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Ep 323 – How Cannabis Retailers Are Leaking Data to Competitors

nicholas paschal alpine iq

Just as oil powered the old economy of atoms, data powers the new economy of bits. Here to tell us how to leverage our cannabis business data and market more effectively is Nicholas Paschal of Alpine IQ.

Learn more at https://alpineiq.com 

Key Takeaways: 

[1:02] An inside look at Alpine IQ, a data analytics and marketing platform for cannabis companies

[1:27] Nick’s personal background and how he got into the cannabis space

[7:24] Why it’s important for companies to take protective measures with their business data

[11:18] How Alpine IQ not only offers analytics tools but also helps businesses determine the best ways to act on data

[18:32] What companies can expect during Alpine IQ’s onboarding process, from integrating apps to ensuring compliance across the board

[21:36] Alpine IQ’s audience feature and how companies are using it to generate ROI

[31:45] How streamlining analytics tools using Alpine IQ can provide incredible value for cannabis companies

[35:35] Alpine IQ’s journey achieving product-market fit and how the company got its first customers

[39:26] Where Alpine IQ currently is in the capital-raising process

Click Here to Read Full Transcript

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-A insider dot com. Now, here's your program.

You may not have heard, but data is the new oil. Just as oil powered the old economy of atoms, data powers the new economy of bits. Today's guest is going to tell us how to leverage your cannabis business data and market more effectively. I'm pleased to welcome Nick Paschal, co-founder of Alpine IQ to the show.

Nick, welcome to CannaInsider.

Nick Paschal: Hi, Matt, thanks for having me on. I'm very excited.

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

Nicholas: I'm in good old Dallas, Texas, the land that's very flat and dry around here.

[laughter]

Matthew: Compared to Colorado, you're right. What is Alpine IQ on a high level?

Nicholas: Alpine IQ is really a customer data platform and a semi Marketing Cloud. Our goal is really to protect you from breaking promotional compliance, segmenting and personalizing customer journeys, and overall sinking of your in-store and online operations.

Matthew: Okay, that's a lot and important stuff, and we're going to dig into that. Before we do, can you share a bit about your background and journey and how you got into the cannabis space and started Alpine IQ?

Nicholas: Yes, for sure. Stepping back, when I was 13, I played video games, and eSports was not as big as it is today, and out of playing Halo professionally and traveling, I forced myself to learn technology in order to pitch sponsors and try to get people involved in eSports. Over time, that really just laid the foundation for me to jump into the startup game and be more of an entrepreneurial. I started a couple of startups, failed, learned all those lessons, and all those things are very necessary and had my first breakthrough startup in 2012. I've since sold that company three times now. Funny long story, but not relevant to cannabis.

Then my younger brother actually was working for Tilray for a number of years on the retail team. This is all public knowledge, but they were going out trying to get into retail and buy up different chains. Part of that was we were just talking, actually playing video games again, that's how we stay in touch because he was living in Seattle. We were talking about what's inside of all these data rooms? How are these retailers managing things, and especially across provinces in Canada, and we would later obviously work in the US as well.

I started tinkering around with data management in the space, and really found that there was a really great solution there, so we started building out a product alongside the retail team there. Then over time, just eventually had a proof of concept, went through beta, got the green light from a lot of very key players in the space, and then we started to go to market in February 24th, so right before COVID hit, and that was pretty crazy timing, but it's been a journey so far.

Matthew: Wow. You said you played video games professionally, specifically Halo, the Microsoft game, is that right?

Nicholas: Yes. [laughs]

Matthew: That's pretty crazy. I've never met anybody who could do that. Now also, you mentioned eSports, and people that are listening are like wait, what does eSports mean exactly? What is that fantasy football? eSports is now bigger than regular sports, I think. What does eSports mean to you?

Nicholas: For me, it's how millennials were raised, essentially, I feel like, or at least my parents [laughs] growing up playing games and then getting into Halo. That was really the first one that popped off outside of the PC World and went mainstream. At the time, it was on USA as a live event that they were streaming, and that was really the kickoff and eSports being gaming tournaments and live streaming online via companies like twitch which didn't exist at the time. All of those were just very natural progressions to me in that sport, and coming from MLG, which is Major League Gaming, was kind of the first thing that I was in related to that. It really forced me to be an entrepreneur because nobody really believed in gaming being a big industry from people watching it tournament style.

Convincing brands and sponsors of that was a big step, and putting together decks and websites for team members, and then that eventually led to 3D. I got really into particle effects, which led to me actually working on Halo, because one of the guys from Bungie saw my work on YouTube, and I got basically hired and had to move overnight from Arizona with no car when I was 17, so it's pretty crazy.

Matthew: Wow, that's nuts. How old are you now?

Nicholas: I just turned 30.

Matthew: That's quite a long journey then. That's really interesting. I know, in South Korea, in other places in Asia, that the eSports have gone to a whole another level. In fact, I don't think most Americans or North Americans are really aware to the extent they're filling arenas. You're watching people play video games on a big screen and stuff. I think that is someplace where things are headed, especially now that we've got Oculus 2 out there, it doesn't need to be connected to a PC and you can join events virtually and it's really becoming quite immersive. Do you have any thoughts on that?

Nicholas: Yes, I think the cordless VR stuff is pretty huge. I think that the barrier to entry, though, is still the price point on that. It's one thing to get a VR headset, but then you also have to get the PlayStation or build a workstation that's powerful enough to handle it. Yes, eSports is growing immensely. Even here in Dallas in Arlington right next to the Cowboys Stadium, there's a whole indoor arena just for eSports and gaming events, which launched, I think it's the biggest one in the country, if I recall correctly. It's just growing crazy. Especially in, like you mentioned in Asia, there's huge Superbowl stadiums that are just constantly sold out for games like League Of Legends and some of the more popular ones.

Matthew: Fascinating stuff. For listeners that are just not as immersed in data, and specifically, cannabis data as you are, how can you orient us so we can evolve our thinking to catch up to where you're at, and to think more critically about our business data what it is and how to use it?

Nicholas: Yes, so I think really the bottom line is that you're at risk of owning your customer if you have leaks in what I would call your data network or your data infrastructure. At the end of the day, if you don't have trust and confidence in your customer data, or inventory data, or machine learning derived pieces of information to help you grow your business, you're just going to have a lot of downstream problems occurring for both the customers in their journey, and loss of man-hours related to like your internal staff, either on a brand side or maybe a retail side. Some of the other things people don't realize is you're going to bleed customers to competitors in different ways that are subliminal.

Just to back up, a couple of months even, there's so much money getting poured from cannabis into silvery businesses. It's smart money, it's Silicon Valley money, these guys know what they're doing when it comes to data. Those in silvery businesses, you have to be careful with their intentions long term, especially when you have what I would call some conflicts where LPs and some of the big players that are your direct competitor as a retail operator or brand, are collecting that data downstream or have the ability to anonymize it and use it in exchange for maybe free access to your point of sale, which is a very common thing in cannabis.

Just being able to control your data long term and your data network is so critical. When these CPG brands get into this space in a big way, in a couple of years, your data, if you're giving it away for free or you're not governing it correctly, is going to end up powering their rapid penetration into the market. You should be owning your customer, you should control your data, you should have data breach clauses, and really speak powerfully about that for your business.

