AnnaRae Grabstein: 0:05

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Ben Larson: 0:52

Hey everybody, welcome to episode 72 of High Spirits. I'm Ben Larson and, as always, I'm joined today by Anna Rae Grabstein. Happy New Year. We are here, we are back. It's been three or four weeks since we've been here, I don't know, who knows. I'm just glad to be back in the saddle, super excited for the show that we have today. We have a good friend, louie from Flyers, on board to talk about hemp beverages in 2025, as if we don't talk about that enough, but it is what is top of mind for many people out in the hemp and cannabis world. But before we get there, as always, and especially because it's a new year, I need to check in with my co-host, anna Rae. How are you doing this morning?

AnnaRae Grabstein: 1:36

Oh, I am so good and I feel healthy and ready to tackle life, but I also feel heavy because of what's happening in Los Angeles and the fires. Yeah, that's insane.

AnnaRae Grabstein: 1:51

There's so many memories coming back to me, as a Sonoma County resident, of the fires that we suffered here from 2017 to 2020, almost every year and I just my arms are just open to all these folks. I know what it's like to have to leave your house and not know if you can ever come back to it, and I had a hard time sleeping last night, I'll be honest. I was just watching videos of what's going on in the Pacific, palisades and in Altadena and the areas surrounding that area. So I just want to send my love to all those folks. I'm so sorry this is happening to all of you.

Ben Larson: 2:28

Yeah, and just seeing the articles about State Farm dropping their fire protection policies just months before this happened, it's just devastating.

AnnaRae Grabstein: 2:38

We've got a lot of different types of disasters going on all over the world and I think in many ways, we're all starting to get numb to it, but this is real. These are the things that distract us from the work that we're doing in all of our respective industries, so I hope that we can see an end to these fires quickly, and also so grateful for all the first responders that are out there working hard trying to get these things to stop moving.

Ben Larson: 3:09

I'm going to draw a little bit of a nexus in between what's happening here and how people are highlighting State Farm and other insurance companies for dropping their policies, and similar to how we find kind of the wrong scapegoats with hemp and cannabis regulations in California in particular. These insurance companies are businesses, they are for-profit companies, and so California, with the number of fires that they've had, it's impossible for them to really drive profitable business in California because of the limits that they can charge on their policies. I'm not by any means defending insurance companies, but what I will say is we are a heavily taxed state and I think more attention needs to be put towards the government in Sacramento, as it does with the failed or the failure of many cannabis companies and the ban on hemp and all that. So it's my PSA regarding, you know who are?

Ben Larson: 4:15

you shooting your arrows at?

AnnaRae Grabstein: 4:17

I think that these fires are going to force the issue probably more than the state had hoped, especially because a lot of these neighborhoods where homes are burning are multi-multi-million dollar homes. I think that they said in Pacific Palisades, the average value of homes in that area is four and a half million and they just go up from there and so it's billions and billions of dollars of costs to rebuild these neighborhoods, and the insurance companies are not going to want to keep insuring going forward after this.

Ben Larson: 4:50

So this is sacrament Entering into fire season, which is typically, you know, summer, not winter, which we departed summer. A few months ago I was talking to one of my friends who has an insurance brokerage and he was afraid that if it was one more big fire in California that all the insurance companies were going to leave. And then what happens? It's impossible. You can't buy a house if you or you can't get a loan for a house. If you happen to have loads of cash in your Scrooge McDuck, you can. You can go plop down a bag of money for a house, but you know most people need loans and good luck getting a loan without insurance.

AnnaRae Grabstein: 5:28

Like I said, this is forcing the issue. Sacramento is going to have to step up in this area. They need to step up in other areas. Tough and restrictive regulations are not the solution to. You know, supporting innovation, supporting coming back from disaster, all of those things. We need to be a little more creative so we'll see what happens and, uh, if, if anybody needs anything that's out there listening that we can do, please let us know. Yeah, let's go over a quick few news items. Uh, before we jump into the episode with louisgeon General's alcohol warning, were you paying attention to this this week?

Ben Larson: 6:07

A little bit, a little bit, yeah, yeah. Dave Briggs called it to all of our attention in the space for not leveraging it to basically crush alcohol and bring all the attention to hemp beverages. But yeah, I mean it's like duh. I guess my response is, like we all know, alcohol is terrible. We're trying not to say it out loud too much because we're also leveraging the alcohol networks and their desire to have us on their shelves to kind of progress the conversation. So it's a delicate conversation but you know, I think it just kind of tells us more of what we know and you know the younger generations are hip to this. Maybe if I was, you know, 60 years old and pounding six packs every evening, then maybe I might be surprised by this news. But I don't think anyone in their 20s and 30s even probably, you know, skipped a beat when they saw this come out.

AnnaRae Grabstein: 7:04

Well, so the Surgeon General said that he's recommending that warning labels are more prominent on alcohol products.

Ben Larson: 7:13

Are we going to do that for sugar? What do you think of warning labels?

AnnaRae Grabstein: 7:18

in general Like yes, we know that alcohol is harmful, but are warning labels a useful way to communicate harm?

Ben Larson: 7:26

I think so. I mean, have you seen what europeans do to cartons of cigarettes? I, I don't like staring at that shit. Um, I don't smoke cigarettes, so like I'm a pretty easy uh deter. It's a pretty easy deterrent. But yeah, I, I I think it does help if, for anything, it makes the the labels less pretty. And you know, go to go to Canada, look look at the the cannabis products in Canada. It's definitely less attractive than going to a grocery store and looking at the litany of products that you can buy there.

