To Be Blunt: The Podcast for Cannabis Marketers

054 Disrupting the National Cannabis Beverage Category with Blair Markell of Cann

June 14, 2021 Shayda Torabi Episode 54
To Be Blunt: The Podcast for Cannabis Marketers
054 Disrupting the National Cannabis Beverage Category with Blair Markell of Cann
Show Notes Transcript

On this episode of the To Be Blunt Podcast, Shayda Torabi has on Blair Markell, the Head of Strategy for Cann, one of the best-selling cannabis beverages in the country, to talk all about the cannabis beverage space, D2C channels and navigating delivery, and how social tonics are changing the landscape of cannabis beverages.  

There is so much attention, excitement, and consumption for cannabis canned beverages; it’s capturing a new consumer. According to Fortune Business Insights, the global cannabis beverages market stood at 367 million in 2019. It is projected to reach 1520 1 million by 2027. 

[00:01 – 08:30] Getting to Know Blair Markell and The Story of Cann 

[08:31 – 18:37] How Cann Went From Zero to a 23.4% Market Share 

[18:38 – 32:11] Launching Direct To Consumer Channels and Navigating Cannabis Delivery Services   

[32:11 –43:08] Cann’s Brand Vision and How Social Tonics are Changing the Game 

[43:09 – 45:22] Lessons Learned from Bringing Cann into National Markets  

[45:23 – 50:51]  Closing Segment    

 

Blair Markell is the Head of Strategy for Cann, microdosed social tonics that are the #1 selling THC beverage in California. With a background in cognitive psychology and consumer research, Blair was drawn by the challenge and opportunity inherent in changing people's associations, beliefs, and behaviors around cannabis. She has her MBA from Stanford Graduate School of Business, and a Bachelors in Psychology from Duke University.

Follow Blair on LinkedIn (in/blair-ballard/)

Follow Cann on Instagram @drinkcann and visit their website http://drinkcann.com/



Shayda Torabi has been called one of the most influential Women in WordPress and now she’s one of the women leading the cannabis reformation conversation building one of Texas’ premier CBD brands. She's currently the CEO and Co-Founder of RESTART CBD, a female-run education first CBD wellness brand. And has formerly held marketing positions at WP Engine and WebDevStudios. Shayda is the host of a podcast for cannabis marketers called To Be Blunt, where she interviews top cannabis brands on their most successful marketing initiatives. When Shayda's not building her cannabiz in Texas, you can find her on the road exploring the best hikes and spots for vegan ice cream. Follow Shayda at @theshaydatorabi

 

Key Quotes:

“What we had to do early on was to get the entire supply chain of the cannabis industry between retailers, distributors and manufacturers to actually believe in the future of this microdose beverage category that not only never existed, but the entire industry was not built to support.” - Blair Markell 

“In the marketing space as almost anyone who works anywhere in this space knows, it's really, really hard to market at scale outside of compliant cannabis channels. And so there's not really a playbook that we can follow, which I find very challenging yet very rewarding.” - Blair Markell 

 

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Blair Markell  0:00  
When you think about the products that are typically sold in dispensaries until this new beverage space came into being, they are these very small, lightweight tins of gummies, and flour and all of that. And we came in and we were selling this product that was extremely heavy, took up a lot of space had a very high price per milligram cost. And so what we had to do early on, it was less so convincing the consumers to buy our product, but more to get the entire supply chain of the cannabis industry between retailers, distributors and manufacturers to actually believe in the future of this microdose beverage category that not only never existed, but the entire industry was not built to support and so we spent a lot of time kind of playing this doing the stool fight between getting the entire supply chain to care about us to put us on the shelves etc. Because even if people love your product if it's not sitting on the shelves, it really doesn't matter and it won't sell.

Announcer  1:08  
You're listening to To be blunt, be podcast for cannabis marketers, where your host Shayda Torabi and her guests are trailblazing the path to marketing, educating and professionalizing cannabis light one up and listen up. Here's your host Shayda Torabi.

