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 Matt Melander President of Levia to discuss
- Levia Story from Origin to exit to Ayr Wellness
- How they navigated challenges in a new product category
- Alcohol vs Infused Beverages
- And so much more
https://www.linkedin.com/in/matthew-melander-320b6250/
Levia uses a proprietary technology which provides for rapid onset of the effects of THC, typically 15-20 minutes with lasting effects up to 3 hours, allowing for a more consistent consumption experience compared to many edible products.
Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) (“Ayr” or the “Company”), a leading vertically integrated U.S. multi-state cannabis operator (“MSO”), today announced that it has closed the acquisition of Cultivauna, LLC, the owner of Levia branded cannabis infused seltzers and water-soluble tinctures.
“Bringing Levia into the Ayr family represents a key addition to our portfolio of high-quality, branded offerings,” said Jonathan Sandelman, Founder, Chairman and CEO of Ayr. “We look forward to expanding the presence of Levia’s seltzers and water-soluble tinctures across our multi-state footprint, while bringing new, innovative form factors to life, like beverage enhancers. With a fast-acting formula and great taste, we believe Levia will be a crucial component in expanding our reach to new and existing consumers who seek a predictable and familiar cannabis experience.”
This show is presented to by 8th Revolution:
At Eighth Revolution (8th Rev) we provide services from capital to cannabinoid and everything in between in regard to the hemp & cannabis industry. Our forward-thinking team can diagnose, analyze & optimize every detailed nuance of your company to keep your business safe, smart, and profitable. Our flexibility and experience combined with ongoing research create unique insights into how to best grow your market share. Contact us directly at [email protected]
[00:00:00]BryanFields: What’s up guys. Welcome back to the episode of the dime I’m Brian Fields. And with me as always is Kellen Finney. And this week we’ve got a very special guest, Matt Malenda from Livia. Matt. Thanks for taking the time. How are you doing today?
[00:00:14]Matt: I’m doing well, boys. Nice to meet you. Both.
[00:00:16]BryanFields: Yeah. Looking forward to diving in county.
[00:00:18] How are you doing?
[00:00:19]Kellan: I’m doing well. I’m looking to look forward to holding down the west coast with some east coast boys
[00:00:23]BryanFields: here today. And just for the record, Matt, your location.
[00:00:28]Matt: I am in Marblehead, Massachusetts. So just north of Boston, another east coast or
[00:00:34]BryanFields: in the building and the war continues calendar, I think we’re starting to push it.
[00:00:37] So Matt, so for our listeners that are unfamiliar with you, can you give a little background about you and how you got into the cannabis space?
[00:00:45]Matt: Absolutely. Um, classic example of right place, right time. Uh, I spent the majority of my career in the financial services business.
[00:00:57] Hey, I got a buddy who needs to raise capital. You [00:01:00] seem like someone who could help him, um, started asking some questions and completely got the Heisman. He’s like, you got to take this one and talk to him direct. And, uh, that was February of 2018. And I do, uh, the original founding team of, of what is now.
[00:01:17] Levia. And they had this, I actually a co-packer for cannabis products and manufactured goods with a focus on beverage, uh, and, and kind of. Business plan a and now we went to 2021 on business plan, quadruple Z and really focus more on our product. So, uh, it was a very long windy road of regulatory challenges and capital constraints and the global pandemic and you name it.
[00:01:46] We dealt with it and we just kept plugging away.
[00:01:49]BryanFields: Love it. So I guess before you kind of got into cannabis with your background, was there any hesitation to kind of move into the cannabis?
[00:01:57]Matt: For me personally, no. Um, kind of [00:02:00] grew up always weed was around people smoking cannabis and Simos in high school. So I wasn’t really like new to it.
[00:02:07] I wasn’t something, I was a huge participant in, it doesn’t mean I wasn’t pretty well versed in it. It wasn’t like it wasn’t like now where I called myself a daily communicative back, that was kind of like, all right, it’s Sunday. And I don’t really want to have trouble sleeping tonight. So maybe I’ll just smoke a bowl and go to bed.
[00:02:23] But. No, it wasn’t so much the industry that, that concerned me more than working for a, a bulge bracket, investment bank, their compliance and regulatory rules, which are still the same today, given the banking law. Um, they were definitely when they found out what I was doing, it was, um, let’s just say that was the last day of.
[00:02:46]BryanFields: Yeah. A little, little stigma there. So let’s talk like early days. I know you, you shared with us kind of the, the pivots throughout the years, obviously with the global pandemic, that’s never the best time to kind of start up a business and a federal legal industry. So take us through those early days, [00:03:00] you know, getting started, what was it like?
[00:03:02] What was the experience like and what was your day-to-day like?
[00:03:06]Matt: Um, yeah, absolutely. So those very first days, so I said it’s kind of February of 18. I found out about this. Started kicking the tires a little bit, looking at the models and Hey, you know what, doing my own research. Um, by June it was really more alright, is this, does this have legs?
[00:03:25] And if so, what is it what’s going to take? And actually the first investor myself. So I, uh, I put my money where my mouth was said, I’ve always wanted to be involved with somebody from the beginning. Um, Cut a sensitive check of my percentage of my personal net worth. And instead of set a couple hail Mary’s and said, let’s go, um, at those early days it was, it was two parts.
[00:03:47] It was, it was trying to raise capital in a, in an industry that has no banking access to like credit or anything. So, um, that’s obviously challenge Then the other part, which I actually still believe to be the hardest part [00:04:00] of the industry is where do you find zoned real estate to be able to operate a business?
[00:04:04] It’s finding a needle in a stack of needles. Um, so most of my days were spent driving around aimlessly through the Podunk town to Massachusetts because they all had said yes, uh, Massachusetts is unique. We have this thing called town meeting where, when the regular, when the regulations opened up the adult use market cities.
[00:04:26] Mandated to have X amount of recreational licenses. And from if I’m not mistaken, it was some math equation that was full-time population versus the amount of like packaged stores, equal X amount of rec licenses. Right. So those were, those were available. But then in the town setting, it went to town meeting and had the path public vote.
