Changing the Game – How 1906 is Redefining the Cannabis Industry Join Peter Barsoom,, CEO & Founder of 1906, as he walks through the groundbreaking journey of building one of the cannabis industry’s fastest growing edibles companies. With host Karson Humiston, this episode of Proud to Work in Cannabis is filled with insight into building one of the cannabis industry’s most successful brands, and an inside look at the highs, lows, and oh-f moments in between. Get an exclusive inside look at the remarkable story of building 1906. Karson Humiston - https://www.linkedin.com/in/karson-humiston-64572b97/ Vangst - https://vangst.com/ Peter Barsoom - https://www.linkedin.com/in/pbarsoom/ 1906 - https://1906newhighs.com/ Recorded on Squadcast
Changing the Game – How 1906 is Redefining the Cannabis Industry
Join Peter Barsoom,, CEO & Founder of 1906, as he walks through the groundbreaking journey of building one of the cannabis industry’s fastest growing edibles companies.
With host Karson Humiston, this episode of Proud to Work in Cannabis is filled with insight into building one of the cannabis industry’s most successful brands, and an inside look at the highs, lows, and oh-f moments in between. Get an exclusive inside look at the remarkable story of building 1906.
Karson Humiston - https://www.linkedin.com/in/karson-humiston-64572b97/
Vangst - https://vangst.com/
Peter Barsoom - https://www.linkedin.com/in/pbarsoom/
1906 - https://1906newhighs.com/
[00:00:00] Hi, I'm Peter Barum, co-founder and c e o of 1906, and I am proud to work in cannabis because it's one of the most amazing plant medicines that nature has given us. And it's about time that we use this plant not just for healing, but for, uh, changing society as well. Hey everybody, and welcome back to another episode of The Proud to Work in Cannabis podcast.
I have been looking forward to this episode, and we've been working on getting it scheduled for a while now I'm really excited to have the co-founder and c e o of 1906 Peter Barum here with me today. Peter, glad to have you on the show. How's it going, Carson? It is always a pleasure to spend time with you.
I've been looking forward to this. Thank you. When is the last time, was the last time we saw each other trailblazers? No. [00:01:00] Uh, yeah, actually it was right when you, and, and we missed each other when you were in New York closing your last funding round. Right. So I saw you So, wow. That that's Fall 2021 is the last time we saw each other face to face.
Yeah. Too long. Way too long. Well, I will, we'll, we'll do a live catch up just with a couple thousand. People, uh, listening in. But let, let to, to give the audience a little bit of context. Of course. I would imagine most people listening are familiar with 1906, the national brand that you've created the best product on the market, one of the best products on the market.
I'm biased of course, but how did you, what were you doing before you decided to create 1906? So, uh, I was in finance for 20 years living in New York, and I quit my job in. 2014 cuz I decided I, I no longer wanted to kind of pursue a career in, in finance and wanted to, [00:02:00] uh, work on something else and took a little sabbatical, uh, for a few months.
And then Geeta, my co-founder and I, uh, decided to get into the cannabis market. It was January of 2015. So, Colorado had been legal for a year. Washington State had been legal for a year, obviously a lot in, in, in the press around that. And we hopped on a plane, uh, January, 2015 to come to Colorado and check out what the market was like.
And what we expected to see was a well functioning market that had an array of different products and services serving the broad spec spectrum of consumers. Um, What we found was quite different than that, and what we found was a market a year in that was still largely focused on heavy user mail. Uh, uh, and flower where it was all about potency and all about [00:03:00] low cost.
Uh, and frankly, um, very little appealed to, uh, uh, to us and, and people like us. So, uh, that's where we thought there's something missing here. Um, if this is the first state to go legal and we know how amazing cannabis could be, why isn't anybody creating products and creating a brand that, that, that speaks to, uh, people like, like Geeta and I, and, uh, I remember it was at the end of that trip and it was pretty disappointed after those four or five days here thinking that, oh God, like maybe this market isn't ready.
Or maybe there isn't a market for. Uh, low dose control dose, fast acting products that deliver a specific effect and are, and are an alternative to alcohol and pharmaceuticals. But thankfully, the last meeting that we had, uh, was with Christian Cedarburg, um, who's, who's been our attorney ever since that.
First visit to [00:04:00] Colorado eight years ago, and it was after a two hour session with Christian that he made it all, not just possible, but feasible and exciting. Uh, and so I remember being in the car Git and I looking at each other and being like, okay, are we gonna do this? And we looked at each other and we said, yeah, let's do this.