AnnaRae Grabstein: 8:01

I don't know if I don't know what the process is for creating required warning labels, other than the analysts have been saying that it would need to go through Congress in some way, and so I doubt that it will happen.

Ben Larson: 8:15

That's funny. In the cannabis industry it can happen really fast and overnight.

AnnaRae Grabstein: 8:19

For alcohol. It sounds like it would need to go through Congress and I doubt that it will happen with the new administration. So the surgeon general is on his way out, but we'll. We'll see what happens. And the next quick doesn't drink.

Ben Larson: 8:34

So maybe you know, maybe he'd be in favor of this Sure. Who knows? You just never know.

AnnaRae Grabstein: 8:38

Yeah, and the next hot take is is just about New York. The regulators have announced their plans to increase the number of licensed cannabis dispensaries to 625 in 2025. And they have just crested, I think, above 250 over $1.5 billion this year in New York, which seems absolutely reasonable based on the size of the market there. I could see it cresting $2 billion. So I think that the New York market is finally, finally coming along at a pace that can get people excited and hopefully open up access to more consumers.

Ben Larson: 9:29

Great, I love it.

AnnaRae Grabstein: 9:30

Yeah.

Ben Larson: 9:31

More New York. Yeah, go New York. I don't have much more to say about it than that.

AnnaRae Grabstein: 9:35

Let's talk about hemp, let's do it. So we're kicking off our first episode of 2025 by talking about beverage. I'm really excited to bring on Louie. Louie is a TEDx speaker, a wingsuit pilot, a Guinness world record holder and also the co-founder and CEO of Flyers. We invited him to talk about his journey as a creator and a builder in the cannabis and non-alcoholic beverage space because he's got a great story to tell and lots of lessons to share Worth noting about Louis, he has worked in a consulting capacity with teams at places like Budweiser and Red Bull and PepsiCo, which I think have probably positioned him really well to dive into hemp beverage. So, Louis, super stoked to have you. Welcome to the show.

Craig 'Lewie' Lewis: 10:26

G'day legends. Thanks so much for having me, Looking forward to this conversation.

Ben Larson: 10:30

Awesome man. Well, so good to see you For our listeners. Can you let us know where you're sitting today?

Craig 'Lewie' Lewis: 10:35

Sitting in our office in Williamsburg, Brooklyn in New York.

Ben Larson: 10:40

Oh, so maybe you do care about New York.

Craig 'Lewie' Lewis: 10:43

We care very much about New York.

Ben Larson: 10:45

yes, Okay, so you're a beverage company. You do infused cocktails. I'm very familiar with it, so maybe I should let Anna Rae guide the questions here. But what is that dynamic like being in a budding, exciting, regulated cannabis market? A budding, exciting, regulated cannabis market, having been a cannabis infused product and now just growing all across the nation with your infused hemp beverages?

Craig 'Lewie' Lewis: 11:17

Yeah, it's been really interesting because, you know, we trialed a cannabis derived version of the beverage in another market in the regulated industry that had milligram caps and we ultimately learned that low dose THC beverages did not work in those channels. And so when the kind of like realisation the window opened to create the hemp-derived THC versions of that product, it really allowed us to kind of like scale nationally and pretty quickly. And so it's exciting times because there's a lot of brands that are building really great products in the market and getting these products out to consumers who are helping, you know, and helping them moderate their alcohol consumption and helping them like relax and wind down. So ultimately, you know, that's what society and humans want, and there's been a lot of vices in the past that people have leaned to that have like pretty negative side effects, and so being able to create a product that really helps solve the problem for these people in their lives is really exciting. So we're excited to 2025, to be able to continue to do that at scale.

AnnaRae Grabstein: 12:07

So I see the cannabis beverage space as one of the areas where there are the most new products that are coming in. They're coming into the industry and the consumers have access to, but the access points are different depending on what state you're in and also the products span a lot of different categories. They're not just beverages. We are seeing sodas, cocktail replacement, seltzers, teas, all kinds of things, and I was on your website right before we started and it seems like you guys have really leaned into kind of familiar cocktails as the products that you are bringing to market and, with a background in innovation, I'd love to hear from you kind of how you landed there. When you were looking at all the directions that you could go with creating a product, why'd you go with cocktails?

Craig 'Lewie' Lewis: 13:06

yeah, so great question actually. Uh, we worked on like the innovation pipelines for big beverage, so this is kind of our bread and butter, and we actually spent over a year, you know, working through this before we even started, like building the product and launching it. Uh, and so we, you know a lot of the research, um determined that people, you know, alcohol, occasions are eternal and people are looking for the same kind of products, but with a different level of function and without the side effects. And so we knew, okay, we need to meet people where they are and we need to create something that was familiar, in a familiar format, um, with this new element of, like the ingredient that's, this functional ingredient that's in it. So we knew that if we could create something along the lines of a cocktail that someone's familiar with, we could tap into that existing experience of that flavor space.

Craig 'Lewie' Lewis: 13:55

And so the three cocktails that we launched with the Margarita, our Apero Spritz and our Old Fashioned they're all in the top 10 most popular cocktails globally. So we decided to start with these three because we knew that there is a huge portion of people that are familiar with those kind of cocktails and they would look for a version that's very similar to that with another function. So one of the versions of success we're seeing is like if you have THC margarita on the menu, it doesn't matter what the brand is, they'll see that and be like, yes, like I want to try it, let's go. Because if you like a margarita, you know that you're going to be able to probably going to enjoy you know the THC version of it. Same thing with the old fashioned and the Apero, and they're all three different kinds of people and occasions with those three cocktails and we launched those three to target those different groups that have a broad span of different consumers out the gate.