[00:04:47] Uh, not surprisingly, most of the more affluent Boston bedroom communities said no. So you start kind of, you’re either going out towards the Western part. Humans or you’re getting lucky and [00:05:00] you’re finding stuff and the quote unquote greater Boston area. Um, we ended up looking at 13 different towns and having like substantive conversations with, with town officials and administrators and whatnot.
[00:05:11] Uh, when I’m saying needle in the stack of needles, found a perfect location. Barefoot former paper mill and Rockland, Massachusetts. We ended up in the town planners office. He laid out the map or the overlaid district and he said, oh, you guys might’ve found that building’s on the right side of the street, only the left it’s cannabis friendly.
[00:05:34] So that’s kind of what those early days were like. It was just hitting your head against the wall, going come on, someone, give us a chance to succeed. Um, so it was actually. December of 18 that we finally got a lease negotiated and signed and found a piece of property. Um, and then from there, we, we started the next phase, which is zoning and regulatory approval site plan, approvals, environmental conditions, all of the nitty gritty of property [00:06:00] development.
[00:06:00] Um, all the while it’s still kind of iterating, trying to build a product, understand the beverage segments growing it. It was very much. Um, a spider web of continuous improvement on a daily basis. And I have to say looking back on it now, it was probably the scariest time of my life professionally, because there was no, no certainty of a future paycheck.
[00:06:21] Um, but it was also what hands down the most liberating. And now I look at myself, I’m like, man, I would go back and do that again.
[00:06:29]BryanFields: I love it. And I appreciate you sharing that ensure the capital raises gotta be extremely challenging and then finding a location extremely challenging. And then while, so at the same aspect, are you doing the R and D is beverages kind of the origin of the business plan?
[00:06:41] Because you know, you, you talk about how those are the two hardest parts, but once you get the location, it’s time to hit the ground running and then I’m guess there’s gotta be some thought process. Is, is anyone going to buy this product?
[00:06:52]Matt: Well, you never know that one until day one. When you hit the market.
[00:06:56] Um, let’s plan as a set. It was very iterative. [00:07:00] When I first looked at it, it was super critical CO2 extraction on site. We’re going to be able to oil be whether it be vape cards, tinctures, et cetera, we can white label and we can find a way to make ancillary rep great check the box. The other side of the facility is we’ll.
[00:07:20] We’ll just, we’ll build. We’ll pack or similar to any of these contract brewing organizations that are out there. And I mean, look, the, the rise of craft beer is there’s a lot of equipment out there. There’s a lot of qualified, talented people, and you just need to kind of say, Hey, look, it’s a new active ingredients, same old concept.
[00:07:38] Um, by saying R and D in those early days, we were learning about what everyone else was doing. It was a lot of nano emulsions. It was a lot of using these big, bulky things called. And needing your protection. And it was, you know, products would come out of solution. Things would stick [00:08:00] to the sides of cans.
[00:08:01] You never knew what the potency was going to be. And we were doing all of this with a soda stream and above a garage. And like, you know, you’re, you’re doing very little. Product development also given regulatory environment. It’s like you can’t send this stuff out for testing really. You’re, you’re stuck in a little bit of a circular reference.
[00:08:18] Um, with that said, I mean, we, we kept focused on those three pillars of co-packing with oil-based products just as, as one revenue source and then this idea of our own brand. The third wheel would have been like co-packing other beverage companies that were out on the Western part of the stand. I mean, those early days we got introduced to the folks from Keef Cola.
[00:08:42] We got introduced to the folks from Hi-Fi hops, which is a lot of Anita us. I mean, those were the OGE if you will, of the space. Yeah. I still remember one meeting with one of those groups where they told me stop. Now you’re never going to succeed. So, uh, um, all along, you know, but nobody’s doing this east to [00:09:00] Denver in this market, Massachusetts is just growing, we’re going to, we’re going to keep fighting.
[00:09:06] Um, and it was, it was just very, very iterative. And over time things change, we met different partners. We found different, a different suit. But need to work with product change. Got a lot simpler, got a lot cleaner. Um, governor baker banned vaporizers. We took that as kind of the word of the wise, Hey, you know what hard to call yourself a wellness brand.
[00:09:28] If you’re, if you’re outlawing all vaporizers. So, you know, again, things happen and you just have to be willing to Bob and weave and some days you’re the punching bag and some days you’re the guy hitting the speed bag. You just got to know when to duck and on.
[00:09:44]BryanFields: Yeah, that’s really well said. So kind of continuing on that.
[00:09:46] Did, did anyone on your team have cannabis experience and if they did or did not, did you have outside partners to kind of help you navigate the landmines, which is cannabis?
[00:09:55]Matt: So my primary partner, Troy Brosnan is a, he’s a cannabis savant is [00:10:00] what I like to say. Um, he’s been interfacing with the plant for about, better part of three decades.
[00:10:07] Now, maybe a little more, uh, he was the. The cannabis wisdom of everything we did. And we’re kind of like a yin and a yang in terms of if you had, if you needed to go into a boardroom and, and try to raise capital Troy, wasn’t your guy. But if you needed to sell to the local mom and pop dispensary’s, who actually believe in, in cannabis culture and.
[00:10:30] The sanctity of the plant and the health benefits. He had a story that was, would resume. And I think that’s part of our success is that we, we got the best out of each other and, and, um, circumstantially it’s, it’s still kind of how we do new product development and how we, we did everything. We’d love you.
[00:10:47] And until frankly, we, we ended up actually selling the business about, um, early February of this past of this year. So, um, now he and I are, frankly, like that’s what we do is we play. [00:11:00] Besides to, to create the viable structure. Um, as I said, personally, person at the beginning learned a lot of it from him and on the fly.
[00:11:12]BryanFields: Yeah. And that’s the way you got to do it. So I want to talk about the three different products achieve dream and celebrate, kind of get the origin of why you have three. And if there were others early on, or if it was kind of started with one and then added the two more.
[00:11:28]Matt: Uh, honestly, my kind of story on that is, is the strain name game is as confusing as the person.
[00:11:39] They mean anything to you is the person who actually came up with said, oh gee, this is somebody else’s purple that it’s like, they mean nothing. And what that does for the novice consumer is it is a deer in that. Even the veteran consumer, they kind of look at comfortable what they know and, and there’s a lot, I mean, there’s [00:12:00] constantly new genetics coming to market.