And, uh, I, I owe, um, I, I, we owe a lot of the formation of this company to Christian's, uh, uh, vision and his support for the last eight years. Yeah. So unpack that conversation a little bit. What, what was it that Christian said that made you realize, okay, like, like what was happening in the conversation that made you go from being discouraged to encouraged?
Yeah. So when, you know, in those first four days that we were here, uh, I met with probably half a dozen dispensary owners, visited at least 20 dispensaries, met with a bunch of consulting firms that were advising [00:05:00] people how to get into the market, you know, and, uh, the general consensus from folks is, look, the things that people care about are high potency.
Uh, uh, flour, uh, cheap and gummies. Um, and so it was like, okay, that's great, but that can't be the entire market. Um, look, I'm a flower smoker. I love smoking flour. Part of the reason why we started 1906 is for those times in the day or places where you can't smoke flour, in which case your shit out of luck.
And back in 2015, less so now. Most edibles sucked. And they sucked for three reasons. You have no idea how it's gonna make you feel. Number two, it takes way too much time to affect you. And number three, it's often made with poor quality ingredients. I don't need more sugar in my system. And, uh, more poor quality ingredients.
So it was like, this can't be the best that we can do. Just because you don't smoke cannabis [00:06:00] doesn't mean you shouldn't have the best possible cannabis experience and. Really what Christian did is he sort of helped validate that, hey, yeah, that's where maybe the market is today, because that's where a lot of people are focused, but there's a lot of consumers who are, are looking for something different and where it's not just about stoned and getting blasted off and, and getting high as a kite for as cheap as possible.
Um, and he gave us that confidence, I would say. And no, there is a market here and you know, Uh, uh, he and, and the whole firm at, at this NTI Cedarburg were supportive of us. Just to give you a little anecdote, um, a little story. So, We show up. That was January of 2015. Um, we produced our first r and d batch in April of 2015.
Rented an errand b and b, brought the whole team out of scientists, uh, uh, chemists, um, chocolate [00:07:00] tier, and. We spent a week in the Airbnb basically setting up a lab, decarboning oil, making different batches of, of chocolates at the time, trying different formulations. And so we had maybe 10 different formulations that we had made at the time.
Um, now there's only so much you can try on yourself in a session because you try something, you gotta wait a few hours and then you can maybe try again. So it's a slow process of trying to get feedback and we didn't know anybody in Denver, like, you know, very few people. And it's like, okay, how do we get feedback on all of these products that we make?
And literally we invited the whole Vicenti Cedarburg team and their friends and their family over to our Airbnb to do a full product sampling. And so we had probably 50, 60 people there. We had surveys. We were able to get feedback, uh, and really helped accelerate our r and d process. That's [00:08:00] so funny. And you know, an earl, an interesting thing about the early days of Colorado is that we found, and I've heard the, the story that you just shared.
I think a lot of people, you know, because they were so wrapped up in where the market was at that time, they couldn't see where the market was going. I remember Ryan from Leaf Link telling me that he went to visit people and they had the orders written on the whiteboards and that's how they were choosing where to place their orders.
And he was pitching them on Leaf link and they said, well, why would we do that when we can write it out on. On, on our, on our whiteboards, si similar to you. They, you know, kind of a discouraging trip. Or then for banks, they said, well, we post, we're, we can post on Craigslist. So we're able to find staff on Craigslist.
Why would, why would we need a bank? So I think some of the early, uh, um, Colorado folks, you know, were, were happy with where the market was and weren't really seeing. Uh, the forest from the trees in terms of where it could be. So I think a lot of people had that experience that you had, and so thankful for folks like Christian that could really see [00:09:00] the big term, long-term picture here.
So, all right. So, you know, you, you, you mentioned that you decided to do it, you had the confidence to do it. You brought a whole team out, you did the testing in the Airbnb. How did you go about launching and what was the launching process and experience like in Colorado? So this was April, 2015. We made our first, our r and d batch.
Um, we didn't actually, our, our beta launched, uh, of 1906, happened in November of 2016. So it took a year and a half to actually put our first product into market. And why was that? Well, one of the biggest challenges getting into the market was getting a license and getting a location. Uh, Denver had a moratorium on issuing new license, thankfully, because the last place I'd wanna locate our business is, is, is, is frankly Denver and the challenges dealing with the municipality there and, you [00:10:00] know, heard horror stories about.
People getting delayed and they can't get the fire department out to, to give them permits, so on and so forth. So we took Denver off the list of place to to, to be, and, and Denver had a mo moratorium on new businesses. Um, thankfully Commerce City within uh, uh, a short period of time. I think it was the, uh, sometime in, in the summer of 2015, opened up their jurisdiction to, uh, license.
