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!
Edible manufacturers have the ability to make or break a new consumer. From Chocolate to Pearls Grün’s Innovative Approach has positioned them as a trusted national market leader.
This week we are joined by Christine Smith, Founder of Grün, to dive into their:
- Disruptive impact
- Licensing strategy
- Formulation success
- Expansion challenges
- Product innovations
A women-led band of visionaries founded in 2015 by mother and architect-turned-chocolatier, Christine Smith, Grön creates delicious, handcrafted cannabis-infused edibles for the community. What started as one delicately nuanced dark chocolate bar has since expanded to multiple product lines available internationally, serving millions of happy customers.
Follow us: Our Links.
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
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[00:00:00] Bryan Fields: What’s up guys? Welcome back to the episode of The Dime. I’m Brian Fields and with me as always, as Kellen Finney. And this week we’ve got a very special guest, Christine Smith, c e o, and founder of grn. Christine, thanks for taking the time. How you doing today?
[00:00:14] Christine Smith: I’m, I’m doing great. Thanks for having me.
[00:00:16] Bryan Fields: Excited to talk to you, Kellen. How are you doing? I’m doing really,
[00:00:19] Kellan Finney: really well. Excited to talk to Christine. Excited to kind of dive into the world of
[00:00:22] Bryan Fields: edibles.
[00:00:24] Kellan Finney: Um, you know, and I, I’m also very grateful that, uh, Another west coaster, right? To share some wisdom with the
[00:00:30] Bryan Fields: East coast over there. Yeah. That, that is, that is correct.
[00:00:33] Uh, I know that Christine has aspirations on the East coast and we would like her to join the East coast sooner rather than later. So for all those regulators out there that maybe can expedite the process, please help us. We need, uh, more edibles of gr So, Christine, far listeners on freely about you, can you give it a little background about
[00:00:47] Christine Smith: yourself?
[00:00:48] Yeah, sure. So, uh, my name’s Christine Smith. I, uh, started a, an edible company by, by chance, uh, not by choice, um, way back in the early days, um, which feels [00:01:00] like many moons ago. Um, 10 years ago. About 10 years ago, um, in the basement of my house, um, I was practicing as an architect and, uh, You know, uh, really started this as a, as a love hobby project.
[00:01:12] And it, and it, and it quickly grew into something much more. Um, we’re based originally out of Portland, Oregon. Um, and, uh, you know, kind of came into this in the medical market, back in the forgiving days where you could kind of play around with things and, and really just kind of took the, took profits and kept reinvest, re reinvesting and doubling down on what we were doing.
[00:01:33] Um, Grew very quickly in the Oregon market to a, to a top premium brand. We started in chocolate exclusively. Um, then 2019 realized there was a whole world out there that we were missing with Gummy. Um, I’ve always stayed exclusively in the edible category, so we’ve really never danced in, in, uh, in, in production or in retail.
[00:01:54] Um, we expanded into Nevada in 2020, uh, Arizona. [00:02:00] And Oklahoma in 2021, Missouri and Canada in 2022. And we’re really excited to be coming over to your neck of the woods, um, both Maryland and New Jersey, um, here in 2023. Awesome.
[00:02:15] Bryan Fields: I wanna stick with those early days. What was the inspiration and what kind of led you to kind of going down and experimenting while you’re an architect with starting to make some of those early products?
[00:02:25] Christine Smith: You know, I’ll tell you the truth. I mean, so I, I, I’m, I’m a fourth generation Texan. I was in my upper thirties. I had never seen a cannabis plant or touched it in my entire life. Um, I was a young single mother, recently divorced, and I needed ex, I needed a side hustle. So in the medical days, you could, could grow, um, as a caregiver.
[00:02:48] With cards for patients. And so I started doing that in my basement as uh, and I started learning more about the plant. I fell in love with the plant. Um, really realized pretty quickly that I was not a [00:03:00] smoker, but I was looking for an alternative to alcohol, um, as a young mother that on a microdose level.
[00:03:05] Um, and there were no products like that. Everything was like, Cheeto induced hangovers on the couch for nine hours at a time. You know, Mylar wrapped cell, our cellophane wrapped, um, you know, rice crispy treats that, that were made with canna butter and stuff. So I just started experimenting and pretty quickly, you know, at the time I was using r s O, that was the only thing available.
[00:03:28] Distillate didn’t even exist back then. Um, and pretty quickly discovered that chocolate was a really, really good match for, for R s O and especially dark chocolate and salt and some of these other flavors. And, and I, I’ve always loved creating in culinary aspects of things and I don’t know, I just wasn’t afraid.
[00:03:45] I reached out to a chocolatier, I apprent under one, flew to the East coast and, and just kind of delve into it and, um, Just started this little company as a, as a side gig. Um, the word groom, the name simply means green and Swedish. Um, I [00:04:00] studied architecture school in, in, uh, Scandinavia during college. And yeah, it just kind of, I mean, I, I say it was like, it just kind of happened, but I mean, there’s been a, it’s been so much work and, you know, I, I would, I had a nanny that was living all pair from Chile that was living with me, and I would make the product, uh, and then she, uh, We’d go down and wrap it.
[00:04:21] We would trade off the baby. And then we had one guy, one guy that was driving around in his car with his shoebox selling a hand wrap chocolate bars to the dispensaries. And that’s how it started. And, uh, you know, millions and millions of products later, you know, we’re still, we’re still here. We’ve stayed self-funded through our growth.
[00:04:39] Um, it just really doubled down and stayed really lean. I love
[00:04:43] Bryan Fields: it. So let’s stay with those early days. Obviously there was a point in your career when you realized this was more than just a sign off on my hobby, and you were gonna make that transition full-time. Yeah. Take us through that conversation you had internally and then with the people around and like, was there any hesitation going through that when you first made [00:05:00] that move?
[00:05:00] Christine Smith: You know what? I think my dad just about all his hair fell out. Right. So he was, he was like, you’re doing what? You’re giving up this career in architecture. You know, I was a junior partner at my firm to do what? Um, yeah, no, I, you know, there was no hesitation for me. I really bel you know, the, the, at the time Oregon had passed adult use, so we knew this was coming on and I just, you know, I saw it as an opportunity and so I.