Shayda Torabi  1:31  
Hey y'all it's Shayda back with you for another episode of The To be blunt podcast. Kicking off today's episode we are talking about one of the leading cannabis brands coming out of California. They are a canned beverage company their company has called it can ca n n and they are a micro dose social tonic and they happen to be the number one selling THC beverage in California. What's really interesting and this is pulled from MJ biz daily, the top three brands represent 50.6% of sales. So about half of the market opportunity for cannabis beverages is run by three brands and cans market share is actually 23.4%. So almost half of that is for one specific brand so they're doing something right Another thing to note about them they are a micro dose product so their products have about two milligrams of THC per can comparatively from just my experience being in the industry. I've observed other cannabis canned beverages having anywhere from 10 to 20. to higher percentages, I think I saw one coming out of Washington that was 100 milligrams of THC. So comparatively, you have really low dose being microdose to very high dose products on the market, everything in between. And really I was just excited to sit down with Blair. She's the VP of growth for Cannes and tried to get a better understanding of what is their go to market plan. How did they launch they were in California originally, that's where they're headquartered, but now they have rolled out in other states, including Nevada, and Illinois. So I'm actually heading to Illinois and Nevada later this year. So I'll be really keen to try the product for myself up close and personal. But I really want to focus in on canned beverages in general, part of the excitement of talking to Blair is to get a better understanding certainly of their brand, but also just kind of from an abstract perspective getting an understanding of cannabis beverages because this is another report pulled from fortune business insights. It says that the global cannabis beverages market stood at 367 million in 2019. And is projected it to reach 8520 1 million by 2027, which means it's going to have a increase of 50.9% in the forecast period. That's crazy to me. I think that you know, originally when cannabis first was becoming legalized, obviously there's the culture of cannabis, which is predominantly smoke culture, smoking joints, rolling bloods, flour, things like that. And I think now that cannabis is going mainstream, you're seeing the productization of cannabis and certainly an interjection of a CPG world. CPG stands for consumer packaged goods. So anything that is a package product, so like a canned beverage, that is something that you see now alcohol taking advantage of there's a ton of alcohol and seltzer brands that are doing canned beverages, as well as just products that are sitting on shelves, anything in packaging, that's again going to be a CPG. And so cans sits in a really interesting position because they've built this brand, they're now bringing this brand across the United States as they do multistate rollouts. And we also touched on a really interesting go to market plan that Kant has taken advantage of and has leverage that they kicked off actually before COVID, but it served them very well in COVID. They're actually a direct to consumer brand, which unlike other products, really and depending on what state you're living in, that can be something that is hard to navigate, it's really hard to be direct to consumer, usually the models mean you have to go through the dispensary. So that was something that we dived into. So if you're curious about that, definitely stay tuned, but otherwise really grateful. Have Blair on the show. Like I said, they built a really well known brand and a brand that I respect a lot in the space and in a category that is booming. There's just so much attention, excitement and consumption for canned beverages, especially for cannabis canned beverages and extra especially I think for a new consumer that's kind of where the fascination lies. Right. I think why you're seeing this heightened excitement around these types of products is because it isn't for the traditional cannabis consumer like myself who enjoys you know, smoking a joint here or there or ripping a bomb, it is for the consumer who is looking for an easy way to introduce themselves into the product. And I believe by can being microdose it makes them much more approachable to non traditional cannabis consumers. So lots to discuss, really grateful to have Blair on the show, and let's introduce her and dive into the conversation.

Blair Markell  5:49  
Yeah, so my name is Blair Markel. I am the head of strategy at Cannes, which is a microdose. Social tonic, the company was launched in 2019, based in Los Angeles, California. Since then, we've expanded to a handful of more states. And well, so over the course of the next couple of years, which has been incredibly exciting, and also very challenging over the course of a global pandemic. We started this company because we had a passion for the idea of making cannabis more shareable and social experience, especially for this growing number of people that were frustrated by their drinking habits, or, as we like to call them were conflicted hedonist very social people who like to go out and they love to socialize. But they also really care about health and wellness and some of the implications that often come especially the morning after with drinking alcohol. And so Jake, the co founder, along with Luke, he started this company and crafted everything about this beverage to be something that people could really drink in place of or alongside alcohol. And that is behind every single thing that we do from the formulation of it being a microdose, which is fundamentally different from how most cannabis products are formulated, where you get your entire dosage in one consumption experience can is really dosed in a way where you can enjoy one two or three similar like how you would enjoy a glass of wine or a can of beer, the packaging looks like any other CPG product that you pick up at the grocery store and the taste and the flavors when Jake and Luke crafted them they had in mind, some of the most popular flavor pairings are happening in this craft cocktail movement of not just these overly sweet, very basic and simple flavors, but really thinking about what's an elevated taste and flavor experience. It's not just sweet, but it's sweet, savory, interesting and complex. And so it's been really interesting to see challenges that we're nonetheless faced with despite the fact that this product is almost a one to one replacement in every sense of the word to alcohol, but they're still with the type of consumer that we're going after that's newer to cannabis and as falls under this Canada curious category that our consumers do. There's this lack of stigma, fear and education around the cannabis industry that it's very difficult. And I'm sure we'll talk about this more. But from a marketing perspective, it's a very difficult psychological barrier to overcome, despite the fact that our product is very easily replaced with liner beer in a social setting.

Shayda Torabi  8:31  
Yeah, I just have to commend y'all. I mean, you launched in 2019. Obviously, there was a year that pretty much was non existent things to the pandemic. And now we're in 2021, but still not a long time being in market and being in the California cannabis market. On top of that, it feels like that market is super saturated. I happened to come across some stats from an MJ biz daily that was actually pulling up market share for different categories in California and Washington and in Colorado, and it showed Cannes as really being the leader, I think it was 23.4% market share. So the top three brands in total made up 50.6% of sales. That's just a tremendous amount of growth. And so I'm curious from your perspective as head of growth from that marketing lens as well. How do you go from being a nobody to building a brand with obviously very beautiful packaging? Your website is very engaging your social media is very educational, informative, do you accredit it to perhaps some micro dosing aspect where you're introducing a more subtle approach for people to get introduced to cannabis? Is it the brand itself? Like what do you think attribute it to you taking the number one position for market share in California?