Cause if you recall, even though Colorado had legalized. Every municipality had the option whether or not they wanted to ban, uh, retail shops, whether they wanted to ban cultivation, whether they wanted to ban manufacturing, right? So thankfully, commerce City opened up and we found a property. That we were going to buy.
Uh, we closed on that property in the fall of 2000, uh, 2015. And boy was it so hard to get financing. [00:11:00] Um, even real estate findings. I remember. The area that we're located in right now is an industrial park and all of these, all of the value of that real estate shot up dramatically after they allowed cannabis to go in because there was very few places where you can locate cannabis.
And I remember, uh, pitching some of my real estate friends about, Hey, we should buy multiple of these locations here because there's gonna be a lot of demand if I'm having trouble finding location. Other people are, I couldn't get any of my real estate investors to bite to. And the idea at the time at one point was even to like open up a cannabis industrial park where you have a testing facility, where you have extraction, where you have cultivation.
So you could bring all of the cannabis. Processors together in one place. Anyway, that, that, that didn't work out. We, we, we bought our building, uh, or we bought our, our, our space, uh, in the fall of 2015. And it literally took a year [00:12:00] to get permits, complete construction and get up and running where we launched the, the brand in November of 2016.
So literally from January 2nd, 2015 to November of 2016, almost two years during which time Wow. We had a team, we were doing r and d, you know, salaries, expenses, legal, so on and so forth. Uh, with, with, with, so it was, uh, it's, it's, it's, it's challenging. I never thought it would take that long from that moment to get into market.
But yeah, cannabis continues to surprise cannabis. He's literally, um, that's the understatement of the. Last almost decade. Um, in terms of fundraising, you, you, you talked a little bit about the, the challenges there. Did you do a round, like a seed round before the launch? Or talk to us about when that first round was and what the dynamic was like.
I don't, I feel like there was very few cannabis funds even operating [00:13:00] at that time. Yeah. Um, so, you know, I, I had a career on Wall Street for many years, and while I was never an entrepreneur and didn't raise money for, uh, my own ventures, you know, was in, in those circles pretty extensively, I thought, oh, this is gonna be easy to raise money.
I'll just call up my friends on Wall Street and, you know, and in New York and, um, pitch them on, on, on, on the idea of what we are doing. And there were very few takers early on. Everybody was scared what was gonna happen to cannabis? How do we know that the feds aren't gonna roll it back? This is so risky.
It's illegal, so on and so forth. So it was very challenging. Uh, and we ended up, uh, uh, Geet and I bootstrapped the company initially, you know, with our own funds pretty much for the, for the first year. [00:14:00] Uh, I remember we, we pitched our few and we started raising money in, in 2016 and initially raised, uh, our first, uh, like $500,000, uh, which we thought like, wow, uh, this is, this is great.
And we got a good start. And some of those investors, uh, continue to be continuous investors kinda, uh, throughout that process. But literally it was just ask anybody and everybody for funding. Um, And the checks were anywhere from 50,000 to, the biggest check we'd gotten originally on was 300,000. So fundraising was, was was super, super tight.
And we just looked at it as, okay, you just gotta be continually fundraising and every single new milestone is another opportunity to go back to the well. So when we got our licenses in October, when we launched the brand in November, when, you know, But it was continuous fundraising mode. [00:15:00] So you gotta, or at least I learned how to be very comfortable with, you only have this much money and you gotta continue to raise money to, to bring in new money.
Very different than sort of typical venture funding where you go out, you raise millions and millions of dollars and you're like, okay, I have runway for the next 18 months. Uh, we've never had that kind of runway. Well, I think it's different, right? You know what I mean? Like, like to your point around tech business, tech businesses versus cannabis products.
Like it's, you know, there's, there's such a limited amount of investors that can invest in any kind of cannabis business, including a tech business like ours. And then for your business, there's even. A fewer category of people that would be willing to, so I wanna talk about funding more as, as we go into the show, but I wanna, how did the launch go?
What surprised you? What didn't surprise you? I'm super, I don't know that I've ever heard you share the story. Clearly something [00:16:00] went right because every single person that I know is now, um, 1906 is their, one of their favorite products. So tell me about the launch. Yeah, so let me tell you kind of what our thesis was in, in creating 1906.
And, you know, we, we started 1906 for three reasons. One, like I mentioned, is, uh, for people like us who like smoking flour, um, and they wanna have the closest possible flower experience in an edible format. Um, the second reason why we started in 1906 for people like my father-in-law, my nieces and nephews, um, my mother who don't know how to spell t h c, but what they want is an alternative to alcohol and pharmaceutical.
