Ep 321 – Cannabis Drinks Are Hot, But Only If The Formulation Is Perfect

jonathan schultz backyard soda

Are cannabis and hemp beverages on the verge of explosion? It all comes down to the fickle whims of beverage consumers. Here to tell us more about it is Jonathan Schultz of Backyard Soda.

Learn more at https://www.backyardsodas.com 

Key Takeaways: 

[2:09] An inside look at Backyard Soda, a Denver-based startup creating all-natural, non-alcoholic, CBD-infused sodas and cocktail syrups

[3:28] Jonathan’s background and how he came to start Backyard Soda

[9:36] What beverage consumers are looking for in cannabinoid beverages right now

[14:44] Why Backyard Soda chooses to use whole ingredients even though this drives up price points for customers

[21:10] How Backyard Soda is partnering up with restaurants and hotels looking to add CBD cocktails to their menus

[23:46] Why Backyard Soda uses full-spectrum CBD unlike most other cannabis beverage brands that use CBD isolate

[29:03] The challenges of distributing CBD beverages and how Backyard Soda has overcome them

[37:38] Where Backyard Soda currently is in the capital-raising process

Click Here to Read Full Transcript

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Matthew Kind: 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 CannaInsider.com. That's C-A-N-N-AInsider dot com.

Now here's your program. Are cannabis and hemp beverages on the verge of explosion. It depends if you can understand the fickle whims beverage consumers. Here to tell us more is Jonathan Schultz of Backyard Sodas. Jonathan, welcome to CannaInsider.

Jonathan Schultz: Matt, thanks so much for having me. I'm excited to talk to you for a little bit.

Matthew: Give us a sense of geography. Where are you in the world today?

Jonathan: I am, in Denver, Colorado. We are at our office, which is based here in the RiNo neighborhood, chatting with you from there.

Matthew: I get a lot of people moving to Denver from other areas because of COVID.

Jonathan: It's such a hot area right now. I think Colorado has done a great job of really mitigating and managing, and things, and people want to be outside. This is a great spot to do that. We're seeing a ton of influx, good for real estate. Not probably so great for everything else as far as resources and things, but people need the sun and people want to be outside and play.

Matthew: Good points. Well, I guess for Colorado size and how cool a state it is, it was just a matter of time before-- it's like 5 million people, it's going to just probably double.

Jonathan: In the last probably 10 years, and I will count myself as one of it where I'm not a native. I moved here from Ohio about 10 years ago with my family. We did it for the same reason that everybody else did, which is just the beautiful scenery outside. Yes, I think people are going to continue to make their way here.

Matthew: Great. Well, give us a sense of what Backyard Sodas is on a high level?

Jonathan: I like to tell people, Backyard Soda is at heart a simple syrup company. We like things simple. [chuckles] Simple syrup is one of those things that people know about. They've probably used or said, "Oh, I've got to make some for a mint julep," but don't realize how versatile it can be, especially with making drinks. Our whole idea around Backyard Soda was to make gourmet drink simple. We want people to think and to feel that they can create the drink that they go out and spend $14 or $15 for if they're at a high-end cocktail bar or they're out to dinner, and then they could do that at their house in their own backyard.

Now they have the opportunity to do it both with an infused a full spectrum CBD version, in addition to our regular non-fused syrups. Then we also have a line of ready-to-drink CBD-infused sodas and mixers. We're pretty simple company and that's the way we want to keep it.

Matthew: Can you share a little bit about your background and journey? Jonathan, you mentioned you're from Ohio, but give us some more sense of what you were doing before, where in Ohio are you from by the way?

Jonathan: I grew up in central Ohio. We actually lived in Cleveland for about 15 years. That's where I went to a business school. I got my MBA from Case Western. Prior to that, we've lived in New York, we'd lived in Boston, and then my wife and I both graduated from Colgate University in upstate New York, so that's where we met. I've had a pretty varied background when it comes to positions and career. Everything was mostly in financial services. I was working for financial companies, banks, and ultimately, I just decided that after several years of that, I wanted to work for somebody that was a smaller company.