[00:05:27] I, I cashed in my stock options at my architecture firm and took all the money and bought a tempering machine and leased a little space and did all the construction work myself and just kind of dove in and really, that’s where it started. But you guys, it’s, these were the early days when you could start a cannabis company with $50,000.
[00:05:47] You know, some people say they could do it for less. I, I mean, I, I think I, I, I probably. Had about $50,000 that I started with, with, you know, really doubling down and ordering packaging ingredients, buying some like just the [00:06:00] starter equipment. Um, And paying for a license. And Oregon’s an open state, which, which allows for, you know, you don’t have to, to win it.
[00:06:07] Um, on merit, you could just pay the fees to, to get it. It’s a $5,000 fee to get a license. They aren’t, they don’t exist anymore. But at the time, um, it was possible. And, you know, it’s been, it’s been a real journey. It’s been a real challenge. But best thing outside of my children I’ll ever do in my whole life, I know it.
[00:06:26] I’m ha I’m in the middle of it.
[00:06:28] Bryan Fields: And so chocolate.
[00:06:29] Kellan Finney: Right. Uh, I’ve heard that it’s one of
[00:06:30] Bryan Fields: the more challenging form
[00:06:33] Kellan Finney: factors to work with in terms of successfully generating edibles on scale and like the whole homogenous homogenization aspects and those things. So like were there other form factors that you experimented with in the early days and like what was like the kind of.
[00:06:48] And all, be all that made you kind of
[00:06:50] Bryan Fields: settle just on chocolate.
[00:06:51] Christine Smith: Sure. Well, I started with chocolate and, and ironically enough, chocolate is super homogenous and the reason is that it’s fat soluble, right? It’s kind of like butter. Why butter [00:07:00] and oil? Um, cannabis is fat soluble. Um, and it’s why it works so well with those.
[00:07:05] It’s actually much harder to get homogeneity and sugar or gelatin products. The hardest would be a pure sugar, like, um, like a lollipop because the fat doesn’t want to separate. Um, from the sugar. Um, but I, that’s, that, that was one of the reasons why I started in chocolate. I think the hardest thing for people with chocolate is the tempering aspect of it, and then, you know, the temperature control, but tempering chocolate by hand or being able to buy the equipment to do it accurately is more expensive, um, and is really challenging.
[00:07:34] What, uh, what is temporary?
[00:07:36] Bryan Fields: I’m. Yeah.
[00:07:37] Christine Smith: Tempering. No, no, no, no, no. For sure. So tempering, tempering chocolate is when it makes it shelf stable. So chocolate itself, if you buy chocolate, it’s like, uh, maybe not chocolate chips, but if you buy chocolate bar, it is tempered chocolate and that temper chocolate, the molecules are actually in a grid format so that it’s a molecularly, it’s a, it’s a molecular chemical process that happens.
[00:07:59] [00:08:00] So un when you melt chocolate, the molecules are all floating around like they’re doing all their thing. And when you cool it, if it’s not tempered, they form in just like a whatever format they’re gonna be and that it won’t hold the temperature as well. And you won’t get this clean snap and the sugar in the fat will start to separate.
[00:08:15] So if you’ve ever gotten chocolate and it looks a little powdery or it’s got kind of some white specks on it, that’s not chocolate that’s gone bad. That’s just the fat and the sugar that’s separating chocolate is super shelf stable. Um, temp, excuse me, tempering chocolate. Is a process of taking it through a temperature conversion.
[00:08:32] And so you take it, you melt it, you bring it back up to a certain temperature, you, you drop it just a little bit and you could put some seed chocolate that is tempered in it, just the right temperature. And the chocolate itself will copy that molecular structure and it’ll temper itself and then it’ll cool and stay hard.
[00:08:48] So, excuse me, sorry. So it is a chemical reaction to make tempered chocolate, and so they make machines that can do it for you. And can spout it out. But generally people that are starting out are often doing it by hand, [00:09:00] which is, which is a beautiful and very challenging process. Is that how you started out by hand?
[00:09:07] I started out by hand and then getting a little machine. I called it the baby machine. I still own it. It was $800 and I was so afraid when I bought it that I spent $800 on this machine that I ordered from Amazon. And uh, yeah. And then, and then you. And then
[00:09:21] Bryan Fields: I know what an incredible story,
[00:09:23] Christine Smith: you know, I was like, oh my gosh, I could spend $800, it could make 20 chocolate bars at a time.
[00:09:28] It could hold two pounds of chocolate. I even start, that’s where it started. And then you, then you scale up to the 20 pound machine and then the 50 pound machine. And now we work. Off of, um, you know, we have multiple 200 pound tanks that feed into, feed into tempering machines, automatic tempering machines that people operate.
[00:09:44] Um, and they have chilled coils that, that the machine, you know, that chocolate rolls through, but, Chocolate is only, uh, about 20 per, depending on the market, somewhere between 15 to 20% of the market share. Most of the market, the, the compatable market is a gummy [00:10:00] market. It just, it just is. That’s just where we’re at, right?
[00:10:02] It’s 70% of the market is gummy and, and we really quickly realized that being number one in chocolate is great, but it only gets you so much. And so we leapt into leapt into gummies around 2019 and we thought we knew what we were doing cuz we were such great chocolate makers and we didn’t know what we were doing.
[00:10:17] We made marshmallows. You know why? Because gelatin is a protein just like egg white. So if you whip out whites, they’ll turn hard, um, and stiff, right? Gelatin will do the exact same thing. So it’s really easy if you don’t have the correct ingredients. And so we, uh, We hired a food scientist, um, that, that formally worked for Haribo, and she really helped us develop our, our gummy recipe, which has made it spectacular and, and just really, really great form factor.
[00:10:46] And so now our gummies, our pearls and our megas are about 70%, 75% of our, of our revenue and product base.
[00:10:53] Bryan Fields: Did, did one of the pearls on Megas go first? Take us through the origin when you first got started understanding, yeah, from a capital standpoint, we’ve gotta [00:11:00] invest, we’re doing chocolate, but we wanna expand.
