CannaKorp - The Keurig of Cannabis? The Iphone Vaporizer? The Keurig of Weed?
To listen ot our interview with James Winokur, the head of CannaKorp, just click the YouTube video below.
Let's find out and talk to the main at the helm of CannaKorp, James Winokur.
00:01 James: Good morning.
00:02 Curt: Good morning James, how are you?
00:03 James: Doing well, how are you?
00:05 Curt: Excellent, it's Curt here with cannabis.net. Oh, it looks like you're in a hotel room, you must be traveling.
00:11 James: I am. So my internet dropped just before you called, and got it all re-booted, and here I am.
00:16 Curt: That's excellent. So I'm very curious, this CannaKorp is it, and the Keurig of weed, or the vaporizer of weed as it's being called is just tearing up the internet. So I have to ask you to start. We live in a society of quick clips and 140 characters. How do you feel about being labeled the Keurig of weed?
00:40 James: I think it's great that people quickly understand what we're trying to do, which is to make it all very convenient, easy to use. We prefer Keurig of Cannabis. Nice alliteration. But really there's more to it than that, but it's a quick way for people to understand. The reason there's more to it, we're taking a bigger leap. In the coffee business, there are a lot of standards already in place. We're bringing new standards to the industry so it's really even more than just convenience.
01:10 Curt: Excellent. Now, there is a beta out, where are you at as people start to look this up and want to know, "When can I get one? What's going on with this?"
01:20 James: Yeah, we have a long list of people who'd like to be part of our pilot program. [laughter] Quality testers. I actually have with me the appearance model.
01:30 Curt: Oof, love it.
01:32 James: Yeah, so we wanted to go out and make something that we could show people, "Here's what it will look like." This is a non-operating model, but if people have seen the videos I'm holding what we have been showing and the idea is very simple, so people get it. You put a pod in the bottom, the vapor is captured in the vessel, it's a one-way valve, so I can inhale, and it's really called self-titration. So I can easily feel the affect and I have 10 or 15 minutes to use this so I can take another inhalation and really experience this and understand, "Hey this feels great." Or maybe, instead of a 2 milligram pod, a CannaCup we call it, I'll move up to a 5 milligram pod. So we are about to go to manufacturing and to your point, we will be in a pilot program at the end of this year. That's our plan.
02:20 Curt: Now there is a working model I assume at the factory that you may or may not have tested.
02:25 James: Yeah, no. Certainly we have to have prototypes and if you looked at it, it wouldn't look like this cause this has to be manufactured to look like that. We've gone through many iterations of prototypes.
02:36 Curt: A lot of testing has been going on. I'm not too far from Stoneham, I could probably be there in 10 minutes if you need testers.
02:41 James: Awesome. I'm not there, but yeah, we'll sign you up as part of our beta program, sure.
02:47 Curt: Now, as far as the Cannabis part, is there... Will you be doing the, we'll call it pods to keep the metaphor, is that something you're looking to team up with a grower, or what does that part of it stand? If you're making the actual vaporizer/Keurig, who's doing the Cannabis part?
03:06 James: Yeah, so we have this technology, the vaporizer in these cups, I'll show you the cup. This is a model of a cup. And the idea is to partner in the US, state by state, because the regulations require that, where it's legal, we'll have a relationship with standard operating procedures. So a partner who we've vetted whose qualified to be in our cup, we'll put their cannabis inside here, and it's a co-branding opportunity, maybe a little bit like craft beer. So if you're a patient or a consumer and you like someone's particular strain, we want them to say, "Oh, can I get that strain in a cup?" This one would have that brand on it and you really have that experience.
03:47 Curt: For the neophytes out there, what form of Cannabis would actually go in that pod you showed? Is it the flower, is it...
03:55 James: Yeah, so the whole premise of what we're doing, we're very strong about this. There's a lot of different ways you can use medicine in general. But we're very strong that we want this to be the natural flower. Our standard operating procedure is to take the natural flower, grind it to a certain profile that we have found is the best, homogenize it, and then put it into the cups. So now when it's tested after homogenization, you can be sure that each cup in that batch is exactly the same. So same ratio of THC and CBD is the primary thing that people look for, percentage of THC, etcetera.
04:30 Curt: And after the use of the pod, at the bottom of the cup, would it be kind of like vape weed? Would there be a residual or residue at the bottom?