It was still in the financial services, but it was a pet insurance company. It was a brand new startup, and I really got the feel for what a startup is like to work for when you're the third or fourth person hired. Ultimately, I went on and decided that that was the path I wanted to take, but I think I wanted to start it myself. I've done a couple of startups and mostly in the technology world, but I'm a big fan of cold beverages.

Matthew: Well, you picked the right field.

Jonathan: Exactly. When we have the opportunity to take over Backyard Soda we saw just a huge opportunity from not only the beverage world, but what was coming down the line in the cannabis world with the passing of the Farm Bill, and just something that was going to be a lot of fun. I don't program software, but I can make a drink or a cocktail. [laughs]

Matthew: I'm a big fan of the nitro coffee. I think the first time I had that it was in around Boulder at 2014 and that has really added something. I feel like that just it's so flavorful and effervescent. It's like, "What else can we be doing here with drinks?" There's just crazy time to be experimenting. People are pretty open to experiment. Tiger Claw and these types of drinks too, is kind of really eaten a hole in beer and wine probably. People are saying, "You know what, I'm going to rewrite my whole idea of what an adult beverage is and what coffee is, what everything is like, I'm going to expand my palette of what I drink." Would you agree with that?

Jonathan: It has. I think I didn't actually drink coffee until I really figured out cold brew. Again, I've got a weird quirk of I don't really like hot drinks, so coffee was never really my thing [laughs] until I could put it on ice. I guess I could have put coffee on ice, but the cold brew was great because it took a lot of the acid out, things like that. I think with the drinks, you're absolutely right. There's people that really want to be that home mixologist at this point, they're open to experimenting. I think they've been out and about now that they're in a situation where, I won't say locked down because I feel like the country's just moved a little bit out of that, but there's still a lot of places that are open.

It just the world obviously isn't the same. Being able to create really interesting drinks and play around and experiment with this, I think is a ton of fun and gets people to be creative. I think the use of things like soda stream, where you can carbonate your water and now add our syrups to make your own CBD drink at home or soda at home. That has been something that people are starting to realize, "Hey, I can do this myself." It's been interesting.

Matthew: You're in the space before you don't like warm drinks. It's a little unusual, but I like guests that have a little strange edge to them, so we'll keep going.

[laughter]

Matthew: You had a skill set making drinks, and then you're like, "Hey, what the cannabis space sounds interesting, hemp CBD. Do you remember the moment where you were just had the idea?

Jonathan: I do actually, and it was back in summer of 18, and a friend of mine who we had been discussing just extraction, and CBD and what can be done and things like that. To me, I found that consuming CBD, vape pen, that's not my interest. It seems weird to be you don't pull out a vape pen at a social party or at least maybe some people do that but I don't and taking tinctures and things just didn't have a very, what I'll call, social norm to it. I said, "What's more normal than cracking a can of soda or making a cocktail? Why wouldn't we create a CBD-infused ingredients that you would put into this?" That ingredient was our simple syrup. It allowed people who are maybe moving towards the non-alcoholic side.

In general, the market is saying, "Hey, less alcohol is being consumed, but we still want something." This allows an interesting mocktail that has the benefits of CBD without necessarily having to just drink seltzer water or wine.

Matthew: When you decide then to go into the cannabinoid beverage market, how do you orient yourself in terms of what you think drink consumers want from a cannabinoid beverage? How do you dial that in?

Jonathan: Well, I tell you first and foremost, they want something that tastes good. [chuckles] I know that sounds counterintuitive a little bit to where-- come looking at it from a cannabis world. At the end of the day, people buy anything once but if you want them to buy it a thousand times, it has to taste good. I think that was the first and foremost thing that we looked at and said, "If we're going to create a cannabis beverage, it has to taste good. It can't taste like basically drinking cannabis. There's a little bit of taste there. You want them to know it, but you don't want that to be the overpowering flavor.

