What Does It Take To Create A Great CBD Beverage?
For VYBES CEO Jonathan Eppers, failing was the first step.
It’s a question many entrepreneurs are asking these days — what does it really take to start a popular CBD company?
Determination and a unique brand? Maybe, luck in product and distribution choices working out? Or perhaps a catastrophic lawsuit destroying your hard work and leading you to a personal revelation and broader mission?
Unlikely as it seems, for beverage company VYBES, it’s turned out to be a bit of all of the above. In two years since its launch, the brand has grown to span 2,600 stores in 25 states, growth that seems poised to continue as the excitement and infrastructure around CBD builds. For CEO and founder Jonathan Eppers, much of VYBES’ success and future vision is rooted in the pain of a previous failure.
Eppers, a Midwesterner in upbringing, started his professional career in the Los Angeles tech scene, first as a Product Manager at MySpace and then at eHarmony. Personal frustration with a housing rental experience led him to found RadPad, a mobile marketplace for apartment rentals.
RadPad was an early hit, garnering impressive traction and $15 million in venture capital funding. After its founding in 2013, the business quickly scaled to be the largest marketplace in Los Angeles and expanded to three other cities. Growth was an intense experience, as pressures in development, expansion, and marketing competed for Eppers’ limited attention.
Those pressures quickly intensified in early 2016, when classified ads web giant Craigslist filed a lawsuit against RadPad alleging the company was “scraping” listings from their site. For a young company with only $2 million in revenue, the lawsuit’s substantial legal fees were essentially a death sentence.
“You’re focusing non-stop for three long years on building this thing. Then, one day, it just comes to an end.”
RadPad’s assets were sold less than year later, and Eppers found himself drained and jobless. The company had consumed every aspect of his life — without it, he was not just unemployed, but endured near-constant stress, anxiety and depression.
Not wanting to deal with the negatives of doctor-prescribed pharmaceutical solutions, he began exploring natural solutions. A friend suggested Eppers try a then relatively under-the-radar remedy: CBD. He hadn’t heard of the compound before, but, desperate to try anything that might help, picked up a tincture at a local natural foods store.
It worked, bringing a relieving calm and lower anxiety. Moreover, after deep self-reflection, his experience with CBD also helped lead him to new desire to spread similar balance to others.
It wouldn’t be straightforward. In contrast to today’s “CBD everywhere” environment, the landscape was far more uncertain (or sometimes hostile). While the 2014 Farm Bill had loosened some restrictions on hemp and CBD, companies and consumers still faced a myriad of conflicting laws, inconsistent regulation, and limited research. CBD’s murky status was challenged by the Drug Enforcement Agency with a Schedule 1 drug designation, while different states legalized the compound in unclear, frustrating ways. Medical research was just beginning to catch on to the potential of CBD.
It’s no surprise the product offering was limited, focused primarily on tinctures. While Eppers had benefited personally from the dropper format, he felt beverages had the most potential. He soon discovered that building a CBD beverage was easier said than done.
Cannabis does not lend itself to the beverage format readily. Cannabinoids like CBD are lipophilic (literally, “fat loving”) — meaning they cannot be directly incorporated into water-based solutions. Drinking a canna-beverage in 2017 typically meant dropping CBD oil into a beverage and stirring it up, a jury-rigged quick fix that’s neither stable nor all that appetizing. The solution: encapsulating CBD in other compounds and distributing them evenly in what’s known as an emulsion.
Eppers eventually found a Colorado-based food science company working on water-soluble THC emulsion. He convinced them to use their process on CBD as well, a decision that’s worked out well for both sides.
But making the CBD water soluble was only the first step in what Eppers describes as “a pretty fun food science challenge”. The initial formulation has been refined six times to improve nearly every dimension — from decreasing the initial bitterness to increasing stability and shelf life to focusing on organic ingredients.
When VYBES launched in January 2018, it was one of a few first movers to essentially create the CBD beverage category. Competing companies were localized if existent at all, and few offered a mainstream flavor profile. VYBES resonated with consumers by leading with a high dosage, organic ingredients, a glass bottle, and straightforward aesthetic.
“I knew what I wanted in a beverage, but didn’t appreciate it’d lead us to a premium product.”
It’s their premium image, first mover status and commitment to product development and innovation that Eppers believes will keep VYBES ahead as the number of competitors multiplies. Whether refining ingredients or adding new flavors, the company is working to build on its early lead in matching consumers’ shifting tastes.
This customer-first mentality has led them in forward-thinking outside the bottle as well. With the CBD market lacking regulation, low grade and sometimes unscrupulous competitors have clouded the landscape. Meanwhile, manufacturers struggle to comply with the limited guidance available (as VYBES itself experienced when California regulators impounded nearly $200,000 of product in January). These factors led the company to pursue testing and labeling practices to align with what they believe will become industry standard. Unlike many peers, VYBES independently tests its production runs and provides this information to its consumers.
More than anything, Eppers emphasizes VYBES’ focus on keeping the consumer first. Even if the “cool” factor around CBD slows, he thinks CBD is here to stay.
“Hot or not, VYBES will keep playing a role in bringing balance to people’s lives.”
Interested in canna-beverages? Check out stories on why they’re changing the game, and how Oh Hi! is using beer expertise to build a THC seltzer brand.
At Cannablurbs, we’re excited to share the varied perspectives of different leaders across the industry through profiles, interviews and Guest Articles. If you’re active in cannabis and think you have a strong viewpoint to share, shoot us an email to talk about collaborating.
