Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
This week we are joined by Adam Terry, Co-Founder of Cantrip, to discuss:
- How the Minnesota law is changing the beverage market
- The Future of Cannabis Distribution
- How to unlock the Cannabis Beverage Category
Cantrip is, at its core, a fun way to consume and experience cannabis.
We’re a sessionable, social beverage that is made for everybody looking for a way to hangout without the hangover.
About Adam Terry:
Adam is the CEO and co-founder of Cantrip. He’s a chemist that has spent over a decade working in extractions, coffee, cocktails, and developing cannabis products. Adam set out to create a new product with one goal in mind – to bring to market a cannabis product that was all about fun with friends.
Cantrip was designed at the nexus of Adam’s interests in interesting beverages, the joy of cannabis, and connecting people through shared experience. As a person who does not connect with the binary gender system, Adam has made it his mission that Cantrip be a product truly created for all to enjoy.
#Cannabis #CannabisBeverages #Cannabiscommunity
At Eighth Revolution (8th Rev), we provide services from capital to cannabinoid and everything in between in the cannabinoid industry.
8th Revolution Cannabinoid Playbook is an Industry-leading report covering the entire cannabis supply chain
The Dime is a top 50 Cannabis Podcast
Contact us directly at [email protected] Bryan Fields: @bryanfields24 Kellan Finney: @Kellan_Finney
[00:00:00]Bryan Fields: What up guys? Welcome back to an episode of The Dime. I’m Brian Fields, and with me as always says Ke Finney. And this week we’ve got a very special guest, Adam Terry, co-founder and CEO of Canr SELs. Adam, thanks for taking the time. How you doing today? I am
[00:00:13]Adam Terry: doing great, Brian. Thank you for, uh, having me on the dime today.
[00:00:16] We’re excited. Dive in. Ke how are you doing?
[00:00:19]Kellan Finney: I’m doing really well. Really excited to talk to Adam, learn a little bit more about, uh, cannabis beverages and uh, how are you doing Brian? I’m
[00:00:26]Bryan Fields: doing well. And Adam, for your location please. East coast or West
[00:00:29]Adam Terry: Coast? Uh, East Coast. Let the
[00:00:33]Bryan Fields: record say
[00:00:33]Kellan Finney: Kaan. Another one.
[00:00:35] Another one. It’s
[00:00:36]Adam Terry: alright. We gotta ask you The only, the only place for cannabis is important.
[00:00:40]Kellan Finney: Wow. We’re Where’s the bold statement? I like
[00:00:43]Bryan Fields: it. I like it. Coming out firing . Certainly clipping that. So Adam, for our listeners that are unfamiliar about you, can you give a little background about
[00:00:49]Adam Terry: yourself? Uh, yeah.
[00:00:51] So I’ve been in the cannabis industry since, uh, early 2015. Uh, I have a background in engineering product design, [00:01:00] and you know, it’s basically been my whole career, uh, post-college, focusing on cannabis, focusing on cannabis products. Spent a couple years extracting a lot of oil in California, and then I’ve spent more years back on the east coast in Massachusetts working with MSOs, designing labs, designing products, and then eventually creating my own products back in, uh, in mid 2020.
[00:01:20] And that’s where we get to. Can
[00:01:23]Bryan Fields: any, any hesitations early on to get into cannabis? Was it something you knew you always wanted to be involved with?
[00:01:29]Adam Terry: Uh, if you want to go really back in my cannabis career, I started consuming cannabis in high school, and then I joined the pot club at UMass. Uh, when I went, uh, I went to UMass Amherst, which had one of the oldest, uh, cannabis activist organizations.
[00:01:45] Uh, in the country. It was the oldest club on campus at UMass when I was there, and they threw a big festival every year for it. So I always knew the thought that it was gonna be something I could never put on my resume. Uh, I did not expect to go into cannabis professionally. I wasn’t sure [00:02:00] where I’d end up professionally.
[00:02:01] And then I moved to California, uh, and when I was in California, seemed there was a big need for engineers who were willing to take the risk of going into cannabis. So there really wasn’t any hesitation. I just kind of jumped straight into it. Really Not that many regrets other than I probably can’t get a job outside cannabis at this point, but we’ll see.
[00:02:18] I don’t think, I, hopefully
[00:02:20]Kellan Finney: when you’re going through kind of these product developments, well it made you settle on a beverage.
[00:02:25]Adam Terry: That’s a funny question because we were just talking about headset before the, uh, you know, the recording started and, uh, in 2018 and 2019, it was adamantly against beverages because as someone who worked for a multi-state operator who was job, it was to design everything down, straight up the flower.
[00:02:43] My position was always, there’s no way we can fit a beverage facility inside this vertically operated facility. You know, usually at that time they were giving us maybe 5% of the total footprint for manufacturing operations. Usually something like 500 to a thousand square feet and some of these [00:03:00] smaller MSOs.
[00:03:01] And so I said, Why would we dedicate, you know, a good chunk of our footprint to what is gonna be, you know, half percent to 1% of our revenue and it’s gonna be the lowest margin product we make. Uh, I also went to Colorado that year in 2018, and every beverage I tried was pretty terrible. So I thought there was no way to make a good tasting beverage.
[00:03:20] And then in 2020 I decided to make a beverage myself at. And I realized this is not only possible, um, you can make a great tasting one. And it’s really started to unlock for me when I thought about volume versus margin, because the beverage had an opportunity to get repurchasing behavior in a way that I didn’t see as possible in edibles.
[00:03:39] You know, a typical edible pack is, you know, 20 servings in Massachusetts, 10 servings in California and Colorado. And for my wife and I, we were only consuming, you know, one gummy maybe a week or you know, two gummies a week between us. So it would take, you know, a couple months to get that repurchase. I thought if I could make a low dose beverage so that you would want to consume more than one in a [00:04:00] single, um, you know, situation that you could get people to repurchase more frequently.
[00:04:04] And that’s really where beverage started to unlock for me, uh, and when I started truly earnestly working on can trip in summer of 2020. So you made
[00:04:12]Bryan Fields: the beverage at home, you started working on cant trip on the side. How, how quickly after that did you decide this might have legs? We wanted to. Take on a put time and effort into this project?
[00:04:23]Adam Terry: Yeah, well, I, uh, I left my previous job in early 2020 due to unrelated reasons. Uh, mostly, uh, there was some things going on with the company. The big band hit us pretty hard in 2019 as a company. Uh, the company I was previously working for made most of their money off of Vapor cartridges in Massachusetts.
[00:04:41] So I like to say that Charlie Baker personally killed my career. Uh, so I was pretty dedicated to it pretty quickly. Uh, it was something I really wanted to do. Uh, I, as somebody who’s been a product developer, I really wants to create a product to my own that I could focus on the branding and the product, uh, myself.
[00:04:57] So Can Trip was really [00:05:00] figuring out which product I wanted to do, and I definitely had a lot of people tell me. Bother with the beverage, go make a cartridge if you’re that good at making things. But to me, it seemed the, the, uh, the cartridge market was saturated and there was no way I was gonna sell to MSOs cartridges when they were already producing them.
[00:05:14] Now a quick aside on that is I was very wrong on that because that was exactly what I told Liam O’Brien at Fernway. Uh, right before they launched, I was like, I don’t think this is gonna work, because Amazon are, they make their cartridges now firm place like a 35 million company in one state. So I was very wrong on that.
[00:05:31] Uh, but moving to the beverage, I still saw an opportunity for something like six or 7 million in revenue in the first year for the beverage market in Massachusetts. No one else was online. This was before Levy launch. Uh, this was before really anybody had launched except SIP at com can. So I thought that the opportunity was there for the taking.
[00:05:50] So my goal was to, you know, fundraise and get to market as quickly as possible. We managed to, uh, close our first round of fundraising in March of [00:06:00] 2021. We launched in June of 2021 using a manufacturing partner in Massachusetts. And that put us as I think the second or third that bridge on the marketplace, uh, right alongside Levy, um, High Five, and at the time I think can had launched one flavor in Massachusetts.
[00:06:15] Um, and, you know, those are still the top performers in the market today. So first mover advantage is still key.
[00:06:23]Kellan Finney: So you started working as an engineer out in California, manufacturing the ingredients, and then transitioned into product development, and now you’re kind of running your own business. What does that transition from?
[00:06:35] An engineering kind of technical based skill set to kind of more of a business focused mindset. Can you kind of walk us through that transition that you’ve been going through?
[00:06:45]Adam Terry: Yeah, I, I, it is definitely an interesting question. Not everybody in engineering ends up moving into business, uh, from the more technical side, but engineering as a discipline really is business with a focus on understanding the science and technical aspects of [00:07:00] business.
[00:07:00] Um, at least that’s the way I always viewed it. Certainly you can get really complicated in the academia of different things within the discipline of chemical engineering or any other type of engineering. But at the end of the day, the, the way I saw it is that as an engineer, my job was to communicate what are the economics and the effectiveness of our manufacturing processes.
[00:07:21] And so focusing on things like THC recovery and the extraction process, uh, and other KPIs really put me in a position to help communicate to my bosses where we did need to spend money. And as I went further down that rabbit hole, um, I started to get more involved with the business end of things. And that, uh, particularly interested me, um, as I moved into the product development phase.
[00:07:44] You know, the first thing you do in product development is you develop your bill of materials and you say, How much is this gonna cost me to make roughly? Because, you know, really wanna make a product if you’re not gonna be able to make money on it from a, a retail price point. I think product development is really, uh, when I moved into that [00:08:00] area after kind of finishing the lab designs that I did for these MSOs was where the business really sparked for me.