CBD can be very bitter, especially if you're just utilizing an oil or things. There's blockers to mask some of those taste but first and foremost it has to taste good. Next, we want to make sure that we were looking at this from a daily user that isn't looking to necessarily manage something. Obviously, if you're managing some sort of ailment or illness with CBD, and there's some incredible stories out there of what it can do, you're probably not going to go out and drink a bunch of sodas and cocktails to manage that.

Our look at it was what's that daily use number and things that people might want to have a drink with some benefits. If you're going to have a soda at lunch, if you're going to have a cocktail after dinner, this is a great way to consume a daily dose of CBD from that standpoint. We wanted to balance those two. I think we've done a pretty good job with that.

Matthew: Okay. When you have a prospect that says, "Hey, I like the idea of a CBD beverage, how much CBD should I be consuming?" I'm sure that's a question you get all the time and what do you say to that?

Jonathan: Yes, it's probably the number one question. The problem is that the answer is I can't tell you the answer. Everybody's body a little different, everybody processes a little bit different. It depends on the CBD itself. We utilize a full spectrum, we take the whole plant and that goes along with our ethos of using whole ingredients because we believe there's an entourage effect that works when you have not only CBD but CBG and CBN and some form of-- or minimal amount of THC. It all works together from that standpoint.

It's really hard to say. I know that's not a good answer that anybody wants to hear but somebody that consumes 20, 15 milligrams of a full spectrum CBD that's 6'2 and 220 pounds is going to have a very different effect probably than someone that is 5'2 and 105 pounds. It just tends to be a tough question to answer and I think it's something that hopefully we'll get dialed in as an industry of, "Hey, this is the right amount and we believe that somewhere between 10 and 25 milligrams per day."

Matthew: Okay. Each can has how many milligrams?

Jonathan: 15.

Matthew: Okay. How you get the water solubility right for the CBD because I know if it's not soluble it coagulates in the liquid and it's not a pleasant experience? How do you work that?

Jonathan: Luckily, we've got a partner that is the extractor that we utilize here in Colorado. All the industrial hemp that we utilize is grown here in Colorado and extracted here. Luckily, they've been able to put together a great water-soluble product for us. Really what our focus is on the taste and sort of our formulation of what are the ingredients that we are utilizing, and then we have the CBD in that water-soluble form that allows us to just add a theme as we're making our batches. It's great to talk to them and it's great to understand their process. It's complicated so I won't get into it but they do a great job. That is a really important piece in this.

Matthew: You mentioned whole ingredients earlier. Is it difficult to use whole ingredients more than artificial ingredients? Are there any whole ingredients you're particularly excited about right now?

Jonathan: Yes, whole ingredients to us is incredibly important. I think that most companies out there if you look at the back of a can or you look at a lot of ingredients labels, it will say “natural flavors.” To us, it's like if you've got something that's strawberry flavored or watermelon flavored and you don’t actually see watermelon or strawberry on the ingredient label, you just see natural flavors, that’s a turn off at least to me and I think that's where the world is going. We take our ginger for our ginger lime and we take whole ginger and press that to a hundred percent juice. We use a hundred percent fresh lime juice. The lavender is lavender flower that's grown in a single farm out in Palisade, Colorado.

Home mangoes for our mango jalapeno. We use whole vanilla beans, which is unheard of to be quite honest because vanilla is very expensive, most people will just use an extract. But we also believe that there are really great properties of utilizing. People drink ginger ale for when their stomach is upset so that they're probably just reviewed Canada Dry. It's not really doing a whole lot.

When you actually consume the whole ginger, it really does have that effect, lavender, all of those ingredients have terpenes and they also have their own, I won't call it necessarily medicinal, but effect of whole ingredients is much different than just a flavor. We believe in that wholehearted. Like I said, we use that across the board, including, the CBD and the cannabis so that we have used all of the terpenes and cannabinoids in the plant.

Matthew: Now, it's a tricky balance because you want to use the best ingredients possible, but you want to keep your price point reasonable. How do you balance those two things? you are?