[00:12:01] Our goal is, look, let’s simplify, simplify, simplify, and let’s create brand archetypes that kind of speak to the feeling of what someone is going to experience when they drink. One of these products achieve as our sativa. We do our best to kind of keep the genetics consistent, but you know, there are supply and demand constraints that you can, you got to play with.
[00:12:23] So that one it’s get stuff done, work or play. Um, the original flavor for that is, is raspberry lime. Um, celebrate that’s our hardware line it’s in my opinion, it’s the perfect alcohol replacement kind of go to a backyard, barbecue, hanging out with friends, be a little chatty uplifted, but. Also like naturally relaxed that one is, uh, originally lemon-lime.
[00:12:46] And then we also do some seasonal flavors that we run in the hybrid vein. Uh, simply highlight, say no reason to leave the middle of the fairway right now. This is still the early, early days of, of the segment. So for those flavors, we’ve done a cranberry lime, [00:13:00] a pomegranate punch, uh, just a couple of weeks ago, we released our spring seasonal, which is an orange blossom.
[00:13:07] Um, next one, which is going to be announced in the next couple of days, but I’ll, I’ll, I’ll leak it. Here is, uh, a mellow mule, which is a ginger lime flavor. Um, so that’s been really fun is to continue to kind of work with local with our flavor house, continued to develop and innovate really cool flavors because when you’re working with water, uh, ostensibly, a water.
[00:13:28] You can make it taste however you want. So you, we just want to keep making it fun and, and, and continue to convert new consumers. And then thirdly is dream. Uh, that’s our indicator says all kind of wind up the corners of your day. If you want to watch a movie, relax on the couch, get a good nights. Or, um, that one comes in jam Berry, which is just our, our mixed Berry flavor.
[00:13:50] So, um, kind of long story short on why we did it. It was purely simple stated. So that the can of curious as if, as we like to call them, [00:14:00] wouldn’t be staring at the iPad or the TV screen and the dispensary and be like, oh my God, what am I looking at? What am I doing? It keeps it consistent. We continue to expand in new markets.
[00:14:13] We’re going to hold those archetypes together. Similar that when you go from California to Boston, bud light, bud light, we kind of want to create that same understanding. So. Um, consumers know what they’re getting every time they, they crack open a camp. Uh, quick
[00:14:26]Kellan: question. Uh, how did you guys settle on the flavors for sativa hybrid and in the car?
[00:14:32] Did you try to pair those with kind of your staple strains that you use for the sativa? Uh, beverages or is it kind of just, uh, you want to walk us through that thought process,
[00:14:44]Matt: you know, actually killing this is going to be another place where you’re going to have to put a feather in your cap to the east coast poise, because we have this thing in Boston called polar beverage company, which is the O G emoji seltzer companies.
[00:14:56] Uh, they’ve got every flavor under the sun. [00:15:00] Their cranberry lime flavor is like legit. Flatwater the only thing I drank during the day. Um, we just tried what was right in our backyard. So polar has been around, I think since the 18 hundreds in Western mass, they’ve got everything from. I mean, you pick a normal flavor from LA to, I think they have one that they do during the summer.
[00:15:23] That’s called unicorn kisses. I have no idea what goes into unicorn kits, but you can’t find it in the supermarket. So it sells really. Um, so we just actually went off of that. We tried to just reverse engineer. What was right in our backyard for the exact same reason that initially we were only going to be sold to Massachusetts.
[00:15:37] Everyone here knows polar. You can’t really go this without finding it. So, uh, nothing, nothing to do with the strains. It was entirely based on the consumer. Seltzer coupled with the kind of legacy Selter can know of from growing up in new England.
[00:15:55]BryanFields: I want to talk more about the form there’s, I’m so intrigued by that process.
[00:15:58] So like when you’re doing the [00:16:00] kind of the mix and match is trying to understand, like, I mean, that has to be kinda daunting. Right? You’re you’re trying one and there’s gotta be a thought process where it’s like, can I drink three or four of these? Or like, are you, you kind of experienced it for like one and then kind of moving on to the other, how does that work?
[00:16:17]Matt: I think some of that just comes down to the regulatory framework of what we were operating under. So in Massachusetts for a consumable product, a single serve maximum dose is five milligrams. Uh, so Charlton Lee light and it creates a sessionable experience. So for us in product testing, as I said, we did it out of a soda stream.
[00:16:36] So for me to pour myself an ounce or two. 15 different flavors and kind of Trium swirl them sometimes spit it out, sometimes swallow it, didn’t it, you know, you knew what you were getting into. Um, and, and so that was really where we came from the potency, just, we went with what the market allowed. So I know some of our competitors have gone lower [00:17:00] than two and a half milligram products.
[00:17:01] Others do tens others. Um, I personally. I think somewhere in that two and a half to 10 lion share of the market needs to be, you give somebody a a hundred milligram product who’s who’s in novice and you can give me a hundred milligram PO product. I’m going to see the boogeyman and it’s not going to be, um, you try to keep it super consistent and can at milligrams, like people will feel it.
[00:17:28] Some folks we say right on the can, like, if you’re new to this drink half, wait a few minutes. Don’t be, you know, we, we, as consumers, culture, that’s built around single substance. Psychoactives primarily in beverage form from caffeine and coffee to booze and the right. Like we understand dosing ourselves against that.
[00:17:50] If you give somebody at six arches shots of espresso, they’re going to be shaky and they’re not going to be happy. Well, guess what? Next time they’re never going to have sex. He gives [00:18:00] somebody a shot, a one-fifth of a couple of shots at one 50. There throat’s going to burn too. They’re going to not be in a great way either.
[00:18:06] So it’s that, it’s that product understanding and consistency and repetition, that kind of built it for us. Um, now, like anything, everybody has different tolerance to cannabis. There’s somebody who, five milligram product they’ll turn their nose up at it and say, not for me. I’d have to drink two liters of this before I feel anything.