[00:11:01] Take us through the, that thought process so people can understand like the challenging of those decisions and understanding of like how important it’s to get that first entry into the market, at least on the right
[00:11:10] Christine Smith: path. Sure. Yeah. So we started with a 10 piece, which were the pearls. Um, so they’re individual beautiful little balls.
[00:11:16] We call ’em pearls because they look just like pearls and it just, Great and fun. Um, and again, this was just in the Oregon market back, back in those days. Um, we started with the pearls, um, and they did really well. Um, and we are really excited with their success. But what we saw in the market itself is Oregon, you know, everything on the west coast is, is happening earlier than other areas.
[00:11:37] Um, in Oregon in itself, being an open market without limited license structures saw really. Large price compression happened and the market really tanked back in 2000. This is like 19. This was before Covid 2019. Um, and our chief revenue officer, who at the time was our head of sales, came to me and said, I think we’re really missing the opportunity here to bring out a [00:12:00] product that’s at a lower price point.
[00:12:02] Same kind of we’re passes value onto these consumers. And my initial response was, No way. This is going to eat our own margins up. People aren’t gonna buy our higher margin products. They’re just gonna want the lesser value product, which in a sense is a, is a single serve. Right? So it’s a compliant product, but it’s a larger pearl.
[00:12:20] We call it the mega, initially started as the Mega Pearl cuz it’s just like the mega ball. Um. Now it’s just known as the mega. But, but he said, trust me, I know I can, this is right. I promise you this won’t be a mistake. And I did blindly trusted him. It was the best thing we ever did because what we learned was we opened the door to an entirely different customer.
[00:12:42] So the 10 piece customer is a very different customer than the, than the, than the high dose customer. And all of our product, um, revenues and, and um, um, turnover grew. Um, sorry. So Megas, I’m so sorry guys. [00:13:00] The megas are our best. Um, volume producing product. It’s not our highest revenue product, but it is definitely a market disruptor.
[00:13:09] Um, and it’s so fun and it really services a level of this industry, of, of consumers that are looking to buy a product for under $10. That’s a higher dose product, a higher concentrated dose product than a, than the single, than the 10 piece, 10 milligram piece. Um, and that’s a big cons. That’s a big piece of what the, today’s customer is in the cannabis industry.
[00:13:32] Kellan Finney: I completely agree and I think that, uh, a lot of companies talk about how there’s this like market for high dose edibles and a lot of people just don’t touch it. Right? And like I know like a lot of my friends that are
[00:13:43] Bryan Fields: like active consumers, they’ll go into a
[00:13:45] Kellan Finney: dispensary and buy edibles and then they get this like, Terrible feeling cuz they buy, uh, they 10 edibles and then they eat the whole thing and they’re like, well, like I just ate my whole package of edibles in one day.
[00:13:56] I feel like a derelict, right? Uh, versus the mega, a lot of my friends [00:14:00] are like, it’s way better because like, it’s just, I feel like it’s one dose just for me kind of a thing. So I think it’s, it’s
[00:14:05] Bryan Fields: brilliant. Honestly.
[00:14:07] Christine Smith: It’s, you know, the other thing too, and we, we spend a lot of time on this by saying what is a value, right?
[00:14:11] So getting a value product does not necessarily mean it’s cheap. We’re putting the exact same inputs in, in the mega as we are the pearls. It’s the same high quality ingredients. The Japanese gelatin, the, the fruit powders. Everything, we’re just passing on the value of, of putting that in a single, instead of the, the labor and the, the input of doing it 10 times over in a small base.
[00:14:34] So it’s like the equivalent of buying a two liter of Coke versus buying the cost of buying a 12 pack. Right. Like they’re, it’s, and those are different customers that are doing that and servicing both of them is, is really. It’s fun and passing it on where people feel like they’re getting a value and it’s, and it’s really fun.
[00:14:51] I mean, it’s a fun product to eat a gumball of a, of can
[00:14:55] Bryan Fields: weed. And I think it also speaks to the type of person that’s making those [00:15:00] decisions, right? For me, like I’m going for the 10 piece, but if I wanted to try a new product, committing on 10 is kind of like a, an actual like thought puzzle. If you take one, you don’t like it, but one, it’s kind of like an impulse pie, right?
[00:15:09] You go into the, the sh. This food store and you, you’re walking down the final aisle and you’re like, you know what? I could take this. And that’s kind of what it felt like to me. It’s like it’s that impulse shopper where he’s looking for something. He’s like, I do want an edible. I haven’t tried this, but it looks awesome and I can easily grab it.
[00:15:22] And is that kind of how you’ve seen it, it quickly play out?
[00:15:25] Christine Smith: Yeah, for sure. And it’s a register add-on, you know, retail’s, retail, loves it. Um, we’ve just seen exceptional growth with that, with that product in every market that we’re in. It’s, um, you know, it really is. It’s, it’s, it’s, it’s really fun. Um, you know, and I think we’ll continue to see, continue to see that, that growth.
[00:15:43] But, you know, equally, I think what has, what has led to the success that we’ve done, a product form factors and being able to, to attract that, that consumer, um, But also is our, our lead and, and our push with the, with the minor cannabinoids and [00:16:00] the targeted effect, um, you know, formulations that we’ve made.
[00:16:04] So in our, in our, you know, we’ve got the higher dose single serve, but in, in our other categories, which we’ve got the pearls, um, we’ve got the chocolate bars, and we also have pips, which are like m and ms, right? And, and those are our lower dose products, but really leading into the day and night effects.
[00:16:20] So, you know, the, the sleep are one to one-to-one. Formula. Uh, C B N C B D T A C, and then the C B G R daytime, which is really more of a focus, um, which is really fun. It’s like such a fun product to take to a concert. The focus one? Yeah, it’s
[00:16:35] Bryan Fields: really good. It’s, I haven’t tried that one. My favorite one that you make is the sleep one.
[00:16:39] I call it the smiley sleep because I just, and I’m smiling and I wake up and I’m very smiling and my wife always teased me about it and. I’ve tried a bunch of other sleep ones and I, and I wonder, like from the formulation standpoint, was that something critical to get in, to have it one to one, to one at 10 milligrams or did you experiment with anything else earlier on in the process and then end up settling
[00:16:56] Christine Smith: differently?