AnnaRae Grabstein: 14:48

I want to follow up on that and say so. You started with data, understanding the consumer the most popular cocktails globally but then how did you take that from an inspiration to a formulation? Was that something that you guys were doing around your kitchen table in Brooklyn? Did you work with flavor engineers or formulators? What did that look like?

Ben Larson: 15:14

And how did you decide which? I love it? I didn't think I would love it, but a sparkling old-fashioned. So just loop that in there, because I was pleasantly surprised by that in there, because I was. I was pleasantly surprised by that one. That's important.

Craig 'Lewie' Lewis: 15:28

Yep. So we had previously worked on many projects with Ivy Nix, who's our chief flavor officer, and at the start of this we immediately said hey, ivy, are you interested in being involved with this with us? And she was like yes, 100%. So Ivy owns a bar called lander which is one of the most awarded bars these have been in the top 50 bars many times before and so we bought, like you know, thousand dollars of ingredients on like day one and went to her bar and ivy just went to town. She was like this, like a mad scientist, lighting stuff on fire, capturing smoke, giving us all these flavors, and we basically made these three like gold standard versions of those flavors. Uh, from that were bar worthy, and then that kicked off a year of commercialization work. We did 70 rounds of flavor work to take it from the bar crafted versions to a version that was worthy of launching that we knew that we could make a million cans of and keep that flavor consistent.

Craig 'Lewie' Lewis: 16:28

Um, on the old-fashioned piece traditionally an old-fashioned is really punchy and like three ounces, and ours is 12 ounces um, but the carbonation actually creates this really important um mouth texture that doesn't exist.

Craig 'Lewie' Lewis: 16:41

So when you have, you don't have any alcohol in there, there's a lot of elements you need to replace in terms of the experience of a cocktail. So we add bitterness, we try to add this complexity and with the carbonation it adds enough sophistication and complexity that you can get away without having like a lot of the heat and burn that exists from the alcohol version of it. So not only do we have to lengthen out an old-fashioned and put 12 ounces you know design in a way where we want someone to have a second and a third, we also made it carbonated as well. So it's our own version of an old fashioned. We actually launched it, calling it something completely different with our CBD version that people didn't know what it was or what it meant and we're like, okay, it's an old fashioned, but it's, you know, 12 ounces, it's carbonated, but it's our version of an Old Fashioned.

Ben Larson: 17:23

Awesome. So you go through the formulation process, you've decided that you have the right flavors, obviously you have a great infusion partner and you get that all figured out. How did you determine, with the complexity of all the different state markets, what states you were going to focus on? How are you going to thread that needle on the various potencies and all that? Yeah, maybe it wasn't like this in the very beginning. In the very beginning, you know, a year and a half ago, but, like very quickly, over time, the hemp category has become as fragmented as the regulated cannabis space as far as regulations and potency caps go. So, yeah, let us know. How did you, kind of like, navigate that? How did you decide on the potencies for the products?

Craig 'Lewie' Lewis: 18:14

that? How did you decide on on the potencies for for the products? Yeah, yeah, great question. So we're new york, based in new york brand, so early 2023, we launched in new york, uh, and we existed there for a period of time and we thought that you know, our like complex and more premium positioning is really right for you know, a new yorker, um, and we started selling it in like an on-premise location in the city, in manhattan. They were selling our cans for $18 a can, which is if you ask a New Yorker what you'd spend on a cannabis cocktail. That's the kind of numbers that they give you, which is mind blowing. So the on-prem account was just making some amazing margin and we were the number one seller for eight weekends in a row, above Mowi and above Verve.

Craig 'Lewie' Lewis: 18:49

So that was really like the initial first step in our first market where we created, like we understood, a bit of product market fit, particularly for us being a cocktail and being on-prem, and we knew that, okay, this is the occasion, this is where we want to focus on, and then you know what's it look like when we scale and build from there.

Craig 'Lewie' Lewis: 19:04

So a piece of wisdom that I received was you know, with your DTC model you build and then grow. But with your wholesale model you build as you grow. So the idea is you start in a state, get some product market fit, build there and then turn on a second state, turn on a third state. So geographically our co-packer was out on the East Coast, so we naturally started on the East Coast states and that was New York, new Jersey, connecticut. In the early days and you know for everyone keeping up on the hemp drug, thc regulations Connecticut changed their regs. New York changed their regs pretty quickly, new Jersey's kind of, you know, working on things right now. So we've been through the case where we've scaled into a lot of states and then pulled back from those states and now we focus on states that have clear regulations that are set, where we know we can like scale pretty quickly in those states without the risk of those regs changing or being pulled out from underneath us.

AnnaRae Grabstein: 19:56

And so, within those different state markets that are creating regulations, you have been able to find a way to strategically invest in certain markets, which makes a ton of sense. But, as most people that listen to this know, the Farm Bill is the federal law that really unlocked the opportunity for these hemp-derived products to come to market, and the Farm Bill did just get extended another year. But I'm wondering how, as you're building, growing, creating aspirations for what this company could be, how you stomach the consistent changing of policy and regulations as an entrepreneur, when you're trying to build something that I'm sure that you'd like to be able to depend on and make projections into the future, that you have realistic expectations you can meet.