Blair Markell  9:40  
Yeah, no, it's been a really interesting journey. And we kind of divided how I think about our growth journey into two different phases were the first phase when we first launched this product beverages overall, let alone microdose. beverages were about 10% or less, in most cases, less of cannabis sales and When you think about the products that are typically sold in dispensaries until this new beverage space came into being, they are these very small, lightweight tins of gummies, and flour and all of that. And we came in and we were selling this product that was extremely heavy, took up a lot of space had a very high price per milligram cost. And so what we had to do early on, it was less so convincing the consumers to buy our product, but more to get the entire supply chain of the cannabis industry between retailers, distributors and manufacturers to actually believe in the future of this microdose beverage category that not only never existed, but the entire industry was not built to support. And so we spent a lot of time kind of playing this doing the stool fight between getting the entire supply chain to care about us to put us on the shelves, etc. Because even if people love your product, if it's not sitting on the shelves, it really doesn't matter and it won't sell and then on the other side, and this is what we're starting to spend more time on now that we've gotten more momentum and helped build out that supply chain as well as had more competitors and similar products enter the market, we're starting to shift more focus to like what that other element was, which was convincing more consumers that were like almost everyone that works at a company who didn't identify as a cannabis consumer and like might have even had stigma associated with being a cannabis consumer and what that looked like and what that felt like they might have had that very bad brownie experience in the past that made them feel like this industry wasn't for them. And so well, early on, we had to kind of split our attention half and half between getting the b2b side to care about us getting the b2c side compare to care about us now we're shifting a lot more to really getting consumers to meet like finding opportunities to meet consumers where they are, that's a very, very hard challenge. And I have a background in consumer psychology and behavioral change. And so that was why I was particularly passionate about this industry and this product in this role, because it's not like any other CPG industry, which is if you have a really great product, people are just going to buy it, it's really not that simple in the cannabis industry because there is a lot of fear. And there is a lot of trust, especially with this consumer that we're going after that most of the people we talked to, they aren't cannabis consumers, or they're people that are still very new and don't want to identify as cannabis consumers. And so I would say like early on the growth was largely because we got the existing cannabis industry to care about and believe in us and the bud tenders really fell in love with our product. But now our growth is overwhelmingly coming from our initiatives that are focused on what we like to say is meeting consumers where they are and trying to find opportunities to meet consumers outside of the existing dispensary channel, because when you look at the Venn diagram of cannabis consumers and canned consumers, the overlap between that is actually pretty small. Most of the potential for us with our growth is going to be those consumers that aren't walking into a cannabis dispensary, and aren't reading articles about cannabis or anything like that. And so we're doing a lot more and we'll start doing a lot more focusing on that. But in the marketing space, as almost anyone who works anywhere in this space knows it's really, really hard to market at scale outside of compliant cannabis channels. And so there's not really a playbook that we can follow, which I find very challenging yet very rewarding.

Shayda Torabi  13:26  
Yeah, I think it's an interesting idea because I come from cannabis in the sense that I've been a cannabis consumer for 15 years, I very much have pushed my tolerance I like the traditional products. I like smoking it I like edibles there's a time and a place for it. But the more I've dug into the industry, the more I've advanced my own personal consumption. I really love micro dosing, especially as I age, my tolerance has shifted. And so I know you identified more of your consumers are not the traditional cannabis consumer. But I think even the cannabis consumers are transitioning how they're consuming. I think you're seeing that in the data. And I was looking through headsets data, just kind of over the past couple quarters and canned beverages as a category is increasingly becoming more and more popular. And then obviously you'll have identified that market from a micro dose perspective for the listeners just to contrast it that same report that has y'all being the leader in California, the leader in Washington is a brand called major and their products are 100 milligrams of THC, 100 milligrams of THC in a bottle. I just thought that was so wild. I can't imagine who the consumer is who wants to drink a whole bottle of 100 milligrams but just knowing that there's a kind of the two ends of the spectrum and kind of where you all are sitting at and trying to play from there. I very much appreciate that approach because I do think that's how you're going to introduce cannabis into more of the mainstream is by creating safe products that resonate that work that gives you just enough of the effect and so kind of leading off of that point. You're sold in California. I've saw you've expanded into states like Illinois, you're still sold as a THC product, even though the THC milligram is very Low how does that fit kind of from a federal, I guess have perspective because you are adding CBD into the beverages? Is there a possibility of you being able to be more nationally distributed? Because the THC count is so low? Or does it still position you as you have to be sold through a dispensary through the current channels of distribution?

