While hotels have prohibited cannabis use for years, it’s now considered a benefit many guests are demanding.
Here to tell us about it is Matthew Singer of tökr, an app that creates a personalized cannabis experience based on individual preferences.
Learn more at https://www.trytokr.com
- Matthew’s background in cannabis and how he came to start tökr
- An inside look at tökr’s premium cannabis delivery marketplace
- How COVID-19 is affecting the cannabis environment in California and beyond
- How the hotel industry’s stance on cannabis use is changing in the US
- Ways in which boutique hotels are leading the charge for on-site cannabis use from trusted vendors
- Cannabis consumer behavior in hotels and what’s trending right now
- Matthew’s opinion on California’s black market problem and what needs to be done to fix it
- Why brands have a hard time telling their story in dispensaries and how tökr is working to solve this
- Where tökr currently is in the capital-raising process
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 that insiders that are shaping the rapidly-evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider.com. Now, here's your program.
We've been told for years that hotels don't like cannabis consumed on site, but that's changing and now considered a benefit for many hotel guests and for hotels themselves. Here to tell us more about it is Matthew Singer of tökr. Matthew, welcome to CannaInsider.
Matthew Singer: Thanks, Matt. Really excited to be here today.
Matthew K: Give us a sense of geography. Where are you in the world today?
Matthew S: Practicing safe distance. I'm at home right now in my apartment in Marina del Rey, California.
Matthew K: Okay. What is tökr on a high level?
Matthew S: tökr is a highly curated non-plant touching cannabis e-commerce marketplace and delivery platform.
Matthew K: Okay. Can you share a bit about your background and journey in how you came into the cannabis space and started Tökr?
Matthew S: Absolutely. Actually, started my career working in finance for RBS. In 2009, markets crashed and I was laid off with thousands of coworkers and quickly realized I'd never worked for a big company or a big corporate company ever again. I packed my golf clubs, my snowboard and drove from New York to Colorado. My first job in Colorado was a cloud communications technology company called Telesphere. We started with 20 employees that grew to over 200 in less than three years and was then acquired by Vonage, which is a publicly-traded telecom company.
Shortly after that acquisition, actually left Telesphere with my COO and mentor to help start a company called PlayerLync. If you've ever watched the NFL players and coaches are actually allowed to use tablets on the sideline to review film and communicate with the booth upstairs. We close 28 out of 32 NFL teams in our first year and quickly started to work with the NBA, NHL, and MLB to help teams communicate on and off the field and really get rid of paper playbooks and go digital.
At that same time, Colorado became the first recreational cannabis market. My friends started brands like Keef Cola, Cheeba Chews, incredibles, and cultivations and dispensaries like Native Roots and Herbal Cure. I quickly just realized from studying the market and being in Colorado that there just wasn't a really good resource for the curious or a new consumer. Everything was just still so much stoner-focused. With marketing being so restricted and cannabis, Facebook paid digital, Google, there wasn't really a good resource for premium brands to reach their target audience, and then on the flip side, the new consumer to have a safe place to learn about cannabis and how it can help certain aspects of their life. I quit my job and dove head over right into building tökr.
Matthew K: Great. We're in a difficult environment now in some ways, but a great environment and another area for cannabis businesses that are doing well. It's the best of times and the worst of times as they say. How is COVID-19 affecting, would you say, your business and then the larger ecosystem as a whole?
Matthew S: COVID-19, obviously, cannabis in most States, especially California, has been deemed essential. During the global pandemic, we've been okayed to continue to operate business and continue to get people our medicine. For the long tail of the future of cannabis, that really is going to help federal legalization in the cannabis space.
Matthew K: Okay. Just so people are clear listening, what tökr's role is consumers shop on the tökr platform and then they buy from a local licensee that delivers the cannabis. Is that correct?
Matthew S: Yes, tökr is actually the marketplace. That's where you're going to shop. Then California rules and regulations actually do not allow a cannabis delivery to be done by a non-licensed holder. We've actually partnered with-- our first depot is here in LA, mid-city Los Angeles. When an order comes into tökr, that depot partner license holder receives our order and then they handle the last mile, everything from transaction to actually bringing the product directly to the customer.