Craig 'Lewie' Lewis: 20:49

Yeah, yeah, yeah, great question. It's been a expectations you can meet. Yeah, yep, yep, great question. It's been a roller coaster for sure, to say the least. You know, there's the concept of two steps forward, one step back, but I'm kind of like it's five steps forward, 10 steps back, like it's just, you know, a bit of a yeah, it's been a challenge, but it's been exciting, because smooth seas never made good sailors, so we're pretty getting pretty good at sailing these days and I, the way that we kind of look at it is, you know, we we look at the States that are either the least likely to change the regs and the most likely, and we kind of have, you know, similar to way like Total Wine uses, they use a traffic light system, right, and that system is kind of like, okay, these States are clear, these States are kind of like yellow, orange, not sure, and then these states are red, and so, you know, when we first rolled out in early 2023, there wasn't any indication of whether a state was, you know, green, yellow or red.

Craig 'Lewie' Lewis: 21:39

Those regs didn't really exist. Now they do and we're helping to like change that and be a little bit more proactive. And so, when it came to things like Georgia. We worked directly with the distributor to help kind of influence the Georgia regulations to make it more positive for the beverage market in the space, and that market is just opening now and it's going to be pretty significant.

Craig 'Lewie' Lewis: 21:58

So and then similar kind of things are happening where the groups and the teams and the brands and the industry are kind of working together to really like fight on the front lines to create positive regulations in the space.

Craig 'Lewie' Lewis: 22:09

And that's happening on a state-by-state level and on a federal level. There's a lot of federal activity going on. There's, you know, a lot of trade associations that are joining forces to kind of support that, knowing that we have 12 more months to get more toothpaste out of the tube, which is exciting, and we're looking forward to doing that over the next 12 months as well. And you know, I think ultimately the key solution with on the reg front is for all of the brands and the stakeholders in the industry just to work together collaboratively. Prior to that it was a little bit of more like silos and different groups kind of working separately, but now it really is this like joint effort on all fronts for everybody to build out the category work on the states and the federal level. So it's there's a lot of momentum in this industry right now, and I think this year is going to be pretty significant.

Ben Larson: 22:58

So, louis, I want to go back to something that Anna Rae mentioned earlier. In the crowdedness of the market these days, it seems like a very low, buried entry. Everyone's launching a beverage and, as someone that fancies themselves in the know, like, anytime I travel somewhere, I see a whole handful of new brands that I've just never heard of before. How do you stand out in that, like you've? You've been successful in in raising some money. Um, you know I, I know we, we shared investor through delta emerald ventures and, uh, I think you brought in some capital from from mindset capital, who, aaron, was also on the show a few months back. How are you doing it and how do you plan on continuing to put that distance in between you and other brands and attract new capital?

Craig 'Lewie' Lewis: 23:45

it's. It's been, uh, really interesting to like build a brand in the category, because now there's so many entrants, uh, that are coming in and I kind of think about it like they get some water, they put some flavor in, they salt base and thc into it, slap on a label and call it a beverage brand. Um, and you're seeing a little bit of like a reset in some markets, like minnesota, where those bottom 20 of brands are getting like removed from the shelves because either they weren't stable, they weren't consistent or the flavour wasn't there and they really didn't spend a lot of time on working and building the product itself. And so what you find is there's about a dozen brands that are kind of like building and scaling nationally and the way that we position ourselves is like in a portfolio of seltzers. We are the premium cocktail in that seltzer Sorry in that portfolio.

Craig 'Lewie' Lewis: 24:30

So for us with a distributor, we say, okay, if you have five to seven brands, there's a water, there's a few seltzer brands and there's usually a cocktail brand in there as well, and we like to be that one and we like to be that in a portfolio for investors as well.

Craig 'Lewie' Lewis: 24:44

So we talk about there's a lot of storytelling that goes involved, like all of the effort that went into that building of the product itself. We submit to all the different awards. So it's not just us saying, talking about the flavors, we say that we have 20 plus different award competitions that are. Also, we've won 70 plus awards in all those comps so we can say we're the world's most awarded THC beverage, which is exciting and that's helpful for those conversations when you're chatting with investors, because they see the quality of the brand, the product, they see your expansion in the market and you just kind of like all these notches on your belt as you kind of present that and you wrap that up into a nice little story. Uh, and then you know that that's the key piece, right?

Ben Larson: 25:21

it's more than just the numbers so so these, uh, these awards that people go after? There's a lot of debate, I see, on linkedin about this. It's like is it vanity? Is there actually anything good there? Um, but you're saying that it does actually help you stand out when you're talking to investors. Uh, are there? Is there other value that comes along with these awards, because sometimes they cost like five hundred dollars, seven hundred dollars a skew to to submit to right that's right.

Craig 'Lewie' Lewis: 25:48

Yeah, I have strong convictions about this. So on the dt DTC side, the awards are not necessarily as advantageous. Right, it's just about like the brand, the quality, the product that you can, you know, the storytelling, the reviews and that's all really important. But on the wholesale side, if you have a lot of this industry exposure and you continue to like, push the narrative about the awards and that you're winning, you have third party blind taste judge panels that that rank you against alcohol equivalents and you still win awards. That has value for the, both the retails and the distributors.

Craig 'Lewie' Lewis: 26:20

And so we have inbound from distributors that are massive distributors and say hey, we've seen and heard you and all of your awards, let's have conversation. And then I find myself on a meeting with this conference room of executives from this large beverage company that basically found us and really wanted to talk to us because we position ourselves as the world's most awarded. So the like, inherent, like um, intangible value that this award program brings is really on the wholesale side, and a lot of these big companies have really, like their bread and butter over the years, have been like what are the awards like? You go into a liquor store and you'll see some of these like wines. People might shop by the awards that are wines.