Blair Markell  15:19  
Yes, this is a question that we get asked a lot on increasingly people that are dying to have can out on the east coast in New York, New Jersey now that the laws have changed, and I promise we're working on it as fast as humanly possible. So despite the fact that we're microdose basically, from a legal standpoint, the only thing that really matters is where your THC or CBD is derived from. And so if your CBD is derived from the hemp plant, then you're federally legal, you can ship it in the mail, you can send it in all 50 states and your life is an extremely easy, but it is a lot easier than if you're a cannabis product. If you're a cannabis product, which we are in which is where CBD and THC come from, because they're from the cannabis plant. That means that they are still federally illegal. And so we have to set up operations in a state by state basis. And so every single state that we operate, that we sell in everything from the plant that's grown to the person that consumes it has to happen within that state. And so when you think about how difficult it is to scale and to open new states, it's very time and it's very, very capital intensive, because you have to find suppliers, you have to find manufacturers, you have to find distributors and you have to find retailers in every state you operate in. And so it's as extreme as even though we are for sale in California and for sale in Nevada, where cannabis is federally blue in both places, we can't take product from California to Nevada and can't do vice versa. So it makes it very complicated to do the only way that we would be able to get around that is to make a CBD only product which we as a brand don't have any interest in doing all of the science very much points to when you have a CBD isolate with the absence of THC or any other cannabinoids or terpenes your body actually can't process and experience the effects of the CBD. THC really is the magic potion to allowing you to feel any effects. And so most of the CBD drinks which people often get us confused with just because we do have a high CBD content, we are extremely different from them because we have the magic ingredient of THC, which actually will allow you to feel the effects where but it also makes a product more difficult to sell. If we stripped the THC out, yes, our lives would be easier. But no, our product wouldn't be effective. And quality and experience for us is very, very important. It's one of our non negotiables. And so while it would be great to be able to sell our product anywhere as a brand, we're pretty firm on not wanting to shift into the CBD only space. Got it? No,

Shayda Torabi  17:52  
that makes sense. I'm very aware of kind of words derived if it's hemp versus like marijuana derived that obviously qualifies or disqualifies the ability to send it across state lines. I just know here in Texas, we have the same law as the federal law, which is you can't have more than point 3% Delta nine THC. But I have started to see people get really creative because I guess the interpretation is point 3% by weight. And so I've started seeing some products that are gummies or even a little tinctures that the THC percentage is more in the four or five 6% Cushing with the CBD which is essentially making it legal in the state of Texas to have these more in the category of a micro dose product. And so I was just curious, also in your marketing and messaging, if you can help kind of walk us through you say like direct to consumer. So from my understanding, you have to be sold through a dispensary. And so therefore you're not necessarily direct to consumer. But how do you interpret that? And how do you kind of walk through that aspect?

Blair Markell  18:46  
Yeah, so that was another thing that I was looking forward to talking about. So typically, in the cannabis industry, almost all brands they purely sell through retailers or delivery services. And so your relationship as a brand with the consumer is mediated by a cannabis company. And no matter who you sell through any of those retailers, we obviously one don't get to own the consumer or any of their purchasing behaviors or the experience that they have in terms of when they land on the website, what they see what products they scroll by what the messaging about our product is all of that and when we thought about who our consumer was, and realize that our consumer is a consumer that like might not be ready to admit that they are a cannabis consumer and might feel weird or off by scrolling through a menu where they have to pass by flour and vape and concentrates and all of that we saw that there was a tremendous opportunity and still something that's really new. And I think we were actually the first brand to do this but to launch a true direct to consumer channel within the state of California because by doing that we could control the experience and allow our consumers to feel like they were ordering wine or beer or anything else online. just happened to be cannabis that showed up at your door. And so what we do and how we do that is we actually work with a delivery service that white labels their delivery system. And so we control everything from what the website looks like to what's offered the pricing to the email marketing to the SMS, marketing and anything else that we do. And then we just have a fulfillment provider, fulfill it in the back end. And that's been a tremendously successful channel. For us. It's definitely very, very time intensive, what I've probably spent a majority of my time on over the last year, but it's grown into a very, very significant portion of our business because it allows us to, as I was talking about before, meet consumers, where they are of these consumers that look like my mom and look like my mom's friends who still might feel weird about going into bed bed as fancy as it looks like or going on to ease or one of the other delivery services and having to see all this cannabis messaging and scroll by all of these like cannabis products that very much don't align with them versus having them land on a website that's beautiful, has bright colors has only our product only talks about it the way that we want to talk about it and also allows them to purchase in ways that are impossible when you walk into a dispensary. But how people consume camp, people don't usually walk into a dispensary. It's not that easy to walk out of a dispensary with five, six packs of camp, they usually don't have bags for that that's a lot to carry, it's really heavy. But if you get it delivered straight to your door, that's really easy. And that's how you want to order something that you're going to bring to a party or if you're hosting friends for dinner, you don't want just one six pack of can you want to have four six packs of can and you want to have them stocked in the fridge and you want to share them with friends. And so the reason we built the channel and the reason we thought it was worth the effort of investing in our own marketing and our own sales, collateral and all of that construct a consumer channel is because we realize that there is an extreme advantage of providing a purchasing environment that not only met our consumers where they are but also allowed them to have the purchase experience required for the type of consumption that people are having with our product which is different from what a dispensary typically has and can offer to consumers.

Shayda Torabi  22:14  
That's so cool. I didn't even know that was a possibility. And I guess that's kind of the mystery is it sounds like the possibility other brands could take advantage of it. It just obviously like you highlighted is time and money intensive to go instead of this specific channel. But it makes sense for who your consumer is because you really want to allow them that comfortability to bypass the dispensary experience, which if you aren't comfortable with walking in and having it smell like reefer and see all the other different products, it can be very overwhelming in an actually off putting. And so being able to go direct to them is obviously a channel that so many other CPG brands have the luxury of being able to do you just had to figure out how to do it in the confines of the cannabis industry in California.