Give me something that'll help me with pain, with sleep, with anxiety, with focus, with energy. And uh, I want, I don't want to take Ambien or Xanax or Adderall or Melatonin [00:17:00] anymore and I've heard cannabis helps with these things for those people, of which there's a lot, cannabis can be a confusing mess.
What is the strain? What is thc? What is cbd? What is a milligram? Why am I taking AK 47? Why am I putting Durban poison into my body? Right? All of these things make cannabis really inaccessible, and so the second reason why we started the company was to make cannabis safe, accessible. And effective, uh, and make it so that actually for those people who are interested in utilizing cannabis, there's a clear way that they, that, that they can do it.
Uh, and, and then the third reason why we started 1906 has to do with our name, which is the year that the Wiley Act was passed, which effectively started the prohibition of cannabis. And our mission is to bring cannabis back to a pre-prohibition status. And. Uh, remember that there's been a hundred plus years of a racist war on drugs, and so part of our mission is to [00:18:00] undo the harms of the, the war on drugs that we've had.
So, um, that was our mission and in particular from a product perspective, we set out to do, solve two major problems. One is the fact that edibles take way too much time to hit you. I'm a New Yorker. Impatience is a virtue. I don't like waiting for anything, let alone kind of my medicine to kick in, and so it's unacceptable.
That you should take a gummy and have to wait 45 to 90 minutes before you start to feel effect. And as you all know, that leads to really dangerous situations of over consumption. We all, or many of us know the, the Maureen Dowd article from eight, nine years ago and the New York Times where she took a gummy, didn't feel anything.
Then an hour plus later took another one and ended up sort of, you know, searching for the off switch. And that's happened to many of us today. So, That is a terrible, terrible experience to have to wait so long. If you're in pain or anxiety or insomnia, [00:19:00] you need your medicine to kick in fast. The second thing is the fact that, um, cannabis in edible form, uh, it was just weed in weed and sugar.
That's it. Well, I smoke Jack Carre because of how it makes me feel. I smoke particular strains because of how it makes me feel. Why should you go from a place where if you're a smoker, you can really dial in the effect that you want, but now all of a sudden, if you're not smoking, all you have is just weed plus sugar.
Well, how is this gonna make me feel? And most of us use cannabis to feel a particular way. Your kind of high is different than the next person's kind of high. Your effect may be very different from from the next person's effect. And so consumers should have that choice, and patients should have the choice about how is it you want to feel?
So how do you solve that problem of how do you give somebody a specific effect in an edible format? And so those were the two problems we needed to solve. Make it fast acting, and, and, [00:20:00] and give a specific effect. Um, and then we started with chocolates because we love chocolates and, you know, uh, we thought like, it, it can be, it can be done, right?
So when we launched in November of 2016, we launched with, uh, three experiences go at the time pause, which is now chill and, and midnight for sleep. And we launched these chocolate boxes that were individual truffle size chocolates. Um, how did the launch go? Well, We learned a lot, I'll tell you that much.
Um, the launch went well in the sense of like, we actually launched, but uh, our packaging was off the mark. We had these big white packages that you couldn't tell what the name of the brand was. You couldn't tell what the experience was really. Like, looked like did not stand out on typical dispensary shelves that are a sea of like bright [00:21:00] neon colors.
And, you know, our packaging just got lost because we tried to do something clean and, and a little bit more upscale. So packaging was a failure. Uh, we had to go through packaging changes like three times in the, in the, in the first six months. Getting on store shelves was incredibly challenging. Uh, and I was the one who was doing sales myself.
So going to visit dispensaries and their first question is, okay, you know, what's the price point? And when are you gonna make a 10 milligram product? Because we were focused on low dose products and everything that we did was was five milligrams. So the constant question is, when are you gonna make a hundred milligram product with, with, with 10 pieces in it?
And uh, and this is too expensive. So it was a lot of work to have to convince dispensaries to take us on our shelves. And then when they did take us on our shelves, we still had to do a lot of work training bud tenders, sampling. [00:22:00] And, uh, uh, and doing pop-ups all the time to educate folks to it. It was a slog for the first many months to try and prove out, yeah, there, there is a market here because you had butt tenders who, you know, it's like a hundred milligrams is what they need to sort of start their day.
Who think like, oh five milligrams. That, that, that's, that, that's nothing. And why would somebody pay? Uh, uh, $30 for a box of six chocolates. Um, so like I said, we were cutting across the grain at every single, at every single place. Wow. And so, so how long did that go on before you started to really pick up some momentum and have Bud tenders being excited about this?
