Modern Bud: Cann's Path To Becoming A Next-Gen Billion-Dollar Brand

23:12We had big questions. We were like, can you make the product? Can we create something that we both love and think tastes delicious? Can we raise the money? Those were the big three questions we had to answer. And we went into formulation exercises not really knowing. We didn't have constraints. We sort of knew we didn't want to use fake sugar or natural sugar substitutes that left a bad aftertaste. And we cared a lot about all natural ingredients. But beyond that, we didn't have any real constraints in the formulation exercise. We got lucky. The liquid that we came out of, that would have been September of 2019, a week in the lab, is the liquid that's in the product today.

23:42What do you have to learn about the beverage industry? What did you have to learn about starting a brand and putting liquid into cans? Because that is not something that, you know, you can do without a lot of help. Right. No, definitely. It's funny. Had we known what we didn't know, we probably wouldn't have started this company. I think that's the hundredth time I've heard that on the podcast. It seems to be like that piece of information that everyone shares, but no one internalizes. I think for us, it's beverage, like you mentioned. It's just structurally more challenging, right? We're talking about something that's heavy.

24:15It's liquid. It's cannabis, which has its own unique regulatory constraints, but also just the transition that the industry is going through is creating all of this newness. And so the idea of like finding a co-packer is challenging, which would not be the case in traditional beverage. And then there's natural. And all of those kind of intersect in making our request near impossible. And it forced us to have to really, like you say, learn a lot about the beverage industry. we were lucky in that we kind of dovetailed with the boom and sort of decline of craft beer, regional craft beer. And so we had access to capital, which was basically like the equipment that would make these products was sort of perfect, leveraging craft beer equipment.

24:53We had tons of knowledge online. I mean, we were able to, Luke and I came into this knowing very little about food science, beverage science, cannabis science, manufacturing. You know, we had like sort of a cocktail party familiarity with how these things should work. And just spending time online with homebrewers and blogs around homebrewing, going to brewery supply stores, asking questions. We had like these little mini pony kegs that we got and CO2. The technology is kind of the same, interestingly, when we did our early prototyping. And we did them in glass bottles initially because it's so much easier to seam.

25:24And then we would test that on folks. But once we even switched to cans, we had this hand crank seamer, which I think you had to crank 18 or something times to just seam one can. That's the exact same technology. The forced carbonation, this, the seeming technology is the same technology that's used on these massive lines today. It's obviously much faster and there's a bunch of them and everything, but we learned all of that. We had a view from the very beginning that there are certain things that we didn't know anything. So we had to start there of the stuff we didn't know. There are going to be things that we wanted to learn.

25:52And if we wanted to learn them, then we would learn them. And we learned fast. That's one thing that we could do really well. If we didn't want to learn them, we would find somebody that already knows them and engage that person to help us. And so we also worked with a lot of really smart people, food scientists, master brewers that were able to help teach us these things. And then we hired really great people that already knew it as well, or similar to us would learn fast. And so we got up that curve fairly quickly, but we're constantly dealing with, especially in the early days, science challenges, food science challenges, stability.

26:19I mean, these are products that not only do people consume them, they ingest them, but they change slightly the way that they perceive the world around them. So it was really important to us that we had the safety, the quality, like I did not want to give anybody botulism. And I also don't want to make anybody, you know, uncomfortable because they consumed too much of a product that they weren't sure exactly what they were going to get. And so those were really important challenges. We learned them quickly. And because we were the first, first microdose cannabis beverage, first to sell in multi-packs, we had to build a lot of this ourselves, helping speccing out facilities, sourcing capital, running our supply chain in a world where maybe you would have gotten a lot of support from co-backing resources and companies in traditional beverage.

26:59So we had to do a lot of it ourselves. Looking back, I think it was really helpful because it taught us a ton about the industry and it also gave us a real perspective. I mean, we could move as fast as we could move, which was scary, but also exciting. Sourcing capital, you've mentioned that a couple of times, and I don't even know how you start with an investment plan or strategy for a brand like this, at least early on. Data is possibly, I guess, one way to start, you know, just showing the potential for a brand like this. Was data as important as I think it might be when you're talking to an early stage investor?

27:32Yeah, it's interesting. So we think about it a lot as in the beginning, when you're pitching an investor, there's a couple of important things. The first is absolutely how can you use data to show the potential, right? Because they're evaluating how big could this be possibly? Like, if I believe you and you're successful, Like, what are we talking about here? And we, you know, investors, especially early stage investors need that number to be really big because they're, you know, they're, they're going to, most of these are going to fail. And so that's important. The other thing is they're assessing you and sort of, are these the right folks to do this?