Matthew: When you say the leaks, I just want to be clear like data leaks so you're using maybe some sort of SAS software, or have an API that links your database to a third party for whatever reason it might be to accomplish something. That might be used in a way that you might not approve of but might not be aware of.

Nicholas: Yes, exactly. It's kind of the same argument that's very public with people like Facebook and TikTok right now, is you don't really know downstream just by using a couple of cool tools how they're going to be able to capture the customer in a way that you didn't really realize upfront. That might not just be, I don't want to pick on tech providers and your stack, a lot of people don't have that intentions. There's also leaks in a sense where if you connect your Mailchimp up and then you're doing SMS campaigns on a platform and the opt outs don't speak together, then that might open you up for problems down the road with compliance.

So just little things like that, that add up especially with such a new space where these tech providers are brand new and all the kinks aren't worked out, and everybody's just trying to work together.

Matthew: You know sometimes I see a lot of tools relating to data, and it lend themselves to analysis paralysis because the data's so overwhelming. It may be beautifully presented, but it's not clear what the actions are, like, "What's actionable here and what's my priority of action?" If I'm going to take some action, which one should it be first? How can you help us understand your data management platform and how to analyze the data to do something powerful?

Nicholas: Yes, for sure. I would say the first step is that you need to clean it and connect it all together. You need to get all your integrations. In this space, especially pre-COVID, most of that is being looked at as, "I just have to connect my point of sale. I can look at my transaction data with a couple of different providers or maybe that powers one or two marking tools."

The problem is if one of those pieces of data changes. Let's say that you have a customer wallet and their phone number changes or they change their address, what do you have to do with that person, and is that going to affect when they walk in to the store, if they're going to have the right information on the point of sale that they would have in the customer wallet that might be provided by somebody else? So just like cleansing, de-duping data. That's a big piece and mapping it together across all these destinations and sources of data.

In Alpine IQ specifically, we wanted to make it really simple to have key metrics. We have a managed service. If you don't understand data science, you don't want to look at a bunch of graphs all day. You just want actionable things to do as of business that would make a difference on your bottom line, we have that as an add-on for a lot of people.

In the dashboard, when you first get in there, we're super agnostic. What happened was, we made this data management platform. Originally, we were going to connect to a lot of tech vendors in this space, specifically in marketing and audience creation, and they didn't really want us to get into their business and power or anything. It was this gate-capped environment, so we ended up just making our own, what I would call Kroger brand of cereals, to match those. You have the option in Alpine to either use another provider for each piece of your technology stack, or you can use our own pieces that we've built specifically because we know that those are the highest ROI generating pieces, things like SMS campaigns, loyalty, wallets, personalizing stores screens.

The ability to attribute ROI across all of those tools, is probably the biggest difference in Alpine versus other things out there. What I mean by that is, when you connect your email provider, like maybe Mailchimp or Klaviyo, and then you have Alpine SMS campaigns, and you might have AdBlue banner ads doing retargeting and geosensing, it's very simple in Alpine to look at a couple of graphs and have a couple of stacks there that tell you, "Mailchimp sent you this much revenue versus Alpine SMS versus AdBlue banner ads." You can really break it out and split it out in one place so you're not looking at these detached different analytics tools on a hundred dashboards. It's all just going to be combined and nice. That's the first thing, it's just combining and being able to look at it in a clean way.

There's a couple of stats that we generally like to move the needle on, both from the managed service and what I just tell anybody to do, is look at the deviation of the member club average ticket size, so your loyalty club purchases versus your non-loyalty member purchases, and try to rise that percentage up, both through dynamic discounting and promotions and just targeting the right people at the right time is a big deal. We even have pieces on our system that map out the audiences you create for SMS or for Mailchimp, and then showcases that on a Google map of where those customers live so that you can decide on physical world promotions and events that might be relevant to specific audience.

Matthew: SMS is really a popular way to do promotions because it comes right up to your attention, unlike an e-mail or something else. There's some litigation right now for people that say they have opted out, which goes exactly to your point of like, "Hey, you've got to make sure you have clean data." When someone opts out, maybe in one database you have hyphens in their phone number and another part of the database that doesn't have hyphens, so your software thinks those are two different numbers, opts out one and not another. The next thing you know, there's a lawsuit because you texted someone that opted out.

Nicholas: Yes, the TCPA lawsuits are definitely a big thing in this space. We have a lot of customers actually come to us after those happen and still run SMS and are very excited about what they're generating there. You have to make sure that you're TCPA compliant in Canada, you also have CASL, in California, CCPA. You have all these different things that you have to look out for, not just for text messaging but e-mail compliance and all these different privacy policies.

Cleaning the phone numbers and cleaning records and de-duping them is a big step to honoring opt outs. In Alpine, we actually have a page that we give every customer that they can link to from their website, and you can opt out GDPR, CCPA compliance, and it connects all of your tools together. If they opt out of our page, then it'll automatically tell like Mailchimp, "Hey, they're opting out," and SMS campaigns will stop. To be honest, a lot of those TCPA lawsuits arose because customers were exporting SMS files from vendors and then switching vendors. There's edge cases there where, if you download a CSV file of all your member club people and you have opt out dates, and then they happen to send a couple of text messages in between the time you're transitioning and somebody opts out, when you're on the new vendor, that's going to send a text message. They're going to get upset and they're going to think they already opted out when the new vendor has no idea. You just have to be really careful transferring things. We try to help people through that as best as we can.

Matthew: We talked a little bit about the dashboard and what you see when you log on. Let's say I'm a business owner. I've committed to Alpine IQ. I've connected up as much of my business as possible, to it. What kind of insights will I be getting? What's actionable there that would draw my attention if I was looking over your shoulder at the dashboard?

Nicholas: As far as onboarding goes, typically we can get that done in a day. We just take you through an onboarding call. We make sure all your data points are connected, all those API keys are good to go. We'll map all the stores together, if you have multi store operations. The first thing you're going to see is, you're going to see a data network. When you log in, you're going to see all of your ingestion points of data pulling in, in real time, the accounts of people coming in, and then our system's core which is cleansing of that data, making sure it's compliant, and then shooting it back out to other third parties or our own in-house tech stack, which would be like SMS campaigns or one click review widgets for SEO boosting.

It's pretty simple once it's all set up. You're really just getting reports day to day, or those are also e-mail directly to the right team members where the data is relevant to them. That's a big difference for us, and yes, ease of use and simplicity is really key in this industry, especially when you're trying to connect up four or five different providers on average for every retail store.

Matthew: Okay. Let's say I'm a cannabis retailer. I've got Alpine IQ. How do I cleanse and sync that data? Is that happening automatically? Am I prompted to cleanse somehow and sync? Because I know that's something that you have mentioned in the past and it's important, but I don't know if everybody knows what that means.

Nicholas: Essentially, after you connect your, let's say you have a website, so you connect your website to our system, which basically tracks page views, what was put in cart, what videos did somebody watch, like maybe those were edible videos specifically. Then you might connect like a rest API, your point of sale, you have email providers, you have, e-commerce like I Heart Jane. All those things, once they're connected, Alpine is basically going to look at data from all of those places coming in real time. Then in some cases, there's a four-hour delay for certain point of sale systems. For the most part, it's really quick, and there's even a timer on the homepage that says, hey, at this time, we're going to run the next cleansing of your customer records and then sort them into very specific, granular audiences that you can use. It's pretty easy to see that it's running, it's constantly going to be going and protecting your entire data network.