[00:08:07] Because product development is such a cross-functional field. I mean, you really have to be taking in the concept of, you know, what’s gonna sell from marketing and sales. You have to be, uh, driving unit economics. You have to be thinking about, um, capital spend. And so all of that really is what it takes to start a business in many ways.
[00:08:25] You know, I think I’m a little bit light on the sales and marketing expertise really. So I was back then, I’m a little bit more versed now, But the, you know, doing all of that together really put me in a, in a key position to understand how cannabis businesses work, um, what is necessary to make them work, why they’re unique from other businesses.
[00:08:42] And because I had spent my entire career sort of enveloped in that, rather than, you know, having moved into it from other industries, I think it put me in a, in a. Great position to be able to run a cannabis business more than any other type. And so far it’s been somewhat successful. [00:09:00]
[00:09:02]Bryan Fields: And one of the things that you did not share were some of the obstacles that are just unique for cannabis, right?
[00:09:05] Operating a cannabis business, kind of layers on different challenges. So getting started early on with Can trip. Were there unforeseen obstacles when you got started that you, you hadn’t thought about prior that now looking back seemed kind
[00:09:15]Adam Terry: of obvious? Uh, certainly. I mean, in many cases there are things you foresee but you can’t do anything about.
[00:09:22] Uh, I think is is a better way to put it. Uh, distribution costs certainly we’re higher than we anticipated. Uh, you know, having in Massachusetts there’s no third party distributor model, or at least there wasn’t, you know, three years ago. We have had logistics, um, come online in Massachusetts, but it’s not the same as California where there’s a distribution license type and it’s an entire business for many of these people.
[00:09:46] Um, we really only have a couple fully full-fledged distributors now in Massachusetts. And even then, it’s not the same. Because in Massachusetts, uh, they can’t really buy the product from you wholesale. It’s essentially consignment distribution where they can [00:10:00] warehouse it and they can distribute it, uh, to people.
[00:10:02] But you don’t get paid for the product until the dispensary pays for it. So, uh, in, you know, that can cause a lot of cash flow issues, but also just the expense and the cost of it. So it’s really key to have internal logistics for distribution if you’re a manufacturing license in, in Massachusetts. And that unfortunately was not something that our first manufacturing partner had in the state.
[00:10:21] You know, I like to think that we were one of the earliest, uh, companies doing the style of manufacturing. We were where we actually provided the equipment and the personnel, um, and the expertise in know how to set up these manufacturing lines inside somebody else’s license. And that worked off sort of a service, um, agreement with them, which at the time our attorney said he hadn’t seen elsewhere in the state.
[00:10:43] So we were one of the early people to really be able to bring a brand that wasn’t, um, you know, owned by auf manufacturing license into the state. Um, at least, you know, in a small and independent way. And that allowed us to remain a little bit more capital efficient. Um, in terms of our raise, it means that we didn’t [00:11:00] have to overshoot and, you know, that, that really helped us get off the ground in a strong way.
[00:11:05] Uh, where we were, I think Bdsa actually had us listed as one of the top 10 retailing beverages in any type country within 60 days for a launch. That’s incredible. Was there any
[00:11:15]Kellan Finney: other major differences between like the California market and Massachusetts market?
[00:11:19]Adam Terry: Oh, I mean, between my time in California, I mean, I worked in California in 2015.
[00:11:23] Yeah. So the differences were myriad and almost indescribable in terms of the level. I mean, it was almost unregulated when I was out there in 2015. It was medical, right? You know? Yeah. I mean, I had a med card and we all had to have med cards. You did have have one You did. We were operating within the parameters of the law that existed, which I’m pretty sure like the regulations went as far as like medical marijuana is now legal and you must have a med card and non-profit.
[00:11:48] I’m not sure how much else exist. Like vapor, I was making largely vapor cartridges out there, uh, for a brand that still exists. And, uh, they just, there were no, you didn’t have to test your [00:12:00] product. Uh, we still did because, uh, frankly, you know, it’s a marketing aspect if you want to like, sell your product at the time.
[00:12:08] It’s like, who’s got the highest THC results? Um, and do you remember
[00:12:11]Kellan Finney: when they brought pesticide tests online for the first time?
[00:12:14]Adam Terry: I actually had already left California when they, when they dictated that, um, which was a whole thing because actually it happened right after I left. So I still had many friends there.
[00:12:22] Said we had to basically remove everything from our facility, scrub it down and start over, uh, because there was pesticides on everything at time, everything. So I left California in like, uh, October. 2016 or, uh, I, I left the state the end of that year, but I left that job in October, so right before the election happened and Prop 64 passed.
[00:12:43] Yeah. Part of the reason I left is because I was looking at the regulations, I was looking at the facility I was working, and I said, There’s no way this company ever meets these regulations. And I believe they do, uh, at this point in time. Uh, but I, I think I was still largely right, almost nobody met the regulations when they actually went into effect.[00:13:00]
[00:13:00] And so it took years for them to start even actually trying to enforce these things because, you know, there was no BioTrack then in California. There was no metric. Uh, and it wouldn’t be until I moved back to East Coast and started working in New Hampshire that even saw BioTrack or received a sales system for the first time.
[00:13:17] But it was also one of the very few people on the east coast at that time who actually knew how to extract cannabis professionally. Uh, and so that was one of the motivating forces and be returning to the East Coast was I really felt like an opportunity for people who knew how to extract and infuse things.
[00:13:32] Um, in a way that just didn’t really exist in 20 or early 2017, uh, in Massa. .
[00:13:40]Bryan Fields: So slightly switching gears can trip. What are the early flavors and how did you come up with the dosing mechanism for how, for how much you put in
[00:13:47]Adam Terry: each can? Yeah, that’s a good question. Uh, early flavors, lemon, basal ginger peach and grapefruit hibiscus were what we launched with, uh, a little insider infos, that the first product I wanted to make was actually something I called [00:14:00] Berry Dream.
[00:14:00] Just Andrew Berries have these great really tart pink berries. Uh, they’re also known as the five flavored Barrier ocha. Uh, and there’s actually a local grower in Massachusetts, but the berries were very expensive and more to the point, I don’t think anybody knew what they were. So I decided to go something a little bit more accessible to the human population.
[00:14:17] Um, from the very beginning I wanted to have terpenes, uh, infused in them as well. That was really important to me. Just for flavor purposes, I really wanted to create flavors that blended with the taste of cannabis because I had created a lot of products that were essentially, you know, raspberry with cannabis underneath, or cherry with cannabis underneath.
[00:14:32] And I never felt like that was the ideal way to blending. I was a bartender for a very long time. I have a, you know, I like to think I have a fairly well developed palette, so I focused on creating things I thought would blend with the taste of cannabis and terpenes were an important part. Um, just really exciting to work with up beverage.
[00:14:48] I mean, uh, I honestly, if I did go back to bartending at some point, might start to use terpenes directly in cocktails because they have such marvelously complex flavors and you only need a tiny drop. So we like to think it as like a garnish [00:15:00] on the, the cocktail. The grapefruit was also originally grapefruit elder flower, which eventually changed hibiscus, uh, because I like the flavor and I like the pink.
[00:15:07] Grape Forbis continues to be one of our most popular flavors. Um, in terms of choosing the dosing, it was originally gonna be two and a half by two and a half. In terms of THC and cbd, I really want to low dose products, so less than the, uh, the maximum allowed in Massachusetts, which is five milligrams.
[00:15:22] Cuz I want to encourage people to drink more than one in evening and make it taste good enough that they would, you know, seek to, you know, we all have that problem where you eat a really good canvas infused gummy, and then you want to eat more gummies, but, uh, you probably shouldn’t because you’ll get way too stems.
[00:15:36] Uh, which is why it’s important to buy a bag of uninfused gummies when you do go to take a gummy, in my opinion. But the three by two ended up as a, it just felt better honestly when trying it. And I thought it was gonna be easier basically to hit our testing ranges with, uh, with an integer than try to say like 2.5 specifically.
[00:15:55] Because as anyone who’s tried to do cannabis testing, particularly in the beverage space node is, you know, there is [00:16:00] going to be testing variants. And so if you claim to be two and a half, but like you’re 2.7, I think. There’s less forgiveness there than if you claim to be three and you’re at 2.7. Um, to be honest.
[00:16:11] So it’s, it’s all in that range, um, which I think is perfectly kind of acceptable. And there’s, I think a 5% variance in cannabis testing is as good as you can really hope for on average. And I’ve seen a lot of MSOs like data sheets that suggest they have much wilder swings than that. Um, but part of it is the consistency of creation and even bigger part of it is just the consistency of testing between different matrices.
[00:16:32] Um, beverage is a particularly difficult matric, uh, matrix to test. Uh, and so a lot of, uh, testing labs, especially in their earlier days, struggle to actually recover all the THC that’s trapped inside the, the emulsification.
[00:16:45]Bryan Fields: Is it challenging trying to balance the formulation of those different characteristics of the products and then have the, the cannabis actually highlight with all the terpenes?
[00:16:52] Is that, is that a challenge or with, based on your skillset with the, the background and the bartending, that was something that you were comfortable with and just easily navigated. . [00:17:00] Yeah.
[00:17:00]Adam Terry: It’s not that hard for me to create a, a beverage that doesn’t, actually, most people don’t detect any cannabis taste at all, and it’s because it’s blended in there.