28:00You know, they could believe every single thing we have down on our slides and still say, I don't want to invest because I'm not sure you're the ones that should do this, right? Like what uniquely makes you capable of executing on the plan that you've created. Now, some of it is that you created and you know it, but a lot of it is sort of the second piece, which is how do you make it more than just a presentation, more than just a set of pages that you share or walk through? And for us, that was easy. I think a lot of beverage companies have this weirdly, it's an advantage because we bring the product to the pitch.

28:27It's in the room. You know, we can make, we can build this because it's sitting in front of you. And now maybe we'll change the branding. We didn't have it right in the first, which we didn't, but smart investors get that. They'll say it like something to the effect in the room is like, well, we know you'll figure out the branding. That's, that's the easy part. You just need the money to do that. Right. But having the liquid, having them be able to crack open a can and taste it again, this is why we hand-seamed like 18 times every single can, which took hours and hours. But that experience helped investors understand that we actually are able to make this product because we did.

28:54We made it. And how we did it was, you know, they didn't need to know at that point. But that really helped bringing it away from just a presentation that's on a set of pages and into the room in a real way. Did you ever encounter an investor who said, I don't think you're the great guys to lead this brand, this company? They never said it in those exact words. I'm sure there were investors that thought that. we got a lot of no's and no's are never really no's. They're kind of like, yeah, let's keep chatting or like, right. Best of luck with things. You should meet this founder or whatever. Yeah.

29:20Everyone wants to be nice and play nice and they want to be helpful because ultimately they don't know either. Right. Like a lot of times people would, in the very early days when we were fundraising, we would be sometimes halfway through a pitch and we'd realize, oh, they think we're a CBD company. Like they don't even realize that we have THC in here. Right. And that was like, oh God. And we had a bunch of those. I mean, I would say maybe 20 pitches where Luke and I, going back and forth between Bay Area, New York, LA, and everyone was just kind of like either using us to get smart on the industry or thinking we were CBD when we weren't or trying to push us to become CBD when we didn't want to.

29:50And so we struggled a lot with that, but it only takes one. And once we had one, it was amazing how many other folks that we had talked to before came back being like, oh, we want to get in. And so that's kind of the last piece of fundraising, right? Which is there's a lemming mentality to it. You need to get one. Once you have one, it changes the conversation. Once you have one, do you tell the other investors or does that one tell the other investors? You tell them. We did at least, right? We were like, great, we've got somebody who wants to take the whole round. We think you'd be really strategic and helpful.

30:17Let us know if you're interested. We're going to close this out in a week. And then most of them come back saying, yeah, we're in. How much can you give me? So when do celebrity investors come into play? Yeah. So that was a whole nother phase of fundraising. And it didn't even really start as like a fundraising. It wasn't intentionally about fundraising. It started with us in the early days being pretty generous with product. So anybody that would follow us with a blue check on Instagram, we were like, Oh my God, can we give you a free product? And we started in LA and a lot of LA is built around this interesting sort of like media ecosystem where people leverage their proximity to famous people to get free things.

30:51And they do it really well. So good, good for that. And we kind of took advantage of that in the early days being like, Oh, oh, I'm so-and-so's hairdresser, or I do, you know, styling for, you know, this person, that person. And we're like, great. And we'd love to give them can't. And we give this person can't to bring them. And, you know, the reality is it's probably never getting to them, but we would always follow up and we'd say like, Hey, did, did they get it? Did they like it? What was the feedback? Right. We used, we did a lot of this in the early days around the guys of feedback. Cause we really wanted to know, we're like, do we need to change the liquid?

31:15Like what's wrong? How do we do you think about positioning? And so that was like a big part of the early celebrity strategy. Wasn't even intentional. It sort of emerged, kept getting these products in hands of people around LA and was mostly Luke and I driving them in cars, dropping them off and trying to tell the story to whoever would listen. Interestingly, most of them never heard from again, but a few would come back and say, this is amazing. So-and-so loves it. Can they get more? Or can I get more? Or then we'd start seeing more people follow us. Partly because it wasn't available in that many places because we only had a handful of MedMen dispensaries were available on Ease at the time.