Matthew: Okay. Very cool. Audiences, let's talk a little bit about that and what that means. What's an audience and how do you see retailers and brands using the audience feature to generate ROI?

Nicholas: Right. Audiences really are, most people in this space would say, okay, an audience is somebody that has previously purchased edibles or some kind of like generic category. With our system, we have a full segmentation and filtration tool. We generally give you a ton of different audiences that are pretty configured based on what we know is going to be used most, things like top 20% spenders across all of my stores. You might generate these audiences. you can select different traits. You can say, I want to target people that are top 20% spenders that visit at least three times per month and they have over 700 loyalty points, and then you can analyze those and use those people in campaigns down the road if you want to.

Matthew: Okay. Let's just, if you were to just hypothetically put on the hat of being a cannabis retail brand, how would you optimally run things from a digital perspective here? I think of Alpine is like this old time switchboard where the operator is plugged into everything else. It's plug plugged into all these other systems and stands there looking at them all. Now that you're at the switchboard and you have full visibility into all the different systems, how would you run your cannabis retail brand and leverage Alpine to do it the most efficiently and optimally?

Nicholas: I would use a lot of different tools. Right now, the incivility business side of things in the tech space is growing so fast. There's so many vendors in the space, and it's even after taking demos and seeing sales decks, which we did looking at people through Tilray. It was what is working over here? What's the best tech stack? How do I combine these things together? Really I would start with my base set up, my current point of sale. I would install website tracking. I would connect together my eCommerce setup, and that way I can look at everything in a consolidated place. Then I can switch out vendors. I can change out SMS campaigns to target different audiences that are more granular. I'm saving capital, but not sending SMS to the wrong people at the wrong time. Or maybe I'm a high tourism zone and text messaging people at daily deal to come into the store today is a bad idea to just blast a 40,000 members when like 500 of them live anywhere nearby to do that today.

It's like all these little optimizations I would do. I don't know if you want me to give some examples of upgrading campaigns or anything, but--

Matthew: Sure. Yes, I love examples.

Nicholas: Let's say you have 30 stores. Because really, we built this looking at Tilray, we knew it was going to be a very large thing. We went backwards on building it for big enterprises, and then that helped even single store operators obviously. Then they have trust to, as we grow, it's going to work. Let's say you have 30 stores in Colorado. We'll use that top 20% spenders that visited three times last month as an audience example. All you would need to do in our system is create an SMS campaign, and you can use all these little personalization tools, it's drag and drop really simple. You can say like, Hey, first name. that would relate to, Hey, Nick. It'd say, Hey Nick, happy Tuesday. I hope you liked the white widow you bought last week. White widow could be taken automatically from our system as the highest price item from their ticket on their last order.

You're not saying, Hey, I hope you liked the papers you bought. You can get really granular with that. Then you can give them a recommendation. You have a new string called Durban poison that we think you would really love. That recommendation is based on machine learning currently available inventory days of stock and things of that nature.

Now I have one SMS campaign I can send to 40,000 people, but it's going to be different for every single customer. Which is also going to help me not get blocked by carriers when I'm sending SMS because it's very personalized. We can even link a coupon in that SMS campaign that goes to a page that has a barcode to easily scan it at the tail or something else. When this is sent to a customer, there's an SMS campaign I'm talking about. Alpine would automatically add that discount to a customer wallet alongside any arcade style points, discounts, or anything that they're familiar with. This could even go to use the discount for pre-ordering on something like iHeart Jane because that's connected to Alpine. All this stuff is speaking together.

When they come in the store to pick up their product, after ordering on iHeart Jane, in that example, they can scan their ID at the door or be in a waiting room, depending on your state or province. Then we even 10 power things like store screens by saying, Hey, Nick is in the queue. He's about to walk in the store. I want you to put mostly edibles or Durbin poison content on all the screens in the store. Then the bud tender that handles him, I want you to give him a tablet recommendations list of products that are he's most likely to buy based on the white widow purchase and all of his order history and what other people have bought with the same order history in the store.

Then in the customer's brain, everything about their interaction with you is amazing. It's personalized to them. They feel like you understand them. The higher ticket prices come from that, the loyalty comes from that, and that's when you really start to get the boost. Then on top of that, when Nick leaves the store, he's going to get a text with his points, his wallet, that's going to have promos and recommendations in it, and that's going to drive him back to the store again.

Then on top of that, he might get a text message because he's a top 20% spender from Alpine to go review you at the exact store that he just visited in your 30 store chain network, on Google, Facebook, Leafly, Weedmaps, those types of things. All of this that I just said in that example, is completely automated with Alpine. You basically make an SMS campaign, and all of that stuff would automatically happen as the customer interacts with you. There's nothing really, you really have to do after that single day set up and creating a couple of campaigns. At the same time, that SMS campaign could sync to MailChimp, and MailChimp could send out an identical piece of content to that same person.

Matthew: Interesting. That really makes the prospect feel or the customer feel like, "Oh, this retailer gets me. We're in sync here." That makes a lot of sense.

One question about the customer journey. If you're watching videos and let's say all the videos relate to edibles, is it say like, Hey, this person's watched 700 minutes of edibles videos. They get like a tag or some way to know that this person's interested in edibles, but do you have something that says like, Hey, they're super interested in edibles. They're like, they're a 10 out of 10. Or is it just like Edibles?

Nicholas: No. Yes, so typically what we see in the space is just a simple tag for a basic category. I studied machine learning pretty heavily at MIT. My favorite topic, for sure. I probably bore everybody about that. Essentially, our system has got all sorts of brain power in the back end that's saying, okay, Nick is likely to visit within six days based on his propensity with my brand. I want to send a text message out when he's likely to come to the store within two hours. All those things are not necessarily like I wouldn't consider them tags. It's basically like a machine learning derived trigger to send a SMS at a certain time, or a trigger to push a discount when we know that they like edibles, like you said. They can always change interest. It's not like I walk into a kiosk, I tap, I like edibles. That's the only thing I get. If I go from edibles and I start buying a ton of concentrate or tinctures, which is very different type of buyer, generally, tinctures buyers are completely separated. Then I'll start getting different recommendations based on that. I would compare that mostly something like the Netflix recommendations that you get for TV and movies. If you start watching romance stuff, romance videos and TV shows are going to be more prevalent in your feed.

Matthew: I wonder why mine only suggests the Hallmark channel, Nick, any ideas?

Nicholas: I said romance because I'm thinking of my wife's recommendations.

[laughter]

Matthew: It is funny. It's like, how do I break this? I got to watch, like Rambo movies for a week. You can change the profile I'm under or something.

Nicholas: Yes, I got pop patrol for sure on all of mine for my kids.

[laughter]

Matthew: There's a lot of people listening here, and I can totally understand the situation. Because you start with one software platform, or you start with like one software SAS company to do something specific. The next thing you know, you integrate with another one because it integrates with the first one and they both do maybe one or two things well, and then before you know it, you have three or four and you're using all of them, and it feels like it's going well. Then someone like you comes on and it goes, well, it's like you have a body without a heart and a brain. You've got these parts that are not connected in a way that makes sense holistically. There's this sinking feeling like, Oh no, my date is leaking. I don't understand my customer journey. Are they even getting an optimal experience? How do I benchmark that? There's all these questions that start to swirl. What would you say to someone who's in that position?