Jonathan: That's a great, great observation. It definitely costs more. I think what we have done, we have been able to control our costs but I think we're also talking to people about why you might want to spend a little bit more in order to have that type of whole ingredient. I think people are realizing, the market in general is realizing that the natural and organic is here to stay. It's not going anywhere. People don't want to see red dye number whatever or words they can't pronounce on their labels.

I think as people look at their health and they look at what they put into their bodies they're willing. If it costs a few cents more or it costs 50 cents more but it is something that is truly all-natural, I think people are not only willing to pay for it but are starting to seek it out because of the fact that they've heard just don't want those chemicals in their system.

Matthew: What are the retail prices for your drinks? Do you sell them four packs or singles? How does that work?

Jonathan: We leave that up to the stores. Most of them are selling individual cans. We sell a six-pack on our site. That six pack goes for 24.99, and then we will see most stores selling an individual can anywhere from 3.99 to 4.49. It just depends a little bit on the retailer and it depends a little bit about the location. We, I think, hope that those prices do come down right now. I think that the market is interested in. They're finding benefits of consuming it then they're willing to pay but ultimately I'd love to see those prices down in the 2.99 a can 3.49 a can, very similar to Kombucha that you might see many of the grocery stores. Being aligned with that product, I think is the right place to be.

Matthew: What's the conversation like with the retailers? Is there picking your brain, learning about backyard sodas and how it fits into their lineup?

Jonathan: It's also new to them. This isn't like an entirely new category so it's true, they are really learning. I think most see that there's a huge opportunity that truly is about to explode, and it is one of the fastest-growing categories. Even though it's a brand-new category and so that's exciting for them. I think their biggest question is where do I put it. Do I put it in the soda aisle? Do I put it in the beer aisle? If you are a liquor store, do I put it in the mixer aisle? Those are the things that need to be worked out a little bit. Just what's going on? As people walk in and start asking for it, "Where is it?" They'll start to be like, "Oh, we need to put this in the mixer aisle,” or something to that effect but everybody is a little bit different from there. Other than that, at least here in Colorado, the education level's pretty high. As other states allow and legalize the industrial hemp to be put into food and beverage in their own state, the education of retailers will become easier.

Matthew: How about-- is there any restaurants, or hotels that'd be CBD Mocktails or anything like that? Can you talk about that?

Jonathan: Yes, actually there are. We're really excited about it. We have multiple places here in Denver that are utilizing our syrups and our sodas for CBD cocktail menu. Lustre Pearl in RiNo is one of them, Charcoal Bistro in Park Hill is another. We had a great opportunity with one of the music venues here in town, Cervantes, that did some signature cocktails for an event when they were having events. That has been actually a really interesting place that we would like to be once the music venues start to come out because we are what I call mixer focus. They can create a CBD cocktail or a mocktail. Now you've got for folks that may be driving or aren't drinking that night, they've got something interesting for folks that are looking to add to the alcohol. they can now have that CBD Moscow mule or that CBD margarita, things like that.

I think that the mocktail menu is something that people and restaurants are really starting to want to put out there. As I mentioned before, there is a trend going towards less alcohol. But when you can create an interesting drink that's truly made for someone that isn't interested in consuming alcohol, but it has a fun feel and you don't have to compromise that taste, or that feel, that's important. Bars and restaurants can probably charge almost as much for a great mocktails they do for an alcoholic cocktail. That drives some great business. If somebody isn't drinking, it's just like, "I'll just stick with water," because it really isn't anything on the menu that they want or they have an opportunity to say, "Oh, really? Love the looks of that nonalcoholic cocktail. That looks delicious." Why wouldn't you want to sell a mocktail to someone that isn't planning to drink alcohol that night?

Matthew: Right. What are your feelings in terms of using CBD isolate versus full spectrum? I know you said you like whole ingredients, but the masking which you talked about a little bit earlier, the full spectrum oils, you really notice that taste. It can stand out. How do you try to determine what the right balance is there?