04:37 James: Yeah, so inside here, the plant material has these resins on them. That's really where the medicine is held and that gets vaporized. The plant material does not combust, does not go into the vapor so you'd be left with inert plant material. There'd be nothing left of anything useful.
04:54 Curt: Got you. So [04:55] ____ do cannamilk with it or stuff that people do with the vape weed that's left over.
05:00 James: No, it's going to be highly efficient, that's the great thing about vaporization and our CannaCloud in particular. Highly efficient so there wouldn't really be anything you'd use this for.
05:08 Curt: Excellent. Is there a ballpark in your head you're thinking what this will cost? 18 months from now, I'm at Bed, Bath, and Beyond let's hope. Somewhere else, maybe I'll have to order them officially through somewhere else, but what would the ballpark price be?
05:21 James: First, I have to tell my joke because everybody loves it. We would love to be in Bed, Bath, and Beyond someday, and of course we'll be in the Beyond Section.
05:29 Curt: Way beyond, way beyond. More like Spencer's. Maybe Spencer's Gifts' right.
05:32 James: Yeah we'll start out with dispensaries, so we'll want people to buy the CannaCloud and the cups in the same place. That's where you get them. One day we could be in pharmacies, CVS, Walgreens. Walgreens recently said they'd love to be in the Cannabis business. I don't know if you've seen that. But we're targeting for the CannaCloud appliance 150 to 170. So very disruptive price for the appliance. We want people to be in our system, we want it to be affordable. And then, of course, the cups lend itself as a system. We know exactly how much is in here, what the dose is. We're creating a new thing called a vapor dose. So especially a patient would understand what they'd just inhaled, but even a consumer will understand, "Oh, I bought something. Is it really what I bought?" Well, we'll have third-party testing so that label will reflect, "Yeah, it really is what you bought."
06:23 Curt: Will you have a similar model to Keurig in licensing of the cups, so, like you said, the craft beers as Blue Dream from Sonoma comes online and they make the pod, you'll be getting a penny or a nickel, kind of a Keurig model too?
06:36 James: Yeah, exactly. So we really want to be in the pod business and that's, from a business standpoint, that's what generates our revenue is a royalty model.
06:45 Curt: Okay. Have you been approached by Keurig or someone of a much higher stature in life, we'll say, and already wanna take that idea and keep it for themselves or [06:54] ____?
06:55 James: No, and we as the original three founders, we attracted three former Keurig executives to our team. They're very entrepreneurial. They started Keurig very early, so they love that maybe we do this again and lightning strikes twice. Someday, I think if we are in the market and killing it like I hope we will, I can imagine people will be interested in this.
07:17 Curt: Real quick. If people haven't read the story about you guys, where did it start? What was the light bulb moment? Was it coughing through a bong or what was the moment when you guys looked at each other and how did you come up with it?
07:30 James: Yeah, so my co-founder Michael Bork and other co-founder Jeremy Krause really initiated all this. It came from Michael's experience. He and I were actually colleagues at a software company, so I kind of knew they were working on this. But Michael said, "For a new person especially, it's kind of daunting. What is a strain? What does that mean? What is THC and CBD? Why is it like bread but instead of buying flour I actually buy the wheat?" It backs stuff all the way to in order to make bread you got to go buy wheat and then grind a certain way to make flower. It's like, "This is all very complex. Why can't it be as easy as a K cup?" That was his inspiration was just it all seemed too daunting and complex.
08:14 Curt: And then the idea for the vaporizer and the pods and a great model to follow.
08:18 James: Yeah, so I like to say we didn't sit around saying, "Hey, can we think of something that's like the Keurig model?" It was the other way around. It's like, "This should be easier and simpler and one way to do it is pods."
08:30 Curt: Will there be deep down the road when, like you said, you're killing it? A more portable version than the large melon-shaped one, say a vape, a smaller more compact like they do with Keurig, how they have a dorm room and then the big boy?
08:43 James: Right, yeah. So I can't talk too much about future product development, but we do think of ourselves as a technology company. We don't wanna be a one-trick pony and come out with great products through our life cycle. I will tell you, though, the reason this is like this. There's a lot going on in here, and in order to get the really great vapor and the experience, the taste that people really enjoy, you need a lot of stuff going on in here. The vape pens and other portable devices are limited by battery power and the scale of what they are. It turns out that there really aren't too many legal places you can use marijuana outside the home. [laughter] So if you're home, why not have a really great experience with a device like this?