Matthew K: Okay. I remember going to cannabis conferences and events five, six years ago and the hotels having just really, really extreme language about not smoking cannabis in the rooms, but that's changing a little bit. Can you talk about what hotel's official answer is about cannabis and then what's allowed?
Matthew S: It really just comes down to culture. Cannatourism especially in California is huge. People know that California has legal recreational cannabis and these hotels really want to be ahead of the times. Our first mover, we definitely on tökr are not screaming, "Light up a joint in your room." That's certainly not allowed. We make it really clear that you can't smoke a joint in your room and you're still going to get that $200 fine that all California hotels do still implement. We push people to go on a hike or walk around the city or learn about Koreatown and then go sample all the amazing food there.
That's like I said, that the smoking fine is still going to be enforced and we like to actually feature more discrete products like a microdose edible or a cannabis beverage, vapes, and tinctures. It's a really good introduction and safe place to start for somebody coming to town visiting that might not be using cannabis. Hotels again, they want to be at the forefront of culture. They know people are doing this. People have consumed cannabis in hotel rooms for a very long time and now they can just offer a safe introduction to how to actually purchase these products as opposed to going to an illegal dispensary that they found on an illegal delivery service online.
Matthew K: Well, illegal delivery service, but what about legal ones like Eaze? Why did they look at tökr and say, "I want to order on tökr versus Eaze because tökr is endorsed by this hotel. I feel more comfortable about it," what's the thought process there?
Matthew S: We've had success in this area because our menu, the products we offer really fit the type of consumer that are staying at these high-end boutique hotels. We certainly aren't going limit-- the hotels can't really stop other delivery services from entering that property, but we actually are putting marketing in hotel rooms so consumers can really learn about how to safely and discreetly purchase products and not be recommending a guest to, like I said, go to one of these illegal dispensers that are just still really, really around here in California right now.
Matthew K: Why don't you talk about that a little bit? The illegal environment or the black market is just enormous in California and it obviously eats away at the legal market. That's just something that's still, it's not talked about that much. A lot of people say, "I buy for my friend or this or that," and it's just, "Why should I pay 30 to 40% more?" There's all these different dialogues going on, but how do you see the illicit market?
Matthew S: Yes, no doubt. This is definitely one of the biggest concerns in the cannabis industry right now. It's one of the primary issues that led to the downturn in the industry at the end of 2019, well before COVID-19 struck the economy. With that said, it really depends on whether we are talking about it in the short or long term. The long term, the economy in this country is just it's not set-up to tolerate a black market for a product that is available in locations that are paying taxes and so readily accessible.
We're really talking about the reality on the ground today, not in a mature cannabis industry because we're just not there yet. I can't give you a timeline on when this will take place, but the regulators will definitely get their act together and find a happy medium to start to incentivize the traditional market transitioning into a regulated environment.
Matthew K: You mentioned that you tried to encourage people in hotel rooms to maybe get like a drink or an edible, but what are the most popular things that they're ordering right now?
Matthew S: I'd definitely say a low-dose or microdose products, whether it be an edible from Pantry or Cuba or beverages from Cann and Artet. Microdosed low-THC products are just a really great place to start your cannabis journey and not overmedicate and then you might not want to ever try it again if it sends you to the moon.
Matthew K: Just circling back to the illicit market for a second, is it becoming confrontational at all between the regulated and the unregulated market where maybe they're starting to turn each other in or really pushing the politicians to get involved and to crack down on illicit market and in Southern California or California in general?
Matthew S: Obviously, for the sake of my own business and the health of the industry, I want everyone to be playing by the same rules in a regulated environment, but I refuse to view people as the enemy in this situation. A lot of the people that are still operating in the traditional market, they paved the way for legalization.
Demonizing these people, it's just a lack of understanding how we really got to where we are today. It's more failure of regulators, not of the people. Sacramento just made it so painfully difficult to even enter the regulated market, let alone thrive. A lot of people have just had no other option. Until we sort through the environmental factors, calling the unregulated market the enemy I just think misses the mark.
Matthew K: Okay. How are brands doing with this huge thriving black market? How does that impact them?