[00:17:06] I mean, I don’t know if I could create a lemon line that wouldn’t have any cannabis taste, but frankly, at the, the dilution levels we’re talking about, we have a 12 ounce beverage that’s roughly 355 grams of fluid. We’re putting in five milligrams of, uh, cannabinoids. So that leaves you a lot of room. I will say though, that I have, you know, I have tried out 50 milligram beverages with my own recipes and you can definitely taste the, can a little bit stronger.
[00:17:29] Um, but you know, some people still don’t really notice that some people have, you know, of really will willful blindness when it comes to cannabis flavor. To be honest, I think it’s people who’ve tried edibles more and more frequently. They get used to it and they stop noticing it. But for the most part, people don’t really taste cannabis in any of the can trips.
[00:17:45] Uh, and that that is intent, uh, intentional by design. And that’s just something that’s is relatively easy for me. When you spend years trying to make cocktails that don’t taste like cough syrup, you start to figure out what the elements are and it’s usually keep it simple, certain, you know, know how [00:18:00] certain flavors work together and then build from there.
[00:18:02] Um, you know, you can break flavor. Do I do something called flavor analysis when I. Go to make new things where I take what I want in terms of flavor, I break it down as to what I think in terms of its tasting notes, its constituent flavors are, and then I seek those flavorings and build them back up. I just did the same with the root beer, and I’m a lot more pleased with the root beer that I built from, um, sort of like constituent flavor components than the, you know, default beer flavoring that the, the flavor has provided.
[00:18:28] So that’s one of the things I do love best about my job is, is creating these things. Is there any
[00:18:34]Kellan Finney: flavors that just absolutely don’t work
[00:18:36]Adam Terry: with cannabis? Uh, sharing is actually always a really difficult one I find to work with. With cannabis. I don’t, I think it actually has more to do with c b D, you know, I’ve talked to some food scientists about why that might be, there might be a, you know, a interaction between the benzel, the high that is a primary constituent of the cherry flavor.
[00:18:54] With cannabidiol itself, I really struggled to make a good tasting like sea, like cherry [00:19:00] cbd. But, uh, for the most part, I haven’t struggled with it as much with thc. Um, and a lot of it has to do with dilution rates. Uh, but you know, for the most part you can make almost anything work. It’s just what is your tolerance for that cannabis flavor?
[00:19:14] Are you willing to blend in something, you know, more interesting to kind of work with it? I just think generally, like using a fruit or citrus flavor on its own, you’re always gonna taste the cannabis below it. Um, but I had these sort of like herbal and spice twists that we use kind of in cleansing with that bitterness a little bit better.
[00:19:31] Um, I would also, you know, suggest that Citrix acid and tartness do a lot to sort of counteract the, um, uh, the bitterness of cannabis. You know, bitterness is a very specific flavor profile. Cannabis is more than just bitter. It’s got earthy toms, it’s got a very specific cannabis taste to it as well. Uh, but bitterness is there and tartness usually counteracts bitterness, um, in a similar way that an acid counteracts base.
[00:19:56]Bryan Fields: to clarify your products have THC and CBD in them? [00:20:00] Not
[00:20:00]Adam Terry: all of them, uh, but most of them do. Uh, our original low dose line has three milligrams of THC and two milligrams of cbd. We have our higher dose line at five milligrams of THC in Massachusetts. And I don’t know when this podcast is gonna air, but by next month we might have 50 milligram beverages out in Minnesota.
[00:20:17] Ooh,
[00:20:17]Bryan Fields: breaking, um, what, why was that important in the combination? Was it to try and reduce the, the psycho activeness of the products or was there another reason behind it?
[00:20:25]Adam Terry: Yeah, I think it creates a more social experience. I think having CBD there, you know what, I think what ultimately we found is that it does counteract this psycho activeness, or at least the way that people notice psycho.
[00:20:39] And that has actually in some ways been a detriment. Cause people will be high, not think that they’re high. Um, this is happened with my mother-in-law, uh, who drank one and said, uh, you know, I didn’t feel anything, but I also never heard her stop talking for three hours. Uh, . At, at a time. So I’m absolutely certain it worked.
[00:20:57] And so there is definitely like less of a, [00:21:00] a THC forward effect when you add that cbd, which is why for the five milligrams we chose to not put, uh, additional CBD in there and we get pretty good feedback on it. But overall, the cbd, at least I, from a personal standpoint, I find it lot easier to continue to hang out with people when I have some CBD in my system.
[00:21:18] I also am a big proponent of, you know, using CBD along with thc. Cause I think THC works better. I also think CBD for me doesn’t, you know, have much impact unless there’s THC with it. You experiment with any otherize. I’m experimenting with some for a line I’m working on that should come out next year. Um, definitely.
[00:21:38] What’s the,
[00:21:39]Kellan Finney: what’s the biggest challenge with working with those minors? Is it the price or is it just the, the different
[00:21:43]Adam Terry: chemistry associated? Yeah, I haven’t even gone into like full pricing yet, but that’s almost certainly gonna, I haven’t found like, significantly different chemistry between cannabinoids when it comes to flavors, uh, so far in a, in several years of working with them.
[00:21:55] I was doing a, a different consulting project with cbg, uh, relatively [00:22:00] recently, and I didn’t notice any material impact of using a different cannabinoid. I mean, they’re, they’re pretty close, like chemically speaking, and while minor, like small changes can create big effects, they don’t always. Um, and so, you know, so far I haven’t found any cannabinoid that is like particularly thorning to work with.
[00:22:18]Bryan Fields: So when your mother-in-law mentions to you that she’s not really sure if she’s feeling it, that’s one of the bigger challenges, right in, in the low dose beverages is that people are assuming one thing and then they, they experience it and while they might be feeling it, they’re unsure if they are. So how do you have that conversation to make her feel comfortable so that others that are not your mother-in-law can experiment and then continue to buy your product?
[00:22:40]Adam Terry: I honestly don’t have a good answer to that. If I did, I’d probably sell a lot more can trip. The, uh, the fact is like, I think we see in Massachusetts, you know, we had our theory of the case, which took below dose. I think that is, uh, you know, validated by the biggest can beverage company and that the world right now is can who primarily started out on these micro doses?[00:23:00]
[00:23:00] I don’t think that held in Massachusetts. Lev is still the biggest, uh, player here in the state. They only make five milligram beverages, and we see that as soon as we launched our first five milligram beverages, they started outperforming the Lotus immediately. I think people want to feel like they’re high the same way.
[00:23:17] If you drank, uh, beer and you didn’t feel like you were getting drunk, you’d say something like, say something was off. No, and honestly, it’s, you know, as much as it’s frustrating because I do know that if someone drank the second can trip, they’d probably start feeling more stoned. These things are still pretty expensive overall at retail.
[00:23:33] You’re talking five to seven bucks a can. So people want to feel something off one. Um, and I think the five milligram dosing profile has been largely more successful in this state than a low dosing profile. Uh, and we may have to make adjustments in the future, uh, to, to account for that. Well, I don’t,
[00:23:49]Bryan Fields: Hold on a second.
[00:23:49] I don’t disagree, Adam on, on that. But if someone has one beer and they don’t feel anything, they’re not showing Inclination is the drinking second beer, which I think is, is where we want people to be with the low dose [00:24:00] beverages.
[00:24:00]Kellan Finney: But people like you can go buy three, two beer, right? Which is lower alcohol concentration than normal beer.
[00:24:05] People don’t buy three, two beer. They buy regular beer that has 2% more alcohol in it because they know that they’re, you know what I mean? Like, people aren’t gonna buy the three, two beer. So like, I think that, like with beer, it’s a psychological difference, right? Like you already know that if you drink four beers, you’re gonna get drunk.
[00:24:22] That first one just didn’t kick in fast. And like when you’re young, you drink a couple beers, it’s a completely different situation, but by the time you’re like in your mid twenties and you’ve done it, been around the rodeo a couple times, it’s a like a psychologically different experience. And I think with cannabis, because there is the prohibition, you’re seeing this massive other difference in my opinion.
[00:24:41] So I think it’s like, it’s trying to compare apples to oranges with cannabis and beer because like consumers know that if they drink enough beer they’re gonna get drunk. They don’t know if they’re gonna get high from drinking cannabis cuz like my mom literally says that she can’t eat enough edibles to get high and she just doesn’t eat edibles.
[00:24:57]Adam Terry: That is its own problem that, you know, can’t trip, [00:25:00] uh, faces as well, which is just some people have incredibly high thresholds or you. Infinite threshold. There’s some people that just don’t get high in edibles, but I think that’s exactly right, co. And I think the other part of it is you buy a beer in a liquor store and it’s gonna cost you at like two to three bucks a can, uh, at the end of the day.
[00:25:16] And can, Tripp is gonna cost you, Most places are five for a lower dose and step in for the higher dose. Uh, and it’s, it’s kind of frustrating cause a lot of people still, a lot of retailers do actually charge seven for the lower dose one, which means they’re taking more than a hundred percent markup on the, the wholesale price.
[00:25:33] And it also means that they’re moving less velocity and people are less willing to buy a couple of them. So there’s a couple frustrations that also come along with not controlling your retailer, not controlling your retail price. Um, you know, we thought we could affect that through wholesale pricing and it just really didn’t move, uh, in the way that we wanted, but, It’s scale, it’s points of distribution.
[00:25:54] All those things kind of make it so that beverage is gonna continue to be a really tough market, uh, in [00:26:00] any of the regulated marijuana states, uh, until things significantly change. And I’m glad Can’t Trip went in when it did because I said this when I was actually fundraising. If I can’t get this online in 2021, we’re not doing this.