Yeah, I would, you know, it, it, it. Um, in fe I'll tell you a moment where things started to shift, and that was in February of, of [00:23:00] 2017. We just launched our love product, uh, which is a, which is an aphrodisiac design for both men and women. And, uh, cosmopolitan and Penthouse Magazine, uh, did two big stories on love when it came out.
Which blew up our phones, blew up our emails, and that really getting national press is what it took to, uh, to sort of change the perception with, with butt tenders and, and with managers. You know what's so funny about that is I think the power of press is real because when vans in, in August, 2017, we launched.
Gangsters, which was our job board, and we got some national press, like Fast Company wrote a story and CNBC wrote a story and that was the turning moment. And so it's super interesting that you, you guys had a similar experience with the national press, [00:24:00] and I wonder if that's unique to cannabis because we can't advertise or why do you think that that is Because.
The same thing happened to us was like, we, we got some really good, great press and things really turned for us from there on out. Yeah, I, I think you're right on Carson. It's like, how do you discover information about cannabis? I mean, if you just Google stuff, you'll just get lots of shit, right? Yeah. So, uh, having trusted sources validate, um, is what made a difference.
And then of course, you know, for us it was always about trial. If people try the product, they'll come back and buy it. So press helps at least open up the consideration set. Um, and then doing tons and tons of popups because you can't rely on the bud tenders alone at that time, you know, unfortunately, uh, with all the turnover in the industry.
Mm-hmm. Um, the lack of adequate [00:25:00] training in general with bud tenders, uh, uh, makes it, uh, difficult here. Um, and really kind of our focus was, yeah, you, you gotta win the butt tenders, but you have to win the consumer directly as well. So at what point did you start thinking about national expansion? Because how many markets are you in today?
We're in 10 markets today. Yeah. So, so what was the second market that you decided to launch and how did you choose that second market? So the, the second market that we launched was in September of 2020, and that was Oklahoma. Um, wow. That wasn't the, I mean that wasn the plan cuz we did it, but that wasn't the original plan.
Like the original plan. I moved out from Colorado to New York and we, and, and we all thought, well the next frontier is California. Right. That was sort of the thinking at the time. California was gonna be this great market and you know, Colorado is our test ground. We'll learn how to operate [00:26:00] in a legal market.
We go to California and then, you know, we go, we go big and hard. Um, thankfully we never entered California. Uh, and so we have avoided many of the problems that California operators have had. And it was, it was hard, uh, to think about how to expand because it's not easy to open up new markets. So, At the time, you really had two choices as a brand.
One is you could license, uh, your brand to other partners and hope and pray that they do a good job making your br making your products and selling your products. And that's the traditional path of like Kiva and one, and, you know, most other brands in the marketplace, they enter into the licensing deals and maybe they get eight to 15% royalty.
Right. And they're, and they're training their partners. But I remember having many conversations like with my friends at Dixie and with my friends at WA about out-of-state expansion. [00:27:00] And I, and I remember them all saying kind of the same thing, which, uh, is that it's very difficult and in particular, like the partners generally, uh, are very challenging.
And nobody was happy with their partners. Like it was crazy. It was like, what kind of model is this where. If you tell me like, okay, this is the way you expand, but you're not happy with any of your partners in their lawsuits and they're not doing a good job. So I was like, okay, that doesn't seem like a good option.
Option two is you can get your own licenses by winning them or buying them and, and, and building out facilities. Um, which is expensive. So we went down sort of a modified option two with one of our partners, ascend, and we started building out a, a facility in Massachusetts. So we were gonna take up a few thousand square feet in their Atal facility in Massachusetts, and we started a construction project in 2019 that was supposed to finish.
In, uh, early, uh, 2020, and we were [00:28:00] going to have like our own manufacturing suite within their Massachusetts facility. It was gonna cost more, but not as much as it would cost if we had our own license. Lo and behold, we're in the middle of this construction project and Covid hits. Um, uh, we had not raised enough money to finish the construction markets dried up, so we were like in a one of those oh fuck moments.
Um, And at the same time, the Colorado market disintegrated very quickly because when Covid hit and people went into lockdown, people stopped traveling to Colorado. And even though the dispensaries were, were, were deemed, uh, to be essential, um, still the, the market dried up. Like 70% of our sales went away in one month.
Um, being a a not profitable company, With no extra cash on the balance sheet. [00:29:00] Um, and sitting there staring down this abyss of like, nobody knows March, April, this was how long Covid is gonna last, what's gonna happen there? Where do we raise money? So on so forth was like, wow. And it just so happened that literally the week before the Covid lockdowns, I was in Denver and had met with our, uh, who is now our Oklahoma partner, they had reached out to me and said, Hey, we want you to come to Oklahoma.
