

Yeah. It's just new image. The medium shirts? I'm kind of like...

Yeah, medium. Are you going to go to the slacks next? From the jeans? I don't think so.

I kind of like the jeans. I kind of like the jeans. I don't like the jeans. I'm like a hybrid of Rosales and Martin.

That's what it is. I need to get flip-flops is what I should wear, you know. It's kind of like the both. You can't use the mom jeans argument anymore for Rosales.

Yeah. First of all, he's very sensitive about it. Second of all, he's slim, slim Rosales. Yeah.

You can't say a word. And you know, he didn't go to school as a dietician, which is kind of ironic. Maybe Spence helped him. You got him into the ketogenic diet?

Did you say it? I'd have to say I was somewhat responsible for it. You were? I mean, I'm sure you look at somebody like me and you decide, I really probably need to die because I don't want to get there, you know?

He's the before. Well, I mean, you know, the life that you lived, I'd have expected that you've had at least three heart attacks at this point, so you're doing pretty good, you know? I've definitely had a lot of therapy. A lot of therapy?

A lot of therapy? A lot of therapy? And you keep getting further and further away from the mic, too, which really sucks for us. There you go, that's much better.

He has a very deep voice though, it's catchy. It travels well. Yeah, it travels well. That's good.

All right, on to the questions? Yes. All right, first question. The three questions.

The three questions. What one person, living or dead, would you like to have a cigar with? Huh. That's like a question that I've heard before.

Yeah. Living or dead. I asked it differently though. I did.

You asked it really well. Thank you, thank you. I hate to steal Ojo Senko, although I do think that would be really, really interesting. That's my man.

Yeah, Ojo Senko's just such a character, man. Nobody created space like that guy. I mean, he's just such a character. He's got his own cigar now, though.

I know. I was thinking that the other day. " But yeah, no. But he'll never come.

He'd definitely be an entertaining guy to sit down and have a cigar with for sure. Okay. Talking about Ocho Sink. That's an excellent answer and go fuck yourself for stealing that from me.

Alright, question number two. Best piece of advice anyone ever gave you? Best piece of advice anybody ever gave me? I think Hanky Kellner said that having a consistent cigar was the most important thing, period, when it came to this industry.

On the manufacturing side, and I think that was probably the most important piece of information that I've ever gotten on that side of the business, for sure. Okay. You know, there's cigars people are not going to like, cigars people are going to like, but if you have a consistent product, then you find the guys that do like it, and they'll always go to it. They'll always go to it, because if it changes, they're going to notice.

Which is a really, really hard thing to do in our industry. I mean, it's difficult. Right. All right, final question.

What's your favorite cigar? The HR Signature Corona. Okay, now what's your favorite cigar that's not yours? It's not mine.

Probably the thing I've smoked the most lately that's really, really good is the Genetic Deformity. I just think that's such a cool cigar. The Neanderthal Genetic Deformity? Yeah, it's a really, really good cigar.

That is a good cigar, for sure. It's a twist on something that I already liked a lot. Alright, I got another question that's not on the list. Who is your favorite rep or broker in the industry?

My favorite rep or broker in the industry is Joel Schwartz. Yeah? Yeah. It used to be Trendsetters Marketing, but it's Joel Schwartz now.

Is he the guy up in New York? No, he's in the Southwest. He does Phoenix and Colorado and New Mexico and Nevada. Is Joel Carroll still working with you?

Uh-huh. Yeah, Joel's still doing social media for me. Are you still subjecting him to cruel and unusual punishment like you did last year at the show? No, that wasn't really me.

That was my wife. That makes it even better. No, that's totally true. So, poor Joe, he got a nice little sign with a radar detector showing...

First of all, let me explain something. We get our booth space at IPCPR, you see the big floor map when you're getting everything, And it looked like, great location, absolutely great location, and we ended up being behind Battleground Cigars, which had this huge tent, that blocked a lot of people from seeing us, because of this huge tent in front of us, and then we had pillars, huge pillars on either side of our aisle, so you had to like cross over a bunch of wires behind a pillar to get to us, and then to even see us, if you were walking down a Another, more traffic dial, you have to be like, you know, Akeem Olajuwon looking over the battleground. Right. Tent.

So, we made up a sign that looked like a big, big, you know, like Navy radar and where we were in our booth number and made a sandwich board and had Joe wear the sandwich board. Fantastic. We were walking all around the IPCPR trade show floor to make sure people understood we were really difficult to find and where we were. I mean, I didn't really, the poor, first of all, poor Joe Carroll was sweating bullets, man.

It was a heavier than average sandwich. We made it 75 pounds. Wow. But it's sturdy, we still have it, and if there's a holocaust or some sort of, you know, serious, serious situation.

Right. Nuclear fallout? It was a clear fallout, absolutely. Very nice.