Nicholas: [laughs] Call us.

[laughter]

It's a very simple workflow that we use often, and has really good success at jarring revenue, is to connect these things up. Do you dupe them have trust in my data, and be able to swap out and not have vendor lock on some of these downstream tools. Just getting that foundation together, even if it's rudimentary and bare bones for now, that's great. If you have a lot of tech providers already, there are ways to cleanse it out.

In some cases like let's take some TCPA lawsuits, if you have dirty SMS data and you're worried about that, there's ways to cleanse that. However, some people do choose to go back and say, "You know what, I've got to restart my member club. This doesn't work." We've had that happen before. It happens. People are learning as they grow right now. Our job at Alpine is just to stop that from the get go and just get you online and with a good solid foundation. Then let you have the freedom to use any tool you want without freaking out that you might lose a piece of data when you transfer. If I try this for seven days, it's going to break my entire network of other tools trying to work together, like on discounting or on other things.

It's not just that. It's also like in the future. Let's say that legalization happens in a bigger way, and all these blue chip tech providers can get into this space and you can start running Facebook Ads, and you can start running some of these key platforms that work so well in a normal environment. If you don't have your foundation set up with Alpine, you would click one button and say, I want to send all my cannabis audiences that are cleansed to Facebook Ads, and that same audience goes to MailChimp and your SMS campaigns. It's all just working together. It's not really that daunting of a task with the platform. It definitely is setting it up blind.

Matthew: People are like, "Wait, you can do that?" Yes, if you have your customers' emails, you can upload them to a Facebook ad campaign, and they can just push the ad right to you. That's a good point.

Nicholas: Yes, they have your most active contact information. That's where all the privacy stuff has been coming up lately, but it definitely works, and so does stuff like Google Ad words, or even something as simple as like doing an Intercom chat on your eCommerce store. Like how do you trigger SMS or in store screen display is based on if that person made a chat with you, and what was that chat about? All those types of events get funneled into Alpine and then it powers your downstream situation.

Matthew: You mentioned earlier in the interview about how, when you were getting started, you went around and talked to different companies, individuals, and got the green light. I think you said. What was that early incubation period like? Were you just trying to see if people wanted this or if they saw the need, or were you showing them a prototype? How did you get that product market fit?

Nicholas: Originally, we made a deck. We modeled the framework base layer off of some blue chip providers that are very large and do most of the Fortune 500 that isn't cannabis. That was really our foundational layer. Then we connected a couple of APIs and tools together for a few retailers, and then just started working backwards from there and did every single integration. I remember just speaking to entrepreneurs out there that might be listening. It's just like when you get into to this industry, it's so gate capped, and it's not generally early retailers or brands, they all want more tools to do their jobs better to connect everything. There's a lot of blocking going on between tech providers that don't want to release APIs, or they feel like somebody is going to be competitive to them downstream.

Honestly, it's funny because we didn't want to be competitive to these people. They just said, that's what we think you are. Then we turned around and said, all right, if you're not going to support these people on prevent vendor lock, then we're just going to build our own solution for it. We have like two or three vendors, minimum per type of marketing channel you might use, like SEO generation, and then we'll have our own version of ourselves that comes with the platform. It was very difficult. It was extremely difficult to get in touch. I remember sending probably 20 integration emails to people and saying, Hey, we're new. A lot of people don't have API support teams, and they get their time wasted a lot by kids coming into this space, thinking that they can just make it a tech play overnight and they just don't let them in.

It took getting the retailers and some of these brands to say, hey, like we need this. We got to find a new point of sale, or we got to find a new vendor for this other process because you're ruining my downstream chances of being successful. My example I always give is like these people doing blocking in the space, it's not beneficial to anybody and not even themselves. If you look, Apple isn't going to come into the space and block you from getting on the app store. You can go as a developer and sign up in two minutes, pay 90 bucks for a year, have unlimited API access and drop an app after it goes through an audit. That's not possible in cannabis right now, per se, in certain situations, but a point of sale, like Stripe, largest online transactions, huge API, well-documented, you can sign up as a developer in two seconds and power their customers with amazing tool sets for free.

All the excuses in the space of like, "Oh, we don't have enough money for this. We didn't budget this into our original tech play," I feel like those are just excuses and really like-- Just to give you an idea. We have three engineers. We have three engineers. We have done 24 POS integrations. Not one of them has taken more than 24, maybe 30 hours to do without talking to anybody. Most of it is probably six weeks of just back and forth on email, just wasting 10 team members time trying to get in, and that's it. It's unbelievably daunting just to get in.

Matthew: Well, so this is a very cool product mission control. It was put on. I think it was like mission control or the switchboard of your business. It was put on my radar because people said, "Hey, this is really a interesting software solution." Well done to you. Where are you in the fundraising process right now? Have you raised capital? Where are you?

Nicholas: Yes, so like I said, I sold my previous business a couple of times. Long story, but basically I took cash from that and then self-funded and have a great team of people working with us. In May, a couple of months after we really started selling publicly, we took on a small private round, and then in the future, we're very conscious about conflicts of interest in the space, and I want data to be owned by the retailer or the brand, and it's collected by you, so like, why shouldn't you own it? Your customers really don't deserve to be anonymized and sold to third parties, so especially at large competitors.

We're always looking for finance partners and to expand our growth, but we're looking at another-- doing like a larger, I would call it a series A strategic in the next couple of months.

Matthew: Nick, I 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 for way of thinking that you'd like to share?

Nicholas: Yes. I get the book question a lot, and I'm an avid reader, for sure. My favorite book, at least in the last couple of years, is definitely Sapiens. I believe it's Sapiens: Brief History of Mankind. I can't even describe how amazing this book is, but just understanding the growth of human psychology and where we're headed. It's just a very good foundational book, and it dives you into that whole process of how we came to be psychologically today. I would recommend that, so it's Sapiens.

Matthew: Great. Besides what you're doing at Alpine, what do you think the most interesting thing going on in the cannabis field is?

Nicholas: Oh, this space is so fun, honestly. I talked earlier about gatekeeping and stuff and how difficult it is to get in, but it's super fun. The people are great. There's pioneers everywhere, and as long as you jump those fences, it's amazing to work in it. The coolest stuff that I've seen is just-- I like seeing the transition of the customer education side, understanding what plants actually do to them, and the new research coming out about those different things. Also some of the more advanced stuff, like people trying to DNA splice and use CRISPR to change the effects, that's pretty crazy, but we'll see where it goes.

Matthew: Yes. Well, let's end on a Peter Thiel question here, Nick,. What is one thought that you have that most people would disagree with you on?

Nicholas: I like his book too, by the way, I forgot what it's called.

Matthew: Zero to One.

Nicholas: Zero to One. Yes, that's a good one. Can you rephrase that?

Matthew: Sure. What is one thought you have that most people would disagree with you on that you believe to be true?

Nicholas: After I worked on Halo, and then I went to-- I ended up doing feature films and working on those in commercials and stuff like in visual effects world. You remember the Sonic the Hedgehog that came out. It was last year and everybody freaked out because he looked just non-menacing at all-- he was just terrible looking. From a design perspective, he was just like way too cute for what the historical version of Sonic was.