Blair Markell  22:54  
Yeah, and I mean, that's the hardest part about it. And like I'm going through the challenge right now, I spent the last year basically proving the case that this direct consumer channel on cannabis is a totally feasible option and one that shows a tremendous amount of potential, especially for brands that have consumers that aren't walking into the door of dispensary organically. But the way I described this channel is and how we try to run it is we try to run it like every other CPG brand runs their direct to consumer channel. But we basically do it with our hands tied behind our back because you think about all the tools and tips and tricks that other companies have for growing and scaling a DTC channel. It's a lot of paid advertising, it's a lot of the handy tips and tricks that you can use through Shopify and some of those very well optimized direct to consumer platforms. Well, we can't do most paid advertising, namely, we can't do any paid social, you can try but Facebook usually ends up being smarter than you are, unfortunately. And we can't use Shopify, because we're not a federally legal industry, Shopify, and most of the other e commerce platforms, they don't allow cannabis brands to be on it. And so we have to work with a partner who builds out their own backend system. And they don't have the same scale that Shopify does. And so when you think about all the convenient integrations with clay, vo and subscription programs and referral programs that you can neatly plug in as a CPG company that will probably generate most of your sales. We can't do that in cannabis. And so it's a very big challenge. And I haven't even come close to cracking the code on how to do it. But it's been exciting to feel like we have the opportunity to be the brand that really figures it out. And so while I would like to say I know how to do it, and I'm an expert, no one is and we very much are on the forefront of it, which I think is great, but it's also hard because I can't really look to any other brands and say, how did you guys do that? How did you scale your platform because you've been looking at CBD companies that have some of the similar restrictions we have especially on like the paid advertising front they can still ship their product. across state lines, which doesn't sound like that great of a benefit, but I can tell you, when you can't ship across state lines, and you don't have all the zip codes, even in one state covered, I would kill to be able to get my product across state lines. So it's gonna be really interesting. And I think it'll, it's hard to know how difficult or how easy it'll be and what the code will be to crack because I think there's so much that's going to change over the course of the next year that could have a fundamental impact on a direct consumer channel in cannabis, whether it be federal legalization that allows us to use Shopify and allows us to pay with credit card, or enabling some cross state commerce between California, Nevada, for example. So it's really hard to know how easy or difficult that my life is going to be growing and scaling this platform. But I think one of the things that working in the cannabis industry definitely teaches you is like you have to design with what the regulations are right now and be prepared for things to either go extremely well for you in one direction or extremely poorly for you in the other direction. And so it's taught me a lot of life lessons for sure. So So yeah, I think if we had this conversation a year from now, it'll be interesting to see how much has changed over the course of regulatory and also consumer adoption perspectives.

Shayda Torabi  26:26  
quick break to say thank you to restart CBD for sponsoring this podcast. Restart. CBD is a brand my sisters and I founded in our hometown in Austin, Texas, we operate a retail location as well as an e commerce store and you can browse our wide range of CBD products at restart CBD calm. Again, thank you to restart for allowing me the time and resources to put on to be blunt. I hope you'll check them out for your CBD needs. Let's go back to the episode. No, absolutely, you're speaking my language. I'm so glad that you took the time to share that transparently. Because I come from corporate technology and platforms, I come from WordPress, I preach open source these platforms that say that they're CBD friendly, even like you highlighted Shopify depending on what product you're selling, even in the CBD capacity could eliminate you from being a potential business client for them. And so you've expressed it very well of having to operate with your hands tied behind your back and just you know, commend you for the brand that y'all are building and really trying to push forward in that space regardless. And obviously, the proof is in the pudding or the proof is in the can because you're the leader in the market. And that's obviously a testament to the investment that y'all are making in this industry and in this category. And so kind of a follow up to that when y'all launched direct to consumer, my understanding from delivery is like some delivery isn't people might not know this, but delivery isn't, you know, like a blanket thing that every cannabis industry has, like Colorado has been rec for how long and they're just now trying to establish delivery. And so obviously, if you were trying to establish this brand in Colorado, it would be a much different operation. But kind of reflecting that you are in California, you are able to offer this, the pandemic kind of forced a lot more brands to take advantage of delivery, despite it being an essential business in the state of California was that something that y'all had already had launched, that you saw was a way that you could continue to like lean into that channel, because COVID was happening and you saw people taking advantage of delivery more, and maybe there was more surplus of the non traditional cannabis consumer who was feeling anxious and stressed out and was more open to trying cannabis and therefore your product was very appealing because of its ratio products. I'm just curious if that really impacted or if it was just kind of like a challenge regardless, and you were just trying to navigate and get your product to market in the best way that you could.

