Matthew: Hi, I’m Matthew Kind. Every Monday look for a fresh new episode where I’ll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. Are you an accredited investor looking to get access to the best cannabis investing opportunities? Join me at the next ArcView Group event. The ArcView Group is the premier angel investor network focused exclusively on the cannabis industry. There is simply no other place where you can find this quality and diversity of cannabis industry investment opportunities months or even years before the general public. If that’s not enough, you will also be networking with the top investors, entrepreneurs and thought leaders in the cannabis space. I have personally made many of my best connections and lifelong friendships at ArcView events. If you are an accredited investor and would like to join me as an ArcView member, please email me at feedback(at)cannainsider(dot)com to get started. Now here’s your program.
As the cannabis grows it’s getting harder for entrepreneurs to make their products stick out in the crowd. Some are going out of their way to offer a unique experience that is not a “me too” product. One such company is Oakor. I’ve invited Josh Kirby, founder of Oakor on to CannaInsider today to tell us about his unique product and how to stick out in a crowd. Josh, welcome to CannaInsider.
Josh: Thanks Matt. Thanks for having me.
Matthew: Josh, I like to give listeners a sense of geography. Can you tell us where you are today?
Josh: Yeah I’m in Seattle, Washington right now.
Matthew: A lot of cool things coming out of Seattle. I keep on hearing innovative things. Do you agree with that? Do you think there’s an innovative surge in the cannabis industry in Seattle?
Josh: Yeah it’s definitely an interesting market with a lot of really, really unique things happening.
Matthew: What is Oakor? Can you explain it for the listeners?
Josh: Yeah. So Oakor is a cannabis brand that’s focused on bringing smokeless cannabis products to consumers with a main focus on trying to destigmatize cannabis as a plant, as a form of medicine and as an industry in general.
Matthew: Okay and how did you get into the cannabis industry?
Josh: I actually got into it kind of by accident. I was working with a couple friends on trying to start some business. We didn’t really have any sense of direction other than we wanted something with either changing laws or changing technologies. We ended up falling into the medical cannabis industry. I moved out from New York to Seattle to start Oakor. As soon as I sold my first product and started getting patient feedback , I just immediately fell in love with the industry and fell in love with everybody who’s playing the game out here.
Matthew: Now can you describe your dissolvable strip and what that is for someone that’s never seen something like that before?
Josh: Sure. So the easiest comparison is it’s essentially a breath strip. The only difference between it and say a Listerine strip, aside from the fact that it has THC in it, is that it goes underneath your tongue. So it’s designed to be sublingually absorbed which mean all of the active ingredient in it gets pulled through the membranes and the capillaries inside your mouth directly into your bloodstream which makes it fast acting and it makes it super efficient.
Matthew: The thing that really stuck out to me about what you’re doing here is (A) it’s so different. I mean if someone’s coming into the cannabis space and they’re listening right now and they’re like hey I’m going to make a brownie, it’s like good luck. I mean the person at a dispensary has probably got so many different options for chocolate and brownies, I mean, it’s not to say it’s impossible but something like a dissolvable strip really catches your interest because it’s discreet and there’s a lot of different ways you can consume that easily without making a big stink. I mean it just seems like it solves a lot of problems. On top of it if you have bad breath, does that help too Josh?
Josh: Not as much as you think. It’s not as much of a breath strip as it is just an efficient way to absorb cannabis. So if you have bad breath, this probably isn’t your solution.
Matthew: Right, right. Now what are purchasing managers in dispensaries what are they saying when you show them this for the first time?
Josh: You know it’s a total mixed bag. Some people get it right away. We have a lot of people who are just like wow, this is exactly what I’m looking for. My friends and I had this idea forever ago, I’m so glad somebody did this, and then we get people who are just totally confused by the concept and it takes a while to walk them through. So it’s kind of all over the place and that’s what we expected with launching a unique product. There’s no real story you have to tell when you hand someone a pot brownie, but handing them an oral dissolving film infused with cannabis is a little different.
Matthew: Circling back to the Washington market, would you describe Washington or Seattle’s market as functional?
Josh: Yeah so I would say it’s functional and getting more functional every day. There’s been some challenges in Washington that other legal states haven’t had to face. Colorado for example had a very well-regulated license to medical cannabis market so when they wanted to take the switch over to rec it was very easy for them to just say you guys get to start selling to anybody 21 and up now. But in Washington we didn’t have the luxury of having a well regulated medical market. It was kind of gray area for years and years and years. Taking those unregulated businesses and just allowing them to sell cannabis to anybody 21 and up wasn’t really an option. So because of that we’ve been dealing some interesting fallout from the medical market transitioning into this recreational adult use market. But overall I think everyone has been doing a great job in keeping their head down and pushing things forwards. It’s just been a rocky road getting there.