Craig 'Lewie' Lewis: 27:01

One they don't know any of the brands but they'll see one like oh, that one's one of platinum or that one's one of gold, and they'll try it and taste it. So it's helpful both for like retail velocity, but most of the time it's helpful for like distributor and retailer conversations, like when I do a ride along. I go into a store and say we make the world's most awarded THC beverage and here is how we do that, and then we kind of talk through it. So that's where the value really comes to life. We're being more selective now in the awards that we submit to, because the price everybody's cranked up the prices and when you have six SKUs it ends up being quite a lot. So we pick and choose these days.

AnnaRae Grabstein: 27:44

So awards are cool, but results are even better. In my mind, and I know that you are planning for a Series A, so I'm curious to learn, kind of from a data perspective where you've been kind of, what your top line looks like and where you think you're going, as you position yourself, to bring in more capital this year.

Craig 'Lewie' Lewis: 27:59

Yeah, yeah, great. So we've effectively been tripling the business year on year on the THC side. So you know we're coming into the Series A in February and we're, you know, around between the three and four million trailing 12 months gross and we anticipate another three or four X for the following 12 months as well. So ideally we'll be in this 12 mil mark 2025. Unlocking the capital is key to that scale.

Craig 'Lewie' Lewis: 28:24

But you know we're operating now in about 10 states of distribution. We have about 10 more in the pipeline, but we're being really careful about the distributors that we select and work with because we want to make sure that they are brand builders in the space and they really support the category. And we're starting to see that now. We're starting to see some really high quality distributors come and enter, really help brands build and scale. So you know, right now, I think, with this 12 month window of the farm bill, it's an opportunity for us to like put our pedal to the metal and turn the gas on. Hence the Series A coming up in a few weeks' time.

AnnaRae Grabstein: 28:55

So when you're thinking about deploying that capital, I know from our earlier conversation that right now you're about 50-50 in the direct-to-consumer versus distribution. But in order to reach those growth goals, do you see that ratio of your business shifting to a larger percentage going through distribution, or will you be growing direct to consumer while you're also growing distribution at the same rate?

Craig 'Lewie' Lewis: 29:20

yeah. So great question we've got. I've got a few points to it. So we we hit profitability at that 50 50 mark, so the business model works and is scalable. Um, we've got some of the strongest margins in the category and so that's allows to like we haven't needed to raise as much capital over the years. So but we also know, like high noon did, a billion dollars in revenue last year and none of that was DTC, that was all wholesale.

Craig 'Lewie' Lewis: 29:45

When you look at building for exit and you're looking at the potential acquirers those potential acquires being big elk none of them have DTC models and they're not interested in it. They probably won't even, you know, they probably cut it off. However, the DTC model is really important for brand building, credibility, brand awareness and also cash flow, right? So your payment terms for distributors are like net 30, net 60, whatever, and by the time you actually pay it's pretty far down the line, whereas DTC you're selling it, cash comes in the next day. So the DTC model helps fund the wholesale model. So our strategy of 50-50 split is working at the moment, but what we're looking at doing is continuing to focus on wholesale and transition that so the wholesale side of the business ends up being 60-40 and continuing from there, because we know that's what the value is that these larger potential acquirers are looking for.

Ben Larson: 30:32

So, louis, something that we talked about on a previous show, when we had Scott O'Malley on from Clarity, was servicing the distributor. And I want to get your perspective here, because when you're doing direct to consumer, you're selling to the consumer, you're speaking to them and their desires, but when the distributor becomes the customer, it changes right and how you're servicing them, how you're making yourself attractive. You talked a little bit about the pitch, but post-pitch, once you're on the menu, how do you keep them engaged, how do you keep them excited about the brand? And has that changed over the last 12 months? As one might think, the category has become more sophisticated.

Craig 'Lewie' Lewis: 31:16

Yeah, yep, this, I think, is the most important key piece for MTHC brands in building in wholesale, and the key principle that I try and communicate is that distributors distribute and you should not expect them to do anything more Because they have a thousand brands in their portfolio. They'll take your margin and that is it. So it's really up to the brand to support the distributors in that effort. So that's both pull through strategies on retail and also push through strategies like incentives and promos for their sales team. But out of the gate you have this kind of smorgasbord of strategies and activities that you can turn on. We turn them all on with our distributors. It's it's the whole kit and caboodle, like we want pos, we want incentives, we want promotions, we want to do I do ride-alongs.

Craig 'Lewie' Lewis: 32:02

Let's start first week of the market. I'll go there to the market and spend three to five days and just hit 10 accounts every day in the market, and I'll do that in every market that we turn on. Uh, because then we learn a lot about what works in that market and what doesn't we learn about the accounts. Uh, you know the key accounts and chains, um, and so I think particularly this category, because there's so much education required that it's really important to have like a what I call a hands-on or white glove approach with your distributors.

Craig 'Lewie' Lewis: 32:30

I think if you just sell them a truckload of product and sit back, you're not going to get a reorder. You know a significant reorder and your velocity is not going to be there. You've really got to help educate the retailers, turn on promotional incentives directly with the retailers as well, give additional margin where it's available and support their sales team too, because you know all alcohol sales are down and you know, a lot of times we you know the distributors might see the hemp brands as like a bit of a knight in shining armor to help kind of save the hemorrhaging that's going on. Um, but the education isn't there. Consumers aren't aware about these low thc products available on shelf. So the brand has to do the education, uh, to make sure that that sell-through happens yeah, it's, it's wild.