Blair Markell  28:42  
Yeah, so we actually launched this channel on February of last year. So we launched it before the pandemic which was good because we were fully prepared and ready and up to speed and knew how to run it, I think it would have been extremely hard to start it during the pandemic. And so we started this channel just because we already knew that regardless, we had to meet our consumers where they were, which was providing like a non cannabis intensive experience of getting a product in their hand. We did see over the pandemic, we saw a very significant increase and not only adoption of our direct consumer channel versus purchasing at a dispensary, but also extremely high repeat purchase rates and increases in our average order values that we saw on that platform. And I think it is exactly what you're talking about is like people were locked inside in a pandemic. And we all had the desire to drink more, because we were feeling anxious and uneasy with everything going on. But we're also sitting at home all day. And so the idea of drinking on Mondays and Tuesday nights was really interesting at the beginning when we thought this is maybe going to be a one or two month thing by the time the summer rolled around. It was this very difficult tension of feeling emotionally compelled to want to drink more but also knowing that you want to drink less just for health reasons and also because the appeal of drinking alone on a normal weeknight is just not nearly as exciting when you know this is going to be something that will be around for a while. And so we've served as a very incredible solution to a lot of people that were frustrated by their drinking habits. And going through a hard time in COVID, we did a survey that we just closed over the last week or so about our consumers, as well as like about how their alcohol and their cannabis habits changed. And it was actually really fascinating to see that when we asked people how their drinking habits and their cannabis habits changed before they tried can, most people reported that they were drinking significantly less and consuming significantly more cannabis and mostly using kan as a one to one replacement for alcohol than anything else. And so it's been amazing to be able to see not only from our sales, but also from data from our consumers that the product really is filling the need that we designed it to solve, which was allowing people to still have that drinking experience, but giving them an option that allowed them to cut back on a behavior that they weren't that satisfied with. So it was really great to see that. And I think it'll be really interesting to see, as we got more people hooked on this product over the course of quarantine and staying inside, like how their relationship with can is going to evolve now that we're socializing again, and going to bars and all of that we designed this product to be shareable and for people to feel comfortable bringing it over to a friend's house for a party, etc. But a lot of people first tried this product when they're sitting at home alone. And so I think it's also going to be I don't think it'll necessarily be a challenge. But I think it's something that's on our mind from a marketing perspective to remind people that like, no, this wasn't just your best friend in quarantine. But it also is something that can help you ease back into social interactions. And it is something that you can bring to a party and not feel weird about sharing with a friend or a family member, because it's a microdose. And so can pretty much be enjoyed by everyone who either has never had cannabis before, or is someone like yourself who's been enjoying it for 15 years. And so we're deliberately spending a lot of time with our messaging or directing consumer channel around that, which is yes, this product might have served you really well. But it's also a great thing for this next exciting phase of your life where we can start socializing again. Yeah, you

Shayda Torabi  32:11  
use the word social drinking, and kind of I think another extrapolation of that in the media you hear a lot from California is like Cali sober, which is more or less consuming cannabis and not consuming alcohol. And I think that trend is you know, bleeding into the rest of America. I think you highlight it from the pandemics perspective, there were a lot of people who thought shortlived. Okay, let's drink on a Tuesday. And then it quickly became, oh my god, I can't keep drinking on a Tuesday and a Wednesday into Thursday. And you know, the weekends were blurring into the weekdays. And so I think we have this social shift from a consumer perspective of looking for alternative products that we can enjoy and unwind but aren't going to hurt our liver or hurt our bodies long term or provide hangovers or any of these like negative effects that we've seen alcohol kind of unraveling in our day to day lives. And so kind of going back to some points you made earlier. I'm curious to get a little bit more clarity so from my understanding certain states have different thresholds for how much THC you can like leave a dispensary with. I'm wondering if there are any caps on like you mentioned, it's better to buy you know, a six pack or maybe even a couple six packs are the dispensary's offering that type of opportunity for consumers to be able to walk in and buy multiple or you sold more in singular kind of come and go type of packaging in the dispensary is versus your website which I observed offers this kind of dialogue to connect you to these delivery services of being able to purchase more but again is there a cap on how much someone can purchase I saw some of these you know the THC content if you're buying multiple cases can get pretty high and I even saw on the website that you'll have you know an email that's like email us for events and so knowing you know that is part of your vision for the brand is to be this product that is enjoyable for anybody anywhere especially as we are beginning to socialize more looking at it from a cannabis consumer perspective of Hey, like I want to see cannabis more adopted I was on your social media, I saw that you kind of were cheeky tongue in cheek, someone that I want to be able to buy this at erawan market. I can't believe I can't buy it at erawan. And you're like not yet maybe one day, how do you see your brand being in the cannabis industry a THC products but obviously with this micro dose aspect to it, do you see can being that brand that kind of help push into more adoption in the sense of the legislation and the laws around cannabis in terms of how much someone can be consuming? And I just maybe you don't know enough about California's market. So I'm just curious how y'all navigate that?