Jonathan: Yes, it's difficult. Like I said, that whole idea around a beverage is that taste is always number one no matter what. It is important, but for us, there is no question, full spectrum is the way to go. The CBD isolate is certainly easier to work with, but I'm not sure it really necessarily provides all the benefits. There is probably some question around whether or not if it is used in the pharmaceutical, which I believe there have been a couple of-- maybe just one pharmaceutical products that have come out that are for, I want to say epilepsy utilizing the Isolate. The question really becomes around whether they'll allow beverages and food to introduce just an isolate into it. The FDA will have their ruling of that at some point down the road.

I think they've got a lot on their plate right now. [laughs] But there's been a lot of waiting around for the FDA to give a ruling one way or the other. States are making those rulings on their own. As I said, I think the FDA has a lot on their plate right now and are probably worried a lot more about finding a vaccine for COVID versus making rulings on CBD at this point. It'll be interesting to see what happens and where it goes. We are hoping that that is something that they rule on soon. For now, we are excited about what we utilize in our drink.

Matthew: Talk a little bit about your Backyard Cocktail Kit? What is that and who's that for?

Jonathan: Yes, back in March when things really started to close down, we started to look at what are the opportunities here because our business was really based around walking into a restaurant or a bar or a liquor store and saying, "How do we get this on the shelf? How do we get this on the menu? You’ve got to try it, you’ve got to taste it." Well, if you don't have customers coming in, and tastings have really been shut down, what's the next best opportunity here until things get back to normal? Really our focus turned to online. Sorry, this might be a little bit longer answer but to get to it I just want to give a little bit background. We did a bar attender contest because all the bars were basically shut down. We provided the bartenders with product. We said, "Create your best drink with our products."

We got some phenomenal, phenomenal recipes. We were really excited about it. We started to think about just, "What are people missing?" They are not really excited of walking to stores, places we are not seeing the foot traffic. They weren't going to bars because they were closed, but they wanted to be able to make something at home that, "Where can I get this ingredient, or I got to go to four different places to pick up things?" We looked at it and said, “I think there's a great opportunity here. Just similar to Hello Fresh, or Home Chef and Blue Apron where you're getting your meal kits in a box. Why wouldn't you get a cocktail kit in a box?”

It's delivered through a delivery partner. They provide the spirit, they provide the syrup, they provide any of the [unintelligible [00:28:09] need to go with it as far as whether that's citrus, whether that's bitters, things like that. There is a recipe card that tells you step by step how to make it. It comes with typically 8 to 12 servings. If you're having a party. You can say, "Hey, I've got this really cool cocktail that I want to make." We partnered with different distilleries around Denver and let their bartenders create the drinks. We partnered with Pete's Beverage here in Denver as a delivery partner and a company called Handoff, which is a Drizly like startup where you can just order what you want on the app. We think it's a perfect opportunity for people to stay home and have gourmet cocktails in the backyard.

Matthew: What's it like trying to navigate the distribution? How do you get into retail stores? Was that difficult?

Jonathan: It's very difficult. [chuckles] It is probably one of the more difficult things there is to do. Retail stores, they want to see traction immediately. They are not really interested in taking up shelf space to prove whether or not you can sell a product or not. It's not easy. They've got a lot of products that are coming at them every day. You've got to be the right price points, you've got to have the right marketing, you've got to have the right branding, you've got to have the right messaging. That's even for them to just consider taking a look at you. Then you hope they'll taste it. It's not easy. We have been really exciting and lucky that our products were in Wholefoods, are [unintelligible [00:30:07] in Wholefoods, and getting into some of the liquor stores and the bars and restaurants has been challenging, but we've been doing it. I think our key is getting people to taste the product because once people taste it, I think people typically are like, “Wow, this is really great, this is way better than I was expecting because I've had other CBD stuff and it does doesn't taste that great.” I think it's all a combination of that and it takes a long time. It doesn't happen overnight but as you build relationships and continue to work on social outreach and messaging, I think they're more inclined to try you out.

Matthew: Well, you mentioned a few of the flavors, mango jalapeno, can you talk about some of the other flavors?