Matthew: Washington’s a very popular flower state. Is that, being a non-flower, more discreet company, do you see that kind of pivoting in edibles and infused products kind of taking more a foothold now?
Josh: We thought that that was going to be the case, and you’re totally right. Washington is definitely a flower market. Our assumption was that as the market matured and as it moved further into the recreational space we would see that change happen and we would get closer to that 50% edible saturation like you see in Colorado and California. But what we’ve been noticing actually is flower has stayed about three-quarters of the entire market over the last year and edible sales have actually gone down a little bit. It’s a really interesting space.
Matthew: You’re mentioning that there’s kind of a mixed bag in response to the strips, the dissolvable strips. I mean people that understand it they get it right away, but for the people that don’t get it, what’s their objection? What are they not seeing?
Josh: That’s a good question.
Matthew: They just don’t see why someone would want to have it that way versus something else?
Josh: Yeah I mean one of the main push backs we get is why would I have this over a brownie or why would I carry this around if it’s so small or if the dosage is so low or if the price point is too high. We get things from all over the board.
Matthew: So it’s like a circular tin correct? The Oakor dissolvable strips, it’s a circular tin. Is it circular little strips that you put in your mouth?
Josh: Now they’re actually squares. We tried to make them circular at one point. We were able to do it. There was just a lot of waste created from that. So we decided to stick with the square shape.
Matthew: Okay so you have the squares and what kind of dosages? Do you have sativas, indicas, hybrids since they’re CBD focused? What can you tell us about the strips with that?
Josh: Yeah so we have eight different varieties of the strip right now. We have an indica, hybrid, sativa, a one-to-one which has 10mg of CBD and 10mg of THC, a two-to-one which has 10 CBD and 5 THC. A low dose strip which is 5mg of THC and then an extra strength strip which has 20mg of THC. All of our baseline of strips have 10mg of THC per strip and each tin comes with 10 strips in a pack.
Matthew: Now most people are familiar with THC and also most people are becoming familiar with CBD, but when you hear the one-to-one ratio can you just explain why someone would want that?
Josh: Yeah so there’s some interesting effects when you combine THC and CBD and there’s a lot of speculative research out there about why this effect happens. A lot of people call it the entourage effect. What I notice specifically when I consume CBD in tandem with THC is that a lot of the undesirable effects of THC are mitigated. So I never tend to have any sort of paranoia, any sort of uncomfortable feeling or badly racing thoughts whenever I take CBD in tandem with THC. And I don’t come from… I personally don’t have any glaring health issues so I can’t really speak to the efficacy of CBD and THC for my personal wellness, but we get a lot of reports from people saying that the one-to-one and the two-to-one rations, that combination of CBD and THC really, really help them with the different ailments they have.
Matthew: What about onsets with a strip versus some sort of other edible? Can you give us any anecdotal information about how quickly you feel the medicinal effects of a strip?
Josh: Yeah. So in general because it’s a sublingual dose, meaning it’s absorbed underneath your tongue, it goes directly into your bloodstream. So the onset can be four to six times faster than a traditional edible. If I were to take a brownie, I have to eat that brownie. All the cannabis is bound to the fat molecules in the brownie. So it goes down into your stomach, your stomach acids have to break that down, then those cannabinoids get absorbed through either the lining of your stomach or the lining of your intestines. They pass through your liver and then they hit your bloodstream. And then from your bloodstream they have to travel all around your body and find your cannabinoid receptors. And they have to go all the way up to your brain and cross the blood/brain barrier before they can hit the ones that make you feel the high effect. But with the strip you’re getting those cannabinoids directly into your bloodstream which means they’re hitting your cannabinoid receptors much, much faster.
So depending on what you’re doing, like if you’re being pretty active, you can feel the effects within ten to fifteen minutes because your blood is moving around your body and that’s the carrier for the cannabinoids. But if you’re kind of just sitting or maybe you just ate a big fatty meal or you’re watching TV, then you’re not going to feel the effects for probably 30 or so minutes. But in both cases it’s still faster than eating an edible.
Matthew: This is a very unique product. Is it difficult to find a manufacturing partner or the equipment to make something like this?
Josh: Yeah it was actually totally impossible to find a manufacturing partner. When I first came up with the idea for the product I spent about two months in my kitchen at home trying to figure out how to make it because I couldn’t find anybody that would help me out, and I ended up creating a handmade breath strip process that we still use today.