Ben Larson: 33:12

I was talking to one distributor, uh, later last year and even just with the um, the turn against bud light because of their political snafu um cost that one distributor, I think, 40 million dollars of cash flow and that's a gap that has to be filled or people get fired right, and hemp was right there and largely filled it. So it's pretty wild to see how this category is really becoming a lifeline for not only distributors but breweries, as we know, as co-packers and many others. So it's become a hot topic here in California because again our governor decided to cut off that spigot for a lot of people.

AnnaRae Grabstein: 34:04

I want to lean into your point about consumers not having awareness and understanding of the category, and you are clearly taking a proactive approach. You said you're trying to do it all to make sure that you're hitting on all those points. What does that look like? Are you creating special merchandising pamphlets, posters, online ads? What is the silver bullet that really works to educate consumers?

Craig 'Lewie' Lewis: 34:37

about something that they might know nothing about. Yeah, yeah, it's interesting. So there's not really a silver bullet. It's more like you've got to have, you know, 10 different levers and strategies and you've got to do all of them. And for us, when it comes to the retail presence, like signage and POS, is really important. But what you find is a lot of the premium liquor stores actually don't allow any of that at all. So ultimately, all you are is a can on shelf and if they don't have prominent signage for the space like, I think there's some groups like Total Wine More and Specs that are doing a really good job by having really large signs that says THC drinks, right, but there's a lot of places that don't have that at all. So if you can't have POS and your can's on a shelf and the store doesn't put signage there, if you can't have POS and your cam's on a shelf and the store doesn't put signage, there's only basically one way that you can enter consumers and that's demos doing samplings and tastings. So we have like 200 demos in the next four weeks going on all across the States.

Craig 'Lewie' Lewis: 35:28

We work with seven different agencies and we see a massive return on investment from our demos, mostly because we've done so much work on the flavour that when people taste it they're like delightfully surprised about the complexity of it. Uh, and that transition translates to like cases and cases out the door. Most of the time we sell out of everything on shelf when we do demos and we're now trying to get better at making sure that we plan ahead for the demos so there's enough stock on the floor for that. So I think demos and tastings are really important because you get a bit of face time and 101 101 with the consumer to both educate them and then give them the flavor. That's the can in hand liquid to lips, like that's the age-old strategy that exists. It's the same thing for us.

Craig 'Lewie' Lewis: 36:07

Um, and then online education about what people can expect when it comes to the feeling. That's a really prominent question that when people have never tried it before, they want to know, like, how am I going to? Am I going to be on the moon for 10 hours or am I just going to feel a light buzz? What happens if I have a second? So we try and do the best job we can to help kind of communicate that relaxing feeling, like the elevated relaxation that you're going to get. The next layer which some brands are starting to do now, is to turn digital traffic into foot traffic. So saying hey, working with a distributor or a retail chain to say we can run geo-targeted ads to say these products are available in these markets. Go to your nearest total store or Beanie's in Chicago and access these products and have like co-branded initiatives on the ad front. Difficult to track ROI on that, but it's a commitment on the brand side to help try and drive foot traffic in store.

AnnaRae Grabstein: 36:57

Yeah, I like that when you were talking about the in-store prohibition against certain types of POS materials at certain stores. Where my mind went before you started talking about sampling was about the fact that really, the can is your billboard. That is the thing that sits on the shelf that they can't take away or they can't tell you, you can't promote. It's right there, and I know that you guys did a pretty major packaging overhaul at some point On your website. You've got both. You're calling it your vintage packaging and your new packaging.

AnnaRae Grabstein: 37:36

But it's a big deal. What is the can telling the consumer? How much can you learn from just looking at the package? And I'd love to understand and hear from you what the process was that took you to the kind of extreme length of going to for a full package redesign.

Craig 'Lewie' Lewis: 37:57

Yeah, yeah, great question, and I you know I love this stuff. Like we spent way too long redesigning and looking at this. I think we had about 20 decks and about nearly 300 slides worth of, like you know, like research on it. So in that scenario, like the problem is that everybody's trying to stand out on the shelf, everybody's trying to do that. So if everybody tries to do that, no one stands out on the shelf. So what you see is what I would call like you know, there was even in the functional beverages. If you go to a grocery store outside of MTHC, it's just like rainbow vomit, right, everyone's got all these colors and it's just like you know, it's crazy, no one's standing out on shelf is kind of like a hard mission to fight against. Um, so what you nailed it, uh, anna ray in the billboard effect is what we're trying to build, so really like strong presence on shelf.

Craig 'Lewie' Lewis: 38:48

Right now, I think there's a level of like distrust in society, both for corporation and government, and so we started really leaning into thinking about like this nostalgic world and we wanted to bring that to life and the reason we want to bring that to life and the reason we want to choose, because during this, when people are, you know, there's this level of mistrust, they lean to things that they're familiar with, and so that's why you'll see this rise of nostalgia. You'll see it from like aesthetic bar design to the, to the rise of records. People are familiar with these things and they trust those things they were familiar with. So we looked at rebuilding and redoing our brand through that lens, because we wanted to be something like okay, this looks like something I've experienced before. It looks familiar, it looks trustworthy, incredible, uh, and it's been more likely to purchase on that front. So we you know funny about the vintage cans. It was like eight months ago and, yeah, they're already vintage. That's how fast this category is moving.