Jonathan: Yes, so, we do five main flavors at our retail for our SERPs. We have mango jalapeno, again, whole mangoes, we do a whole dried jalapeno to basically even out the flavor. If you just throw a jalapeno in there, you don't know whether it's going to be hot or whether it's going to be mild and, so if you dry them and get them chopped up and infused that way, you tend to even out the heat. We do a Madagascar vanilla and that's made with whole vanilla beans. We do a ginger-lime like I said, we press that ginger, the whole 100% juice.

We have a lavender lemon. That lavender's grown out in Palisade, and then we do what we call true grenadine. We've actually changed the naming of it to be pomegranate orange blossom. The reason that we did that as most people think of grenadine, they think of cherry. Real grenadine, the true original recipe of grenadine is actually using pomegranates, which is why we do a pomegranate orange blossom. We just saw those as great flavors for making drinks. We actually do a few other flavors and we've just recently introduced our CBD root beer. Our root beer is very, very unique and it's awesome.

We love it. It's made with whole cherry bark and Sarsaparilla and a whole vanilla. We call it a 7-spice root beer and it's really-- we introduced it this summer as a test. It went well. I think we'll be bringing it out here very soon as a full-time product.

Matthew: That's what [unintelligible [00:32:58] Sarsaparilla, is that what you said?

Jonathan: Yes.

Matthew: Because I think I've tasted like, is it Sarsaparilla root or it's like a little piece of-- it looks like mulch or something you put in your mouth? [crosstalk]

Jonathan: Yes, exactly, it looks like mulch or birch, yes.

Matthew: Yes. Okay. Yes, that's an interesting experience the first time you tried that.

Jonathan: Yes. It's-- but it's the-- for us, it's fair, it goes back to whole ingredients and how root beer was originally made. Root beer was very medicinal when it was first brought out. Not that we're looking for our root beer that tastes like medicine, that is not the case, but we wanted to infuse all those ingredients to make that original root beer taste. This is not your-- this is not A&W or it’s Dad’s. [laughs]

Matthew: Yes. Originally, back in the day, people would say that's a tonic, like a health tonic in there, sometimes talking about drinks like this, like Sarsaparilla root tonic and it helps you feel-- it makes your general wellness feels better after consuming it.

Jonathan: Exactly. Again, that all goes back to consuming whole ingredients. You're not going to get that effect from a heavy corn syrup, lead root beer syrup that just has a bunch of artificial flavors and things like that in there. There's a way to make root beer and make it taste like that, but actually utilizing, like I said, barks and leaves and things like that, and that's what we do.

Matthew: Gosh, I really would hope we stop using corn syrup all together for drinks and in treats and stuff like that. I just don't know who wants that. Anybody [unintelligible [00:34:48]. I don’t know why that is.

Jonathan: Yes, I don't either. We use pure cane sugar from our standpoint. Yes, I don't get-- corn syrup must be very cheap or something, but it's the base of so many drinks right now and it really is-- it's pretty gross. [laughs]

Matthew: Well, you were in the Canopy Boulder cannabis accelerator program. Can you talk about that a little bit and your experience there?

Jonathan: Yes, it was a fantastic program. If most people or I should say most of them if people are familiar with the concept of a business accelerator, it really started in the tech industry. You have Techstars and Y Combinator. They basically take small companies with an idea or maybe they're just getting to a prototype or something, they set them up with mentors, they set them up with being able to create models and help really from marketing standpoint and bounce ideas off them. It's sort of a basically like a mini MBA. I was lucky enough that I had already gotten my MBA so now this was really concentrating on getting product to market.

They typically have about 250 applications from all over the world, they pick 10 companies to be a part of their cohort. We were one of those 10 companies last summer. We went in with this idea for them and we said, “Look, we've got this syrup and want to be doing an infused CBD syrup and we also want to bring this [unintelligible [00:36:34]. In 16 weeks, we started and by the end producing cans and putting them on shelves. It was truly a phenomenal experience and truly an accelerated experience

Matthew: It sounds like the accelerator did its job.