31:46It became a running joke that like Ken was the hardest product to find. And so people would reach out to us trying to get a delivered free product. And that was kind of the way we laid the groundwork. Then we started getting these conversations with celebrities, some early ones like Ruby Rose, Gwyneth Paltrow. And the way we had the conversation with them was really about telling them our story as if they were investors. So we didn't do the whole, let's have a big marketing services, commercial agreement, get your agent involved, get your business manager involved. You'll agree to do these things.

32:14We'll give you this like share of equity in the company. Like we didn't do any of that. We were basically like, we're raising a round if you'd like to invest. And this was a big idea because celebrities are used to brands sending them checks. And we got them to do the opposite, which was send checks to us. And the way we think we pulled that off was really getting them excited about the story. And it was the product. Like people ask me, Jake, how do I do the can strategy and get a bunch of celebrity investors on my cap table? And the answer is there is a strategy there. The good news is you can execute it.

32:41The bad news is it depends entirely on your product and how that resonates. And so for us, we had a product that was endemic to entertainment. People are already focused on what they put in their bodies. They can't be hungover if they're showing up for, you know, an early morning shoot, if they're touring, like there's all sorts of ways in which alcohol can really, really be bad. And then a lot of them have had, you know, ups and downs in terms of their relationship with alcohol. Some of them are sober. Some of them are Cali sober, right? They've been stoners for 20 years. And so our products sat perfectly in that sort of intersection that folks in media and entertainment are so focused on.

33:12And so that helped us a lot. Once we got the early sort of investors from folks like Quanta Paltrow, it was pretty easy because then others were like, oh, we want to invest too. And then we sort of kept letting people in. And it's been great because we treat them like investors because they are. They're smart business people. They like the product. They understand that they should be investing some of their wealth into early stage venture startups. It's not always easy to do that with big funds. And they love doing it with products where they identify with the actual product and also with the founders in the story.

33:40And they want to kind of be along for the ride. Sometimes celebrity investors or partners don't necessarily want their name out there for one reason or another. How did you get your celebrity investors to give you permission to use their name? Yeah, not all of them have. So we have quite a few that we aren't public about. And that's also fine. Like in our mind, it's, this is a long process. We're building an army. And so we think that, you know, over time, maybe they will become more comfortable with it. Maybe it's cannabis. A lot of these folks have global brands. Cannabis is not global in any way.

34:10And so we think it will over time. And so we're really respectful of that. But for the ones that did come forward, I think one, it was really cool for us because it was them sort of saying like, yeah, I'm comfortable doing this. Some of them have already had some public conversation about cannabis consumption. Most of them have not. Like we really didn't go after folks that had strong sort of legacy stoner cannabis brands, in part because that's not really how our product's positioned. And also because we are trying to send a message when And it's really difficult to do marketing in the space.

34:39There's tons of restrictions. And so building an army of investors, particularly ones with big megaphones like celebrities that haven't really been public about cannabis, for them to be public for the first time, that was really powerful. And so we had longer conversations with them about the brand and the story and what we were building. This is also a very different cannabis product than what most people think of when you're thinking of this industry. It's only two milligrams of THC. It's in a beverage. You have to drink the whole eight ounces to get the two milligrams. If you drink both of these six packs here, you're not even getting that much cannabis.

35:10And so that helps. It would be really hard physically to drink both of them. So I think those things, being the safest product on the market, having the positioning be approachable, having the brand be kind of more on the nose and a little bit playful, I think helps a lot with folks getting comfortable being public about it or even bringing it to a party, right? If you're just a random person on the street, it doesn't feel like you're doing something really bad. And part of that was our goal. How do we take cannabis, the industry, from under the table and put it on top of the table? I think I read in a past article where you had mentioned that the problem with cannabis is that everyone's had that really bad experience in college that has left us afraid.

35:49And I think that's true. I mean, before we started this conversation, I told you I'm not a cannabis consumer. I've never consumed cannabis in my life as far as I know. And it's just something I think at this point in my life, it's weird because I almost feel like there's no reason to start. I think it's the same thing with people who drink alcohol or have never consumed alcohol. They're just like, well, why would I start now? I don't really feel like the need for it. All that being said, how do you convince people that this is the safest product on the market? How do you convince people that they should try it if they are not necessarily or they are hesitant about consuming cannabis?