And I thought, okay, well I'll take the meeting. But I couldn't imagine Oklahoma was gonna be in our sights. Right. This is the era of Tiger King. Oh, so yeah, you're like, you're like, where's Oklahoma on a map again? Yeah, exactly. And what do you mean Oklahomans? Like consume a lot of weed. So here we were sitting, uh, early days of Covid and we don't have money to build at our Massachusetts facility, but, uh, Colorado, we cannot rely on Colorado at this point in time.
We have to go somewhere. And thankfully we had [00:30:00] amazing partners in Oklahoma that, uh, brought us to the, to the market there. And so Oklahoma was our, was our second state, uh, that we launched. And lots of interesting stories to tell about how we made that, how we made that happen. So you said something interesting, which was the, oh fuck moment where you're sitting there, it's March, April of 2020.
You have a non-profitable business with 70% of your sales drawing up in Colorado. You haven't raised enough, and I would imagine if you're anything like me, you've had several of these, what we call oof moments. How do you as a founder navigate those moments where it feels like your back's up against the wall and the whole business is.
Riding on you and your shoulders, like how do you mentally navigate it? Because it's, of course, I think for people that aren't founders, it's hard to explain those moments. Yeah, yeah. Um, there's no playbook really. Like the how becomes, [00:31:00] uh, that's when really. How you default to crisis is what is what comes up, right?
Because that's what it felt like. And for me, um, uh, uh, a, a big part of it was talking to a lot of people and getting advice from our investors, you know, from friends and others about, about, about what we do. Um, and then secondly, like communicating a lot. So we were having. Weekly all company Zoom calls. I was regularly talking to our investors and staying in, staying in touch because you don't know how the world would happen.
Um, and I couldn't be in lockdown. Like I, you know, my, my reaction was like, I'm not, I cannot be hold up in my apartment in New York. So I started traveling in pretty much in, in May, and I was traveling all the time. Uh, so my sort of [00:32:00] like response was, uh, uh, action. I'm, I'm a man of praxis and so I was like, okay, let's get out.
So I was in Colorado all the time. I was scoping out Oklahoma and staying on the move is what helped me not feel like I was standing still. Yeah, and I think the communication, like I, the communicating with your team, doing the. Weekly calls and keeping everybody in the know. One of the things that's helped me is like actually even sharing the bad news.
I feel like it's, it's easy to pretend like everything is great and okay, but actually telling folks, Hey, this Global Pandemic is going on. 70% of our sales were drying up. We haven't raised enough for Massachusetts. How did your staff, um, react to that? Radical transparency, even if it wasn't necessarily what they wanted to hear.
I think, uh, I mean [00:33:00] we always had a culture of high transparency and vulnerability from the start. That that's been a big ethos at 1906. Um, and so. It wasn't, it wasn't a big change in the sense of being transparent, the situation, but it wasn't a big change in terms of, uh, of being transparent and, and being, and being open and being vulnerable.
Brene Brown, uh, has had profound influence on, uh, on me in both work and, and personal life, and so vulnerability. Uh, at 1906 is a core attribute that we look for in, in, in everybody. And it starts, you know, it starts with me being open and vulnerable, so sharing financials and, and, and often saying, I have no idea how we're gonna get through this.
Like, you know, we're gonna figure this out, but I can't give you a roadmap and a [00:34:00] plan. I'll, I'll tell you, you know, a quick little story. So we were supposed to produce in August, September of 2020 with our partner in Oklahoma. And, uh, we show up and they, they were supposed to have all the equipment ready for us tablet presses and other things like that because they had that equipment there.
We show up and they're, and we had just launched the drops and we were gonna launch the drops. So not chocolates. The, the pills in Oklahoma and their equipment was insufficient to be able to make our product or just wasn't. Uh, powerful enough equipment. This was another like, oh fuck moment because buying a new tablet press would've been $200,000.
Guess what? We don't, we didn't have $200,000, so we're like, okay, we're supposed to go to market now. What are we gonna do? So we ran basically 18 to 20 hour shifts in Colorado over produced. [00:35:00] And we shut down the tablet, the drops manufacturing line, and literally moved part of the car factory to Oklahoma.
We moved our equipment, our people said, okay, we're gonna go to Oklahoma and we're gonna produce, and then we'll come back to Colorado and then hopefully we'll have enough money there to buy a tablet press so that we can station it, uh, and the other equipment so we can station in Oklahoma. Well, we realized like, okay.