Craig 'Lewie' Lewis: 39:38

Um, so we looked at creating okay, we have our six skews, we have our house cocktail line, we have our sunset spritz line. How does it look if all those six skews are together on a shelf? How do we create this really like bold but familiar brand presence on shelf to, yes, to try and stand out, but ultimately just to kind of create our own little world that exists there. And you know, if we have like either six cans or 12 cans worth of shelf face, it ends up being like a really, really strong presence there, and if you can't have any POS, that really is the only way that you can stand out. The challenge from there is that consumers don't know any of that effort that we put into the flavour or the work, and so they just see a can and they see five milligrams thc and they see a price point and like that is it, and your can has to do the selling, if not demos, samplings and demos it's.

Ben Larson: 40:27

It's amazing. Uh, you know, I'm not. I'm not a consumer brand person, and sometimes I'll look at a product in isolation and I'm like, eh, it's not that interesting. And then I'll see it on a shelf with all its friends and it's like, oh wow, that looks really good. In fact, that's what I'd probably buy, because the way it's merchandised altogether. Yeah, kudos to you and the team for making that transition. We once went through a rebrand and it's not necessarily a fun process mate.

Craig 'Lewie' Lewis: 40:59

We had old product lying around on shelves for months and months and months, and even to the point where some stores were like, okay, we want the new stuff like it's coming I.

Ben Larson: 41:08

I imagine doing a beverage brand as a startup. You know, in those early days where you have limited hands, can be really challenging, right like just hearing you talk about all the links you have to go to get these into people's hands. There's a lot like you yourself on the road days at a time going to all these stores, the digital marketing aspect, the supply chain, logistics Clearly it's not just you. So I would like to kind of transition into just where you're at with building a team and kind of talk about your leadership journey a little bit. So I would like to kind of transition into just where you're at with building a team and kind of talk about your leadership journey a little bit. So how big is the team today to kind of serve the business and what are the plans for building it out this year?

Craig 'Lewie' Lewis: 41:49

Great, great question. Yeah, I think that the team is the most important, key aspect of this and I, you know, right now we're there's 10 of us, you know, by the end of the year, probably double that, uh, so building a really high performance team is something that I actually really like love doing and also learning about right. It's kind of like, um, you know, I try and surround myself with people that have done this before. You know, I have multiple advisors and mentors and coaches, because I'm quite aware that I, like, I don't know what I don't know. So, you know, my perspective is to hire killers only just weapons and empower them with the ability and the um to, you know, the ability and the resources to let them just go for it and do what they need to do, uh, and so, you know, when I first started, it was just there was just like two or three of us and everybody wears 10 different hats. I really like love giving, finally giving a hat to somebody else and be like all right you're better than me at this.

Craig 'Lewie' Lewis: 42:47

Go for it, please. So just ultimately, to be able to simplify and so I can focus on the things that really move the needle for the business and I can bring people into the team that are more equipped and have more experience and resources, and give them those hats and they can just run and gun with it, love that.

Ben Larson: 43:01

How do you balance bringing people on a team versus using outside help, third party agencies, that kind of stuff? What's your philosophy around that? I struggle with that a lot.

Craig 'Lewie' Lewis: 43:12

A lot of the learnings that I had is over time with a lot of different startups. You bring in a consultant and then you bring it in-house. You bring a consultant and bring it in-house and ultimately the brand really learns what's best and what's better for them. There's usually this like yin yang or yo-yo, where you've got to start external first and be like, okay, how do we do this? And then you realize at some point this applies to agencies as well and it really at some point you're like we've learned enough. Now we could probably do this ourselves and we might be able to do it better, and then we can bring someone in.

Craig 'Lewie' Lewis: 43:41

So there's kind of like this phased approach where it's external help. And then you know, when we look at bringing someone in, we usually do like a three-month trial to make sure that we're a right fit for them and they're a right fit for us. And at the end of the three-month trial we're like, okay, let's move this into the next position. And so ultimately it's kind of like agencies and contractors and consultants help us learn and grow. You know, three-month trial 1099. Or if we know that we need someone in that particular role, we'll go through a really, really thorough hiring process and making sure that we can like hire the right person for the team that we've worked together and then give them the resources and they can go for it.

AnnaRae Grabstein: 44:27

And then you've got some pretty cool and outside of beverage experience in your life doing extreme sports and I'm curious of the bridge between leadership and extreme sports and the way that that manifests in your life.

Craig 'Lewie' Lewis: 44:36

Yeah, yeah, really interesting. So I spend a lot of time thinking about risk, particularly when it comes to extreme sports, and within those sports there's a certain range of risk that exists. And so when you think about skydiving or wingsuiting or base jumping, those are the kind of sports where you can be safe within the sports or you can be like a little bit reckless, and I think about basically de-risking it everywhere and anywhere that I can. And I try and apply that to business as well, and to me that just means being really pragmatic and down to earth in all of our approaches.

Craig 'Lewie' Lewis: 45:09

And about that forecast, about the reality of things, um, generally, as an entrepreneur, I'm like glass half full optimistic, positive, uh. But it's also really important to be a little bit more of a realist and be like okay, like this state is at risk, you know, let's think about not allocating a lot of resources to it until we have a little bit of clarity around it, or vice versa, we have clarity around state and regs, let's just turn the gas on in that state. So to me, I think about, in general, like I'm very optimistic, but I'm trying to like, I try and dial that back and be like okay, what is what is a little bit more of a pragmatic approach to look like in this space as a leader, as a business, and then also what is de-risking that look like. And then I apply that in the sports as well.

Ben Larson: 45:50

Wow, yeah, that's really well thought out. Maybe you feel a little insecure about me like structuring my thoughts around leadership here, um, okay, that being the case, uh, I'm going to. I feel confident asking you this question. If you had to give people advice that were entering the space they're like, ah, hemp beverage is where it's at, I'm going to want something like everyone is doing right now. It seems like what would you tell them? What's the wisdom that you would bestow upon them considering your journey over the last couple of years?