[00:16:57] That is a great question and it’s a really [00:17:00] good story. Get you guys. Okay. So back in, back in 2018, 2019, CBN was like, $25,000 a kilo for this stuff. It was crazy expensive. Now it’s significantly less, but it was really expensive. It was really new. There were other products on the market, not in Oregon. We were the first CBN product, edible product on the Oregon.
[00:17:18] On the Oregon market. But there were some in in California that were low dose. So Kiva had one that was out there, and I think a couple others that were really, it was more like a, Four to one or a 10 to one with a one being the c bn. So we started looking at this and we were trying with formulations thinking, you know, like how do you, how do you bring this to market at a cost that makes sense to consumers when you’re passing on this, this cost?
[00:17:39] And, and we just kept upping it. Cause was like, no, this isn’t effective enough. It has to be really good. And we’ve found this 1:1:1 formula. And, uh, you know, we’re like, we got it. We nailed it, and then we did the math on the backside and we’re like, oh my gosh, this doesn’t make any sense. We’re like, we, we, so, like, we believe we’re gonna double down on this.
[00:17:59] We [00:18:00] believe that the price is gonna compress if we double down, if we eat our britches for, you know, I. For a, a few months that we’re gonna see this, this happen and we were right. Right. I mean, it was a good bet and it, and it made sense and, and it’s very quickly become the best selling ratio of any product we’ve ever made.
[00:18:17] And that, you know, it’s a CBN that 1:1:1 ratio makes up about 30% of our revenue across, across three products.
[00:18:24] Bryan Fields: Yeah. It’s, it’s, it kills it. It’s, it’s easily one where like the first time you have it, maybe you be a little unsure, especially if you’re a newer consumer and you’re like, I don’t know, will help me sleep.
[00:18:32] You take it, you know, right away. And it’s like my ultimate favorite one to take. And it kind of stinks because like I take it and I go to sleep, but I am so happy the entire time. I couldn’t recommend it anymore. Um, but I wanna stay with kind of some of the thought process. It seemed like that was a pretty aggressive move, right?
[00:18:46] It was pretty bold. Understanding that from a mass standpoint, it doesn’t make sense. And if it is one that continues to, to go out, or let’s say he doesn’t even sell. You’re kind of caught out in the rain, so yeah. It seems like that’s not the only decision, like that you made the other decision with the [00:19:00] impulse buy.
[00:19:00] Is that a part of the key strategy and where did that kind of, that thought process come into? Like understanding from a nuance as a company, this is the type of strategy we’re
[00:19:07] Christine Smith: gonna deploy? Yeah, I mean, this is a hyper-competitive industry and everybody’s constantly looking at how you’re gonna, I, you know, there’s, there’s lots of good gummies out there.
[00:19:17] I mean, there’s tons of good gummies out there, and it’s a, it’s a big play and a. And a lot of different strategies, right? You can’t just taste good and be able to make it and be successful. You can’t, can’t just have a good, uh, a good ratio. You have to bring all the pieces in it together. And so, you know, I’d say we’re constantly innovating the, the market’s still so early.
[00:19:36] Um, there’s other new cannabinoids right now that we’re investigating and looking at and playing with because they just continue to evolve. We’re still in the very early stages, but. You can’t be afraid to make mistakes, and that’s just something that, that I’ve never been afraid to try things, you know, we can always look at it and we try to make good judgment calls, right?
[00:19:56] And, uh, and, and, and look at things. I mean, we’ve made [00:20:00] mistakes. We, we launched a C B D company and tried really hard, I placed big bets on CBD and, and we, we lost our shorts on that and ended up. Putting a, a pause on it. Um, not forever, and that’s not really our fault. Um, I’d say it’s, you know, just a product of what happened with lack of regulation from the federal government and where things went, particularly in the edible category.
[00:20:21] They, they gave no clarity and the main market just kind of went sour on it. So, you know, between that and, you know, Oklahoma’s been a real struggle for us, so we’ve placed bets on things that didn’t work out, but I think part of our success is not being afraid to try and then also not being afraid to cut your losses.
[00:20:37] And going in so deep that you can’t back out. Um, I think a lot of people just keep doubling down. Like they just get in so deep here that they, that they continue to double down. And, um, but I will say the more practice makes perfect with anything, the, the, I’ve gotten way better at making better decisions by doing this.
[00:20:55] Lock it up, if that makes sense. I’ve got a pretty good handle on if it’s [00:21:00] gonna be successful or not at this point.
[00:21:02] Bryan Fields: So with that CBN bed, it wasn’t like
[00:21:04] Kellan Finney: you guys got CBN and we’re like, all right, we’re launching the product. Like how long did you guys experiment with CBN in terms of formulating different products and different doses and kind of like how long
[00:21:15] Bryan Fields: is that kind of r and d?
[00:21:17] Process. Is it standard
[00:21:18] Kellan Finney: across every single new product that you launch, or is it kind of like you guys know instantly once you make a first product of a, a new miner that you’re like, okay, this is gonna be good. We’re gonna fast track this. Like talk us through kind of that r and d process and like taking something from concept to the market.
[00:21:35] Christine Smith: It’s, it’s really different for, for every scenario. I mean, so Flora Works is a manufacturer of cbn, of minor cannabinoids, and they are, I think the. If not the largest, one of the largest and are, are one of the only ones that are, that are doing this, uh, to ISO standards here in the United States. They are based in Portland, um, and they’re really good friends.
[00:21:56] So early on we had access to, [00:22:00] to C B N in a way and to really understanding how it was being processed, what was happening, and then working with the formulators themselves to help us with this. So that gave me a lot of confidence of, of what we were doing. Um, We also, you know, like our limited, we, we spent months really looking at it and then we, we, we brought some product out into some focus groups, um, and did some placebo.
[00:22:24] You know, this wasn’t, this isn’t super large effect. We can’t do this publicly because we’re operating in a limited, I say publicly, we can’t just go launch this as a company. You have to do this really, really independently because we are not under regulation. I can’t. Send something out that isn’t a fully batch tested product in packaging out and through dispensaries to consumers to test.
[00:22:48] So by the time we’ve done that, we gotta believe in this. So we’re any of this, you know, r and d work that we’re doing internally? Like w we’re doing this really, and everyone today, everyone in this industry that’s doing this [00:23:00] is doing this kind of in a bubble really because of the compliance rules. Um, so we use Oregon.