09:27 Curt: And dabbing, using cannabis oils and such, a similar way for heating. Where do you guys stand on that? Is it a complementary doorway to you guys or are you for or against it?
09:38 James: Again, I think there's lots of ways to use the medicine cannabis and medicines in general. There's liquids and pills and shots and all kinds of things. I think people who are used to this look for another way like dabbing to find a different experience. I think they'll find this experience great for the taste and the general feeling that you get from cannabis. And what they can do outside of that is fine. There's lots of room for people to do things differently.
10:06 Curt: And as far as politically, I always ask our guests this. What do you predict in the next 15 months for cannabis in the US and Canada? How do you see it shaking out? Is it a statewide level?
10:16 James: Well, I think Canada... Yeah, sorry, you're breaking up a little bit there. I think Canada's pretty easy because they want it. They want legalization. The question will be how it gets distributed. So a pharmacist would like it to be distributed through pharmacies. They have national liquor control from that distribution, so some want it to be distributed through the liquor stores actually. But I think, clearly, they're headed down legalization. In the US, obviously, more and more states are coming online. So we have four states that are fully legal. Massachusetts, where we are, as well as a number of states in November, there'll be a vote. The track record so far is about 75% success rate, so I've seen a stat that says today, even without those new states, about 80% of our US population lives in a place where there's some legalization, decriminalization, CBD only, or full medical or full legalization. So when you look at those numbers, it just seems like the momentum is going that way. That it's coming to each state by state.
11:21 Curt: And as the walls break down, I'm curious to hear as a start-up, how has the funding phone calls been for you making them and also coming into your office with this great tidal wave about to happen? Are you overwhelmed with funding? Are you turning it away or are you... Where is it at for you?
11:39 James: I think funding in any industry is a challenge. There's a lot that goes into this. We have developed a business. People don't generally invest in ideas, so they want to look at the management team. What does your pro forma say about unit sales and revenue? There's a lot of inspection that goes on. We did a good job with our initial funding. So if you've read about that. We were trying to raise a million in our seed funding, we raised 1.58, so you can tell from that that we have a lot of energy and excitement around that. And we just started doing our next round of funding and we're getting really good feed, that first blush is a good feel. So, I wouldn't say that we have too much, I never would say that until the money's in the bank, but I think people recognize the growth rate of this industry, and the media that you mentioned obviously, we're looked at as a mainstream product. I think we'll attract people because its very approachable and investors will look at it and say, "Okay they don't touch the plant," that's often a demarcation and, "They've got a great team and a track record here from that team," so I think we're in good shape.
12:47 Curt: Oh, that's excellent, I'm glad to hear it. It's always good to hear. We do a lot of profiles on start-ups on the site to give them some exposure, and obviously the funding like you said, is one of the biggest challenges so to hear that you are literally taking in more money than you need... Hopefully in this round as well, it's obviously a good sign. The product looks great. Who doesn't want to just put your lips right on it as soon as you held it up like, "Oh, let me try that thing."
13:08 James: Yeah, awesome. I'm glad you said that. In fact we've had people look at it who don't understand what it is, they just saw a picture of it, "I don't know what that is, but I want one." They just love the design.
13:19 Curt: Now, do you like the comparison to the iPhone vaporizer or the Keurig Weed machine better? Which one are you going with as far as the message getting out there? I've seen both.
13:28 Curt: I'm sorry I didn't hear the first one you broke up a little.
13:30 Curt: I was saying there, it's like the iPhone of vaporizers cause it's so sexy looking and well designed or is it the Keurig of Weed?
13:37 James: I think the Keurig of Cannabis gives you a business model.
13:41 Curt: Yeah.
13:42 James: We love the idea that if you said, "Hey, if Apple were to build a vaporizer what would it look like?" And we hope people would say, "Oh, probably look like what CannaKorp is doing."
13:52 Curt: I'm pretty sure they have in their backlogs, and I'm pretty sure they're using it during the day, so yeah that's great. Well, I appreciate your time Mark, I know you're traveling and you're probably at a show, and you're probably getting investors interested, so thank you for dropping some time at cannabis.net, we look forward to updates and if there's anything we can do for you as far as promotion and stories just let us know.
14:13 Curt: Absolutely. I appreciate your time.
14:14 James: Alright, thank you.
14:15 Curt: Thank you.
14:16 James: Bye.
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