36:26Yeah, it's a good question. And our goal is not necessarily to get folks that are sober to start consuming cannabis, right? Like I think we truly are positioned socially and as an alcohol alternative because the battles we want to fight are helping people be a little bit healthier by choosing to drink can instead of booze or choosing to drink can instead of taking sleeping meds or something like that, some other prescription. And so for folks that are kind of wary about cannabis and they're thinking like, ah, maybe I had that really bad experience in college decades ago. So I swore it off entirely, or I've recently had a bad experience, which many have as cannabis has become more common and states have legalized it.

37:02People have gone into these dispensaries and taken products. They're often recommended products that are way stronger than they should, or they don't want to smoke or vape, which is totally understandable. And so they go to edible products that tend to be the more intense experiences, just the way that the body processes them, the time that it takes for them to kick in the potency often of these edible products. And so we start with potency. That's the most important thing. We talk about it being the same strength as a glass of wine or a beer. And it is. If you drink one can, it's going to take about an hour for that to get out of your system or what it's doing in your system.

37:33You're not going to really perceive. It's not affecting you as it was maybe at the peak, which you might feel at like 40 minutes or something, 35, 40 minutes. Everyone's a little bit different. And so we also encourage folks to take it really, really slow. Just like think about the first time you consumed alcohol and like the journey that folks go through to really understand what their alcohol tolerance is you learn all these lessons about being hydrated or like eating. Those apply here as well, right? Then everyone's going to be different. You know, cannabis is the THC comes from an oil distillate.

38:00So it's fat soluble. We have to emulsify it in the liquid in order to get it to be homogenous. That means it interacts with the contents of your stomach as well, right? Just like, you know, alcohol would if you had a full stomach or didn't. And so we try to encourage folks to take it really slowly and learn about themselves and how it works in their own body. The last thing that I think is important here is it is an intoxicant. It's a very mild intoxicant. We think it's milder than even caffeine and alcohol in many ways, but it's not nothing. And so I think folks that are trying to be sober or don't want intoxicants, you know, shouldn't drink it.

38:32When you are thinking about the next steps for scaling this brand, what is top of mind for you? We've invested a ton in the brand. Obviously, the product consumers love. From the very beginning, our view was that we wanted nines and tents. We wanted people that couldn't help but tell everyone about our product. That was more important to us than distributing really quickly, really far and fast into different places. That is still the case. We have such a strong, loyal customer base that loves the product. Now it's about how do you make that into a real business that can sustain itself? And so we're spending a lot of time thinking about how do we get the right cost structure in place?

39:06How do we get the right manufacturing infrastructure, the right distribution infrastructure? All of these pieces which are harder because it's beverage, harder because it's cannabis, even harder because it's natural, layer on top of each other. And what we have to go prove to our investors, to ourselves, to the market more broadly, is that these can be real businesses. We're the biggest. And so if we can't do it, no one else can. And we've got really good line of sight to being able to do it. And so part of what we're focused on this year, in addition to expanding to places like New York, which we're really excited about, is really taking the core of our business and making it more efficient, making it run a little bit more smoothly, a little bit more cleanly.

39:41We had a ton of products, a ton of SKUs, all sorts of flavors, seasonals, limited time, this and that, different markets. And each market has its own requirements from a SKU standpoint in terms of packaging and compliance. So that wasn't just like we could buy packaging across the country, right? There's not as much scale benefits in this space. We're paring that back. We're really focusing on what's driving the value. What do consumers love? Let's put our attention there as we really demonstrate that these can be real businesses. It's going to be hard. We're still regulatory environment. We need to be able to access the infrastructure that's already in the ground that's doing BevAlk, soft drinks, things like that.

40:16That would really be the key inflection point. Whether that requires federal legalization of cannabis or not is unclear, but it requires some changes in sort of the legal status and how we're either operating between states or federally. So that may take a while. And that's also why it's really important for us to build a sustainable business now that doesn't require us to continue to rely on raising expensive equity capital from outside investors to fund the growth. As you noted, it's going to require, or it may require buy-in from politicians. A lot of politicians read the New York Times. There was an article last year, kind of a leading headline, I would say, are we drink safe?

40:53And I think there was some controversy, or at least there was some pushback from the cannabis community about some of the things that you read in the article or some of the things that were printed in the article. I mean, are you finding that politicians are sort of thinking about this in a different way? I mean, did an article like that hurt the movement, hurt the opportunity? Yeah, I wrote a response to it, which is available online and on Medium that kind of went through point by point the article and pointed out some areas where I think there could have been some more research done or perspectives that weren't brought to bear.