[00:26:11] Because that was, I think, still the last good opportunity to get online for beverages in Massachusetts. Uh, you know, we will luckily be able to ride that wave into New York State and be one of the very first people online in the regulated marijuana market there. Um, we’ll hopefully ride that wave into Connecticut and the other Northeast states, but.
[00:26:31] You know, I, I see other brands coming online in Massachusetts and you know, I know they exist, but they only register on the boards. When you look at p DSA or headset or anyone, um, the exclusion of a couple powder drinks that are kind of crushing it out there, um, there’s just only so much shelf space and only so much total addressable markets.
[00:26:49] So if you don’t have a chunk there, then you’re gonna be really struggling to, to carve out space.
[00:26:55]Kellan Finney: Brian and I looked at beverages out in Colorado, I think, was it last year, Brian? [00:27:00] Yeah. And it was just the, kind of the exact same, uh, what you just described was what we kind of determined from just our analysis of the market, just cuz it’s such a mature industry that life, like you just said, there’s just no way to carve out your own piece after people have been sitting on those shelves for a couple years, you know?
[00:27:20] Yeah.
[00:27:21]Bryan Fields: There’s just so many products. I was in Canada and I went to a dispensary and I opened up the fridge. I was like, Where’s the beverages? He pointed me the fridge. I opened up the fridge and there was. Hundreds of different products. And I was like, this is the most overwhelming experience. And I just did what, like a, a very poor, simple producer did is I just reached for like one and eye level that was like a flavor that I like and just grabbed the first one.
[00:27:41] Cause I was like, this is, this is overwhelming, right? There’s too many choices. Grabbed that and just left and was like, I can’t believe how many people are competing for such a tiny, tiny purchasing decision on a tiny, tiny ship. And it’s risk. Extremely
[00:27:54]Adam Terry: competitive. It’s extremely, And it’s, it’s even crazier to think that like, it’s also one of the most difficult [00:28:00] things to set up in a regulated cannabis licenses, uh, beverage line cuz most places are cannabis village.
[00:28:06] Do not. Build in large amounts of storage space. They do not build in floor drains. They do not build in the kind of electric and water infrastructure that you need for these things. And it costs, like, you know, depending on how big you build it, but it can easily run into the millions just to get a ba pretty basic setup online.
[00:28:22] Um, for pretty regular volume. You can do like a small scale thing for about a hundred grand. But to get into any sort of reasonable production quantities, you need to be spending, you know, between 500 and a million at a minimum. And, you know, a lot of places are gonna sit down like, Well, I have the same license, can make beverages and it can make vapes.
[00:28:40] So which one is gonna do better for me? Even if B vapes are also incredibly competitive if beverage is just as competitive, origins lower. You know, it’s, it’s real tough, but, you know, big is also a tough marketplace. Um, so, you know, you gotta make your choices on how you build your, your menu and your facility.
[00:28:58] But that’s also one of the things [00:29:00] that drives prices beverage is, is it’s not like I have a plethora of options to go to and I can just go to the manufacturing on the street. I mean, we, we, one of the biggest canning lines in the state when we started, and that was like, I could basically do like 10 cases an hour,
[00:29:13] It was pretty small and slow. We were like in a corner, but we, uh, we made it work and, uh, you know, we were nowhere near what Levy was doing, like a hundred cans a minute, uh, on their line when they, uh, when they upgraded, I think like midway through their first, uh, first year. But yeah, there’s still only really like five successful brands that say in Massachusetts and beverage space.
[00:29:35] And there’s maybe like three or four more and a lot more coming online that I’m hearing about. But I don’t see how any of them are gonna, uh, really get shelf space. Who do you think,
[00:29:44]Bryan Fields: Go ahead, Brad. Who do you think is a, a targeted consumer for infused beverages?
[00:29:51]Adam Terry: Definitely what we’re finding is that it is a lot of people’s gateway in, um, and bore, Jordan actually said this I think at fencing it back in April, which I thought [00:30:00] was a pretty keen insight from a man who has said some pretty wild things about beverage, uh, thereafter
[00:30:05] But he said that people are coming in through more highly formulated products and beverage is nothing if not one of the most highly formulated products in the cannabis space. I think that’s right. You know, it’s a familiar format for people. I think overall five milligrams in a beverage does hit different than five milligrams in a regular edible.
[00:30:22] And I think it hits like softer, um, I think can be as like as or more bio available, but it seems to hit differently where it doesn’t like impact people as much. And this is from an array of beverages I’ve had with multiple infusion technologies, including my own. I find that it’s generally, you know, something like a 10 to 15 minute up.
[00:30:43] Um, peak at around 30 minutes and then offset between 60 and 90 minutes. Um, even at the five milligram range, sometimes it’ll last a bit longer. I think that can depend on how much makes it into your liver or not. But for the most part, it seems to be a softer high. So I can drink multiple five milligram beverages in a day [00:31:00] and get pretty stoned, but feel pretty fun.
[00:31:01] Whereas when I eat, if I eat multiple five milligram gummies in a day, I’m really gonna get that like Del or that hydroxy 11 THC effect that’s gonna make me way too stoned. So they’re a little bit safer. They’re harder to screw up, I think, when it comes to your own dosing profile. And I think they’re just more recognizable.
[00:31:20] So people can’t really focus on, you know, don’t have to learn to. Then I’m telling her to vape. It always drew me nuts when I made vapes. Like people would constantly like complain that it was too complicated to use when there was like a button to press . Uh, it’s like the button was like, I had to write directions, be like, press the button as you inhale, and people are like, I don’t really know.
[00:31:38] That sounds a little tricky to me, as opposed to like dab rigs where people are heating nails and free base in cannabis. Um, , I digress, but the, uh, I think the, the general demo, like that’s not really a demographic, right? Like people coming into cannabis and if I gunned to my head demographic skews towards, uh, women overall and skews towards honestly higher earners.
[00:31:59] I [00:32:00] think we’ve seen in, uh, there was like an internal study by one of these companies that suggested that people who purchase beverages on average are making like over a hundred grand a year. People who purchase concentrates on average are making like 40 or 50 grand a year. So definitely skew towards some more wealthy, which I think tracks with, you know, the cost of these things per milligram of thc.
[00:32:19] but the, the demographics used towards women and wealthier women. So I think we’re gonna see like a lot of millennial professionals focused on these things and, and doing the purchasing, but also just a tremendous amount of people coming into the cannabis industry. And I think that’s kind of what makes us, uh, sort of the gateway, the gateway drug of cannabis.
[00:32:36] Yeah, Grant
[00:32:37]Kellan Finney: grant’s also, like, it’s also something that, uh, consumers are comfortable with from like a inebriation standpoint, right? We were talking about beer earlier, like people are comfortable drinking something out of a can that’s gonna inebriate them versus smoking or any other like, form factor.
[00:32:55] And most people don’t eat an edible or eat like a gummy bear or piece of chocolate and expect to be [00:33:00] messed up from it like a couple hours later. So I think it’s probably the most comfortable, uh, avenue in for
[00:33:06]Adam Terry: most new consumers. I mean, honestly, this is, I don’t know if this is the next topic, but this is for me is like the segue is to why, um, Beverages are gonna continue to struggle so long as they’re contained with only, only within dispensaries.
[00:33:22] Um, and I think it’s, for me, it’s, it’s a lot because people who might try beverage aren’t necessarily showing up to the weed store in the first place. And these dispensaries really limit like who’s coming to get things. And it’s a lot harder to sell a five milligram beverage to somebody who’s already buying joints and dabs, um, than it is to sell a five milligram beverage to somebody who might be just picking up groceries or like, you know, uh, butt light for the weekend.
[00:33:48] And so, really point, Minnesota’s really represented an interesting opportunity for the beverage market. And you’ve seen players including Cant Tripp like Rush in there because the points of distribution are so much broader and pretty [00:34:00] immediately, uh, you know, stores are taking this on. We’re seeing massive growth inside.
[00:34:04] There’s just a gold rush going on in Minnesota right now for cannabis background. Do you wanna, do
[00:34:08]Kellan Finney: you wanna educate our listeners to what’s going on in Minnesota that’s
[00:34:10]Adam Terry: different than Massachusetts? . Yeah. So the, the key to Minnesota in terms of the legal difference is that Minnesota has legalized Delta nine thc, the same molecule that is, you know, typically of interest in regulated marijuana markets, but derived from hemp and the legal, the, the distinction between hemp and marijuana as far as I can tell, is simply a legal distinction.
[00:34:33] Having nothing to do with the actual, you know, uh, component genetics of the plan other than is a hemp is considering anything is grown under the hemp program. So the, you know, compliant with the 2018 US Farm Bill, uh, and also having less than 0.3% of Delta nine thc either when of both when it’s grown and then when it’s sold to a consumer.
[00:34:55] There may be nuances within there too, but essentially, you know, if you grow hemp, you have to get [00:35:00] rid of it. If it’s over 0.3% delta I thc, um, and you can continue to process it from there. If you do, I think you get some remediation options too. Not that familiar with the ins and outs, but at the end of the day now, there’s a program where if you can get the, the THC derived from hemp, um, inside Minnesota, then you can manufacture, You don’t need a special license that takes, you know, 2 3 years to get and, you know, uh, Fort Knox level security system to, to make it.