[00:23:08] As our test dummy, right? So we, we, we, and we still do that with everything that we launch. Right now we use Oregon. So Oregon has more products on the market than any of the other markets that, that we, that we launch. Um, And, um, and we use it cuz it’s a, it’s a great market. They give really good feedback.
[00:23:24] They’re really, really educated consumers with a lot of different options and they ha are really familiar, um, and educated with cannabinoids and with cannabis in general. So, Really that’s our, that’s our test study is Oregon.
[00:23:42] Bryan Fields: I’m fascinated to know how many data points that like you’re looking for in order to feel comfortable about making a decision.
[00:23:47] Because obviously from a timing standpoint, it could vary from a purchasing standpoint, it could vary and obviously, you know, the people who love your products might love everything you do, even if the product isn’t in quote unquote, the one you want to go with. So how do you make those [00:24:00] decisions and how do you make those, those gut feels and those decisions on like this is enough data cases in order to move forward.
[00:24:05] Christine Smith: You know, it’s a good question. I mean, a lot of it is gut and looking at it and seeing something. I mean, when we tried the one-to-one to-one formula, there wasn’t one person that tried it, that didn’t say, this is amazing. I need more. I, I mean, literally across the board, it’s the best formulation. And some of that was we just, is, is, you say luck, but luck is, luck is, is not necessary.
[00:24:25] Like we didn’t just stumble upon it. We worked really hard to find it. Um, but, uh, but, but I mean that probably is the, the happiest. Kind of thing that we’ve come along. I mean, we haven’t found another formulation that we’ve created that I can say tops, that I mean, for real, and we’ve really leaned into it.
[00:24:41] Um, but we have tried lots of different form factors. We’ve, we’ve panned products, we’ve done all sorts of, uh, you know, different product, um, form factors that, that we thought would be, that would take over the world, you know, chocolate covered. Espresso beans and mint medallions and caramels and all sorts [00:25:00] of chocolate covered pretzels and, you know, all sorts of different candy.
[00:25:03] We’ve looked at doing starbursts and even making skittles and, you know, like a, you know, different things. But I tell you, we, we keep going back to these, these formulations that are targeted effects. Consumers are really comfortable with a gummy. As a vehicle. Um, and, and what I would say is everybody’s looking for something new, but I would advise anybody that’s coming into this space, if you can lean into what people are already doing, right?
[00:25:30] You lean into their habits that they’re already doing, and you make that better, right? So if everybody’s already really comfortable with a gummy, then taking that and making it better so that I can help you sleep better or help you stay focused or help your life be better is a much easier transition to growth than it is to say.
[00:25:48] Stop what you’re doing, eating gummy vitamins. Now I have something new for you that I’m gonna train you to do something different. Um, and so that’s, that’s, I mean, those sound like simple, dumb marketing [00:26:00] toys, like plays, but it’s really like, you gotta kind of keep it simple, stupid. You gotta like go back to the basics and lean into, lean into what people’s habits really already are and what they’re looking for an answer to.
[00:26:13] Bryan Fields: I think that’s great advice and I, I think that for people who are trying to reinvent the wheel at the end of the day, why is that necessary? Because individuals like yourself have, have moved millions of units, and I know Q1 was a great quarter for you, so I’m curious to know if you could share kind of a recap on how that went and maybe some of the information.
[00:26:31] Christine Smith: Yeah, sure. Q1 was a, was a fantastic, um, was a pet cat fan, uh, the best quarter we’ve ever had. So we’re seeing, we’re seeing growth in every market we’re in, which is really exciting. Oregon really saw like a 22% decline, um, in, in sales, and we grew by 80% last year in Oregon in a mature, kind of sad market.
[00:26:51] So we’re seeing real growth. Um, we, we produced over a million megas. Um, there between just three markets. Arizona, Oregon, and [00:27:00] Missouri. Um, and that’s just, just in the megas themselves and, and, um, you know, uh, uh, Canada, um, we’ve, we are, um, in a number one position up there in Canada with our, with our pearls.
[00:27:12] It’s a, it’s a different scenario. Up in Canada, they are only allowed 10 or two, sorry. Uh, 10 milligrams at a pack. So we’ve got, we’ve got five pearls that are each two milligrams a piece versus what we do in the United States. So it’s just like Canada. Everything is like the same but just slightly different.
[00:27:31] Um, so it, it is, it is the same up there, but, but you know, just significant. Growth and, and progress. Um, so yeah, I mean it was, we’re seeing, we’re seeing real growth in all the markets we’re in, and it’s really exciting. It’s, the megas are growing, but I would say also these targeted ratios. That’s an incredible
[00:27:50] Bryan Fields: accomplishment.
[00:27:51] I’m curious to know, did that surprise or shock you and what did your dad think? Did he feel like, Hey, this decision,
[00:27:58] Christine Smith: my dad, you know what my, my parents [00:28:00] are, are diehard Texans and I have to say both my mom and dad are complete converts. They, you know, if I had told them 10 years ago, they would never, you know, they’re just, you know, they’re pretty.
[00:28:09] Conservative Texas people and, and, uh, you know, my mom is, is completely transitioned off of Ambien, um, and, and medication. So she’s, she’s using the one to one-to-one, and so are every one of her friends. You know, I, it’s, it’s really, I’d say it’s just, it’s so inspiring to see what this plant is doing. For people.
[00:28:33] And that’s what keeps me going. I mean, it’s like dealing with navigating the regulations and the, and the banking and all the things that are the constant hurdles are, are really challenging. But to go back to what we are doing and, and the amount of, um, success that this plant and good products are having, um, is really inspiring.
[00:28:54] It’s really
[00:28:54] Bryan Fields: cool. It’s really cool. Oh, really impressive. So let’s talk about your expansion [00:29:00] strategy entering new markets. I know your team takes a slightly different approach than some of the other out there, which allows your team to kind of control some of the inputs and the variables, but at the same time makes it rather expensive.
[00:29:09] I’d like you to kind of expand on that for our listeners.