Craig 'Lewie' Lewis: 46:28

Great question. So there's this really interesting concept that a lot of entrepreneurs face and it's called shiny object syndrome and it's where you want to do everything and you want to turn on all the SKUs and all the different flavors and all the different markets and it takes a lot of effort to actually decide. You know what to do and have a to-do list that also actually create a to-don't list and mark a bunch of things on that to-don't list to say I'm actively deciding to not do these things. And so, when it comes to people that are getting out of the space, they want to be all things to all people and you think about, um, basically, we want them to focus and say, okay, think about your beachhead market, where you're launching your consumer, we need their specific demographic, geographic, psychographic variables and be like, okay, we are talking to.

Craig 'Lewie' Lewis: 47:12

You know anna ray, she lives in this market, here's what her interests are. How do our, our comms, really, really focus on her? And so, basically, taking it from this really broad approach with broad brushstrokes in terms of your positioning and your marketing and your geographical approach, to all the way down to like a specific person in a specific location, with a specific flavor and only start there and don't do anything else until you have product market fit with that and then maybe make a second flavor. So to me it's like simplify, um and remove the paralysis by analysis. Just start with one, one product, one market, one key learn because you're gonna make mistakes, uh, and then iterate. Build that into the plan, uh, and then scale from there I, I love it.

AnnaRae Grabstein: 47:56

I'm totally making a to don't list and I'm not making a beverage, but I need a to don't list.

Ben Larson: 48:03

A to don't list. It's hard.

AnnaRae Grabstein: 48:07

I think a lot of us. It's not just shiny objects, but we want to say yes to all things. And I've been working on trying to get to know more often, so I think this is similar. So we are at the time of the show where we turn the mic back to you, louie, for one more time, to make a last call, and it's your chance to leave a lasting impression with our listeners, a call to action, whatever you like, before we say goodbye. So, louis, what is your last call?

Craig 'Lewie' Lewis: 48:43

Thank you. I mean for us at Flyers and also for me personally, like the way I try and live my life and the products that we create. You know we want to help people live their life without compromise. We want to help them, like you know, have this elevated relaxation experience, sleep well, well, and then do what they want to do with their life the next day. And that's what it means to be a flyer. Right to me, it means like flying around the sky in a wingsuit, but to other people it means things like traveling or learning a new language or you know something actually that you know doing something they really enjoy in their life. And we think that the products that we create allows and unlocks that opportunity for people to be able to do that.

Craig 'Lewie' Lewis: 49:17

So, and I think that's also the case for the category, it's not just flyers. I think that all the brands are doing that and helping people kind of like take the edge off, relax, be social, uh, and, you know, go out the next day without it, you know, without a hangover, so they can really do what they want. So for us, you know, if anyone hasn't tried flyers, absolutely go for it, uh, like we'd love you to. But also just in general, the category MTHC beverages are here to stay and we're all building this together. Rising tide raises all ships. It's going to be a big year, so we're here for it.

Ben Larson: 49:45

Indeed, it's going to be a big year Awesome. Thank you so much, louis. I always get so energized when I talk to you. I'm stoked that we're going to be all hanging out in Miami for Canada to con at the beginning of February. Hopefully it gets a little bit warmer so we can actually enjoy the beach. I can wear my white pants, but until then, thank you. Thank you for joining us today. We really appreciate all the knowledge you brought.

Craig 'Lewie' Lewis: 50:14

You guys are awesome. Thanks so much for having me. It was a great conversation.

Ben Larson: 50:16

Appreciate it All righty Anna Rae great conversation, I appreciate it. Alrighty and Ray wow, I need to follow up with him. Actually I need. I almost want to bring it back on because I just learned today that wait hold on. I'm actually I'm going to do something I've never done before he's back. Louis, I'm back. What?

Craig 'Lewie' Lewis: 50:35

do you hold a world record? For I just learned this the world record is the most amount of front flips in a skydive. Uh, and the answer is 32. So did it two years ago? Uh, I had a minute a free fall and did 32 front flips in that. So in the book, yeah, I grew up looking at the guinness world record books and people had long hair and fingernails and all these things. I was like I've read the bins. Well, this looks awesome. So I looked up the records and I saw the previous record was 19. I was like I'd probably give that a crack. Uh, did it. Then they put it in the book.

Ben Larson: 51:04

Amazing, well, yeah.

Craig 'Lewie' Lewis: 51:07

Come join me. You're both welcome. Throw you out of a plane.

AnnaRae Grabstein: 51:10

Amazing. That is so cool. And for our episode next week where we're having our friend Melanie Curtis on, who's a pro skydiver and peak performance coach, who's going to come on and help us think about how to incorporate crazy things like jumping out of airplanes into our leadership. So, hell yeah, congratulations on that world record.

Ben Larson: 51:33

Awesome. Thank you, appreciate it. We'll talk to you again soon. Bye, all right, everyone. As we wrap up, remember that the dialogue doesn't have to end here. We'd love to hear your thoughts. What topics would you like us to cover? Who would you like to see on the show? We're booking out the show. I think we're well into March now, if not April. Thank you for joining us here on the first episode of 2025. Huge thank you to our friends over at KitPrint for supporting this show. Hopefully we'll get more of those throughout the year. If you enjoyed this episode, please like, subscribe and share High Spirits with all your friends, your colleagues, your family, all the things. Thank you, thank you, thank you and, as always, stay curious, stay informed and, most importantly, keep your spirits high Until next time. That's the show.