I'm just convinced that re-skin of the character was just a publicity stunt plan from the beginning.

Matthew: Oh, really? Just get people talking about it.

Nicholas: Yes, absolutely. Then they ended up changing that character and they bought themselves another eight months to change the character's design, and then release the movie again.

Matthew: I've heard this marketing tactic that says you can't tell your customers what to think, but you can tell them what to think about, and maybe that's what they did there.

Nicholas: Yes, exactly. Oh yes, absolutely.

Matthew: Well, Nick, as we close, are investors welcome to contact you if they're interested in possibly investing later.

Nicholas: Oh yes, absolutely. We're definitely in the process of looking for strategics and smart people to work with. Can I get my information out-

[crosstalk]

Matthew: Yes please, for accredited investors, go ahead.

Nicholas: Nick, N-I-C-k, @alpineiq, like brain IQ, .com is my direct email. Feel free to email me if you're an investor, just have some questions, need some help on data, we're here to help, and love to talk to people in this space. [unintelligible [00:44:32] Alpineiq.com has some great ways to connect with us, and somebody will help you.

Matthew: Awesome. Nick, thanks for coming on the show and educating us. You've got a really great company. Cool things happenning for you. I hope you'll come back and tell us how things are progressing.

Nicholas: Yes, man. Thanks so much for having me. I really appreciate it. It's been a good time.

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 guest, learn more at cannainsider.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 cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsider.com, we'd love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis for using it for medical treatments.

Promotional consideration may be provided by selected guests. Advertise your companies featured in CannaInsider.

Lastly, the host or guests on CannaInsider may or may not invest in the companies, entrepreneurs profiled on the show. Please consult your licensed financial advisor for making any investment decisions.

Final disclosure to see if you're still paying attention. This little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening, and look for another CannaInsider episode soon. Take care. Bye-bye.

[00:46:18] [END OF AUDIO]


Ep 322 – Startup Founder Finds Success Helping People Grow Just One Cannabis Plant

Joshua Mezher pot for pot

This startup took away all the complexity of growing your first cannabis plant at home and found product-market fit. Here to delve into the story of A Pot For Pot is founder Joshua Mezher.

Get a 10% discount off your purchase by using coupon insider at https://www.apotforpot.com
See why we gave A Pot for Pot a rare Five Stars in our review.


Key Takeaways: 

[00:59] An inside look at A Pot For Pot, the best outdoor and indoor growing kits for marijuana, cannabis, and other fresh herbs

[1:18] Joshua’s background and how he came to start A Pot For Pot 

[4:49] What comes with A Pot For Pot’s growing kits that make them the easiest to use for home growers

[8:54] How much plant A Pot For Pot can yield and why this makes it more cost-effective for the customer than purchasing flower

[11:49] What auto-flowering is and why it’s important for home growers

[17:44] Joshua’s advice to home growers on how to achieve the perfect harvest

[25:32] How Joshua successfully bootstrapped A Pot For Pot and the story behind how he got his first hundred customers

[32:47] What Joshua finds most interesting about the cannabis industry right now and where he sees it heading in the years to come

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

[music]

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.

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 guest to you. Learn more at cannainsider.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 cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsider.com. We'd love to hear from you. Please, do not take any information from CannaInsider, or its guest as medical advice.

Contact your licensed physician before taking cannabis or using it for medical treatments. Promotional consideration may be provided by select guests, advertisers, or companies featured on CannaInsider. Lastly, the hosts or guests on CannaInsider may or may not invest in the companies, entrepreneurs profiled on the show. Please, consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you're still paying attention. This little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening, and look for another CannaInsider episode soon. Take care. Bye-bye.

[00:51:56] [END OF AUDIO]

Ep 320 – Cannabis Skincare With THC Is Changing The Market

bridget may green bee botanicals

We’ve seen some hemp skincare products, but now entrepreneurs are developing skin and beauty products with THC above the 0.3% threshold.

Here to tell us about it is Bridget May of Green Bee Botanicals.

Learn more at https://greenbeebotanicals.com 

Key Takeaways:

[1:10] An inside look at Green Bee Botanicals and its mission to revolutionize the beauty and wellness industries

[2:27] Bridget’s background in the biopharmaceutical industry and how she came to start Green Bee Botanicals

[7:37] Why Bridget decided to formulate Green Bee’s products with more than 0.3% THC

[10:14] The most popular products at Green Bee Botanicals

[11:00] Why Green Bee creates “clean” products and how this sets the company apart from other skincare brands

[13:47] How Green Bee’s serums and lotions nourish skin from the inside out

[16:45] What customers are saying about Green Bee’s THC products

[24:04] Why skincare products with THC do not produce a high when applied to the skin

[25:27] Bridget’s advice to entrepreneurs on how to distribute their products

[28:11] What research is saying about CBG and its benefits for the skin

[29:49] Where Bridget sees the cannabis skincare space heading over the next 3-5 years

Click Here to Read Full Transcript

[music]

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-A-insider dot com. Now here's your program. 

We have seen some hemp skincare products but now entrepreneurs are offering cannabis skin and beauty products with THC above the 0.3% threshold. Here to tell us more about it is Bridget May of Green Bee Botanicals.

Bridget, welcome to CannaInsider.

Bridget May: Hi, Matt.

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

Bridget: Well, I'm in San Francisco. I've lived here for many years, but I grew up in San Jose, California which is just about 50 miles south. I'm actually sitting in my bedroom, which is my office these days working from home COVID style. Also being a business owner, I'm not paying for an office space, so this is where I am all the time, mostly [chuckles].

Matthew: Well, smart move. What is Green Bee Botanicals on a high level?

Bridget: Green Bee Botanicals, we make cannabis skincare and topicals for the body. These are products that, yes, like you said, do contain THC, so you have to buy them in a dispensary here in California, and they're all vegan. We make products for the face and the body. We use organic essential oils, organic plants and flowers, and clean full-spectrum cannabis, so that does contain THC as well.

More than just a skincare brand, I didn't really intend to be a beauty brand, but that's what it's turned out to. We're really about wellness and we try to educate people about the benefits of cannabis, and then just the benefits of self-care in general and taking care of yourself, the full body, and not just your face, not just your skin. It's not just about being beautiful from a external point, but beauty from within, so getting enough sleep, number one [chuckles].

Matthew: I would be happy just to settle for the veneer of beauty at this point, Bridget. 

Bridget: We take what we can get.

[laughter]

Matthew: Well, tell us a little bit about your background and journey and how you came to start Green Bee Botanicals and what you were doing before.

Bridget: Yes, I came to it in a roundabout way. I actually studied art in school. I come from a family of artists, and I didn't really know what I wanted to be when I grew up, but art was just an easy way to get a degree oddly enough. I didn't have to write too many papers, but then after I graduated, immediately, I realized that it wasn't how I was going to make a living, or how I would want to try to because I've known so many starving artists in my life.

My second love was always science and the environment, and I really wanted to make a difference in the world, and so I went straight back to school and studied biology and chemistry, emphasizing botany really was where my main focus was. Then out of school from that, with a science degree, the jobs were in the biotech industry, so I started working in pharmaceutical companies. I really loved working in a lab and working with instrumentation.