[00:29:11] Christine Smith: Unfamiliar. Yeah. So most, most companies and brands such as ours go into a market under a licensing deal where they, which is more of a traditional model that you’ll see, um, and regardless of in any industry, right? So you license your IP and you.
[00:29:28] Give your recipes to someone, and then that company in another state makes the product and sells it under their license and puts it out on the shelves. That’s why most, most people do things. Um, we are one of only a very small handful of companies that are doing what we call a reverse licensing deal. So we actually will go in and we will operate.
[00:29:47] If we can have our own license, we will, we will get it. Um, but in a lot of states, you. An individual manufacturing one isn’t attainable or it’s too expensive, we will find someone that has a license. Um, and we will, [00:30:00] in theory, lease back space from them. So we will go in and we will build out space under their license, um, bring in our people, our packaging.
[00:30:08] We will work under their license. Um, so it’s, it’s really. No burden to the license. They’re collecting, they’re collecting the, the royalty for allowing us to operate under their license. And while that’s, it is more expensive, it’s a capital investment in the markets that we’re going to, um, you know, a, a significant capital investment.
[00:30:27] Um, and we’re taking the burden of actually. Taking our teams and shipping stuff all over the place and managing deliveries. What we’ve found is it gives us the ability to, to really control and have a pulse on what’s happening out there at the, at the retail side and, and both with our products. Um, and, and to be able to double down when we need to, um, cuz we’re in control.
[00:30:48] Um, so it’s been really successful. Um, You know, I’d say it’s a slower progression than a traditional licensing model because it’s hard to do more than two or three of these a [00:31:00] year. Um, just simply by the amount of infrastructure and time that it takes. I mean, cuz I mean, you’re literally going to the moon and building your own house and setting it up every single time, um, from scratch.
[00:31:13] So it’s, you know, it’s, it’s a lot of work, but sure is fun. We’re having a good time. What
[00:31:19] Bryan Fields: was
[00:31:19] Kellan Finney: the, uh, motivation behind, uh, approaching the expansion with that business model instead of
[00:31:24] Bryan Fields: kind of like, yeah, well, but
[00:31:25] Christine Smith: we. We, we did The first deal we, we did, which was in Nevada, was a more traditional license model.
[00:31:33] Um, and I very quickly grew frustrated with it. Um, the, a the lack of control just with the product itself. B, the, the doubling down on being able to, to control relationship with retailers, um, and the ability, From a marketing perspective, um, if you’re just collecting a royalty, it becomes really challenging to bring in new products and pivot very quickly because you’re not in control of that.
[00:31:56] The license is actually in control of that. They may have purchased [00:32:00] packaging, they’re working through things. They have a different agenda on where, what’s important to them with other products they might be making and things they have going on in their kitchen when we’re doing it ourselves. You know, I quickly, I’ve just really felt handcuffed.
[00:32:12] Um, so we, we experimented with that when we went into Arizona. Um, and really, really accelerated our growth and, and kind of decided that was, that was the model that we were gonna go forward with and all the markets, um, moving forward. And, um, you know, uh, wild, if you’re familiar with Wild Is, is does a similar model from us, um, in, in that way.
[00:32:34] They’re, they’re also an incredible company out of Oregon. Um, uh, but I don’t think there’s another edible, uh, brand, um, entity that is growing like we are.
[00:32:46] Bryan Fields: I mean, I can only imagine the type of challenges that went into that first experience. And also probably the frustration for you with understanding like how critically important is that brand staying powder and how hard you worked in order to achieve that.
[00:32:56] And when a consumer in a new market tries the product, that might be a little [00:33:00] different because it’s another team doing it versus your team, right. Might be off-putting. And then from you, like being the the head of the company, it must be so disheartening for that feeling because you could be pushing consumers that might be a good fit towards another competitor.
[00:33:12] Christine Smith: Yeah. Yeah, it’s, it’s true. I mean, it really is, and it’s like you, it’s. It’s particularly challenging when you look at these states that like, it’s really easy to go into a, a new state where there’s not a lot of products on where the, where the demand exceeds the products on the market. You actually don’t have to be good to, to be successful because you put anything out there.
[00:33:31] The demand is so high, people will buy it. It can be the worst product ever. People still buy it. Um, But, but as the, every market, every market compresses and finds its equilibrium and they all do it in different, in different timelines, you know, but, but they all start to equal out and you’ll start to see different products rise at the top.
[00:33:48] And it’s, and, and it’s, and it’s really interesting to watch that progress, that progression happen. And I have, I have a lot of faith in, in what we’re doing, because what we’re finding is success not just in new [00:34:00] markets. Where we go in and we’re just one of a few products, but we’re seeing continued growth in these really mature markets like Oregon.
[00:34:07] Um, you know, that’s been going for a long time and we’re still seeing really significant growth. So, you know, it’s a different model. It’s, it’s really challenging. It’s, it’s, uh, It’s, it’s hard to do, um, but we’re doing it.
[00:34:21] Bryan Fields: When you create the products where you get additional expansion in these new markets, is there a certain target demographic that you envision as purchasing these products?
[00:34:28] And do you think that there’s more of those people coming in or is it different product, or excuse me, target demographic that’s kind of migrating in maybe like the older, older gentleman who’s looking for a substitute for alcohol. How do you think about that?
[00:34:39] Christine Smith: Yeah, I think, you know, our, our product line, we we’re, we like to say we have something for everybody, right?
[00:34:44] So the, the megas and the mini bars are a product, um, line that we’ve got that is the higher dose. They’re the, the single serve, um, 10 P compliant. Um, uh, and then we have products that are, that are really on the, the 10 piece that are, that are, and tho and I say the [00:35:00] single serve generally attracts a younger crowd, a crowd that is looking for, for a higher milligram.
[00:35:06] A and a and a milligrams per dollar. They’re looking at a value of what they’re getting per dollar because they’re actually consuming more milligrams. Um, so you know that that is a big bread and butter of what we’re doing, and it’s a real disruptor when we go into other markets that, you know, have products on the market when, and generally we find that doesn’t exist in most of these new markets that we go into.
[00:35:29] Um, so then, then we also really see, see the, um, I say it’s a more mature customer, right? That that has a, that’s, that is looking for a lower dose product generally to help them with sleep. Uh, but sometimes for focus or anxiety. Uh, but they’re coming in looking for a targeted effect, not just th h c, they’re looking for an actual.