[00:18:27] Okay. Frankly, you weren’t ever my target country. My target consumers, that person who’s new to this or that consumer. Who’s like, you know what? Five milligrams is great. I can have a few of these in a social setting. It’s a healthier alternative, and I start making better life choices and oh, by the way, what’s the best.
[00:18:46] No hangover. So, um, yeah, it was, again, like so much of this story is fluid. I mean, I mean that pun intended because it’s a water based product, but like, it really was, we, we knew the restrictions were so [00:19:00] astronomical that we needed to be comfortable with what we could get to participate and just being in the market was good enough.
[00:19:08] So has there been a constant dialogue of potency and changing formula and, and going stronger weaker? Yeah. And Budweiser bud light equivalency. Um, yeah, it hasn’t gone anywhere. Absolutely not. We’re we’re comfortable where we are. We think it gives us the best market position to, to attract the most new country.
[00:19:29] I have a quick
[00:19:29]Kellan: question was, uh, so like red bull and monster, right? They like have like a single flavor beverage line. How much influence did, like some of those other beverages have on how you guys kind of settled on three different flavors? Was it just a sativa hybrid Endeca model? And you were like, we’re going to just stick with these.
[00:19:47] How much did like the outside beverage industry influence your guys’s decisions
[00:19:54]Matt: outside influence what we were doing? None of us came in. [00:20:00] Perfect cannabis background, frankly, none of us came to the side. He believed in the concept and the brand and the strategy. Then it was, Hey, guess what? There’s three kind of core cannabis bras.
[00:20:15] If you will, let’s make one for each. And that they know doing limited release was always version one a. So that’s why we do the seasonals. Um, I have. Uh, I’d be hard pressed to believe that some updates and new flavors and the next her’s, it’s just, you know, it’s only about 13 months in market, so you there’s only, you’re drinking from a fire hose trying to just keep up with consumer demand.
[00:20:43] You go you’re in a pod meshes upon
[00:20:49] California’s six times the size of that selling more units. Four months into market. Then the, then the biggest producers in the California market are [00:21:00] selling that still holds true that’s testimony to the sanctity of the product, the consumers, like it might as well give them flavor differentiation and over time, continue to work through that.
[00:21:10] Where, I mean, there’s a very real chance that someday we have an achieved variety pack, right. Where it’s all sativa based, but it’s for four different flavors or a celebrate variety pack, or there’s a mix and match, right. Two of each and you get all the different effects and you can go home. And depending on what you’re looking to do that day, time of day, what you’re up to, if you’re going for a hike or if you’re mowing the lawn or you’re sitting, watching a movie, you know, you can pick and mix and match to kind of map to, to get the best experience for whatever you’re doing in your own life.
[00:21:45] Oh, that’s going to be
[00:21:45]Kellan: so much fun for you guys to develop all those flavors down the line.
[00:21:49]Matt: It’s very fun. As I said, we do it with a soda stream. So we do hyper prototyping all the time. We’re constantly evolving flavors. Um, we’ve got a great flavor house. I’ll give a nod to the west coast, [00:22:00] uh, sovereign flavor house out of Santa Ana, California.
[00:22:02] They’re excellent partner. Um, and we do it. That’s actually probably my favorite thing we get to do is we tell everyone everyone gets to be a part of the creative process here. There’s no monopoly on good ideas.
[00:22:18] It might taste like your wax and it might be a home run. You just don’t know until you try it. Um,
[00:22:24]BryanFields: so when the products go to the dispensary’s, I guess, early on in the development phase, how did you know it was going to be successful? I may say you want to see those numbers move, but there’s gotta be some traction that takes place from some of the marketing challenges on a new product to the space.
[00:22:38] When did you get the feeling that you were on the right track and how, how quickly.
[00:22:44]Matt: I don’t know if I still have, I don’t know, even if I believe that yet today. Um, but some of that’s just like the fear that comes with being an or that you, you have trouble kind of separating yourself and looking at it from a distance and being able to appreciate the success that’s been had.[00:23:00]
[00:23:00] Um, we were very fortunate. Our delays were also in some ways, our benefit, we, when I got involved. The market and in summer of 2019, and we didn’t hit market until February of 2021. Um, with that said, we, we were out there talking with dispensary partners. As new ones came online, we were getting our names out there.
[00:23:23] So by the time we made it officially to market, we had our first two turns of our beverage seller pre-sold. So we knew we had 35 homes, as soon as we hit. A couple of weeks after that, we crossed 50. Uh, pretty soon after that it was a hundred and I think we’re in 152 as we sit here today, 13 months later.
[00:23:46] Um, so, you know, sometimes you gotta just be comfortable taking a flyer. This whole industry is a fire. Nobody has a case study. There is no best practice. It’s trust your intuition. Trust [00:24:00] your heart. Trust yourself. No, one’s going to do it for. And they go get the work. How
[00:24:06]Kellan: important is kind of that, uh, was the, the initial consumer interaction I know, like in Washington and like other states, uh, they do like vendor days, right?
[00:24:15] So like they set up a booth and you can come try the products or talk to like the, the experts on that specific brand. Is that something that’s actively practiced in Massachusetts? And how important was that? If it is during the early
[00:24:28]Matt: stages, we cannot do. Um, so if we were to go that route, like in some of it’s we have not, they’ve done uninfused sampling.
[00:24:39] I don’t think it really does much, you know, you kind of, yeah. The flavor is great, but I’ve tried some uninfused gummy Sam wants because you’re adding something, that’s got a pretty pool cannabis itself. Um, so it was again, [00:25:00] And I think it’s primary. Um, almost industry are the budtenders. They, and they see all the different companies coming and going and they, they start to, um, so we, we leaned in and relied heavily on them.
[00:25:18] We do do our sales people get out there and table at these places on a weekly basis. You better believe it. Um, But for the most part. Yeah, it was a, I think it was a product whose time had come because it makes all the sense in the world as a universal consumption method. And we were the power first mover here in Massachusetts that we were the first one launched.
[00:25:40] So, um, people were looking for it. I mean, I tell this story often, the very first delivery we made in February of last year was to a small dispensary find federal and Raleigh, Massachusetts. Just so happened that, that as we were offloading the truck, there [00:26:00] was a woman in there purchasing something for her recreational consumption.