I did a ton of analytical chemistry for different biotech companies and learned a ton. Going to school is one thing, but on the job training is really where I learned the most. Then in my off times, I also did a lot of volunteering in nurseries with plants because that's actually still where my love was, is with plants. Even though I was having fun in those jobs, it never was my calling to work at a pharmaceutical industry because I feel strongly that the industry is really about making money, and not so much about healing people.

I know there's a lot of good science and medicine going on in Western medicine, but there's a lot missing as far as holistic healing and using plants, using natural remedies, stuff like that. I was always a little bit one foot outside, not really wanting to be there, and then one day I actually was having trouble sleeping. I know we were talking about insomnia earlier and someone recommended cannabis.

There were some new strains out that weren't just 100% THC, there was CBD in them, so they didn't get you quite as high, and they didn't give you that paranoia. Once I learned about CBD, I was mesmerized and did a bunch of studying and read a bunch of scientific papers and started realizing that the cannabis plant just has so much to offer that's not about getting high.

I always thought it was like, "Oh, it's for people with serious illnesses who are dying from cancer et cetera," and that it's super helpful for them as well, but it also is helpful for everyone more on a daily basis and more like a vitamin. There's so much to it. I got so involved in the science that I thought I really wanted to do something in that field. That's just how the impetus started, and then I just started fooling around in my kitchen, making stuff, making salves, and balms. One thing led to another as far as the idea.

I'd make products, give them to my friends, and everyone was like, "Oh, you really should start a business." Around the time when I was doing all these experimentations and starting to think about starting the business, I met Andrea from Sava who, I think introduced you and me, Matt, and she was just starting her business, and so it was just kind of a serendipity.

I met her just as I was launching and she was launching and I got on her menu. It gave me a lot of confidence to keep going, so that's how it started [chuckles]. I don't know if that's--

Matthew: Great connection.

Bridget: A really great connection. That's actually one of the things about this business, this industry that has spurred me on is all the connections I've met, especially women who have introduced me to other people who get me to the next step right when I need it, so I've been really lucky.

Matthew: I mentioned in the intro that we've seen some hemp skincare products, but why go over the 0.3% THC that requires someone to purchase your skincare products in a dispensary? I would think you're probably like, "Well, that limits the audience I can sell to," but gives you something extra. What's the thought process there?

Bridget: Yes, of course. Like I said, when I started, the very first product I made was a massage oil which was for pain and inflammation. Knowing that THC and CBD are both great for pain, and THC is actually especially good for pain, it made sense. The importance to me was getting the product that was going to help people, and because in order to sell THC you're required to sell it in a dispensary, that's where I started.

It does seem strange to start selling skincare products in a dispensary, but that's what my customers were asking for. That's what my accounts were asking for, and because it was a new and exciting product. Because of the science, I just kept thinking, "Well, THC is good for inflammation and as your skin ages, the inflammatory response is part of the issue with aging." It made sense to keep the THC in there. THC and CBD actually work better together because of the entourage or ensemble effect.

The other thing is that THC and CBD are actually really great antioxidants, which is another thing that people are constantly wanting in their skincare products such as vitamin C and vitamin E. The cannabinoids are actually even stronger antioxidants than vitamin C and vitamin E. THC is a very valuable cannabinoid, and I didn't want to water down the products by taking the THC out just because of legal requirement. I'm hoping and hopeful that people are going to start going to the dispensary to get their skincare products.

The other thing which I've learned through being in the industry is that because we have to test our products so thoroughly, anything you're going to buy in a dispensary is going to come with a C of A, it's going to be proven clean, free of pesticides and heavy metals, and that's something you can't say about the cosmetics and beauty products you find in the drug store.

Matthew: Yes, that's a good point. They are rigorously tested and everybody looks for those testing results. Is the massage oil the most popular product then?

Bridget: It's actually our second most popular. Our bestseller is our eye cream, which won second place in the Emerald Cup last year. We're super excited about that.

Matthew: Oh, congratulations, that's great.

Bridget: Thanks [chuckles]. Part of it is it's a very different kind of product and it's an emulsion, a lot of topicals there are just balms or oils. It's a little more difficult to make an emulsion and so it's really nice, this silky moisturizing lotion for under your eyes.

Matthew: I noticed that a lot of skincare products they have ingredients that sound like they're made in a lab and I don't understand them, but then you're saying that your products, "Hey, these are clean and simple ingredients and stuff like that." When people say they're clean, what does that mean? Is that free of the heavy metals like you were saying and pesticides and stuff like that?

Bridget: The clean beauty industry is really booming right now and there's a definition of clean beauty in that. It's free of certain banned chemicals or banned in the European Union. We don't ban hardly anything here in the United States [chuckles], so free of phthalates, free of parabens, free of formaldehyde forming ingredients, stuff that can be androgen disruptors or carcinogens, stuff like that.

That's one side of clean beauty, that's the general notion, but we take it one step further because we have to in the California Cannabis market, we have to test everything for pesticides and heavy metals, et cetera, and processing chemicals. Not only do we say our products don't contain these things that you can see on the label, but we also test for contamination, which is actually really common in products. You'd be surprised how easy it is for lead or pesticides to get into your skincare products.

We test for over a hundred processing chemicals, pesticides, and microbes, and even the most well-intentioned brands on the market may have these lurking in their organic products without even knowing it. I would say, especially in the hemp market, in your general hemp market out there, you should be especially careful of that because hemp [unintelligible [00:13:04] cannabis is a bio-accumulator, which means that it pulls toxins out of the soil and it's actually been used for bioremediation of toxic cleanup land that needs bioremediation.

So, your hemp seed oil or CBD that comes from industrial hemp could very likely have lead or pesticides in it and you wouldn't know it. That's why we test now because we have to in California, but when we do go into the hemp market and make hemp-based products, we will also test everything there as well.

Matthew: With your eye cream and serums, how exactly do those interact with the skin to reduce inflammation and rejuvenate the skin?

Bridget: [clears throat] Cannabis has cannabinoids in it, THC CBD, CBG. Those are some of the most common or popular ones right now, and those interact with the skin. We have receptors all of our body, in our skin as well in the epidermis and the dermis called endocannabinoid receptors, and these receptors are created in the body to interact with our own endocannabinoids that we create in our body and it's part of this whole balancing system that we've just discovered just really recently and it affects every other system in our body.

THC and CBD are analogs for those endocannabinoids that we produce and they interact with those receptors in our body [clears throat] the same way. They help balance pain and inflammation like we were talking about, they balance the hormone response and the oil production in your skin. For example, cell turnover, all these things that need to be constantly regulated in your body, THC and CBD help keep that all in balance.

Plus the fact that they're antioxidants so they're helping fight free radicals and any kind of environmental toxins or sun damage, they'll help remediate or keep that system in balance and keep things healthy.

Matthew: Free radicals, these are the things that shoot at our telomeres, the caps on the end of our DNA, I think-

Bridget: Oh, yes.

Matthew: -and make us a copy of a copy, so that's why someone you haven't seen in seven years looks like a copy of their previous self, less vivid, maybe a little bit less vital because they're moving this direction of becoming a copy of a copy of themselves and those free radicals are the agent for that.

Bridget: Exactly, and in general, they oxidize the cells. They're causing cell damage even on a more basic level, not to mention the DNA, but yes, so all that oxidation over time builds up and causes extrinsic aging that's happening. We're always aging all the time, but because of outside forces that we're fighting against, we age quicker. We always need help with antioxidants [chuckles].