Matthew S: Struggling brands are definitely struggling and because of the traditional market over taxation, they struggle because a regulatory environment was just not really created to allow them to succeed. The struggle with brands and the traditional market, it's pretty endemic of a much larger problem. Like I said, having set people up to succeed, I don't have a crystal ball on when this is going to happen, but I definitely have complete faith that this will change.
Matthew K: That's a tough one. I think maybe the only way it could change is they really just lower the difficulty level to let the black-market operators in because otherwise, what's their incentive to change any behavior? It's a very decentralized thing. It's hard to get rid of it and many people say, "Why do I need to get rid of it? It's like a farmer's market type thing. I can buy apples or almonds from my neighbor in the north Central Valley in California. Why can't I buy a flower from them?" That type of thing. It's a tough dialogue to have, how your behavior should be. It'll be interesting to see how that works out.
It may just be that convenience, like what you're doing ultimately drives adoption. Just like Jeff Bezos' strategy was initially to be the cheapest, but now, Amazon is just wants to be the most convenient where it just shows up the same day or the next day. You don't have to do anything, that convenience trumps everything. What are your thoughts around that?
Matthew S: No, I totally agree and look, people want stuff brought to their house, right? We consume whether it be Uber Eats, or Postmates, or Amazon, or Netflix. We just-- people don't want to leave. The retail space not just in cannabis, it's obviously just been struggling, and that's why our aim to go directly to consumer and bring products within 90 minutes to their house. That's definitely our number 1 focus right now.
Matthew K: Okay. You're in Southern California and you have a highly-curated platform. Do you get invited to any celebrity functions in LA to help with these, with cannabis experiences or anything like that?
Matthew S: [chuckles] We actually, we just worked with one of our brand partners, Cann, to sponsor Paris Hilton's 40th birthday party. Paris wanted to offer a variety of premium cannabis products to her guests. We were invited with Cann to really help be a part of that which was pretty cool.
Matthew K: What is it like participating in that environment?
Matthew S: It's showing proof the times we're moving ahead in cannabis. Cannabis is being socially accepted, whether you're at a party hanging out with friends, it's okay to consume, you don't have to be outside in the back in an alleyway. It's pretty open and like I said, socially accepted.
Matthew K: Okay. You've raised capital and I think you're continuing to raise capital. What's the environment like right now? What are investors-- where's their mind at?
Matthew S: It's definitely different than a year and a half ago. This was the green rush and a lot of people had some pretty fictitious evaluations and weren't able to hit their numbers. Now, you look at the end of 2019 during the downturn when public markets in Canada, people started to release their numbers and stocks are down over 40-60%. That was even before COVID. Investors are definitely looking for lean and mean business models and unit economics that can really actually hit their financial models.
Matthew K: Okay. Matthew, I'd like to pivot to a few personal development questions to help listeners get a better sense of who you are as a person. With that, is there a book that's had a big impact on your life or way of thinking you'd like to share?
Matthew S: I actually just finished The Cannabis Manifesto by Steve DeAngelo and he talks a lot just about the history of cannabis as medicine science and the consequences of cannabis and prohibition. He really touches on the future of cannabis as a regulated consumer product. Steve's worked his entire life for social justice and the legalization of cannabis. Definitely recommend this book to anyone looking to get into the space or that's currently in it.
Matthew K: Okay. Besides what you do at tökr, what's the most interesting thing you think is going on in the cannabis field?
Matthew S: I just think you have to look at COVID-19 right now. During a global pandemic, you have cannabis being deemed essential and that obviously has to really start to help the federal legalization process of cannabis. The challenging part about this right now, you have an essential business, but yet, cannabis operators and cannabis employees can't take advantage of the COVID-19 reliefs that are out there right now. I'm still being a federal illegal product. We are essential but can't receive any of the public funding that is out there helping many of the struggling businesses during this pandemic.
Matthew K: I've heard you mentioned that regulators are the problem a couple times. It seems like there's a theme here, it's getting in the way a little bit.
Matthew S: A little bit. They tend to do that sometimes.
Matthew K: What's one thought you have that most people would disagree with you on?