I mean, you know, I saw him walking around, but I wouldn't say he was walking around the entire IBCPR. No, he was supposed to. Supposed to be. Supposed to be.

He was supposed to, but I think he felt more comfortable around the Roma Craft lounge. And he just, he circled Roma Craft, I want to say, I think he told me 17 times. Wow. It felt like, you know, 1,700 times.

Well, that's Joe, you know. Yep. He tried to tell a story to Ron Lesro, Uston Sirius, when we were at IPCPR, and he's about five minutes into the conversation and decides to say, to make a long story short, and Lesro about snapped. He was like, "You've got no fucking right to ever say that.

You've drug me on for the last five minutes. " That is fantastic. So, what else you got there? Those are the questions.

Other than, would you like to tell people how to get a hold of you? Yeah. com is the website, the drakeisgood is my Instagram and Twitter handle, and then Spencer Drake, I guess, is what it's on, under Facebook, and then @whitehatcigars, as well, is our company account that we utilize for social media. Alright, well, you are a good friend to myself.

Thank you for taking time from your vacation to come all the way out here to Deltona. So, you know, we do appreciate you coming out. That's very nice of you. It was late.

And, you know, usually you're a little more comedic. I didn't know that we were going to touch on so many dark things, but… You did. You had all the questions. You knew exactly what we were going to touch on.

Yeah, but I didn't know it was, you know, I don't know. But it is, to end it on a happy note, this is a really exciting time for us. We've got more inventory as a company than we've ever had. We built this up over the last year to a point that you'll start seeing on social media, we've got some video we took of the Escaparate down during Porosivore, just to let all of our retail partners as well as our consumers know that some of the backorder issues that we ran into last year, because of the success of the product and not having enough of it ready, all that's been solved, we've got a ton of product aging in the humidor, so it's a situation that's going to allow us to be a little bit more aggressive in the market.

I mean I had put my reps basically at a standstill, I told them like no new accounts, no, and we got to the point where we weren't being able to do an adequate job of servicing the accounts that we had, the guys that came on early on and supported us. And to avoid that, we had to build up an inventory if we wanted to be able to grow this brand and get from 250 stores to 500 this year. And you got some great cigars, you know, bar none. It's just a matter of getting, you know, getting out there and having the guys be aggressive.

You run into a situation with these independent guys and they don't want to sell from an empty cart. They don't want to go out and push your product when they've got six others to push. Right. If mine's going to be backordered for two months.

Yeah, but you can't pay the bills on that. So we wanted to make sure we had enough inventory for me to be able to lean on the reps And say, "Guys, we gotta grow this brand at a pace to get the factory where it needs to be. The factory's got, you know, is doing 200 to 300 cigars a day per pair with 12 pair. And the capacity there is, I mean, we're making about 600,000 cigars right now.

5 out of that factory, the size of that factory. And so we got a lot of room to grow without having to really sacrifice the kind of quality that we're putting out of it right now. Right. Now, I think that's where we've kind of capped, it is a million and a half, and in order to get there, we have to start growing a little more aggressively, and in order to do that, you've got to have the product to be able to lean on the reps to get it out there.

Right, for sure, for sure. And I guess that pretty much wraps up. That wraps it up. You want to say a little thing about people listening and commenting?

Ah, yes. We forgot that earlier, the other episode. So, yeah, please leave feedback about the show. Tell us who else you want on the show.

We'll try and drag them in here other than Ocho Cinco, you know, maybe we do a parody or get you guys together for that, so you could smoke the cigar with him and be on the show, probably won't ever happen, but you know, whatever. That would be a dream come true. Yeah. A dream come true.

A dream come true. If you like what we're doing, just please tell your friends about it and, you know, have them listen in. We appreciate your points of view. Yes, thank you, everybody, and thank you, Spencer, again, for coming in.

You're welcome. You're welcome. I appreciate y'all having me. Alright, that's it.

That's it, everybody, uh, that's it. Bye. Alright, gang, that's it. Show's over.

Time to put out that cigar and get back to work. Ain't nobody gonna do it for ya. Everybody get hustlin'. # Don't wanna see your face, you better disappear # The fires in their eyes # And their works are really clear # So feed it, just feed it # You better run, you better do what you can # Don't wanna see no blood # Don't be a macho man #

Show Notes

We continue our Orgin Series this week with Spencer Drake owner of Whitehat Distribution, HR Lable Cigars and the new Soneros Line of Cigars.  Spencer was in town on vacation with his family and took time to come talk with us on this special "Cigar Hustlers Podcast After Dark".

You Can Follow us on Instagram at @CIGARHUSTLERSPODCAST or go to our fan page on Facebook at A Cigar Hustlers Podcast.  Leave us your thoughts, comments or suggest a possible guest you would like us to have on!

You can Follow Mike Szczepankiewicz on IG @cigarhustler or Mike Palmer @floridacigarclub_mike.

Thanks for Listening!!