[00:35:51] To solve a problem that they’ve got. And that’s where we see these more expensive, a higher end, um, product That’s, you know, it’s, it’s still an, it’s still a good value [00:36:00] for what you’re getting. Um, but, but you’re seeing that the 10 piece products with the chocolate, the pips and the pearls, do you see that,
[00:36:07] Bryan Fields: uh, products skew volume differ from state to state?
[00:36:10] Christine Smith: Significantly. That’s a great question. Um, a little bit, but, but really what we see are, are, are two signature SKUs, which are the one to one-to-one, and the three to one, the C B G, um, are, are, you know, uh, those two SKUs right there are about 50% of, of what we’re doing. Um, so, you know, like on that side, so the ta you know, we have other ratios.
[00:36:35] Some just straight T HC and Ava, you know, some with, you know, we do a four to one, uh, C, B, D to T H C, which is actually fantastic product. I mean, it’s a great value. 500 milligrams of cannabinoids, you know, 50. Um, Sorry, 400, you know, in a, in one little pearl you’re getting 40 milligrams of C, B, D, and 10 of t h c.
[00:36:56] It’s a great product. Um, but again, I mean, it’s, [00:37:00] we, we see these two signature products are, are really, and some of that is probably geared towards, they’re really easy to sell, right? So it’s really easy. Customers come in and they’re looking for, I need help sleeping. Um, we’ve made it really easy for the bud tenders to actually promote a product that they can stand behind, um, with that.
[00:37:17] And, um, so, you know, it’s, um, Yeah, I kind of lost track there and separated. I mean, and
[00:37:25] Bryan Fields: they taste delicious, so it’s really nice. I,
[00:37:33] so what’s the future roadmap for, I know you kind of teased out that you were experimenting with some other minor cannabinoids. Is anything you can share, anything consumers that are big fans of your products can expect for, let’s say in the future or maybe when Maryland comes online?
[00:37:45] Christine Smith: Yeah, for sure. So we, um, you know, we’re really excited.
[00:37:49] All our products in Oregon are now made with Rosin. Um, so we’re really excited about that. We see rosin, um, products and, and more, you know, terpene products. Um, [00:38:00] I. Being kind of, see, you know, it’s interesting where the market went, right? It was r s o was initially that it went to dis deliver. Everything was super clean and now it’s getting more educated and people are really more interested in the plant itself.
[00:38:11] And so we’re seeing, you know, the, the market mature, um, which is really exciting. Um, we are. Are experimenting with T H C V, um, really excited about, about that. There’s, you know, some other minor cannabinoids. Right now, everything is still really expensive and so it becomes really challenging to bring it out.
[00:38:28] You know, we’re at such a scale of a company right now that we have to have a repeatable, dependable source that we’re able to bring some, you know, I mean, we need. Kilos of this stuff on a d on a d on a dependable basis. Um, and that’s really challenging with, with where a lot of these, like these newer development things.
[00:38:47] So it’s a lot of it’s in development stage and, and early testing, but it, it just, this industry moves so fast that, um, I think we’ll see more of that.
[00:38:55] Bryan Fields: Are there any sort of early findings internally in your gut that make you feel like that first [00:39:00] sleepy one where you, you knew right away you had something good?
[00:39:02] Is there anything where your gut tells you? I think
[00:39:04] Christine Smith: something, no, I have yet to find something that I can say I haven’t come across. I mean, just honestly, I haven’t found something that I can say as a better formula than the one to one-to-one. I haven’t. I mean, but you know, I mean that doesn’t mean it doesn’t exist.
[00:39:20] We just haven’t uncovered that rock yet. But, but you know, right now it is such an incredible. And really effective formula. Um, and it’s, you know, it’s great. You know what’s interesting when you ask me in different markets is in, uh, in Nevada, in Vegas, our three to one, which is our, you know, the focus awake one is actually sells better.
[00:39:40] That’s the only market that it sells better than our one-to-one to-one, which makes sense, right? Because people wanna get high at, they actually don’t wanna go to sleep, they wanna stay up all night and have a good time. Um, yeah. But, uh, but everywhere else it’s, it’s,
[00:39:53] Kellan Finney: it’s the one-to-one, one helps ’em win some money in Vegas.
[00:39:55] Right. That extra
[00:39:56] Bryan Fields: focus. That’s right. No, no [00:40:00] way there. Are there any elements or approaches that your team is implementing that you feel should receive more recognition? Oh,
[00:40:10] Christine Smith: I’ve never thought of that. Uh, like that do I? Um, I don’t know. I, I, I try to stay humble, um, and modest with where we’re going and just really appreciate, uh, you know, the, the quiet success as we continue to.
[00:40:26] At our quest for world domination. Um, um, but, uh, you know, I think, you know, I think we’ve been really, and we will continue to be really innovative with, with the cannabinoids. We, we, we pivot very quickly and our, our ability to control our destiny in these markets allows us the privilege to do that. Um, so, you know, I, I, I think I, I can’t think of anything off the top of my head other than, um, you know, just watch out.
[00:40:56] Here we
[00:40:56] Bryan Fields: come. When you got started in the cannabis [00:41:00] space, what did you get? Right? And most importantly, what did you get wrong?
[00:41:04] Christine Smith: What did I get right? I think what I, the, the thing I could say, what I, the biggest thing that I got right was not taking money and staying very lean, um, and. And scrappy initially, right?
[00:41:17] I mean, I think particularly in, in the market today, you can look at it, it’s really, really challenging for any company in the cannabis space to start out of the gates with debt and be able to make it. It’s just, you know, it’s just, it’s just isn’t, it’s just a really challenging industry. So, you know, I, I did not take money.
[00:41:34] I hired an accountant to come on early on, so we started, you know, we were just really above board. Um, and that really set us up for, for success. What did I get wrong? I didn’t start gummy early enough and we focused on C, B, D when, uh, you know, 2017, 18 when we really should have been focusing on on on t a C.