Jonathan: Exactly. There's no way we would've been able to do that by ourselves. We would eventually have gotten there, but certainly, it helped, and having those resources helped. They put in an investment, they've got a great opportunity to be pitching in front of different investors and other networks, it was just a fabulous experience. I couldn't tell you how happy we were to be a part of it and to be an alumni and still be working with them on a regular basis to bounce. Eventually, you can call up any time, you can send an email, you can go up to the office, you're really part of a great network.

Matthew: Where are you in the capital-raising process now?

Jonathan: We're basically raising seed right now. Our goal was-- we're raising $750,000. We have taken a little bit different approach but I think it's because we're a CPG and that takes a lot of branding. We look at it a couple of different ways. You can obviously do that by buying as much placement as you can, except it's very, very expensive to build a brand from scratch and just try and place things and put your brand out there. Really where does branding come from? In my opinion, it comes from having people try it and be evangelists and telling people about it. My philosophy is you don't have a brand until somebody walks out of store because your product wasn't on the shelf.

What we wanted to do was raise through a crowdfund. We've actually done that twice now. Our first crowd fundraise was back last fall with a company called Micro Ventures and we raised our goal in 45 days. That was fantastic. We were approached by multiple other crowdfund sites and we actually decided to do another one. We've been very successful there. It's actually about to close in about a week, so there's still opportunity to get in, but we look at that is having now 500 to 1,000 people that not only are trying our product, they're telling people and they're evangelists, they're part of the company, they own-- they're going to own equity from that standpoint.

They want to tell people to use the product and that's what we need right now. It's hard to do that with a couple of salespeople, but you've got a thousand people, we've got some great stuff. We have an investor that came through the crowdfund and he's making all kinds of introductions to distributors and sending out product to people that he knows all over the country who may have some interest in, “Oh, wow, this is really great.” I feel somebody that would be great to distribute this in Illinois or whatever the case might be. It's really interesting. I think at our next round of financing, I do hope to go with the more traditional VC, angel kind of group and bring in then kind of a larger check to allow us now then to start to really build the brand out so that not only the people can see it, try it, but are starting to see it mentioned places and on shelves.

Matthew: Jonathan, I'd like to ask a few personal development questions to help listeners get a better sense of who you are personally. With that, is there a book that's had a big impact on your life or your way of thinking that you'd like to share?

Jonathan: I'm an avid reader. I like to read a lot of articles. I like to be very current. I think the book that probably, if I'm thinking about a business book that's really been one of the guiding principles is Good to Great, Jim Collins. It's not necessarily something that is brand new. It's been around for a long time, but just sort of the case studies and the examples of leadership and how companies evolve through the growth process, I think has been something, it's hard, don't get me wrong, to emulate. Especially when you're as small as we are, we try.

Matthew: What is one thing that you believe to be true that most people disagree with you on?

Jonathan: I would say not getting too overly political here, especially in the current times, I actually believe that we're putting ourselves in a lot of stress around education and how people are focused on it. I have two kids. One of them is a sophomore in college. She ended up going to school, was there for three weeks and they said, “All right, we've got a bunch of cases and we're sending everybody home.”

My opinion is there's a lot of people out there that are scared and are worried, and we’re putting kids and teachers and things. I wish they just said, “We're just not going to have school anywhere for the next year. No one is going to fall behind. If you graduated '19 instead of '18-- Just let's get through this without having to put any undue pressure on children and teachers.” I would say it's probably not the most common thing to hear.

I think people really liked the fact that my kids are going back to school, but there's just so many schools that are finding that it's just really difficult, having a model of hybrid where somebody goes two days a week and somebody goes three days a week, and then two weeks online and then you're back in school. It's just so confusing. It just seems like we all could have taken a year and just figured it out, and then come back and started where we left off.

Matthew: Good point. I don't know if the revenue models support that, so that could be the reason.

Jonathan: Maybe, but revenue and education aren't exactly two peas in a pod.