[00:35:27] And the, the only limita, the only two real limitations are it must be still less, than 0.3% Delta in thc. So compliant with the farm bill that’s checked off pretty easily by most beverages, because most beverages are in the, you know, one 1000 of a percent range or one 100th, uh, when it comes to actual biomass. And then the, uh, the other limitation in Minnesota is that you get up to five milligrams per serving.
[00:35:50] Uh, or 50 milligrams per container. Uh, so those are the, the two matrices that you get to play by. The regulations are otherwise pretty light in Minnesota. [00:36:00] And what that has allowed is at a pretty thriving market. So instead of, you know, there’s 5,000 breweries in Minnesota, they actually minnesota’s a home, like a, a hub for manufacturing, brew, and distillery equipment.
[00:36:12] It’s actually where I got all the equipment for my other business, which is a distillery. The, uh, the, all these beverage lines can now be used for canvas, which means that you have a lot more options, which means you can get more competitive pricing, which means pricing can go down. You can also have traditional distributions.
[00:36:27] So somebody who doesn’t need to spend years waiting for a license can distribute these products across the state. And so we have basically a normal three tier, uh, system. As Brian, you have noted, uh, numerous times, uh, not only in this call, but. Twitter over and over again. There’s a lot of challenges in cannabis, which is why you should download the, the Dime Playbook.
[00:36:46] Uh, but the, yeah, it’s a CPG on its own is one of the most difficult businesses, uh, there is out there. You are paying real money to make a fiscal product that needs to be moved to a place, sold to a consumer. [00:37:00] When you add the CAM challenges, everything gets that much more difficult. This is why you don’t see beverages below $7 for five milligrams in Massachusetts, unless they’re, you know, on sale or in bulk pricing.
[00:37:10] In Minnesota, there’s a real shot. You can buy something for four or five, oh, less than four bucks. At the, at the shelf, because you have all of these preexisting channels and infrastructures, you can take advantage of that, you know, almost every other business gets to take advantage of. Uh, and so that is really opened the opportunity.
[00:37:26] And more importantly, a lot more people are gonna be exposed to your product because you can sell it in grocery stores, liquor stores, uh, restaurants. There’s really no limitation on where you can sell it. Long as the municipality hasn’t banded, you must be 20 or one year old to buy it, so you must still card people.
[00:37:41] Um, but you know, there, there’s also some gray area it looks like when it comes to liquor stores itself, because in Minnesota, this is one of the strangest laws I’ve ever heard about liquor store, Minnesota. There’s a list of things you were allowed to sell at a liquor store, uh, which is unlike I think every other state where there’s a list of things you can’t sell at a liquor store.
[00:37:59] Uh, [00:38:00] and cannabis is not technically on the list of things you can sell in a liquor store in Minnesota, but I think there’s some gray area because you consider it a soda. You consider it. Other things, I don’t know. The attorneys out there are honestly still kind of figuring this all out and so is the State House.
[00:38:14] But for the moment it’s pretty lightly regulated. There are probably more regulations in the future, but it has created this huge opportunity for, um, beverages and Can Tripp was one of the first, if not the first, uh, cannabis beverage that is also in a regulated marijuana market out there. Um, can is also out there as well.
[00:38:33] And then, uh, almost every brewery seems to be coming up with ad beverage now, which is interesting cuz I’ll be back out there next week and get to try a few more of them. But most of them I have tried, if not been stellar. Um, a lot of people are not so used to working with cannabis in a beverage and it’s not the easiest thing to create a taste for.
[00:38:49] So I think people are trying to figure that out, uh, right now. And that’s, that’s left a lot of opportunity for people to kind of sorted all of their stuff out already.
[00:38:57]Kellan Finney: I mean, pretty incredible. It can be just sitting there next to like [00:39:00] a Bud Light or a Budweiser, or Milos
[00:39:02]Adam Terry: or whatever you wanna call it.
[00:39:04] Yeah. Yeah. I mean, it was great to go to a bar and purchase my product at a bar. It, interestingly enough to like the early days of California, there’s some amount of self-regulation that seems to be happening. A lot of on-prem locations are, uh, restricting THC s to like three cans, Uh, makes sense during a visit.
[00:39:22] So this way people aren’t getting, like, we don’t have a lot of clarifying precedent around what happens if a bar gets somebody high and sends them home and they get into a car crash, Right? Like, whereas we have specific laws in this country around what happens if you do that for alcohol. Um, the bar is liable.
[00:39:36] So that’s, you know, one of the, the things that they’re gonna have to face and insurance underwriters are scrambling to figure out what’s going on. I talked to. Different marketing companies out there, you know, who own billboards and other media. They’re like, we don’t even know what to do yet because, uh, you know, there’s other, like, you know, Massachusetts requires warning language on billboards and things like that.
[00:39:56] Um, but they don’t have anything to like for that. So it’s all very [00:40:00] new. Um, but it’s really interesting because in a lot of ways this was kind of already legal in Minnesota and they just kind of clarified the laws, which is one reason they passed in the first place was to clarify like preexisting law around how much teach so you can put in a product under the Farm bill, because the farm bill does allow you up to 0.3%.
[00:40:19] And if you guys are out there doing the math, uh, a lot of edibles meet that, uh, that, you know, arrangement. So there’s a lot of s that could be, you know, sourced from hemp and sold thc, you know, in any state that doesn’t ban it. It’s really unclear what’s going on, but there. There were already existing beverages in the Minnesota marketplace before this law passed.
[00:40:39] There were already existing edibles, and if you do some Googling online, you can absolutely find right now somebody willing to ship you delta i THC deriv from that to your house. So whether or not the government decides to do anything about that is hard to say. You know, as it stands right now, the FDA doesn’t actually consider it legal to be selling CBD across state lines in food products, uh, because there’s something called the drug [00:41:00] preclusion rule because Epidiolex, uh, which is an epilepsy treatment with CBD, is the active ingredient that was passed through phase three trials and approved in 2018, actually, which was kind of funny.
[00:41:11] Uh, the farm bill passed, uh, later that year, and suddenly the question of what can you put CBD in was, was really unclear because technically the FDA considers it a drug. You can’t put drugs in food. You know, you can’t take Viagra and put it in a bunch of gummies and sell it, uh, you know, over the counter to people.
[00:41:30] Well, you could. But you probably can’t. So the FDA already considers it kind of illegal to ship CBD overstate lines in, uh, in uh, even derived from hemp. And Delta I THC would follow under the same exclusion, which is that, you know, it’s delta I THC may be derived from hemp, but it may hit that your 0.3% standard, but there is a drug maral which excess, uh, which would then, you know, further debilitate these things.
[00:41:53] So the FDA actually just appoint a new person, I think in charge of cannabis policy. I think his name is Noah [00:42:00] Bien Mo. Um, and he is actually some cannabis regulatory experience. So that was an interesting move when coupled with Biden’s, sort of pardons last week that’d say, say to me that the FDA is gonna take a post or look at.
[00:42:11] It’s unclear what that’s gonna mean for the marketplace. It’s certainly, I think, still riskier to be selling in Minnesota from like a, a pure perspective of, you know, the regulations could change and then your business has to change with it, but the opportunity is so great that can Trip said was worth it.
[00:42:24] And so did, Can who’s, you know, can Tripp is probably one of the, the lowest funded cannabis beverages, uh, in the regulated marijuana markets and can is probably the highest funded one. So we’ve, uh, we’ve really, I think, matched, uh, matched your energies here and, you know, I appreciate can for what they’ve done.
[00:42:40] They’re a great brand with great marketing and of good people. So, uh, I’m really excited to be kind of like in that same space alongside them.
[00:42:48]Bryan Fields: So, just
[00:42:48] to clarify, a 21, an older individual can go to a supermarket and purchase a cannabis beverage in Minnesota. .
[00:42:58]Adam Terry: Yeah, that’s,
[00:42:59] that’s [00:43:00] correct. As long as the supermarket is well in sell.
[00:43:02] Um, and we’re definitely seeing convenience stores, gas stations, uh, pick this kind of stuff up. I mean, imagine any place you see of beverage do you could technically do that. No. So do you think
[00:43:11]Bryan Fields: the consumers will know though, that these are cannabis products? They’re not though. They’re have products, right?
[00:43:18] Yes. But if you consume them and you get high, like, well,
[00:43:21]Kellan Finney: piece
[00:43:22]Adam Terry: cannabis. First of all, hemp is cannabis. It sort of squares, squares and rectangles. Right? Hemp and marijuana are both, uh, forms of cannabis. Same. Same, but different. They, well, they’re legal designations, right? So they should know it’s cannabis.
[00:43:35] All of our packaging says in big, bold letters that THC in this product. You know, there’s a certain amount of self-regulation, which I think is also important by the companies themselves to say, like, from a public health perspective, I don’t want anyone drinking this who is not prepared to drink th.
[00:43:49] Especially as uh, you know, if we move into other, um, stronger products as you can do in Minnesota with the appropriate scoring of your servings. I don’t want somebody drinking norm soda thinking it’s a regular arm [00:44:00] soda and drink 50 milligrams of thc. So it’s pretty big and bold and you know, there debates about that cuz like maybe the government then, you know, that makes a bigger signal to the FDA to do something about it.
[00:44:10] But I’d rather make accurate statements about what’s inside the can. Um, you know, in the interest of my consumers. Cause I don’t think it looks very good for the brand either to be pushing something which is deceptive. Um, so ours says cannabis infused, we use still warning language, similar but not identical to what we would use a Massachusetts because we feel that it’s important.