41:26The thing that frustrated me, I think the most about the article is it was keying off of these past tropes around whether it was reefer madness, the sort of panic around these substances. We know cannabis is very, very mild and safe. You cannot overdose from it. That is not true of alcohol. The research into cannabis has been really limited because the federal government for decades has prevented any research or proving any funds for research into the benefits of cannabis, only into the harms. And so when you look at the body of research that's out there, it's obviously skewed based on that fact.

41:56I think what the article missed were sort of two key points. The first is the comparison here. Let's put these products in context. we're not talking about 100 milligram THC chocolate bars. Like that is obviously a different risk profile than a two milligram drink where you've got to drink the whole thing in order to get the two milligrams. Those should be thought of differently. I think the article really differentiates between that. Of course, we would agree a hundred milligrams of THC is a very risky product that should be highly controlled. I don't know if that's the case for a two milligram beverage.

42:24The second piece of context that the article misses is we're not comparing this to vitamins. We're not comparing this to doing nothing and being sober. We're comparing this to drinking alcohol. That's the most dangerous thing that everyone does to their bodies on a regular basis in this country. And so if you can pare that back, even just a little, 10, 20%, that has got to be more healthy than the current state. It's got to be better for public safety. It's got to be better for public health. Think about all of these challenges that we're facing in society. We're seeing it here in New York City.

42:52We're seeing it across the country. Alcohol is a huge problem. I don't even want to go into the opioid epidemic, but cannabis may provide an opportunity there to get folks off of many of these drugs. And so I think the relative context is the key piece here. We're not saying that everyone should stop drinking sparkling water and start drinking can. We're saying everyone should stop drinking alcohol and drink can, or should stop consuming hundreds of milligrams of these products. And so that context, I think, is the key piece when we think about what's actually going on in this industry. We drinks are safe.

43:21Most of them are two, five milligrams. And to answer your question about the regulatory environment and politicians, we are seeing real movement. So Minnesota last summer passed a law that allows cannabis beverages to be sold in grocery stores, liquor stores, bars, and restaurants, as long as they have five milligrams of THC or less. We think that's a really smart policy. Cap the amount of THC. That ensures that these are the safest products that are being sold. Other states have done similar things. Virginia has a two milligram cap that they just passed. Kentucky just allowed Delta-8, which we don't use in our products, but is a hemp-derived THC cannabinoid, they are allowing those products to be sold in wider places of distribution than just dispensaries.

43:58Again, capping the amount that you can have in each. Other states are debating these numbers. Maybe it's three milligrams, maybe it's five, maybe it's two. But the reality is they're all sort of thinking along the same lines, which is what is the safe amount of THC that we're comfortable with? If you remember way back in the day, 3-2 beer was a thing. You could sell in some grocery stores. We had to get the full strength stuff in liquor stores. That's not a bad model for this space. Let's think about the risk profiles of different cannabis products based on their potency. There's some stuff that should always be sold in a highly controlled dispensary environment.

44:25And that makes perfect sense. 100 milligram THC products should be in a dispensary. A two milligram social beverage that actually might want to sit next to beer and non-alcoholic beer on the grocery store aisle, because it's going to encourage a consumer to potentially make a healthier choice for themselves. You have strong and thoughtful, intelligent positions on where cannabis beverages should be sold, how they should be marketed, et cetera, and you seemingly have a great megaphone for that in the media arm of what you do, can you use your expertise or can you leverage the success that you've had in communicating what can is and why you should drink it in a sort of educational way, getting people to understand that this is a safe product in so many ways?

45:10Because I think your marketing, you have to be really careful with that, right? Like Instagram will give you some problems if you say certain words. And I think safe might be one of them as it relates to cannabis. Yeah, we have to be very careful about the specific words that we use. Part of why our lives are a little bit easier in the social positioning is we don't make any health claims. This is not a product where we're saying it's going to cure you of this or it's going to make this bad thing better. It really doesn't do any of that. What it does do is it doesn't have alcohol. That's the best feature of our product, right?

45:38And so it's able to deliver on a buzz without all the negative effects of alcohol. And so we talk a lot about that. And in that way, we think it's relatively safer. But safe is not really for us to determine, right? That's something where regulators and policymakers will really intervene to understand. We've got a lot of thoughts on it. I think five milligrams is a good place to draw that line. Three would also be fine. But those questions of safety really do require a lot more research. And we don't know. I mean, part of what the article does, which I criticized it for, is saying, we don't know.