Blair Markell  34:35  
Yeah, so in terms of legal limits, I think when we looked at it, you can buy approximately two pallets worth of can and be within your personal consumption limit. I don't know if you can walk into a dispensary and walk out with two pallets worth of can might be a little bit operationally complex, but no, we sell all of our products in multipacks just because we design this product to be both sessionable as well as shareable. You don't walk into In a liquor store and only buy one beer, you'll walk into a liquor store and you'll buy a six pack, or you'll buy a 30 pack. Or if you buy a bottle of wine, that's obviously multiple servings. And so we're actually pretty strict on selling and multipacks. Because we want people to have more than one in their fridge and have a couple when they consume or share one with a friend, if they haven't dinner party. There's no restrictions when they walk into a sensory of how much people can walk out with. But of course, like, I mean, it's a canned product. So if you walk out with a 30 pack, you can easily buy five, six packs, but it's just going to be heavy and a little bit awkward to carry. But people do it all the time, it's just most of the time, they might not have that you they might send you with a tray worth of candy carried out with. So it's definitely easier to buy that much from a delivery service, especially if you have to walk a distance to your car. But now it's totally feasible to do that within a dispensary in terms of like legislation and being able to to push for for changes there. Well, we've already seen Mexico change their laws for products that are under a certain percentage of THC that they can get sold in any traditional retail outlet, and that these low microdose products are regulated differently from even low dose products and anything above and so we're hopeful that the same thing eventually will happen in the states as well, I would guess it would definitely have to happen on a federal level and would have to be for cannabis products, in addition to the hemp products right now that are illegal. And so I don't know when it's really hard to predict the succession of when things will happen from a legalization standpoint, but I don't think it's outside the realm of possibility for them to say, Okay, any product that's under 2% of THC, which ours would can sell in traditional retail channels, you just have to have this certain messaging on it, anything that's over that needs to get sold through the cannabis channels. So I think it's feasible, who knows if that'll happen before federal legalization or before crosstie commerce, but seeing that Mexico did and It's out of the question. No,

Shayda Torabi  36:57  
that's fascinating. I didn't know that Mexico had implemented that, obviously, then legalizing is a huge win. And especially here in Texas, we're being bordered around all these states that are passing all these great medical and recreational cannabis laws and like, okay, Texas, I'm waiting for it. But that's a good little tidbit to know, kind of a follow up to that understanding that you prefer to sell it in a multipack. But also knowing that your consumer is going to go out into the market, they're going to be social, how do you see it evolving or transitioning? I mean, I just saw someone in, I think, Oregon, they're a THC company, but they opened up a CBD bar. And they're referring to it as low THC. And they're making cocktails with it. And I just thought it was really interesting messaging around this promotion of low THC from a micro dose kind of perspective, also targeting that I don't think you have to be an alcoholic to stop drinking. I think again, it's becoming more socially acceptable to want to choose cannabis as an alternative or just give up alcohol together. In fact, I don't drink a ton of alcohol. I prefer cannabis exclusively. So do you envision there to be a day or time is that in your vision of being sold at a bar being sold at a cocktail bar, you know, being able to do collaborations and that kind of capacity? Or is that not really where you see the brand going?

Blair Markell  38:09  
No without a doubt. I mean, when we talk about the vision for this company, we want someone to show up at a party and for the host gasp Do you want beer wine or can like we want this product in everywhere where someone might be drinking alcohol. It's something that people can enjoy instead of it's something that people can join alongside of, we talk a lot about this product being a better alternative to alcohol, but we really don't try to shame people for enjoying alcohol or enjoying anything like that. We don't think it's like a you're either with us or against us. And in fact, when we did the survey, our consumers were actually significantly more likely to drink more alcohol than non cannabis consumers. But they also hated their drinking habits significantly more than the non canned consumers. And so we know that our consumers still like to drink and the last thing that we want to do is make it seem like you're a bad person for wanting to have a glass of wine or Canada beer everyone at our company still does enjoy that. And so as much as we can just have this product sit alongside white claws and beers and wine, the better. So as soon as we can be available in bars, we will absolutely be there in five seconds. So just need the last to catch up with us on

Shayda Torabi  39:18  
that. No, I'm glad you shared that because I do think it's interesting when you observe especially reflecting here on Texas we are very famously addicted to ranch waters which is tequila and topo Chico and lime juice and I have some friends in the can beverage space and you started watching really over the last two years and I think it's reflected at a national level with brands like white call that have become super popularized and obviously there's others out there that have existed longer but I think the canned beverage market segment is growing and so we started seeing liquor companies go candies, tequila beverages, you can't have glass when you're out you know on the boat or at the beach or wherever it might be there at the pool certain restrictions around glassware and so seeing this candy beverage market really emerge in parallel really to the cannabis can beverage market because when I started consuming cannabis 15 years ago, there obviously were no canned beverages. And then legalization started evolving and happening. And maybe you saw ratio products really maybe the last like four or five years, but not certainly the last like eight to 10 years. And so as the market continues to evolve to meet the needs of the consumers, it's just really interesting to see. Like, really, it was shocking to me when I saw y'all being so on the low dose of THC comparatively to a product in Washington that is just so high THC. I'm also not here to shame anybody, I think consumers should be able to make those decisions. But obviously also knowing sometimes the law that state is what's dictating how much particular cannabinoids you can put in a product. And also pairing that with just like what is the consumer preference and tendency. And I think y'all have just been really on the money in terms of bringing your product to market in a state like California that is so saturated with cannabis that is more of an entry level for people who are not as comfortable or familiar with the product or the plant. So I commend you all for building that brand.