Wow, we can actually do this. We can actually move our equipment back and forth and be sustainable so we don't need to buy an extra press. And we were able to, uh, continue working and operating, even though, like, and, and that was a function of we had no money. If we had lots of money, we would've bought a lot of equipment.
We would've put in Oklahoma. Then the next state, we would've bought more equipment, so on so forth. What we have now, which came about during a time when we had no money, is a much better viable, profitable business model that emerged literally [00:36:00] because we didn't have enough money to buy enough equipment to make our first production run in Oklahoma.
Yeah, and I think, I think that there's so many advantages to running lean and scrappy. Like I w I actually tweeted the other day that I think the times that Vasst has been the most effective and efficient is when we have less than six month of runway. Because your back's up against the wall and you have to come up with things that you don't come up with when you have millions and millions of piled in the bank.
And so I think that's super interesting to your point around like navigating the of moments at times where you don't have unlimited cash and you have to come up with these. Creative solutions. And I think it's really inspiring cuz I think most people out there building businesses don't have the luxury of raising tons of capital.
And so you've been able to prove that just through sheer will you, as the founder and the management team have been able to run through walls and make it happen. And you know, we don't have time to go through every single market, but there's, there's eight other markets that since that time of [00:37:00] navigating the of moment in Oklahoma, how, you know, it really seems like.
The last, I guess it's only less than two years, you've expanded into eight more markets. So can you talk to us about how it went from Colorado, a crisis in Oklahoma to eight more markets? Yeah, in fact, we opened up, uh, 10 markets and we closed two during that time. Okay, there you go. So it was even, even crazier.
Yeah. So we, we closed Arizona and we closed and we shut down Ohio as well. We had to exit the, you know, Ohio, we had to exit for regulatory reasons. Uh, and then Arizona was, was a non-performing market. Um, yeah. Like what you what what we realized is, um, every market has its own dynamics. And our business model of going in and having an asset light model where we bring all of our equipment, our manufacturing, our packaging, and we always [00:38:00] control the production and we control sales and marketing has what is, what has stood the test of time.
There are great partners out there that we work with and, and, and we love all of our partners. Um, but what we've also learned is, It's our brand and we've gotta do the work. You can't rely somebody else to make your product. You can't rely on somebody else to sell your product. Um, and so that core business model is what's kept us through since, you know, since we launched Oklahoma.
Other things kind of, we've tweaked and figured out how, uh, how to dial in. Uh, but we've always, we've always had to do it on, on, on, on the, on the scrappy. Um, we don't spend a lot of money on marketing. It's a lot about winning the butt tender over. And this next phase of this next phase of where we are is all about how do we get people to consider 1906 before they've even walked into the [00:39:00] dispensary.
So these last few years, really since our inception, it's been all about maximizing the likelihood of 1906 being in your basket from the moment you walk into the dispensary, you know, or from before, you know, a little bit before, but really been all about the dispensary experience. And so we have a seven point approach and strategy for how we maximize and, uh, the dispensary experience so that, uh, we get people to consider and to to buy 1906.
The next phase of the challenge is I need a product to help me with anxiety, and I start going online, or I start talking to my friends or whatever before I even walk into the dispensary. And how do we get 1906 to be in your consideration set before you've even walked into the dispensary? So you ask for it by name.
This is the next challenge that is, uh, I can't tell you how we're gonna, uh, I don't know what the answer is. I know we're gonna throw a lot of darts on the wall. And our [00:40:00] approach has always about fast failures. How do we make mistakes and learn from the mistakes as quickly as possible and as cheaply as possible?
So, you know, I have, I have two, two questions as as we wrap up here as right now, of course, the industry is going through a challenging moment, which is not the first time that we've been through this. I remember in the fall of 2019, we were in a similar. Very, very cash strapped environment. It seems like this time around is worse.
What are your predictions for the state of the industry and what do you think needs to happen to get us out of, um, this really hard moment that we're in right now? Yeah, so, you know, we, we have this challenge, right, where from the consumer's perspective, there's high demand for cannabis. There's no question about the consumer demand.
Uh [00:41:00] uh, prescriptions for antidepressants are through the roof. Prescriptions for Adderall are through the roof. People are stressed. People are taking drugs to manage their mental health. That is a fact, and that fact continues to. The other fact is that more and more people are finding that the solutions proffered by pharmaceuticals are not necessarily what they want.
Whether it be side effects from Ambien, low libido effects from antidepressants, uh, Adderall, that makes you feel kind of stressed out. You know, people are looking for alternatives and, and, uh, what we need to do. Is we gotta make cannabis more accessible. So I think the, the, the biggest barrier that we face is the inaccessibility of cannabis.