Matthew: Great. This is a barrier to entry. Someone can’t just decide to do this overnight and be in competition with you. So that’s a great situation.
Josh: Yeah exactly.
Matthew: How did you come up with the name Oakor? What does that mean?
Josh: So it’s named after the street I grew up in in New York. I come from a very small, conservative town in upstate New York that’s not too keen on pot. And when I moved out here I wanted to pay homage to where I came from and I also wanted it to serve as little reminder that even though I’m in a very pot friendly state, the war is not over yet so to speak.
Matthew: What other states besides Washington? Are you focused just on Washington right now, solidifying your exposure there before going elsewhere?
Josh: No, we actually have manufacturers in two other states right now. So we launched in Washington about two years ago, and since then we’ve opened up in Connecticut, which we’re in every dispensary in Connecticut in their medical market, and just recently we opened up in California as well.
Matthew: As a cannabis startup, is it difficult to get financing? Can you tell us a little bit about that journey?
Josh: Yeah so as anybody who probably listens to your podcast knows, you can’t find financing through the traditional methods with a cannabis company. A bank is not going to give you a loan. It’s pretty hard to IPO to get money that way. So you’re really resting on either angel investors or friends and family, and that’s the route we took. It took us about a year just hitting the pavement trying to find someone who was willing to even talk to us and eventually we found an old friend from an old company that we were working on that was willing to give us a loan to fund the R&D and the initial build-out of the product.
Matthew: What do the strips retail for?
Josh: So that depends on where you are, which market you’re in. In California, which is our biggest market currently, the strips retail anywhere between $15 for a tin to $25 for a tin.
Matthew: Okay. Any other products in the works?
Josh: Yeah, yeah. We’re working on a whole bunch of new products. We should have two new products out on the shelves in 2016, and they all sort of follow the same similar model that the slips do where they’re sort of a traditional product that people are used to with a nice tweak on them to make them more efficient ways to absorb cannabis.
Matthew: Which of the strips sell the best? You kind of gave us an outline of all the strips you offer, but which ones are the most popular?
Josh: Our two most popular varieties right now are definitely the CBD only variety, which is just 10mg of CBD in a slip, no THC and the extra strength variety, so the 20mg of THC.
Matthew: Okay. You’ve really done something unique here. Again congratulations to you Josh. For any aspiring entrepreneurs out there, do you have any words of wisdom as they develop their products, apart from don’t compete with you?
Josh: Yeah don’t make a breath strip. Just you know be yourself. That’s really all you can do. It’s a tough journey to get from an idea stage of something to actually getting it on the shelves and assembling a team behind you. And if you’re not true to yourself through that journey and you’re not constantly questioning why you’re doing it and who you’re doing it for, you’re never going to make it, or if you do make it, you’re not going to be happy with yourself.
Matthew: Great point. Be your authentic you, and if you don’t know who your authentic you can you take a 20mg strip? Does that help you discover that?
Josh: It’s definitely helped me find it before.
Matthew: Alright well Josh please give out your website and let people know how they can find you.
Josh: Sure, so our website is www.oakor.com. That’s www.oakor.com.
Matthew: Great. Josh thanks so much for being on CannaInsider today. We really appreciate it.
Josh: Yeah thanks so much for having me.
Matthew: : If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider(dot)com. We would love to hear from you.
Some quick disclosures and disclaimers, me your host works with the ArcView Group and promotional consideration may or may not be given to CannaInsider for the ads placed in the show. Also please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions.
Josh Kirby is on the cutting edge of cannabis innovation. He is creating a dissolvable strip you put on your tongue and it dissolves. Learn why cannabis companies are having to innovate to survive.
What are the five trends that will disrupt the cannabis market in the next five year?Find out with your free guide at: http://www.cannainsider.com/trends
[1:59] – What is Oakor?
[2:21] – Josh talks about how he got in the cannabis industry
[3:09] – Josh discusses his dissolvable cannabis mouth strips
[4:30] – The reaction to his product
[5:12] – Is Washington state’s cannabis market functional
[7:17] – Reasons some purchasing managers push back on getting the strips
[8:16] – Josh talks about the different varieties of strips
[11:35] – Finding a manufacturer for the strips
[12:11] – The meaning behind the name Oakor
[13:09] – Getting financing as a cannabis startup
[14:09] – Josh talks about future Oakor products
[15:07] – Words of wisdom for entrepreneurs
[15:48] – Contact details for Oakor