[00:44:31] You know, make, you know, clear attritions to, you know, the FDA is not approved this product, um, you know, keep this product away from children. We actually use the contains THC symbol that you see in Massachusetts directly on the can as well. Um, so it, you know, it has a lot of the same designations that would indicate it is a cannabis product.
[00:44:49] You know, we’ve never put big weed leaps on our product, but I think THC does, does a pretty good job of communicating what it is in cannabis infuse. So there shouldn’t be any confusion. I hope there isn’t. I haven’t heard any, [00:45:00] uh, any feedback about people being confused about it yet. But
[00:45:03]Kellan Finney: are there any huge differences from a regulatory standpoint on what you need to include on the label in Minnesota versus Massachusetts?
[00:45:11]Adam Terry: Yeah, Minnesota has a lot less language surrounding that. The only that’s thing that you must put on there is the dosing information. All of the same information you put on for any food product and the statement, keep this product away from children. You don’t even have to put anything that technically like you should.
[00:45:27] What’s in it, right? THCs in it. So you should put that on there. But there you don’t have the same, like, don’t drive or operate a machine well under this product or you know, there’s a lot of very long, uh, you know, warning language in Massachusetts that is not required in Minnesota. But we put pretty similar statements on the, the product in Minnesota because we do feel like, uh, those statements were generally created in the best interest of public health.
[00:45:50] Um, and we want to comply with that. The self
[00:45:53]Bryan Fields: regulations and you having to interpret what you think is best just leads to so many more challenges across the industry because not everyone likely will take [00:46:00] the same path as you. And one of the things that concerns me most just hearing this is if you’re sitting at a bar, right?
[00:46:05] You take two couple shots of James in feeling really good and go, Oh, that’s Adam Terry’s brand over there. I’m gonna take a 50 milligram beverage. I’m gonna have one of those. And the combination of alcohol and cannabis is gonna lead to some other hurdles that none of us can even foresee because the combination of those is gonna be altering.
[00:46:19] So Adam, what did you think about the potential combination of those, those two beverages? ?
[00:46:25]Adam Terry: Yeah, that’s a pretty good question. It’s definitely a call that bartenders are gonna have to make and servers, um, you know, there’s a, a history already existing of bartenders having to make pretty tough and discretionary calls around overserving.
[00:46:39] I would certainly, you know, we’re actually, we’ve been talking to our distribu distribution essentially by not putting the 50 milligram beverages in on premise locations and focusing only on off premise locations. And that’s one of the reasons for it. We just don’t think it’s necessary, you know, if bars are only willing to give you a three five milligram beverages, why would they be willing to give you a 50 milligram anyway?
[00:46:58] So I think from a, [00:47:00] a liability standpoint, I don’t expect to see those higher dose beverages in bars. They’re mostly gonna be for take homes. And interesting thing is, so there’s actually an exemption in Minnesota for the child resistant requirement for beverages. Um, so we can use regular lids out there, which is not what we use in Massachusetts.
[00:47:15] We use those specialty like XO lids, but we actually have chosen to use the XO lids specifically for the high dose products in order to ensure that they’re reclosable, so that people don’t feel compelled to drink the whole thing in one sitting. They can, you know, actually close it. And these are special design lids that will keep it carbonated, uh, and keep it completely sealed so they can put it back on the refrigerator.
[00:47:35] So, you know, people may not choose to self regulate. Uh, and I don’t in this, in some, in many scenarios, I don’t see that as an advantage. There’s other things around like restriction, restricting yourself on marketing that I think would be a disadvantage if we took, uh, if we, you know, hamstrung ourself, um, waste certain people do.
[00:47:53] In Massachusetts, for example, in Massachusetts, uh, there’s a specific language that says you may not use cartoons on [00:48:00] packaging. And I don’t know what qualifies as a cartoon, but I’ve seen a lot of illustrated characters on packaging in Massachusetts. None of them are like loony tunes. Like, but I think Lowell Smokes is a good example of this.
[00:48:12] It’s literally like a goat man, if I remember correctly, on the front of their package. And that seems to fly in Massachusetts. How is that a cartoon? Is it on a cartoon? I don’t know. It doesn’t seem that appealing to children, which I think is the most important part. Um, I think it’s probably terrifying to children to be honest, but the, uh, uh, you know, what is a cartoon like?
[00:48:29] Can I put how far in a human depiction can I go on a, on a label before I’ve crossed that step? And what is the enforcement mechanism? So, you know, like those types of things I would fear, but like, you know, I’m not gonna you. There are certain restrictions m so you can’t on a label, like make something that is deceptively, uh, you know, close to a non-cannabis product or like a well known product.
[00:48:53] So I couldn’t make something that look really close to Coca-Cola. Um, another interesting point of like non regulation is that [00:49:00] Fireball, the brand has a brand of gummies in the THC cannabis space, which is literally the same as a non-cannabis brand. And. They just sell it. I’ve never seen an enforcement action against them.
[00:49:13] Product’s probably pretty good, but I just wouldn’t think it would be allowed to use, Like, I wouldn’t think Coca-Cola could show up to Massachusetts, make a Coca-Cola, infuse beverage, put their, like normal branding on it. And you know, I don’t think the CCC would allow that. I guess fireball’s small enough that they would, they get away with it.
[00:49:28] But, uh, you know, those, those kind of challenges I see it as advantage to self regulate. Like I, the testing regulations in Minnesota say that you can’t have more than trace amounts of microtoxins and, um, a couple other like microbial points, but it does not define what trace amounts are. So we have to define what trace amounts are.
[00:49:47] You know, in our beverages they’re all like non-detectable amounts, um, because it’s actually pretty easy to make a clean beverage, uh, if you know what you’re doing. But, you know, regulating on the cannabinoid [00:50:00] amounts, regulating on how batching is done, those are not super well defined in the Minnesota regulations.
[00:50:06] Um, And so by being good actors and providing that information to our consumers, we build a brand of trust. Like people can trust us because we are putting warning language. In fact, I think putting warning language and putting barcodes that can be well traced and putting proper nutrition facts in your label, people are so used to them that they recognize that as the right thing to do and things look sketchy if they’re not on there.
[00:50:29] So I think we actually look better by putting all that warning language on. And like that’s so true that when people make counterfeits, um, I saw the first like counterfeit can like ca the brand, um, the, the other day and they had all the warning language on it. Most of these places do, I guess maybe cause they’re trying to make it look as rep replicated as possible because things look sketchy when they don’t have like government warnings.
[00:50:52] Even look at your liquor bottles next time you pick up a liquor bottle. Like there are government warnings on there that are required and they do not look correct without them. It’s [00:51:00] just, it becomes part of the scenery. So you think, uh,
[00:51:05]Kellan Finney: cannabis knuckle ever be combin. We were talking about them separate.
[00:51:08] Uh, and also, can you combine them Minnesota based on the current regulations?
[00:51:13]Adam Terry: Uh, that’s a good question. I don’t think so. Um, I don’t know when Massachusetts, that 50
[00:51:20]Kellan Finney: milligram beverage you’re talking about could be a really good like mixer, you know what I mean? It sits, sits next to the Jameson and you just make a mixed drink with a little splash of it, you know?
[00:51:29]Bryan Fields: Did we just make, did we just make the next Four Loco?
[00:51:33]Adam Terry: I, Yeah. Four Loco famously banned K’s over here trying to find anyway that he could mix. Uh, he’s like, We’re, we’re gonna
[00:51:39]Bryan Fields: make Six Loco
[00:51:40]Adam Terry: right now. I, I gotta say, I’m not a big fan of mixing alcohol and cannabis beverages. I don’t think they work very well together, honestly, in terms of like the effect and feeling this where my guy who spent a lot of his, you know, early twenties, uh, cross fade.
[00:51:53] Um, so it’s not like I’ve been against in my entire career. I found particularly canvas beverages, like they don’t feel great with [00:52:00] alcohol. Um, like, like more so than like smoking, uh, itself. Um, so I don’t know, can trip’s never gonna get there? Uh, I don’t think we’re ever gonna make an alcohol piece thing.
[00:52:09] I don’t know what the rules are in Minnesota, but to give you an example of what happened in Massachusetts, cuz I do have a liquor business in Massachusetts when cannabis was legalized, uh, the ABC c, which is the governing body of liquor in Massachusetts, sent a letter to every licensee saying, You may not put, to not even think about whispering cannabis into your beverage.
[00:52:29] Uh, like you cannot buy them in Massachusetts. I would expect to see that trend continued. I mean, ultimately you can add cannabis to alcohol if you want. You just shouldn’t be. I don’t think you should be able to buy them in the same product. I don’t think it’s a very good idea, but the exception of like, you know, concentrated tinctures, It is funny because tinctures, like definitionally speaking are made of alcohol.
[00:52:50] Um, Right. But in cannabis, people pretty quickly move to putting them into oil instead because the, you know, it’s pretty, pretty tough getting that green dragon directly on the tongue. [00:53:00] So what we call a tincture in cannabis is actually frequently not a tinctured by, you know, the classic definition of it, but I digress.
[00:53:08]Bryan Fields: What is one fact operating in the cannabis industry that would surprise or shock others?
[00:53:15]Adam Terry: Demand is not as good as you think it is. , like you don’t have a guaranteed demand for the product going into it. You still as competitive in marketing. Um, and overall because of the restrictions on distribution and manufacturing, the demand is lower than it really should be.