[00:26:06] And she was like, oh, what’s that? I said, oh, this is a new beverage. As soon as the market, they say, give us a few hours, let’s get it on the inventory and get it ready for sale. She came back that, uh, that was a Tuesday and came back on that Friday. Came back the following Friday about 12. And since then has been basically buying a case a week and doesn’t drink alcohol anymore.
[00:26:31] And swears by it has to be the consumer trying for themselves and make, to say, you know what, I’m going to change out my lifestyle, or I’m going to make a conscious decision to do this. So no marketing campaigns ever going to do that for you. Absolutely. And that’ll continue, continue to create new door swings, but something as substantive as that, where someone really makes a full wholesale lifestyle change that’s on [00:27:00] you.
[00:27:00] Um, and I think that’s such a great representation of the product because it is it’s zero calorie. It’s zero sugar. I call it guilt-free fun. Um, and people start to use it for whatever their reasons are. I’ve heard folks from. Superstar world renowned musicians who have battled alcohol for 50 years who have found this, and now they don’t battle off their alcohol problems anymore to local folks who again, have struggled with substance abuse in the past or whatever the case may be coming to us out of the blue and being like, you’re not going to.
[00:27:40] Five 10, whatever, the amount of years they’ve been in recovery, I feel normal at a, at a party in a social setting because I like the can is kind of like that social crutch. Um, we never entered, we never set out to do that. That’s just the glory of this project that it’s taken on a life of its own. And I mean, where it was a conference [00:28:00] in Massachusetts ni Cannes a couple of days.
[00:28:03] Um, more people than not came up to us to just say, thank you. And it’s like never again, never in a million years. Was that anticipated? Honestly, I’m thankful that I we’ve been fortunate enough to create something that, that has this kind of have for it. And truly that’s just beginning. I mean, we’re still just in massive.
[00:28:24]BryanFields: It’s so exciting. And when you talk about that social crutch, I think that dynamic is so interesting because there’s so many people who lean on alcohol for that social setting, because they don’t know that there’s another alternative out there. And when you layer on top of it, then no hangover marketing, it’s hard not to consider your options and go, Hey, if I never have to be hung over again, but I can also feel.
[00:28:44] And I have something in my hand, in those backyard settings, because, you know, when you take an edible or you’re smoking, some people don’t want to smoke, but if you take an edible, you still don’t have that social crutch, like you were saying. And I think that’s so perfectly well described. And I think specifically here in the east coast, mainly for me in New York, I think people are [00:29:00] going to be blown away when they first try those products, because it is a game changer for them is replacement for alcohol.
[00:29:05] And I think it’s going to change a lot of people’s lives.
[00:29:08]Matt: Agreed. I think it kind of hit a. Again, we’ve, we’ve realized as we’ve gotten more involved in this smoking is obtrusive hard stop. I don’t care whether it’s a pre-roll or for packable or a ball grip, or it’s a vape present, whatever it is, that area is some sort of thing that you’re exhaling into other people’s vicinity.
[00:29:33] Great. We also have, I mean, I’ll use Massachusetts as the example, sometime in the early nineties, we outlawed smoking at public. That is never coming back. I don’t, you can be the biggest supporter of cannabis and you, if you try to disagree me with me on this one, we can have a very heated debate because it’s just simply not happening.
[00:29:55] You’re not going to be able to spark a joint in a restaurant and get away with it. [00:30:00] Transfer that to the consumable side. I mean, look, I, I, I love gummies. I think there’s, they’re great. But in a social setting, when I end up throwing it in my mouth, I’m going to chew it for 20, 30 seconds. I’m going to swallow it.
[00:30:12] And then I’ve got this really delayed onset sweet party, man. What am I supposed to do for the next hour as I wait for the. Again, you’re going to eventually what you’re going to do. You’re probably going to go find some like a beer or something to hold something in your hand,
[00:30:29] magically, we kind of paired those two things together. You put it in a canned format. So one, you actually get to pace your own dosage. So like not everyone is going to crack this thing and chug it down. Like some people will just sip on it and it’s got it’ll work with them over time. They’re holding it.
[00:30:45] That creates the crutch and oh, by the way, it’s fast acting. So in the same, in the same, call it 10 to 15 minutes. So when you’re taking a drink of alcohol, you start to feel it wash over you. That’s the onset of the effect with this. So you get that benefit. The feeling comes in quicker. It’s [00:31:00] not like inedible where you’re sitting way to 90 minutes before you feel anything.
[00:31:05] Oh, by the way, that’s where everyone gets to the, ah, it’s not working. I got to have a second one. Oh no. I had too many. Um, we get to pace It It gives everyone that kind of equal playing field in a very well understood dynamic, which is sipping on a drink.
[00:31:22]BryanFields: Can you kind of pair the dosing? For example, for me, I like to do, let’s say 10 to 15 milligrams, but what I assume three beverages, is that kind of how you would do calculation or is there more variables in play?
[00:31:35]Matt: Uh,
[00:31:39]’cause it’s, uh, it’s not like you’re taking that, that 15 milligrams in one fell swoop. And then it’s just going to absorb in your system, like anything it’s uh, it’s self-education, you know, start drink one, obviously you’re like, all right. I know I’m comfortable at 15 milligrams. When it, when it hits, I feel free.
[00:31:57] You probably drink three of them feel [00:32:00] where you’re at. The beauty is, is that, you know, if you, if you want to have another one go for it. If you go, yeah, I’m in a perfect. Paul Dyer, maybe I switched over and drink like a regular water. Like you just it’s your, the world is your oyster and you need to create your own consumption methodology that fits for you and your own potency standards.
[00:32:20]Kellan: I have a question randomly. I have no idea the answer to this, by the way. Um, it’s just a thought.
[00:32:28] Is cannabinoids or canines more bio bio, bio li available in liquid than they are in a solid. So like if I eat a gummy that has 10 milligrams and say, I only absorb 80% of that because it was in a solid, is that, do you know the answer to that? Is that something that you guys have explored?
[00:32:45]Matt: Um, I, I don’t know the true scientific answer.