46:06There's no data. We can't no, for sure. And this is like a common thing that I think researchers and folks that are involved in sort of consumer protection will point to without actually asking the question of like, well, why is there no research? And also, don't we have hundreds and hundreds of years of cannabis consumption data that have demonstrated the safety of this product? And the answer is yes, we have. I think often science researchers don't always pay attention to that. They maybe should. It's obviously not in controlled experiments, but this is outside of the world of controlled experiments in some ways because you can't really get consumers to describe to you what they're feeling.

46:37And it's obvious that they're feeling something. So they're more challenging in that way. But yeah, we would love to do more education. I think it's a balance in marketing. How do you establish the brand, talk to your consumer? We want to talk to them about this really fitting into their lifestyle in a certain way. That's a different audience than kind of what you're describing, which is how do you go over the top to policymakers, to decision makers in these various positions in regulatory bodies and talk to them about safety, talk to them about how would we even begin to estimate the impact to public health if people drank 20 % less booze?

47:07Who knows what they're doing instead, but like, it doesn't even matter. Like what would that even look like? I think it would be pretty impactful. Yeah. And I bring up the media part of what you do, because again, you've been really effective at it. It's beautiful. It's very well designed. It's pro. I mean, you know, for a four-year-old company, it is absolutely better than, you know, 99 % of the other content that we see out there. You've invested pretty heavily in media and content. Why, number one, and how have you gotten so good at it, number two? Yeah. So initially why is because we have so many restrictions in terms of what we can and can't do from a marketing standpoint.

47:45And in some ways it's good, right? So we were not forced to go down the race to the bottom performance marketing, digital ads world because we couldn't. Facebook, Instagram, terms of service don't allow cannabis advertising. Now maybe they should, That's a different conversation. But because they didn't, we weren't spending tons and tons of money on performance ads alongside a bunch of our peers all trying to compete for our eyeballs. We had to do a different approach. We had to be more local. We had to be more community-based. Although then we had the pandemic. So we're like, okay, you can't even do events.

48:14So we were in this weird world of how do we tap into the story around the brand, do real culturally relevant, authentic narrative storytelling, which is like what is in Luke and Mai's DNA, and do it in a world where we can't really have live events. We're not really in person. We can't be digital. How does this actually show up? And so the way we thought about that was we have this amazing cap table of celebrity investors that want to help us. They're also sitting around in the pandemic kind of with nothing to do. How do we tap into that and tell stories? Tell stories around holiday. Tell stories around pride, which is really important to Luke and I being a queer-founded company.

48:46And do it in an authentic way, right? Where there's real representation in front of and behind the camera. Do it in a professional, like high production context. I think that was also important to us because this content was going to live sort of on its own on a streaming channel, right? Or in little video clips that we put on our owned social media presence, it had to be really good. I think that's what drew people in. That's what really got the headlines and the earned media and the stories around it was the quality behind it. It's also what gets people like famous celebrities to show up, right?

49:17Because they're not going to come to a shoot that's being done with my iPhone, for example. And so there's a balance there. We got good at it by kind of trying it a bunch of different ways. We started out really small. It was like Luke and I doing video stuff, like lots behind the camera talking about how to make cans, growing up a little bit bigger, getting some of our talent partners involved, our celebrities involved, and then also really thinking about what is the message we're trying to get across, right? So the holiday campaign we did two years ago was really about the combination of alcohol and cannabis, which is controversial, right?

49:46You know, most states in the regulatory regimes don't allow those combinations. And so that was like a big idea that we had. Most of our consumers do mix them. Like I said, we're very inclusive. This is not like no alcohol and only can. It's actually, these things can work together in healthy ways for people. Everyone's gonna be different in what that wellness looks like. And so we did a campaign with Kate Hudson, Baron Davis, Darren Criss, all around sort of like a holiday experience with can and King Street Vodka, which was really fun and exciting. Of which Kate Hudson is an investor. Yes, co-founder of King Street, a great vodka product.

50:17And then in the summer, we did a music video for Pride with a bunch of queer and queer allies. It was incredible. Music videos, I'm wondering why more brands don't do music videos because people continue to watch this thing and will continue to watch it. And we'll probably watch it again, starting in the summer again. So unlike a commercial where you sort of see it once and you've seen it, and this has a song, it brings people in, it has something at stake in the lyrics about Cannes, but also about life and how to live it up to the fullest. And so those were really kind of exciting examples of how we were able to take restrictions in the marketing world and use them to our advantage to create some sort of really high concept marketing that resonates with consumers.