[00:41:56] Bryan Fields: If you could sum up your experience in a main takeaway or lesson, learn to [00:42:00] pass onto the next generation,
[00:42:01] Christine Smith: what would it be? Don’t be afraid. Don’t be afraid to, to conquer your dreams. Like people are, are, are so timid sometimes and, and I, it may not be the right decision, but just make a decision. Just do something because cuz just, just keeping the momentum going.
[00:42:19] And it’s really, that’s what I, I see so much is, is that this younger generation I see outta my daughter who’s in college is, there’s, especially, particularly with social media and everything that’s happening, people get paralyzed by fear and, and that, and, and paralyzed that and afraid that they might do something wrong or that it might not work out right.
[00:42:37] And. Um, you know, you just can’t be afraid to, to, to fail. Um, because that’s, that’s, that’s how you grow and you get better. You get better and better, and you make less mistakes
[00:42:49] Bryan Fields: as you go. That’s great advice. Alright. Prediction time, Christine. What trends do you predict will shape the future of the edible market, and how is your brand adapting [00:43:00] to stay ahead of the curve?
[00:43:01] Christine Smith: Oh, I, I targeted targeted effects. So products that are targeting, uh, actual solutions right to issues because that’s large consumer base are taking those. Um, I do think we’re gonna see a shift back into, um, rosin and resin products, um, solventless products. Um, just like the shift into organic foods happened, natural organic foods, we’re gonna see that shift start to happen.
[00:43:28] Um, Uh, and I think we’re gonna see gummies continue to dominate. Um, lastly, I think we’re gonna see the edible market continue to take over and grow. Um, um, and, uh, I predict. That within 10 years time, the Edible Mar, and this is a, this is far out there right now. Right now, edibles are about somewhere between 13 to 17% of any market that you’re looking at.
[00:43:57] I predict that, that, I’m gonna say five [00:44:00] years. Within five years, edibles are 25% of, of the average market in any, in any legalized state. Let’s go Helen. Yeah. Yeah. I just think, you know, really is, it’s the gateway product for new consumers that are coming in. And, and right now the majority of the products, uh, consumers that are in here are experienced consumers and, and we’re, we’re, we’re selling to them and there’s lots of them, but we wanna bring everybody into this and, and those people are going to start with these products.
[00:44:29] And I take great responsibility, um, for that because we, you know, as, as manufacturers in the edible market, we have the ability, To either make someone or break someone, they may get one shot. And if they have a good experience, they may, they may become lifers, and if not, they may never come back. Um, so it’s, you know, yeah.
[00:44:49] Bryan Fields: Perfectly said. Yeah. I am gonna agree
[00:44:53] Kellan Finney: with Christine. I think that, uh, I think the future’s honestly gonna be heavily reliant [00:45:00] on uh, effects, right? So people are gonna go in and buy specific products expecting a specific outcome, and
[00:45:06] Bryan Fields: as more science gets
[00:45:09] Kellan Finney: involved in this whole strain name situation, that’s kind of a giant mess, if you will.
[00:45:16] Um, sure. They’re gonna sort it out and determine that specific strains have specific chemicals and those combination of chemicals that those ratios will help with this effect. Right. And I think that that’s gonna kind of be, uh, A lot more robust science in five years than it is right now. More of like this anecdotal science.
[00:45:40] I think you’re gonna have a lot more, uh, a larger body of scientific evidence that supports those claims. So I think that’s where the future of, of the edibles industry is. And I, I agree. I think the edibles industry will most likely, I think it’ll probably be 50 to 60% in 10 years, just cuz like, I mean, Everyone knows smoking, [00:46:00] inhaling something on fire
[00:46:01] Bryan Fields: is not good for you, right?
[00:46:03] So like,
[00:46:04] Kellan Finney: as we continue to grow the industry, more and more people are going to move away from smoking, right? Like, and we just don’t know what the long-term effects are of someone smoking five joints a day for 50, 60 years are like we do with cigarettes. And once we do, I think that you’ll see, uh, the same kind of trend that happened in tobacco happen in, uh, cannabis.
[00:46:25] What do you think Brian?
[00:46:27] Bryan Fields: Well, I’m kind of biased because I’m a daily edible consumer, so, uh, yes, I agree, Christine. It is definitely gonna be a big part of the market and, and I think the onset is so critical and I think what I’ve heard from inexperienced people is that they smoke because they want to control kind of their total quote unquote high, when in actuality the edibles is exactly what you’re really looking for In a small dose form, you can get exactly what you’re looking for consistently every single time.
[00:46:51] There is so much variability with the smoking and the different variants of the plant. That once people start experiencing the fact that edibles can be that consistent high that they’re looking [00:47:00] for, put it ex take away from that one glass of wine. I’m not sure cause people love that. But there is a chance to really infiltrate that category to a point where it becomes a daily part of people’s habits.
[00:47:10] And like we’ve seen with sleep and ambient, maybe with Adderall and Focus could be the next wave where people can find a more healthy alternative plant-based medicine that can help alleviate a lot of these issues. And, uh, I’m excited to watch your team not only kind of infiltrate the East Coast, but start to dominate the East Coast.
[00:47:27] So Christine, for our listeners, they wanna get in touch, they wanna learn more, and they want to buy groom products in the future. Where can they find
[00:47:33] Christine Smith: ya? Well, you can find us in Oregon, Arizona, Nevada, uh, Oklahoma, Missouri, all over Canada. Um, uh, here at end of summer, probably around August, I think we’ll launch in August, you’ll be able to find us in Maryland.
[00:47:50] Woo. Excited about that. Um, Yeah, New Jersey. Um, hopefully we’re able to get that launched q4. Um, we do have a license in New [00:48:00] Jersey, so we’re, we’re, uh, working on construction and through the, through the New Jersey process right now, which is, which is lengthy. Um, So, yeah, more more states coming on. We’re, we’re constantly looking at, at deals and looking at states and looking at opportunities.
[00:48:17] Um, you know, it’s really, I say it’s really important for us, every community that we go into, that we dedicate our team fully and completely. So we’re really committed to the markets that we enter in, making sure that we, you know, really, really commit to them.
[00:48:31] Bryan Fields: Well, appreciate that. Thanks so much for taking time.
[00:48:32] This was a lot of fun.
[00:48:34] Christine Smith: Yeah. This is so much fun you guys. Thank you. Thank you.