[00:32:49] So again, I will cage my answer and say our understanding of it is more predicated on the science than it is the, um, delivery [00:33:00] device, whether that be in a solid or in a, in an aqueous form, we work with a pharmacist who has, is a special specialist in drug delivery systems, uh, which creates that advanced bioavailability.
[00:33:16] Frankly, we have done some R and D with other form factors and that aunts that stays consistent. So, um, there’s, I think more, more studies need to be conducted by that young lady and her team to be able to prove out the efficacy of, of that science. But, um, Given federal illegality, getting those studies, greenlit and university settings or programs is a big, a lot more challenging than it needs to be.
[00:33:47] Um, but short answer is down to two, the, the science and the technology that, that a manufacturer is working with, um, rather than [00:34:00] anything that has to do with whether it’s. Uh, a hard, good, or chocolate bar water base or whatever. Yeah.
[00:34:07]Kellan: That is one thing though that the east coast did have a huge advantage from a timing perspective, because like initially all the beverages that came out in Colorado.
[00:34:15] Uh, we’re not very good at all. Like they, and they were literally commercializing brands had products that it stuck on the side and all these things and it just destroyed brands left and right. And so the beverage industry was really challenging in Colorado in the early days. So I’ll give the east coast a feather for doing it the right way, at
[00:34:31]Matt: least.
[00:34:32] Yeah. You know, and I think frankly, we looked at all of the, what I call version 1.0 products that were in Colorado, Washington, Oregon, California, wherever they meet. The trick is in those early days, the best way to mask the cannabis flavor was to make really high sugar content beverages. So I personally, and I think, again, speaking back polar beverage company, like that’s a zero calorie product [00:35:00] backed, like you can drink a 12 pack of the seltzer water.
[00:35:02] It’s just the same as drinking a bunch of tap water. So it just tastes better. And it’s got some bubbles. I don’t necessarily drink a lot of soda in my personal life. I don’t think I would be someone as a consumer who would lean in on a very high caloric sugar content, so to base product, because that was a masking agent.
[00:35:24] So the sugar is the masking agent. Um, that’s my that’s me personally.
[00:35:29]Kellan: It also does help with wellness, right? Like the high sugar is terrible for wellness, so,
[00:35:34]Matt: correct. So it’s kind, kinda like, you know, it’s all those pieces kind of play together. Yeah. If you can create something that is in our case, zero calories, zero sugar, um, people can pick it up with confidence and say, you know what?
[00:35:48] This isn’t going to impact my health goals, weight loss goals, exercise goals, you name it. If again, it fits for everybody. It’s the universal, in my opinion, it’s a [00:36:00] universal stigma breaker. It fits everything we understand. And we freaking do it in a way that is. Naturally healthier than alcohol. Now look, we all know alcohol is bad for us.
[00:36:14] The differences you can’t take, no matter what, you can’t take the calories out of alcohol. First person, you can figure that one out. Give me a call. I’d love to do business with you, but I think it’s relatively impossible. And here’s a case where it’s a plant-based so that you actually can make it naturally calorie.
[00:36:31]BryanFields: A lot of people are going to see this podcast episode and realize your team’s incredible success in a very, very short amount of time. Can you share a story of fact or another concept that would shock someone about the journey and the process that your team.
[00:36:46]Matt: We went to market. We had $38,000 left in the bank and I was in a lockdown hospital ward.
[00:36:51] My wife had just had twins. Uh, so don’t give up on yourself ever. I think that’s probably the truth is I called my business partner from, during a [00:37:00] women’s in Boston. Hey, have we heard from the state yet? The answer at that moment was no, I was like, well, we better because they’re gonna run out of money next week.
[00:37:08] So you know that just, again, it all comes down to the entrepreneurial journey is very much, you have to believe in yourself. No one else is to do it for you. Once we hit. It’s been a rollercoaster. I mean, you’re not supposed to tell me a, uh, a hard, good story where you launch in your cell and 364 days. It doesn’t happen.
[00:37:32] Um, when you go from zero to number one in the category in the country in a matter of six months. So like, I mean, we’re currently number two. It’s, you know, like that, that sort of truth is, is very much the holy moly. Let’s I always joke. There’s no case study for this industry. Well, I’m pretty sure somebody is going to write this case study for business school at some point, because it doesn’t add up to what you’re normally taught.
[00:37:57] Um, yeah, I it’s [00:38:00] it’s exactly that it’s sometimes I think it’s a Steve jobs line, something to the effect of like the people who are going to change the world are the ones who are crazy enough to try. I mean, you just got to be crazy enough to.
[00:38:12]BryanFields: And it’s great hearing you, you know, you share that story, that personal one also with like the limitations of the finance and then to go because of scale, because once it’s popping off, now you have to go back internal.
[00:38:21] You’ve got to kind of scale your operations probably pretty quickly, which is one of those where you’re, you’re operating. You let’s say first or second year now you got to really drop it down to fourth pretty quickly. So there has to be like an internal look where it’s like, all right, like, how are we going to get from zero to actually 100?
[00:38:36]Matt: So. Again, they’re lucky than good. I have to be very honest and say, we, we shot for the moon. From the very beginning, we, we built the facility to the point where our number one competitor nationally, and I dunno the fall or the summer or the fall of 2020 before we made it to market and their comment when they saw the size of our [00:39:00] facility and the amount of tank space and cellar space we had that you’re trying to make beverages for the whole country.
[00:39:06] Well, no, it’s just, we figured why not big possible the worst case scenario again was not that we couldn’t find somebody whose home, they, they obviously would have come and worked with us. They were looking for a place to get their product in Massachusetts. So I said, probably business plan, quadruple zero, and we made it to market.
[00:39:27] You do the best of what you got in our case. How do we throttle up? Frankly, we already had the team and the staff. Most of our operations team, our career brewers, they all kind of saw the writing on the wall. They’re like, holy moly, this is a growth industry. So think of the call it 10 people in our operations beverage staff, six of them come from careers in the brewing industry.
[00:39:54] So they understand the systems and the mechanics and what’s going on. They understand warehousing and logistics [00:40:00] and. It was more a turn to our sales team and said, Hey, can you guys keep up? You know, we know what we can produce on a weekly basis. We know what the testing delays are. We can turn, I think we turned somewhere around 1.5 million units last year, February 16th of December 31st.