Matthew S: Oh, peter to a question. [chuckles] I'll relate it to cannabis. It's just the fact that tökr is really aimed after this new canna-curious consumer. As I started tökr almost three years ago, and even so now, everybody just kept telling me that it was just going to be too hard to continue to go after that new cannabis-- canna-curious consumer and more of that high-time stoner crowd. Well, it was what was going to continue to dominate for many, many years.
Matthew K: It is interesting because you look at who's doing dabs and how much they spend, and there is a tiny bit of the market that spends an outsized amount, but their preferences are already so dialed in. They know what they want, and they generally know where they're going to get it from, and they're not looking for new avenues as much because they're data-efficient auto already and pretty biased on their options where the canna-curious person's more open and open to suggestion and ideas of what inexperience might look like.
Matthew S: It's also just the lack of education that's out there. My mom, for example, my mom doesn't necessarily want to go into a dispensary and talk to a budtender. I've tried to do that and I've been recommended products that here's an edible, but it might be something that that budtenders used to using and they have a completely different tolerances as myself. It's going to be a bad experience and I might not ever want to use cannabis again.
That's why tökr is really after that canna-curious really being able to help them get a safe introduction on starting their cannabis journey and then being pointed towards brands that really can a fact-based help whether it's cannabis for sleeping or cannabis to help with pain relief. Really understand the products that are out there to help and safely navigate getting into the market without again, overmedicating and never wanted to use this product again.
Matthew K: All right. That is a problem. You could ask a budtender like, "Hey, will this 20-milligram cookie affect me as a [chuckles] first-time user of cannabis?" Some budtenders would say, "No, that's a pretty low dose."
Matthew S: I went into a dispensary and I was looking and I just-- I test the market and I asked the budtender, "What would you recommend for a vape pen?" They recommended ASCND by Kurvana. I said, "Okay, great. Why?" They said because it's potent and it hits hard. I said, "Okay, thank you." I said, "What would you recommend if I was a first-time consumer that was looking to try and vape?" They said, "Oh, well, I'd probably recommend the same thing because it's potent and it hits hard and you want to really get the experience."
To me, it's like that's just such a miss. I'm a new consumer and you're recommending something that you'd recommend to a person that's been using cannabis for however long. Again, that's just going to make me not want to return to cannabis. Meanwhile, there are so many amazing brands that are coming out right now that are really-- they know their target audience, they're building a fact-based products but the dispensaries because they might be maybe a lower-dosed item that that budtender a buyer might not want. Really have trouble having an identity in a dispensary.
Matthew K: Much better to stair-step up the affects than stair-step down because you can go up much easier than go down. This can be scary.
Matthew S: Actually, you can always take more.
Matthew K: If there's any entrepreneurs listening, that'd be some way to solve that problem where people can have an on ramp where they can feel comfortable with the dose they're taking and confident out of the gate instead of being scared it's going to be too much like some way to give them that certainty of a good experience. That's a big problem. So, anybody out there listening, please crack that one for all of us. Matthew, as we close, how can listeners learn more about tökr? If they have a hotel or some other property where they'd like their guests to partake on that platform, how can everybody find you?
Matthew S: Yes, so you can visit our website. It's www.trytokr.com, T-R-Y-T-O-K-R.com, and also, anybody can feel free to email me directly at Matt@trytokr.com, M-A-T-T@T-R-Y-T-O-K-R.com
Matthew K: Great. Well, thanks so much for coming on the show and educating us and good luck through this COVID-19 scariness. It will end at some point and we'll be back to probably a different world, but good luck to everything going on, and best wishes in the capital raise. I should mention for accredited investors, are you welcoming accredited investors for your capital raise still?
Matthew S: Yes, absolutely. Actually, we're currently halfway through our seed round, so we've closed two million out of four, and our lead investors are Meredith Capital Partners, Arcadian Fund, and Cannabis GrowthOp out of Toronto.
Matthew K: Okay, so accredited investors can reach out to you at that same email that you mentioned.
Matthew S: Yes, exactly. That'd be great.
Matthew K: Okay, well, thanks for coming on the show. Good luck to you and hope we can check in soon.
Matthew S: Matt, I really appreciate the time. Thank you for having me.
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