Matthew: Well, you said that in a very nice kind way, you must have had a few CBD beverages before. One other question, Ohio question for you, I've gone to Ohio twice in the last couple of years to check out Cleveland and Columbus. I feel like the center of the country is starting to become cooler again. What do you think?

Jonathan: It's funny because we lived in Ohio. I grew up in Ohio. I grew up in central Ohio. My father's side of the family is all from Ohio and Cleveland. I always will be an Indians and a Browns fan. I think that there's just a lot of Midwest value and just kind of people really are down to earth. I think as people leave and go into school and maybe live on the coast of New York and LA and San Francisco, and then they realize, “Oh, my God, it costs a fortune to live here. The quality of life and I can spend $2 million for a bungalow in Los Angeles or I can spend $200,000 and have a nice big home in Cleveland, Ohio, what am I doing?”

You're seeing a little bit of a renaissance from food and cocktail bars and just things like that happening in some of these Midwest places where you couldn't necessarily get that a few years ago, but now it's way cheaper to open up a restaurant or a bar in Cleveland than it is in San Francisco or in Seattle or DC, and things like that. I think that I'm excited. I love it here. I probably I'm not moving back to Ohio anytime soon because they don't get enough sun, but I'm excited for the folks, all my friends that are there, to be experiencing it.

Matthew: That's true there. I remember it was like a couple of years ago, I think Ohio had like a hundred straight days of no sun.

Jonathan: It’s impossible. It can get pretty depressing, at least for me it was, in the dead of winter where you might not see the sun from Thanksgiving to spring. Don't get me wrong, you get a few of those days, but, yes, the sun makes a huge difference to be but there probably is no better month in Ohio than September, it is absolutely glorious there.

Matthew: You're not kidding about the values there. I was in an area of Cleveland called Hingetown. There was these doctors from the Cleveland clinic that were buying these brownstones that had like a view of the lake there. I couldn't believe, I can't remember how cheap they were, but they did need a little work, but I was thinking, this is still a major metropolitan area, has a lake view. It's like cool coffee shops around.

I just couldn't believe how cheap they're buying them for and gentrification full force. I'm rooting for it because I hope it'd be fun to have some cool cities in the middle of the country and there already are cool, but it's this fun to see like some places in the Midwest people want to go to.

Jonathan: I agree. I think the cool part is that a lot of those places have these older buildings that are total blank canvases. Somebody can come in and say, “I've got a building and I want to turn it into a cool office or I want to create an apartment or condo, or even like the brownstone and really just kind of put the modern touches that you want and you see coming from the design centers that are out there, and applying them to these places that you can pick up for incredible steel and then all of a sudden you've got what would be in a magazine in New York, or like I said, San Francisco or something in Cleveland or in Columbus or Cincinnati or Pittsburgh or Milwaukee.

They're all very similar cities. That is pretty cool. I think those cities are going to see some growth.

Matthew: Jonathan, give out your website and let people know how they can contact you and learn more about Backyard Sodas and everything you're doing

Jonathan: Our site is www.backyardsodas.com, that’s plural, sodas is plural. We've got all of our products on there. First-time customers have an opportunity to utilize a discount code that you can sign up for and it gives you a chance to try some products. We've got all kinds of recipes on the website. We have new recipes that we try and put up monthly. As I mentioned before, everything's about of keeping it simple.

These aren't recipes that are outrageous or I've never heard of that ingredient. They're just really tasty and easy to make, and allow people to kind of play mixologist on their own.

Matthew: I'm toasting you right now virtually you can't see it, but toast you. Great job building this company and everything you're doing. It's really cool. I wanted to try one of these drinks soon and I'll give you my feedback.

Jonathan: We'd love to have you do that. Let me know. Love to have you try out the product and make some of those drinks for you and your friends.

Matthew: Cool. Jonathan, thanks a lot. Thanks for coming on the show. Good luck.

Jonathan: Hey, man, thanks so much. I really appreciate it. It's been great to talk with you, and I look forward to our paths crossing down the road at some point.

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