[00:53:31] Like pist demand in Massachusetts is roughly 1.2 billion last year. I think if you had this stuff, At least I think edibles, um, and beverages broadly, like if you made those, uh, freely available in, you know, liquor stores, uh, much of kink you have in Minnesota and then restricted, I think, you know, cannabis Flower and concentrates, basically anything that’s more potent, you’re basically 70% of cannabis sales are now, so babes concentrates flour, actually maybe more like 80% of [00:54:00] the overall market.
[00:54:00] You were restricted that to dispensaries, but then opened up the low dose products all your edibles into regular distribution. I think it would’ve been a $3 billion market last year. I think the, the potential of edibles is largely untapped, so long as we were restricted to these specialty places. And so demand is actually lower than people think it’s gonna be.
[00:54:18] Is one of the hardest things, um, about cannabis because we have VCs in cannabis, right? Like you, you guys are very familiar with beside in and, you know, Measure eight and all these other venture capitalists. Venture capital means something very different consumer package goods than it does in tech. Tech has potentially infinite upside and relatively low necessity for investment and tech.
[00:54:40] You’re investing in largely labor and some sales and marketing in consumer packaged goods, particularly cannabis. You’re investing in infrastructure, you’re investing in building things, you’re investing in, um, ingredients and materials. It’s so much harder to do, and the return is like the potential, maximum return is so much lower.
[00:54:59] The entirety of the cannabis [00:55:00] market in the United States is something like the, what, 40 to $50 billion range. Uh, at least the legal market. You could, I think, open that up to 200, 300 billion pretty easily if you were to open up these edibles into more broad distribution points because people will just not go to the weed.
[00:55:17] Like people who would normally consume cannabis, I think, uh, basically because it was available are not going through the specialty weed stores. They’re out of the way in many cases. Even when they are convenient, you have to, it’s like a whole BRI roll to get through these security places in California and Colorado.
[00:55:33] A lot of ’em still look like head shops. Even when there are like certain nicer stores you can go to. Most places you’re gonna go to or like look like a head shop and a lot of times they have a metal detector out front cause people are showing up with guns and you have to pay it all in cash. All of these things make it like a blaring signal in most people’s subconscious that cannabis is still legal, it’s still something you should engage in.
[00:55:51] It’s still sketchy until we as a country wake up and start putting things where they belong. And again, I do think you could ask the higher [00:56:00] security levels, I think. , you put the weed in the weed store where the weed people go and they will still show up. You will still sell that much flour and concentrates.
[00:56:08] But if you can open up these lower dose products that primarily it’s, it’s not really your flower consumers and your, you know, your, uh, more the traditional consumers going to, you would see demand skyrocket. And that is really the biggest misunderstanding people have about campus. It’s not, you just go in and demands there.
[00:56:27] I’ve seen, I’ve seen people inside campus who’ve been doing it for a few years make that mistake too, particularly those who are used to limited license date, uh, early days in Massachusetts, it was, if you can get a product after market, you could sell it. I, you know, when I was a product developer for an mso, I never had a quote unquote failed product because anything I could get to market would sell.
[00:56:47] Um, but that did not apply when we tried to move some of those same products into California and Colorado. Uh, and so, uh, if you are out there thinking your demand just exists, um, it does not. You have to do it, and you have to do it right. [00:57:00] And, uh, , Sorry, quick aside, cause I know I’ve been going very long on this question.
[00:57:04] I had a guy reach out to me who said he wants to start a cannabis beverage business in New York. And then he has like some people that he knew in distribution and like, I had to basically call this guy and be like, Do not attempt to do this thing that you’re about to do because you don’t even know that.
[00:57:19] Like, he, he alluded to something indicating to me that he, he was like, I think there’s like more regulations around the cannabis business than other businesses. And I was like, Stop. You need to do a lot more research before you attempt to do this thing. Cause he thought like, there’s gonna be a lot of demand there.
[00:57:33] I know how to make a beverage and distribute it. I got this great food scientist, but he hadn’t even read the regulation. Like, realized. It’s just not even in the same world. Like there’s a completely different world. Unless you have somebody who lives and breeds it, you will not be successful. So, you know, shout out to people who read the playbook.
[00:57:50] Uh, hire people who have cannabis experience to start to run your business. If you’re out there and you’re like, I’m just gonna do it and we’re gonna figure it as we go. You have a much higher failure [00:58:00] rate. So bring at least one person on your team who’s been doing this for a while. There’s a lot of us out there now.
[00:58:04] This industry is getting a little bit older. There’s people who have, you know, entire careers in cannabis, so hire them.
[00:58:10]Bryan Fields: Uh, I got shamed for, for that statement that having someone with experience cannabis experience on your team is helpful. And I got shamed. Um, I think
[00:58:18]Adam Terry: I saw that thread ,
[00:58:19]Kellan Finney: but hey, shout
[00:58:20]Bryan Fields: out to everyone who, who took that advice and shout out to everyone who didn’t take that advice, and certainly wishes they did because it’s hard.
[00:58:26] It’s hard. So, Adam, before we do predictions, we ask all of our guests, if you could sum up your experience in a main takeaway or lesson learned to pass onto the next generation, what would it be?
[00:58:42]Adam Terry: That was a good question. And can you cut out all the gaps? Baseball, I think, uh,
[00:58:48]Bryan Fields: take your time.
[00:58:50]Adam Terry: If I could summarize into like, one lesson learned. Yeah.
[00:58:54]Kellan Finney: Doesn’t even, doesn’t even have to be cannabis can just be a life lesson too. ,
[00:58:57]Adam Terry: I mean, pick people you wanna work with. [00:59:00] Like is you’re, if you’re gonna spend your time, especially if you’re an entrepreneur out there and you’re thinking of starting a business and you’re picking, you know, your co-founders, your first team members cant Trip is a wonderful team full of people that are, you know, I always think to myself, these, these other people who are on my team, these are the people who care about cant trip in the world the absolute most.
[00:59:19] And if you, someone, anyone’s on your team, you know, at the, at least at the executive or founding level, that is not all in with what you’re doing, you know, it’s gonna be painful. Um, so, you know, pick your partners carefully. Pick your, uh, you know, the people, uh, who work for you carefully. People still drive everything.
[00:59:37] Everything is soft skills. At the end of the day, you can be technically inclined to the ends of the earth and you will get nowhere in your career if you can’t work with people. Um, and so ultimately, you know, develop your soft skills, develop your leadership skills, and, you know, pick who you wanna work with because you’re gonna spend 40 hours plus a week doing this.
[00:59:56] So you may as well like what you’re doing and who you’re working with. [01:00:00] Well said.
[01:00:01]Bryan Fields: All right, prediction time, Adam. At the BENGA conference bore, Jordan said five to 10 years out, I think cannabis beverages will represent 50% of the industry. Adam, what needs to change for us to get to beverages being 50% of the cannabis
[01:00:19]Adam Terry: industry?
[01:00:19] Thank you for framing it that way because like whether or not think that’s gonna happen and how it would, what we would have to do to get there. Two completely different things. Completely. Like I want to know what bores knows that I don’t because probably a lot, probably a lot if we’re gonna be honest.
[01:00:35] Yeah, that is true. Okay. Like I meant about a couple specific things. Bores Jordan is a smart guy who knows a lot of things. Uh uh, you know, purely is I’m organization and they’ve been very successful in a lot of things they’ve done. What I wanna know that I think Border of Jordan must know is how the FDA is gonna treat hack based, uh, cannabis.
[01:00:52] Like it’s just what we talked about in Minnesota. But like I said, there are people who have been selling builtin I THC products in the United States since [01:01:00] 2018 under the Farm Bill that are derived from hack. They’re mostly operating under the radar because they don’t wanna get slapped down by the fda.
[01:01:06] They mostly, the one successful ones are not making specific claims about efficacy. But if you could centralize and distribute cannabis beverages, all of which are less than 0.3%, I can’t think of, you’d have to have a very, very concentrate beverage. You maybe like the small shots, if you do like a hundred milligrams of thc, even then you might be less than 0.3%.
[01:01:26] I’d have to do the math about how small your shot can get and how concentrated if you could do that. I definitely see, uh, cannabis beverages, this being, you know, 50 plus percent of the market because you’ll be able to get ’em everywhere. You know, imagine if Target picks this up. Imagine if Walmart pick this up, Whole Foods, those places will never carry like raw flour, uh, in there.
[01:01:46] Like you’re never gonna go to Whole Foods to the bulk section. You just see cannabis that you can pick out, which would be super food.
[01:01:52]Bryan Fields: It’s a super food next to Kale. .
[01:01:54]Adam Terry: Yeah, next to Kale. Uh, and they’ve dried out some specifically for you to eat. Um, the, [01:02:00] uh, if you could see, like, but I think that’s very possible for beverages.
[01:02:04] And I think if lawmakers are smart and if we do this in the most logical way possible, you would allow that and you would allow largely edibles to be out there to, you probably, I think, put those behind the counter or put ’em in some sort of glass case. But I think, uh, uh, you know, they’re not more dangerous than alcohol, which is out on shelves all the time anyway.
[01:02:24] Right. And we have ways of restricting that they’re possibly safer than alcohol. And frankly, these low dose beverages, they can do volume. And there’s plenty of players out there that know how to centralize and distribute beverages nationally. So this is entirely possible. And if basically we build on what Minnesota has boldly as a state codified in their own state laws and start to open up other states doing the same thing, beverages should very quickly be, you know, $10 billion.