[00:40:18] So you go as fast as you possibly can. You believe in each other and you build a team where it’s, that you go to that building. It’s more family than it’s a company. Everyone supports each other. Everyone has each other’s back. That’s what cannabis needs to be. The industry, the industry needs to be built for something.
[00:40:36] It can’t be this money grab it. Can’t be sole. Like you need to actually realize that we all your aim from a different place. I used to do something different. I wasn’t, this hasn’t been my career forever. We all looked at it as this kind of bright shining beak successes. [00:41:00] Yes. There’s commercial success, but there’s also a personal success, which is like, it’s a better quality of life.
[00:41:05] You’re a better version of yourself. It’s that kind of buy-in that we all made. And I wish that was the universal standard of the industry. I I’m afraid it’s not. That’s really to art. That’s the story of why Levia succeeds and why it has the following. Well, especially locally that it does is the team cares about each other in a way that, that, that love goes to the consumer buys that product, they experience it.
[00:41:32] There’s something to be said about some of the, the kind of less tangible parts of what we do.
[00:41:38]BryanFields: So let’s talk about the successful exit to air wellness. When did they reach out? How did that conversation start? I can’t imagine. They were like, Hey. We’re looking to partner up, you know, take us through, you know, that early reach out conversation then how long the process takes to let’s say finalize an actual deal.
[00:41:54]Matt: Yeah. Um, thankfully that’s what I used to do in my past life. So I was at least conversationally [00:42:00] competence in what to expect. Um, as I said, we hit market February 16th. I started fielding buyout offers by April. Wow. Um, And again, when you have newborn twins at home, you’re at a startup you’re running on fumes and running on empty.
[00:42:16] And I probably, frankly, my synopsis weren’t connecting. So I was a lot more open with sharing than I otherwise would have been. Um, but we had five public MSO’s reach out and those call it that six to 10 weeks of our life cycle period. And you start having all those conversations and they’re very high level and you start to just kind of think.
[00:42:41] Who do we believe in as much as they have to believe in us and what we’re doing. And in the case of error, Mr. Sandeman, is this the chairman? He and I had one of those phone calls that I’ll never forget it. I can tell you exactly where I was sitting and, you know, we [00:43:00] all that we, we got along on all the right philosophical levels.
[00:43:04] Again, it’s about the product. It’s about family. It’s a pallet in the future of this industry. And, you know, John’s son was actually the one who introduced us. He, he had a call with my business partner nice. Sooner than, than, than when John called. So, you know, you start to realize like, all right, there’s some depth there.
[00:43:20] And, um, in the mean meantime, we were fielding other, um, written offers. Glad we didn’t follow some of them because there’s no, it’s like, there were some, some of those probably wouldn’t have ended well for us. Um, so from there, so yeah, probably. Early may we started negotiating a true deal, put a letter of intent together from there, it becomes the real nitty gritty of diligence due diligence on their part, some due diligence on our part, trying to better understand the, the operating business and what they’re doing.
[00:43:55] Um, and the acquisitions they’ve made. The markets are going to what our [00:44:00] opportunity is, how we’re going to leverage those markets. And it becomes a massive back and forth of let’s make a deal. Really? What, what, what, where are non-starters over there? Non-starters making sure that we did this in the right vein, which was very much collegial and understanding that this beverage segments and it’s first inning and someone is going to create a PepsiCo or Coca-Cola or Budweiser.
[00:44:22] No, one’s done it yet. Do we think we can? Yeah. I, I. Bang my fist on the table until now, until the cows come home and say exactly that. Um, so fast forward, obviously levies is continuing to grow and succeed and kind new customer build, build, build in the background. I’m working on their team. We get to mid August.
[00:44:46] We’re kind of got that goal line of like, all right, we know we, uh, we have. Ancillary things that needed to get solved. So we signed at that point, a binding letter of intent. That was basically the, if you asked me, that was like, when they got down on [00:45:00] one knee, marry them. And then, uh, we actually signed the purchase agreement, signed it from my bed at about 10 30, the night of September 3rd, which was Friday going into labor day weekend.
[00:45:12] So I was actually able to take the last three days of summer and say, all right, I can take a breath. And you show up on Tuesday and you get back to work and the kind of integration components started.
[00:45:27]BryanFields: It’s gotta be a really interesting conversation to have. Let’s say the five MSLs is all kind of flirting with you and you internally kind of battling that internal belief is now the time should we continue to accelerate, but again, you’re in the driver’s seat.
[00:45:39] So it’s gotta be kind of flattering for you when they’re kind of giving, are they pitching you on the positioning within their brands? Are they giving you the future? What is those conversations? Kind of like
[00:45:49]Matt: it’s all of the above. Um, You do have to sit there and go, Hey, let’s make this strategic determination of what the path forward is.
[00:45:58] It’s best [00:46:00] for us. And, and I, my management style is not frankly management style, as much as it’s an altruistic style, which is you do for the good of all concerned, always there, and the product can do no harm. Those were the two binding principles and love you. So, um, you said that in a room and everybody kind of has their opinions of what we should do.
[00:46:20] I think. in Any other market, um, without the federal challenges and banking challenges, we would have had a lot more optionality and, and things that we could have done strategically in those early days to kind of say, Hey, look, the concept works. Now let’s go build this ourselves. Well, I said, I threw my hand up first and I say, guys is Austin building one facility and getting one license.
[00:46:46] We don’t have the. cash or the time to try to, to replicate this across the country. The best thing to do is find a partner who’s willing to move as fast as we want to go. Well, my partner, [00:47:00] Troy and I went down to New York. We sat down with John at his home and he sold us on three things, culture, speed, and belief in what we were doing.
[00:47:10] Um, he certainly as the speed, they have the capacity and speed to go. And culture matters because for me, as I said, it’s a family first. It’s not a more, you need to, um, again, management 1 0 1, you put yourself last and you support the people around you who can give you the opportunity to succeed. And you’re going to in, so doing, you’re going to create a culture that creates winners and supports itself, and everybody picks up for each other.