Matthew: When I hear oxidized, I always think of rust, that's the process of [crosstalk]-

Bridget: Exactly. Exactly.

Matthew: -so it's like human rusting.

Bridget: Exactly, slow degradation [laughs].

Matthew: When you give out samples or you have customers come back to you that say, "Hey, I tried Green Bee eye serums," what do they say? What's their feedback to you?

Bridget: Well, people love our products. Number one, I create them to smell and feel really good. I want them to be a great experience. The ingredients I use, they would be great products even without the cannabis, but the cannabis, it's like an extra active ingredient that really gives you a boost of, like I said, antioxidant benefit, but people love them because of their moisturizing benefits.

The eye cream people rave about how it helps with dark circles and puffiness and oddly enough, this is not why I intentionally made the eye cream, but people often say that it helps them with their acne or a pimple. They say they put it on a pimple and then the next day it goes away, which is just like, "What? Oh, wow, okay, great." I'm not going to say this eye cream is for acne, but [chuckles] anecdotally it's helped people with that and one of our favorite accounts society, Jane Sharon, they used to have parties, this is back in the day.

They'd have people coming to the party that everyone put eye cream around one eye and then walk around and then come back in five minutes and then show them the difference between each eye and people would be surprised, they can really see a visible difference between each eye just in that small amount of time. I think that's partially because of the caffeine I put in there which has this depuffing effect that happens pretty instantaneously. Caffeine is also a great antioxidant so it adds to that whole antioxidant blend.

Matthew: Oh, that's interesting. Inflammation seems to be on everybody's mind these days. We talked a little bit about oxidation, but why are we also inflamed? I feel like a pufferfish right now just thinking about it.

Bridget: I know.

Matthew: What is it?

Bridget: Well, inflammation is part of the natural defense system of your body. It's totally necessary for healing and protecting you. It's like your immune system's response to an irritant. It's sending increased blood and immune cells and that's all good if you have an acute injury, you need the inflammation to heal it, and the pain comes there as well to help you protect it.

If you feel pain in your foot because you twisted your ankle, you're going to protect it by not walking on it for a while, but what you're talking about, feeling like a pufferfish is more like chronic inflammation, which is bad and causes all kinds of long-term problems and I frankly think it's our go-go-go society, we don't rest, we're always on our screens, we're just always tired. Maybe we're not eating right.

All those things add up to this chronic systemic inflammation. In the skin, that can cause a rash or acne or psoriasis or rosacea and it's all just this imbalance. Cannabis, actually, can be part of the help to keep that system in balance.

Matthew: I was just reading yesterday that Americans spend half as much on their foods as the French and the Japanese, I think it said the Italians too. I thought, "Oh, that's so sad." When I go over to France, I noticed, first, they really pay attention to their ingredients. It's not uncommon to be at a dinner table and people are talking about the soil that the asparagus are grown in and it comes from this farm and this is how they get their soil quality. That's not a fringe thing, they're really into it.

They eat so slow. You can have a three-hour dinner. The first time I encountered that, I'm like, "I can't believe we're sitting here this long. Am I on candid camera?" It's three hours.

Bridget: [laughs] That sounds lovely.

Matthew: Yes, it's lovely. By the end, you're hungry again. I think about the pace. They don't have any screens going on, the pace of eating and stuff. Us, it's like, "I got to wolf it down and then get over here." That's not good for digestion. Just the contrast between how they do it in France and here. They're eating rich stuff. It's stuff that we call unhealthy. They're eating gobs of cheese, they're having fresh pastries, they're eating a ton of bread and I'm like, "They're not puffy or inflamed at all."

What's the difference? I don't know. That I think could be a great show, just eating with the French. Six months of eating with the French, how will your body composition change.

Bridget: Oh yes, like a Super Size Me kind of thing [laughs]?

Matthew: Yes, the reverse of Super Size Me.

Bridget: Well, I think it's complicated. I think it's not just our food, but it's everything about our society that is stressful. Any stress is going to cause an inflammatory response in the body. I don't know how to fix that, except take more cannabis, I guess that's helpful [chuckles].

Matthew: Some people say playing in the dirt, getting some dirt on your skin is helpful too to get-- I don't know. You probably know more about that than me, getting, I don't know, microbes and stuff [crosstalk]--

Bridget: Oh, the microbiome?

Matthew: Yes.

Bridget: Yes, absolutely. I played in the dirt when I was a kid [chuckles]. You see people now just constantly slathering their children with hand sanitizer. I don't think that is really good for the immune system.

Matthew: Yes. There's a lot of alcohol in there too, drying you out too.

Bridget: I've read horror stories about these contaminated hand sanitizers that have all kinds of toxins in them that are actually killing people, literally killing people, methanol-tainted hand sanitizer. Which reminds me, we are going to make a hand sanitizer someday and it'll be tested, so you know there won't be methanol in it [chuckles].

Matthew: That's good. Then will it also have something in there to hydrate as well, sanitize and hydrate?

Bridget: Yes, I think I'd put aloe in there or something moisturizing. I don't know about CBD. I don't know if that's a useful ingredient for hand sanitizer, but I'd consider it. It might help moisturize.

Matthew: Now, imagine that since your products contain over 0.3% THC, people ask, "Hey, Bridget, will this make me high if I rub this on my skin?" Do you get that question a lot? What do you say?

Bridget: Oh my God, that's the first question everyone asks me. The answer is no. THC is a huge molecule and the skin is a very effective barrier. It's actually quite difficult to get THC through to the blood vessels. There are patches you can get that have skin penetration enhancers in them, but none of our products have that in them. Our products are actually intended to work on the receptors in the epidermis and dermis, the top layers, and they don't penetrate to the blood vessels.

On top of that, even if a tiny bit got through, it would be such a small concentration that it wouldn't have a psychoactive effect. I use myself as a guinea pig. I've slathered these products on myself for years and I'm a super lightweight. I think I told you, I'm a two-milligram girl. Two milligrams of a gummy is going to get me high and I've never gotten high from any of our products.

Matthew: It's difficult to get on retail shelves. You mentioned Andrea from Sava, she has a delivery business, and that was helpful in getting your product on shelves. For people out there listening, that's one of the things that seems to be a huge barrier like, "Even if I create a great product, how do I get it out there? How do I get it distributed? How do I find retailers that want to carry it?” Can you talk a little bit about how you've done that? How many stores are you in right now?

Bridget: We're in about 60 stores throughout California. I don't know if you know this, but in California, a distributor is required by law. Part of the system, because we have a distributor, they actually help us get into accounts. They have relationships with accounts, so part of it is through that system. Although, I don't love it.

Matthew: How do you get top of mind with them? Obviously, they have some preferential treatment maybe or they maybe like some products more or they talk about other products more. How do you make sure that you're doing it the right way?

Bridget: It's so hard, Matt. I swear. The California system is almost impossible with the distribution and being able to communicate directly with accounts is also difficult sometimes. Actually, some of our best accounts have just reached out to us directly through our website, so I feel really lucky that way. Then also, I feel like networking is really important, like going to events. These days, there's online events. We just went to MJ Unpacked.

We actually didn't meet very many buyers there, but we met other people who were really helping us raise money, getting into other States. I think networking is just the way to go, that's how you're going to find the right people. Then we have a great salesperson who also has a lot of connections just because she's been in the industry for so long. She's like an OG kind of person.