50:52And that's what they love about the brand is our ability to tell these stories. How do you think about your spend on media and content as it relates to the impact that you hope it will have? Yeah, we really had to figure out how to do this in a way that didn't break the bank. These things are expensive, generally. We were really fortunate early on to have an investor at London Alley in our earliest investment round, a video production firm based out of LA, really cut their teeth on music videos. So have a lot of experience working with talent on tight timelines, tight budgets. You got to do this shoot in a day.

51:27It's got to be perfect because it's going on MTV or wherever music videos go now. And then grew into doing this work for brands. And so they have really strong commercial business as well. And we partnered with them to make all of these videos and now are working with them more closely using our creative team and resources, their video production capabilities to really build out this new venture that helps brands tap into what Can has done. We get people reaching out all the time to Luke and myself saying, hey, we love your marketing. Who are you using? What's your agency? And we say, well, we actually have a different approach.

51:56We do integrated creative and video production capabilities all under one roof. And we really want you to come to us to help think through that story and like what's relevant for your brand. We're not going to sort of just take a cookie cutter agency approach. Luke has been really leading that charge and working with the London Alley folks to build out a new business there. Ken has been building out a platform. You have your two primary lines of products, your THC infused line, your unspiked line. You used to have a light line that was there around for a minute. Yeah, we had some limited and seasonal products around lights.

52:26We love the light products. They're kind of ones that maybe we will bring back over time. But the key innovation there was no added sugar. And so they were a little bit different in terms of flavor concentration, but also delicious. Ken also acquired a CBD beverage called Sweet Reason last year, which was a pretty interesting move for the company. You don't typically see emerging brands buying other emerging brands. That was pretty interesting to see. Are you building out a THC CBD platform or is it a social beverage platform? And to what end? You know, in our business, sometimes the ultimate goal means selling to a strategic or at least aligning with a strategic but you know we've seen some brands do an IPO or just sustain as its own company and i guess how are you looking at can as a platform independently or can you know as a potential company that could be acquired by a strategic right we really think about the company as a social beverage company first and foremost so we ask ourselves questions like is it social and for us that can mean a number of things but obviously can is the first brand that we've we've brought out of out of the company.

53:33And we've got a few others that we're playing around with and are excited about. Being social is really important to us. Telling that story around social is what we think is going to really lock in the long-term value. And we see that as we look to alcohol, we look to other beverage brands that have been successful. Such a new category that we've also found over time, we have capabilities outside of just the canned brand, right? The supply chain we set up, the infrastructure, the creative and design capabilities. We're able to turn around new SKUs, new packaging, design work on really, really fast timelines.

54:02And so one of the amazing things about beverage, there's a lot we've talked about that are challenging, but one of the amazing things about it is once you have that infrastructure built, that supply chain and capabilities built out, it's really easy to plug in new products. It doesn't cost that much incrementally to change this label and change the liquid. The hard part is actually all the pieces that go around it. And so the opportunity to innovate and test around different flavors, different brands, That's something we've always had energy around from the beginning. Now we're getting careful about it more so now than maybe we would have been two years ago where it's just like, let's test it.

54:32Let's try it. We're managing inventory more closely. We're trying to get to that next level of efficiency. So it may not be on the same timeline or frequency, but we are playing around with all sorts of different ideas. The CBD company, Sweet Reason, that we acquired, there's a lot of learnings from what CBD went through over the last four years for our business going forward, we think, particularly the environments in which those products were sold. You've mentioned a number of times that can is not anti-alcohol. However, I think a strategic might see some of your content and say, well, they are trying to tell people not to drink alcohol, or at least reducing the opportunity for people to buy alcohol, my alcohol specifically.

55:14So why would I partner with a company like that? How would you address that kind of question? How do you address that topic? It's interesting. We get this occasionally from advisors and folks that have a similar experience to you of seeing our marketing and saying, wow, you're really going hard against alcohol. One, I think you need an enemy in all marketing and whether that enemy can be shifting. For us, often it is alcohol. And that doesn't necessarily mean that you don't also like it, right? Like in some ways, alcohol is our frenemy, but you need that. You need that sort of what is the salient emotional piece that we're touching on?