[01:02:56] They could be 40 billion in a couple years and be competing with the rest of the industry. [01:03:00] So if he has some inside Intel, Boris, reach out to me. I’m on Twitter, I’m very available. , I’m sure somebody you know, has my email address. I know that we’re only two degrees away from each other cause it’s not a big industry.
[01:03:13] Uh, let me know. We can do a deal. Purely launched endless coast. I, I’m Foley until this moment. I had forgotten they existed. , even though they’re in my own state, they seem to be doing okay, but they’re also, uh, anyway, my point being, um, let’s work together. Let’s find a way to do this. You know, there’s a lot of lobbying out there and I think that, you know, my, my view on the biggest failures of cannabis legalization have been twofold.
[01:03:37] It’s been largely, we didn’t really get the kind of cannabis legalization that like the heaviest traditional consumers want. They’re not getting the quality that they want a product. Uh, and honestly, shareholders are not really winning in cannabis right now. I mean, if ask anybody who bought cannabis between 2017 and 2020, you know how their portfolios are doing and they’re, you know, they’re all gonna say, I’m long [01:04:00] cannabis, 10, 20, 30 years, maybe that that’s helpful.
[01:04:03] But I don’t, A lot of these guys, I’m pretty sure retired before then, they’re gonna be taking hits on these long plays. I’m long cannabis as well, don’t get me wrong. But if I bought an MSOs in 2018 and still was holding onto it, I’d be in a pretty, pretty sore spot. Shout out, uh, to Rick. But the, uh, at the end of the day, the, like, this is possible.
[01:04:25] We just have to do it right. And if we, I mean, like, look at, I said this on Twitter, Look at New York. If you just allowed Bodega Guys to sell bodega, we, you’d probably solve your social equity problem. And no one’s gonna die as a result of it. It’s happening in New York anyway, why don’t we just legalize that.
[01:04:40] Cord has been saying that they’re gonna put on dispensers by the end of this year. And you know, Rosa Lux and B is out there on Twitter tracking. It take like minute by minute and it just doesn’t seem like it’s gonna happen. It’s gonna happen. I really don’t think it’s gonna happen. I, you know, uh, and even if it does, you’re talking like one or two stores as you suggested for a photo op and like, what [01:05:00] does that do for anybody except a politician?
[01:05:02] We should just like open up like New York State and let people sell weed out of bda away from hemp farms. They, they are doing that. They’re doing anyway. So what is the difference is like, and they’re not getting arrested for it. So like why is anybody showing up to Attain or any other dispensary in New York if they can get it cheaper and more conveniently from the guy that they’re buying their coffee and bagel from in the morning.
[01:05:22] I mean, it’s just , it’s like absurd to me. And no, you know what? People are doing it in New York basically without any consequence. And I haven’t heard a single story of somebody dying from marijuana use in, at a New York, uh, New York City. It can be done, it should be done. And. Honestly, I think we should probably just move to that system, find a way to, you know, tax and regulate that and we would survive, absolutely survive it just like there, the level of regulation we compromised with the rest of the world, like the rest of the country on, in order to get marijuana legalized in the first place has been one of the biggest hindrances to actually succeeding in this industry.
[01:05:57] And, uh, you know, [01:06:00] that that’s my biggest failures of the cannabis are like actual value for people out of cannabis. You know, it shouldn’t be, it shouldn’t have to have, I’m sorry. It like creates what something for you guys to, to push to people this playbook. It shouldn’t have to exist. You should be able to just go grow weed and sell it.
[01:06:15] And yet we have to go through this whole rig roll and then pat ourselves on the back for being so cool because we could put the right amount of cameras in our dispensaries so that people could be on camera and then still not be able to use a credit card of those dispensaries. Drives me nuts. Drives me absolutely nuts.
[01:06:30] Anybody. Right. Ran over. I, I
[01:06:32]Bryan Fields: just wanna let you know, Adam, that most people use our platform to pitch mass audience about building brand awareness. You took this opportunity to go singularly focus on boar Jordan, the chairman of Pure Leaf, which I, I commend you, right? Like, I have not got confirmation that he listens to this podcast, but I’ll make sure to take off his friends here.
[01:06:48] So a big shout out to you on that one. Kelly, do you want to take a shot at how cannabis beverages would become 50% of the market? I think
[01:06:56]Kellan Finney: I agree a lot with what Adam said in terms of accessibility. I [01:07:00] think another thing that could be a game changer, which scientifically speaking, I think Brian, we’ve got in this conversation, and I don’t know if the science is there to support it, but if some miracle happens and someone’s able to produce a cannabis beverage that creates similar experience as alcohol does in terms of a social experience and getting, like, releasing more endorphins, getting you more amped up.
[01:07:31] encouraging ex or introverts to go have more conversations like alcohol does. Then I could see cannabis beverages growing very quickly under those conditions. But those are the only conditions I see it occurring.
[01:07:47]Adam Terry: So you want cannabis beverages to just be alcohol . That’s exactly what I said,
[01:07:54]Kellan Finney: so, ok. Its so awesome.
[01:07:56] All I was like, invent it. It’s
[01:07:58]Bryan Fields: called alcohol. OK [01:08:00] guys. Oh, okay guys.
[01:08:01]Adam Terry: Let’s
[01:08:03]Kellan Finney: what? Alcohol
[01:08:03]Adam Terry: Without the consequences. That’s exactly what its,
[01:08:07]Bryan Fields: So let’s, let’s take a step back and let’s think about this, right? If Boris Jordan’s making this statement at the conference, there’s probably a reason behind it. I can’t imagine he’s just shooting from.
[01:08:15] I mean, granted, I had no idea that they had a beverage. And based on what you said, Adam , they are not doing so well. So I’m sure that he’s aware of that. But I think at the end of the day, what is necessary in order to get it to 50% is to have it outside of traditional channels like, excuse me, outside of dispensary channels, more into the traditional channels, exactly like you said.
[01:08:32] And how that happens Is a Budweiser a a mosin in order of these big conglomerates to go to the government and say, We are going to produce cannabis beverages. We’d like them sold a traditional retail like everyone else. Here’s our money. Make this happen. And then when that happens and when it’s sold alongside alcohol in supermarkets, it will absolutely explode.
[01:08:54] Because at the end of the day, you’re right, there are differences in the consumer behavior. But at the end of the day, when you go to a [01:09:00] backyard barbecue, most people don’t want to take an edible. They want to have something in their hand from the social standpoint. So the ability to have a cannabis beverage that they can buy the supermarket next to their high noons, excuse me, they can’t buy it at a, at a liquor store.
[01:09:11] Excuse me. They can’t buy high noons at a supermarket. They’d buy at a liquor store. But next to a traditional Cores light or Bud Light will allow the unlocking of that mass consumer that everyone is seeking in order to get to that, that type of number. Yeah,
[01:09:23]Adam Terry: there’s plenty of supermarkets across this country where you can buy high noon right there.
[01:09:26] Cause like New York thing, That’s a New York thing. It’s, it’s a lot of like a blue liberal state thing where they don’t allow Yeah, yeah. You to be, to be honest.
[01:09:36]Bryan Fields: Well, all the mag guys are gonna come from me
[01:09:37]Adam Terry: now. Ah, yeah. Well, uh, the, uh, honestly, I think, I think you’re right about that and the, you know, it’s just, Yeah, it around the address.
[01:09:47] Endless coast, by the way. I don’t know how well they’re doing. I want, I forgot about them, but they’re out there somewhere. They’re out. I believe, I believe in purely if I’m gonna state that for the record, like if, if, if PepsiCo can literally go to the government and pay them a certain amount of money, get this done, that’s actually [01:10:00] kind of devastating for our democracy.
[01:10:01] That’s how this works. That’s, that’s how everything works. I, I honestly hope is not quite that simple. I think probably not. There’s certainly a lot of money involved, but I think there’s also a lot of rigor role involved. Uh, but yeah. PepsiCo wants to partner on this. Uh, Please. Pepsi reach out. Yeah. Is that broaden off of an audience?
[01:10:15] I wanna, that I respect? I I Do you wanna stay for the record? Any beverage company who’s not in cannabis wants to reach out and talk to me. You can absolutely, uh, find me. I’m very, very available on Twitter, Very available through a lot of channels. I’m very easy to get in touch with. So, yeah. PepsiCo, please give me call.
[01:10:30] I’m sorry. Coca-Cola please actually do that.
[01:10:32]Kellan Finney: I know what’s sexy is how much it costs. Cold. Cold to make one can of CocaCola sense. It is. Like, I was
[01:10:38]Adam Terry: like, what? Yes. We haven’t even talked about liquid death on this call. Oh yeah. Million dollar valuation. We’ll have to hold that for another
[01:10:46]Bryan Fields: one. So Adam, for our listeners, they wanna get in touch.
[01:10:48] They wanna buy can trip. Where can they find you?
[01:10:50]Adam Terry: Uh, you can go to our website, Cant trip seltzer.com. Follow us on can, uh, on Instagram at Cant Trip Seltzer. Uh, I’m pretty available on Twitter as well. My [01:11:00] Twitter name is hard to pronounce cuz I’ve reversed the first letter of my last name and the first letter of my first name.
[01:11:04] So it’s Ti Adam Airy. Uh, but just Google. Adam Terry, Uh, I’m very, very visible. I’m on LinkedIn, uh, I’m on Signal if you have, uh, sketchy stuff that you wanna text me about, uh, . Yeah, and we have a contact form on the website, so reach out and uh, if I like you enough, I’ll give you my personal email address.
[01:11:22] Awesome. Thanks for taking the time. This was fun Adam. Thanks guys.