Blair Markell  41:05  
Thank you. Yeah. And I think as we're expanding to more states, it's very top of mind for us, like how fundamentally different our challenges are going to be than in California. Because in California, even for consumers that like myself that weren't existing cannabis consumers have been identified as one, I still had friends that I knew enjoyed cannabis, and it's more normalized. And it's something that nearly is not as stigmatized as it is in other parts of the country. And so as we've expanded to states like Massachusetts, they're a bit more conservative, which is where I lived before I came out to California for business school. It was it's just so fascinating how much different the mindset around cannabis is there. And yes, there's still just as much if not more potential, because you have a higher percentage of these new to cannabis consumers that need a new entry product that's a lot more approachable than the 100 milligram beverage that people unfortunately, sometimes without enough education by is their first experience. But yeah, I mean, it's been interesting, like when I graduated Stanford in 2019, and told my friends back in Boston, I was going into the cannabis industry, I got some really good reactions. And it's been incredible to see how their reactions have changed even over the course of two years. And so I think every new state is going to present a different challenge from a consumer adoption standpoint. And so I'm really fascinated to witness that as well as how quickly mindsets will also shift nationally around cannabis, especially as more states with the last election move towards federal legalization. And I think at this point, there's something like over 80% of people in America support legalization, whether it's just medicinal and recreational. And so we really are changing quickly from a mindset perspective, but that doesn't necessarily mean individuals themselves are going to feel comfortable indulging. So I think it's going to be really interesting to see how it evolves both on a national but also like a state by state basis.

Shayda Torabi  42:59  
Yeah, y'all are now in how many states operating?

Blair Markell  43:03  
You're in California, Nevada, Massachusetts, Illinois, and Rhode Island. Awesome. And

Shayda Torabi  43:09  
what is kind of, I guess the takeaway of because you highlighted it right, California, especially being so canner friendly, going into some of these states, especially with newer markets like Illinois being one of them, I'm going to go to Chicago later this year. I literally I'm like okay, I'm gonna go to the dispensary go explore everything go buy, some can go experience it, but like you highlighted 80% of America give or take is in favor of this plant. But then these markets are so new. So what have been some maybe the learnings or the challenges that you've experienced trying to bring these brands into these markets? Or maybe what has encouraged you to go to a particular state over another state?

Blair Markell  43:45  
Yeah. So I mean, one of the most fascinating things I've learned is, is fortunately been a really good surprise, which is Illinois, as you mentioned, is definitely not as its newer to cannabis. It's one of the states that's like been the most recently recreationally legalized. And it's definitely a lot less typically cannabis friendly isn't in California would be and we launched there at the end of April. And I think it was one of the most successful new state launches that we had even more so than Nevada that you would think would be a lot more cannabis friendly. And I think it was because of the fact that all these consumers that were all of a sudden interested in this industry, they weren't people like in California that had the benefit of this very budding black market where even though it just got legalized, people are like, Oh, yeah, I've been consuming cannabis forever. In Illinois, people saw this industry come and they weren't existing cannabis consumers and for them to walk into dispensary and have been tender, say, oh, you're new? Well, this product is perfect for you. I wasn't expecting for it to take off nearly as much as it did even just one month into that market. And so that was a very, very pleasant surprise. That doesn't necessarily mean it's always going to be easier. There's not going to be without challenge especially to get it to scale up and up and up. But it was very promising to see that one of these markets that we thought might be more challenging from a cultural standpoint actually ended up a very, very strong launch for us. So I think I'm most excited to see what happens in New York because I think people are both very ready. And also not like California where a lot of them have very high tolerances. And so I think that market New Jersey are going to be probably some of our biggest markets for sure.

Shayda Torabi  45:23  
I'm excited for y'all to expand. I'm excited to get my hands on some can. And I just thank you for the time and walking us through kind of how the brand has grown and really, genuinely commend you all for entering the market at such a position that you did. And it's just proof that people are hungry for that type of product and sky's the limit. So thanks for joining us today. I don't know about you, but I'm very thirsty and very eager to try what a cool journey especially realizing how young this company is and how much value they've been providing in this space, how much market share they've been able to accumulate and also the different pieces that they've been able to navigate and address by going direct to consumer i think that that is a huge roadblock for so many brands who are trying to navigate cannabis and get their products out to consumers. How do you play with distribution models How do you play with dispensaries all those different things crossing state lines etc and just really cool to hear from Blair How can has navigated that so thanks for tuning in to another episode y'all know I'll be back every Monday with a brand new one if you want to connect with me online slash offline from the podcast you can find me on Instagram either at the Shayda Torabi if you want to hang out with me or at To be blunt pod if you want to tag the podcast thank you for your listenership. I appreciate it. You're helping make this podcast grow. And it's so cool to get to hear stories from y'all about different episodes and different things that have resonated and helped make your navigation of the industry that much more smoother. So from the bottom of my heart to yours, I appreciate you. So catch you guys next week. And don't feel like you can't reach out I'm always around by love this

Announcer  46:55  
episode of To be blunt. Be sure to visit the Shayda torabi.com slash to be blind for more ways to connect new episodes come out on Mondays. And for more behind the scenes follow along on Instagram at the Shayda Torabi

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