[00:47:38] That’s the kind of business that I always wanted to be a part of. And we said to John from the very early days, Levia is a representation of who we want to be in the world. Um, and, and again, and that was what we did and that’s where we’re going. And that’s where we aspire to continue to, to bring that to fruition every single back,
[00:47:58]BryanFields: without naming any [00:48:00] names.
[00:48:00] Were you feeling any offers from outside industry?
[00:48:05]Matt: Uh, no. No. It was all industry players. Um, I subsequently once we had kind of figured out where we were going. Yes, that happened. But not in those, not when it was still like an open-ended dialogue. Um, look, yeah, there, there a who’s who of big beverage family operators that have been around forever.
[00:48:29] They, they did find their way to get in touch with us that went to come one way or another. Um, again, that’s awesome, but they don’t understand. Then they did something else. And that, that was where their success stemmed from, uh, stick with what, you know, don’t, don’t just follow that shiny object or you’re probably going to over-invest in something you don’t truly understand.
[00:48:50] And you know, another, another class you can’t sell something you don’t understand perfectly. So you can [00:49:00] try that. You can try your best to build a business, but if you don’t actually interact with the product yourself, it’s going to become, it’s going to come across disingenuous. You know that that’s, that’s human nature.
[00:49:14]BryanFields: Since you’ve been in the cabinet and industry, what has been your biggest misconception?
[00:49:21]Matt: The lazy stoner mindset that we were all taught in elementary school is not real. Some of the most successful decorated business people I’ve ever had. The privilege of knowing they, they use cannabis on a daily. I mean, we’re talking fortune 50 CEOs, running global conglomerates who literally we’ve gotten introduced to and been like, oh yeah, no, I actually prefer this, but it’s been so stigmatized forever.
[00:49:50] It’s like, that’s, that’s the part that needs to go. We gotta, we all collectively, as an industry, need to break the stigma and, and let the truth come out. It’s, uh, it’s nothing [00:50:00] more than a smear campaign. That’s 120 years old. So over time it becomes. And people will take it as the truth. And frankly, I think the statistics show otherwise in every recreational market, this does not create additional youth appeal.
[00:50:14] This doesn’t create a bunch of people living in their parents’ basement, playing video games, eating Doritos. No, there’s really, really, really high functioning people out there who this plant actually helps them. And we need to honor that the fact that, you know, these, these traditional cultures who have been practicing plant-based medicine for thousands of.
[00:50:34] They were probably onto something and it behooves all of us to just bring that to the forefront.
[00:50:39]BryanFields: Amen. Amen. 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?
[00:50:50]Matt: I believe in yourself,
[00:50:54] take the take, take the jump. You’re never going to know if you can do it until you try it [00:51:00] and you’ll be amazed at how much more you can accomplish that. Uh, if you’re just willing to take the risk and if you fail, you learned.
[00:51:12]BryanFields: Absolutely. All right. Prediction time. Matt, do you think the beverage category were overtake the flower market?
[00:51:22] And if so, what year?
[00:51:27]Matt: Oh, um, I want to say yes naturally. Um, I think it’s a tremendous lift from where we are. We’re roughly like 2% of universal sales. There’s got to look at that question. Can I reframe the question to you? When does federal deregulation happened? Because it’s my story that a cannabis beverage should be on every draft line in America.
[00:51:48] Same way that what used to be all, all beer is now have hard seltzer options at that point. Do I believe that we can overtake the flower segment? Yes. So once a year, would that be [00:52:00] 26? Good. Kellyn I’m going
[00:52:06]Kellan: to go later out. I do think eventually it does overtake flower. I mean, you just look at like tobacco, right?
[00:52:11] Like everyone right now is going to turns out when you smoke something for 50 years and hailing hot, they probably isn’t the healthiest thing for you. So I think after we have like generational use cases and those things you’ll see more. Education focusing on different or alternative ways to consume THC or CBD or whatever cannabinoid you prefer.
[00:52:32] But I think it’s going to take time. Right? I think that, I mean our generation, um, and even the older generation, they didn’t know any, anything else from a cannabis perspective besides just flour. So I think that it’s going to take time. Like 2050, but I do think eventually it will overtake it. There’s just more people consume liquids and alcohol than smoke.
[00:52:52] You know what I mean? So I really think that it will be, uh, the number one product market.
[00:52:58]BryanFields: Yeah. To continue on that. [00:53:00] I’m going to have to agree. Also, I think with the millennials choosing cannabis over booze, I think that’s going to be a massively growing segment. Whenever you can mark it as no hangovers.
[00:53:09] It’s really hard to compete with that. And I think as let’s say, the alcohol drinkers kind of adopt into let’s re appraisal a replacement beverage. I can’t imagine that those numbers are currently built into some of the statistics that you see out there from a category standpoint, because it’s almost impossible to forecast someone giving up their daily consumption of booze for the cannabis beverage.
[00:53:29] And when that does, I think people are just going to be blown away and shocked by those caddies. I had recent conversations. I was at a wedding and I explained to someone the importance of like, Hey, I don’t want to drink this anymore. I wish I could have it in a cannabis form. And the guy was like, that exists.
[00:53:43] And I was like, yeah. And he’s like, how come I don’t have that? And I was like, well, where do you live? And when he told me, I was like, well, that’s exactly why you’re in a state like New York, unfortunately, that is so behind that once these ideas come, I think the mass messaging and the products that you’ve produced, Matt, I think are just going to blow people’s minds for what the possibilities [00:54:00] can really.
[00:54:03] So Matt for our listeners, they want to get in touch. They want to learn more about your brand, where can they find you?
[00:54:09]Matt: Uh, yep. Best way to find the levy of products is, is levy a website, which is www.levia.buzz bzz. Um, there is a store locator feature built in there where dump in your zip code and boom there’s there’s the closest retailer, uh, on all social feeds.
[00:54:27] It’s levy of. Uh, and then also, um, just the air wellness, corporate website. So air wellness.com. We’ll link them
[00:54:34]BryanFields: all up in the show notes. Thanks so much for your time,
[00:54:36]Matt: Matt. Thank you. Thank you very much.