What do I mean by that one? And maybe you live in a [00:42:00] state like Texas where cannabis isn't legal. Two is, uh, you live in a market like New York where there's only nine dispensaries or 12 dispensaries open. Three is that why don't we have delivery in, you know, in Illinois or Massachusetts or other markets.
So today people are still consuming alcohol way more than they're consuming cannabis. They're still taking antidepressants way more than they're using cannabis. So I look at this and say, Hey, the market is artificially constrained by the challenges that, that we as an industry or we as a society in terms of regulations have imposed.
On people's accessibility to cannabis. I'll give you a a an ex example, like a market like Oklahoma. Oklahoma is a free market and you can, you know, people can talk about some of the issues with the Oklahoma market, but the fact of the matter is, it is the freest market in the country. And how do we [00:43:00] see that?
Number one, 10% of the population has a medical marijuana card. 10% of the population has a medical marijuana card in, in Oklahoma. There are over a thousand dispensaries where you can get high quality products for low cost and have an amazing experience. Number three, it is the most diverse social equity market in the country.
For all the talk about social equity policies that we've put in place, all of which have been a failure. Every single social equity. Uh, uh, uh, market or every single market deserves an F on social equity except for Oklahoma. And why? Because they didn't impose rules and barriers for entrepreneurs getting into the market.
Um, unfortunately, we're not taking the lessons of Oklahoma and applying it to the rest of the world. Instead, we're going backward. We're making restrictions tighter. We're making, you know, look at. Look at, uh, uh, [00:44:00] Illinois, that that was supposed to have this amazing social equity program, and we're just finally seeing dispensaries come into the market there.
So, um, I think that is what's gonna unlock the power of cannabis is greater accessibility. We're really excited for the opportunity to do hemp derived Delta nine THC and offer that to consumers, uh, across the, across the country. So we're gonna be launching our online microdose line of 1906 products, uh, in July of this year, so that way consumers.
In 33 states, we'll be able to go to the 1906 website and buy all of our 1906 products in a microdose, two milligrams, um, uh, uh, online. And I think that's gonna be one of the biggest game changers that we see. And more and more brands are gonna be doing, doing that as well. So I think [00:45:00] the, the future is gonna be a world where, Similar to other markets like the beer and liquor market in, in New York, for instance, where you can buy beer, uh, at a convenience store anywhere, but you have to go to a dispensary or you have to go to liquor store to get hard alcohol.
I think that's the way the market should evolve, which is if you wanna buy low dose cannabis products, get it online. If you wanna buy stronger stuff, you know, five milligrams and above, uh, you have to go to a dispensary. I totally agree with you on the accessibility and it, and, and, and the lessons from Oklahoma.
I mean, as much as people rip on the Oklahoma market, it it, they make it possible for anybody to start a business, which if you wanna put in the work and create a business that attracts high quality customers, you should have the right to do that. Exactly. Exactly. And, and Peter, my last, my last question for you, and I know [00:46:00] we've gone over a little bit, but this is a question I've been thinking about.
If you could go back to yourself in January, 2015, when you're going to Colorado, you're thinking about starting this business. What is one piece of advice that you would give your 2015 self before you've gone through all of these learnings? What's the one? What would you say to yourself in January, 2015?
Ooh. Um,
I would say, um,
always plan for the fact that it'll cost way more money and take way longer than you think. Like, um, yeah. Uh, That's taken that, that's taken a, a, a, a, a hard lesson to kind of [00:47:00] like abs absorb that. Uh, I think I'm an optimist by nature and really building in sort of like worst case scenarios and really thinking harder about what, what, what, you know, what happens if it doesn't turn out exactly as this.
I wish I had done that more. I don't know if it would've changed the outcomes, but it might have changed how I feel about the outcomes. Yeah, the frustration levels of like, you know what I mean? The mental frustration of I thought this was gonna take two months and it took two years. I mean, that's, yeah, that's, that's the worst.
Well, Peter, thank you so much for coming on our next. Dinner date is definitely on me. Uh, we gotta do it. We need to not go two years without seeing each other. So please let me know next time you're in Denver and, and dinner's on me. Absolutely would love that. Carson, thanks for a wonderful conversation.
Uh, it's always great to catch up with you and I really appreciate the opportunity to [00:48:00] share, uh, at least some of our, uh, some of our stories. I feel like we could have gone for another, Two hours cuz we barely even scratch the surface. But thanks for walking us through how you navigate the of moments in cannabis and sharing your story.
And for those tuning in, we'll see you back here next week. Thanks Peter. Thanks.