55:43And it is hangovers and that is alcohol. And so we have to be honest about that. I would kind of throw it back to the strategic and say, how can you not partner with a company like us? Look at your own data. I don't know. Look at it in states where cannabis is legal. Look at it in states where we have our products on the market. What are you seeing in your data? And what are you seeing in the data of the millennials and the old enough Gen Zs? Are they consuming at the same rates or not? How can you not partner with a company that has an alternative, right? And I think that's really the right way to think about it.

56:12And these companies are doing it. I mean, look at all the beer companies having NA beer come out, right? I think that it would be really, really smart to have brands like Cannes that are tapping into the nerve around alcohol and doing it in a way that is still social, that is still playful, that doesn't take itself too seriously, that is about having amazing experiences with friends, amazing experiences with family. In some ways, our marketing is really, really aligned with alcohol if you just take the social beverage perspective. Where we differ is in the sort of side effects of the functional ingredients.

56:43And I think that it would make a lot of sense to me as a big strategic alcohol company or even a big strategic tobacco company to think about what are those pieces of buzz that we want to own across the sort of overall spectrum of buzz sources? And where should those show up in our end retail and what that conversation we want to have with consumers looks like? And I think both are really well positioned to take on cannabis products, both because of where they sell their products today and where we think our products will ultimately be sold. and also because if I'm them, I want to own as much of the share of buzz as I can.

57:16I asked you about business school and you said business school taught you a lot about what you didn't want to do. And you did realize that you wanted to build something big. Ken is on the cusp, I think. You guys are close. Getting bigger every day. Yeah, yeah. Do you feel like this is going the way you thought it would go? I mean, in so many ways, no. I think that part of what is equally frustrating but also so energizing about starting a company in this space or in any space, I think, is I would do it all differently if given the chance, right? I think there's so many lessons and learnings coming out from every choice we made.

57:48And you just have more information after time passes. See the results of those decisions and you look back and saying, oh, we would have done it this way or that way. And so for me, I talk a lot about that expensive education that started after my expensive education. It's those things. It's being like, oh, we would have done this differently, that differently. What's great about CAN today is we take all those learnings and we deploy them in our future strategy and future plans of growth. And so we continue to get better. We continue to learn. In some ways, being the first, we got a head start.

58:13It was the hardest. We plowed the way for so many of these products, which is exciting, also frustrating because it was really expensive. But in doing that, we've learned so much. We've invested so much in the brand. And so we're only getting better. We feel like we continue to be on that bleeding edge of social change and how people think about the way in which they socialize is changing every day. And it's exciting to be a part of that. So the one regret is money. Spending too much money. Oh, we spend so much money. Money is how it shows up. It's sort of like the record keeping of all of the mistakes.

58:42And so you can, I think, sometimes get lost in that. But the way I like to think about it is we invested that in the brand, in the product. We've talked so much about how it shows up from a packaging standpoint, the liquid, what it says about people when they buy it. That is really hard to quantify. That's what we've invested in. We would love there to be more places for us to sell this product to really see that investment payoff. That's the missing piece. We don't have a product market fit challenge. We have a distribution channel challenge. That may just take time. Jake, we've been chatting for quite a bit of time here and it feels like it's flown by.

59:14I feel like I could sit here for another hour with you and talk about Ken and the future of the company and so many other things. But I know you're a busy person and I really appreciate the time you've given me today. Congratulations. Thank you. On what you've built. It's a trip for me because being on stage with you guys, you know, four years ago, I think there were some questions about, oh, is this a niche concept? Is it actually really going to succeed on the market? And you've definitely proven yourselves. And I guess you've given the showdown even more validation for why people should sign up for it and participate, because you could be the next can if you get your act together.

59:53Yes, it really launched us. It's great to be here four years later talking about all the progress we've made over the last four years. Yeah, we should do it again soon. Let's do it. Thank you so much again. Thanks, Ray.

1:00:04That brings us to the end of this episode of Taste Radio. Thank you so much for listening. And thanks to our guest, Jake Bullock. Taste Radio is a production of BevNet.com Incorporated. Our audio engineer for Taste Radio is Joe Cratchy. Our technical director is Joshua Pratt. And our video editor is Ryan Galang. Our social marketing manager is Amanda Smirlinski. And our designer is Amanda Wong. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. and of course we would love it if you could review us on the apple podcast app or your listening platform of choice check us out on instagram our handle is bevnet taste radio as always for questions comments ideas for future podcasts please send us an email to askataste radio.com on behalf of the entire taste radio team thank you for listening and we'll talk to you next time

1:01:03Thank you.