She was working in a dispensary doing medical marijuana in California. This has been really helpful. I think it's all about the people. Also, I go door-to-door. I go to dispensaries, I walk in, I say, "Hi, my name is Bridget. I'm from Green Bee Botanicals and here are the products I make." Little by little, it's just very time consuming and it's hard, but I think that's really the way it is making connections through people.

Matthew: We've talked about THC and CBD and a few other cannabinoids, but CBG seems to be gaining popularity or I should say, awareness. Can you talk a little bit about how you think about CBG?

Bridget: Yes, CBG is one of the newer cannabinoids. People are talking about CBN as well. CBN is really good for sleeping. CBG is my new favorite one. I just started reading scientific papers about it. It's a little different than CBD in that it seems to be affecting the sebaceous gland in a different kind of way. CBD, it appears from the science, has an effect of controlling oil production in the face.

Whereas CBG appears to be improving the production of sebum, so encouraging your skin to create its own moisture, to secrete a little bit more oil. This could be really great for super dry skin. That's something I'm really excited about and we're going to be putting that in our newest product that will be in our hemp line that's coming. [inaudible [00:29:31] want to say soon because things take forever, but coming soon.

[laughter] 

Bridget: That will be able to be sold everywhere, not just in a cannabis dispensary. We are expanding into the hemp side as well.

Matthew: When you pull out your crystal ball and look ahead the next three to five years, don't worry if you're wrong but just guess, where do you think it's all heading in the skincare cannabis hemp space? Where's it all going?

Bridget: Well, there's a few things. One is I actually have heard recently a few dispensaries have told me that customers have been coming in asking for skincare products, which I think is really unusual, like that I feel like, "Oh, the tide is turning," that people are actually going to dispensaries to look for their skincare, and especially because of the Clean Beauty Movement, which is really taking off, young people especially who are really concerned about [inaudible [00:30:31].

They're concerned about impurities and contamination in their skincare. They're going to start looking for test results, and knowing that if you buy stuff in a dispensary you're going to get those test results that will show that the product is clean and free of pesticides and heavy metals. That's just one thing. That's like a small crystal ball idea but the other one is that I feel like a stigma, this is related, but the stigma around cannabis is softening, especially as the more science comes out that proves the medicinal and health benefits.

That's going to change the way people think about cannabis in general. It's becoming more about health and wellness than it is about just getting high. Then the last thing is I really hope that on a national level, we get some decriminalization and expungement of people who have been unjustly put in jail for cannabis that is now legal in many States and hopefully we'll have full-on federal legalization.

I think it's about time we truly end the racial discrimination and acknowledge the role that that's had on our country as it relates to the war on drugs and our broken criminal justice system. That's my crystal ball is the future of cannabis is everyone out of jail and maybe some people making money off it [laughs].

Matthew: Bridget, I’d like to ask a few personal development questions to give listeners a 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 that you'd like to share?

Bridget: It's funny. One of the most recent books I read is A Really Good Day by Ayelet Waldman. Have you heard of it?

Matthew: No.

Bridget: Ayelet Waldman is an author, she suffered from some depression and this book, A Really Good Day, is her journal of taking micro-dosed LSD to help with her depression. It not only tells her own personal story of how that helped her, but it also goes into the history of psychedelics and the studies that were done early on and then how they became illegal and became Schedule One drugs and how--

I find that it's just fascinating how these drugs can help with depression, anxiety, PTSD, and how their study was used. Their studies that happened in the 50s and 60s, even the studies that were done by the government was then suppressed and then added to part of the war on drugs. It's totally fascinating. I recommend everyone read it. It will change your mind [chuckles].

Matthew: I keep on hearing like this great discovery and then it's suppressed. I’m like, "What is going on here?"

Bridget: Right. Same with cannabis.

Matthew: [crosstalk] behind the scenes?

Bridget: Exactly. Yes, if you look at our history, the history of our government, it's shocking and kind of depressing that the people in control they're misguided, if not downright corrupt really.

Matthew: Well, what's the most interesting thing going on in your field besides what you're doing with Green Bee?

Bridget: Well, I’m really thrilled to be partnering with The Galley. They're a contract manufacturer for cannabis in Santa Rosa. Getting a manufacturing license in California is a very difficult and expensive process. There's a lot of small brands like myself and others that aren't even on the shelf anymore who through The Galley are going to be able to get back on the shelf. They're helping facilitate that. I think this model is amazing.

Annie Holman who runs the place, she's such a people person and a great connector and has helped me in so many ways. I think that's really exciting and I hope that other brands are able to get back on the shelf. These people are like OGs that made stuff back in medical times and are really great brands, but they just didn't have the capital to get their own license and their own manufacturing space.

Matthew: What's one idea that you believe to be true that very few people agree with you on?

Bridget: [chuckles] I think this is changing, but we touched on this before about holistic health and the food and chronic inflammation, but I really believe in the mind-body connection as far as illness is concerned. The way stress not only causes this inflammation in the body, but it also can cause pain, can cause illness. Even just thinking a thought, a negative thought can actually make pain in your body worse.

I think people don't want to believe that because there's this whole it's not okay to call in sick, or it's okay to call in sick to work but it's not okay to call in and say, “I feel sad today, I can't come in.” [chuckles] It should be the same thing if you've got PTO, right?

Matthew: Yes.

Bridget: I think this is changing, but I just started reading this book called Unlearn Your Pain by Dr. Howard Schubiner. It's another book that's changed my life. It's really about how your emotions and stress can affect how your body feels and that pain is actually produced by the brain, like that notion it's shocking, and I think most people don't believe it. I'm not saying if you cut yourself, the pain it's made by the brain.

I mean, it is made by the brain, but say, for example, you're sitting on the couch and your ankle is twisted and so you can't walk. But a tiger comes into the room, you're going to get up off the couch and run away, and you probably won't feel any pain until you stop running again. That's like the brain has turned that pain off momentarily so that you can save yourself, so it's a defense mechanism.

Then once you stop, then you're like, "Oh, I have to stop because my ankle is broken."

[laughter]

Bridget: Anyway, it's just that whole mind-body connection, I think, is most people are not quite ready to believe that yet. Part of Green Bee Botanical's education and mission is to help people heal themselves in addition to a little help from plants, but a big part of that is self-care and listening to the body and try not to overextend yourself. All that wellness and self-care stuff is more our whole ethos. It's not just about skincare, it's about healing yourself and listening to your body.

Matthew: Well, Bridget, thanks for coming on the show. We really appreciate it, and good luck with everything you have going on. For retailers out there listening or for people that would like to try Green Bee products, how can they find out more about your brand?

Bridget: You can always email me on bridget@greenbeebotanicals.com. For right now, you have to be in the California market to purchase us at licensed cannabis dispensaries in California. We are actually in talks with a woman-owned business in the Midwest about expanding into her State. We're always looking for other States to partner with. If anyone out there is in another State with a manufacturing license, and then in addition, we'll be launching our hemp line really soon, and that will be available everywhere.

We're always committed to test every batch. Even when our products are available in stores across America, they'll come with a C of A, so you can see for sure that there's no pesticides or lead in them.

Matthew: Okay. Good luck with everything, Bridget, and keep us updated.

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Bridget: Thanks, Matt. I appreciate it.

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