Being a Guide to both Cannabis Enthusiasts and Neophytes
by Eric Vengroff, Financial Analyst, Cannabis Daily
As we at Cannabis Daily recently launched our new cannabis lifestyle and information website called Puffinstyle.com, a couple of press announcements that normally wouldn’t have fallen into the ‘business’ lens crossed our screens.
The first was about a (trademarked) Ritual Box™ for storing all of the various paraphernalia often associated with smoking cannabis, including storage containers, rolling papers and other accessories. The box would certainly be an upgrade to the recycled cigar boxes, shoe boxes or grocery bags that consumers often use. Really a nice-looking piece.
Then we receive another press release regarding a sampler pack of five different brands of cannabis from five different cultivators, curated and packed up in five 1g government-compliant packages that will be available online through the Ontario Cannabis Store’s retail portal.
Seems like a great idea. We covered this story on the pages of our sister site, PuffinStyle.com. Both of these products were produced by Toronto-based AHLOT. Cannabis Daily took the opportunity to interview Greg Pantelic, CEO of this company last week.
CD: We had not heard about your company until your two recent product announcements. What can you tell our readers about it?
GP: “As a company, what we seek to do is inspire the thinker in each of us, and the way that we do this is by being a curation brand at heart. As a cannabis enthusiast, any time I would enjoy cannabis I would write down what I call my “higher levels of thought” in a notebook. That note on my Macbook was called “A Higher Level of Thought”, which serves as the acronym for AHLOT today.
“Us as curators, has been part of our brand since day one. The first product that we ever brought to market was this Ritual Box product. It’s a premium customizable modular storage and accessories product. There are different storage and accessory products out there but what separated ourselves from the rest of the pack was the we’ve curated the different accessories and combinations of accessories which would include, as part of someone’s ideal cannabis experience – rolling papers, a dispenser, a grinder, a storage jar, some pre-rolled tubes, and something very unique to my cannabis ritual – a hemp beeswax candle. We had tremendous success with that. We had sold out a number of the products online and worked with a ‘beta’ community of over 50-strong to iterate and improve the product as we went along.”
The initial successes they had with the box put their brand on the map and allowed the company to prove itself as a curator of quality cannabis experiences before, during and after interacting with it. Greg says the company has other innovative products in the pipeline now. He has also worked with various licensed producers to create custom storage and accessories units and this has given them a window of opportunity to develop products that have been accepted, and will be for sale, at the Ontario Cannabis Store online.
CD: It’s great that your accessories will be available through OCS online –
GP: “It’s a great segue into the cannabis side of the business. Where we’ve gone is from curators of storage and accessories to curating an actual cannabis product, which we’re extremely enthused about…”
CD: Tell us about that.
GP: “I’ll give you a little background by giving you a little context around our customer, which as we learned from our ritual box, is really the modern, high-performing, cannabis consumer, and when you look forward to October 17, they have absolutely no idea what’s going to hit them; they’re going to experience a “tsumami of choice” here. If I can share some numbers, there are 32 licensed producers supplying the Ontario Cannabis Store, there are over 100 licensed producers in the Canadian market, and over 700 others in the queue. Each one of those [LP’s] has their own different set of brands and different sets of strains within those brands. Compounding this are the strict marketing and packaging regulations put on by the federal government, which make it very difficult to identify any brands, and it will be very hard to distinguish between them. That really results in a sea of sameness.
“When you look at the Ontario market, cannabis will only be available online, so you don’t even have the ability to ask a retailer ‘What’s good? What should I try? What do you recommend?”
For what it’s worth, the presence of a physical store won’t make this problem any easier. Store operators and personnel are not allowed to discuss these matters online or in person. The only things they should be able to tell you about a cannabis product is what the price is and whether it’s available. Under virtually any circumstance, buying cannabis in Canada promises to be a relatively poor and unhelpful customer experience. Buying the wrong product can be costly and unrewarding. Five grams of cannabis that doesn’t live up to its expectations is $50 (or more) up in smoke, figuratively speaking. AHLOT is acting as a ‘cannabis sherpa’ for the uninitiated or those returning to it after some time. Greg relates the upcoming consumer experience to walking into a craft brewpub with possibly hundreds of choices, and having never tried any of the brands or types before, the consumer is ultimately confounded by the choices available and uncertain as to what suits their taste or tolerance for strong brew.
GP: “The way that industry solves the problem is through a flight of beer. What we did as we were developing the product is that we went to all these large-scale breweries in the city [Toronto] and asked ‘what percentage your customers buy the flight of beer’ and they said 20%. What’s interesting is that of that 20%, 90% end up ordering a full pint. That’s kind of the value proposition we presented when we went around to the different licensed producers.”
CD: Tell us about what will be in your first flight?
GP: ”We have five 1-gram samples from five different producers – the first time ever where they are all under the same roof, in order to solve that problem of choice for the consumer. The way we’ve curated them is two Sativas, a hybrid and two Indicas”.
CD: What is your financing situation like? Are you raising money, like so many others these days?
GP: ”We’ve taken a different approach on the capital side than many cannabis companies out there. We’re still a privately-held company and we maintain our autonomy. We did raise some capital earlier in the year through Solace Health [Ed Note: a wholly-owned subsidiary of TerrAscend Corp. (CSE:TER)], who was our lead investor on that as well. Coming from technology and humble beginnings, we’re an extremely capital-efficient company, but we also have big vision and big goals. We will be looking to raise a little more in the future, but right now we’re running at a profitable level and we want to maintain those disciplines. We think it all bodes well for future fundraising.”