ICYMI: Takeaways from CannTech 2019, Our Inaugural Cannabis Technology Summit
Last Tuesday was an exciting and historic day for DCM as we hosted CannTech, the industry’s first-ever (and sold out!) cannabis and technology conference and pitch competition. We saw more than 300 of our peers and heard inspiring talks from some of the leading cannabis technology companies like Pax, Eaze and Dosist as well as from industry regulation stakeholders like Former CA State Treasurer John Chiang and CA State Assemblymember Evan Low.
We thought we’d take a minute to reflect on the event and share some takeaways from our big-ticket speakers.
Rolling Stone’s Amanda Chicago Lewis talked about scale with Pax CEO
One of the most anticipated keynotes was with PAX Labs CEO Bharat Vasan, whose company is a pioneer in the cannabis vaporizer space and recently raised $420M(!) in funding. While the cannabis industry is booming, it’s complex to navigate. There’s a complicated distribution system, conflicting state and local rules, and strict advertising regulations. An ongoing challenge for cannabis startups is how to scale and establishing a national brand in a tricky and young space.
Vasan recommended startups focus on impactful areas that will build their brand — for Pax it was word-of-mouth. Every company needs to determine a unique way for their product to get discovered by the masses. He recommended that entrepreneurs start with their company’s story first.
Vasan also stressed the importance of culture when scaling and having a moral compass around how you navigate the space. He asked the audience, “are your employees in it for ‘The Green Rush’, or because they view cannabis as a force for good?” Lastly, he said to prepare for the unexpected. The industry is always in flux, and market moving events can happen at any time (e.g. new state becoming legal).
While raising $420M is not at an arm’s reach for many cannabis startups, Vasan talked about how Canadian IPOs as a more common solution for startups to quickly raise money, “Canadian IPOs are certainly more complicated, but it’s a viable way for founders to be able to raise money and get capital in a way they can’t in the US. Plenty of smart money in there; it’s just complicated money.”
Dosist CEO Gunner Winston talked about branding with Fortune’s Jen Wieczner
In such a fast-paced and attractive industry, it’s difficult to distinguish one company from another — that’s where branding comes in.
To Gunner Winston, CEO of Dosist, the brand has to be put in front of the business. Winston took over as CEO two years ago, and under his leadership the brand has set out to “inspire, to educate, and to engage.” To transcend the cannabis category and become a world-class brand, Winston believes it’s important to engage with the average consumer with a message of empowerment, so they feel inspired and equipped to naturally manage their health and happiness.
A critical component of this is consumer education around dosage because the reality is that it is not a one-size-fits-all system. Dosist sets out to meet each consumer where they are and have a dynamic conversation with them on why dosage varies from person to person and across use cases (sleep, pain relief, etc.). The company expects and requires the same approach to education from its distribution partners, which is why Winston is not afraid to sacrifice sale opportunities if they do not align with the brand’s mission: “I don’t care what happens to our sales, we have to prioritize our brand integrity.”
It is this steadfast commitment to preserving the brand and cultivating consumer trust that will separate first-in-class brands from world-class brands, and Winston has his sights set on the latter.
Eaze CEO Jim Patterson talked tech with Forbes’ Samar Marwan
Technology has historically disrupted conventional industries and the cannabis industry, while not traditional by any means, is seeing an influx of “canntech” companies looking to shake it up. Eaze, established in 2014, has been a pioneer in using technology to break down the barriers to legal cannabis access.
The main hurdle the company faces, says CEO Jim Patterson is the balancing act between working within local, state, and federal jurisdictions. In Eaze’s home state of California, recreational cannabis was legalized statewide in 2016 but allowed for local control over whether or not cannabis businesses could operate in their jurisdictions. Two-thirds of California has restricted access to cannabis, and for a cannabis delivery platform like Eaze, it’s difficult to fulfill the mission of providing access to cannabis that’s legal in the state but not in a specific city. According to Patterson, it comes down to this: “is cannabis access a right that even local governments shouldn’t have the right to restrict access to?”
What has been established as legal in all 50 states is hemp CBD and Eaze has capitalized on this by launching their new Eaze Wellness platform in 41 states, plus Washington D.C. Despite the lack of scientific studies performed on the topic, the non-psychoactive compound is becoming increasingly mainstream and is “really pushing the boundaries of all the different form factors with things like lip balm and deodorant.” Patterson observed that it’s not clear yet what will succeed and what won’t, “but the market will eventually tell us.”
This innovative spirit is what has set Eaze apart from the beginning, and is what will continue to push the cannabis industry to evolve in a way that’s hard for federal regulators to ignore any longer.
Undefined Beauty Won $30,000 for The Golden Seed Pitch Competition
Dorian Morris, founder and CEO of Undefined Beauty, had an impactful pitch touting her CBD-infused skincare line to a tough panel of judges from Canopy Growth, Casa Verde Capital, Poseidon, and Rose Capital Partners. Even more impressive than her being a one-woman team and creating non-toxic skincare formulas was her focus and dedication to social responsibility and cultivating positive change within her brand. Out of 60+ pitch applicants, 28% had at least one female founder — a figure we will work hard to improve in the future, but admittedly were surprised at given this is the cannabis space! Morris took home the Golden Seed $30,000 grand prize and $5,000 in deferral fees from Atrium.
Until Next Year
CannTech was a huge success, and we hope you’ll stay tuned for closer looks at our favorite talks from the event. We hope you’ll join us next year for our second annual CannTech event.