Ben Larson: 0:05

Hey everybody, welcome to episode 83 of High Spirits. I'm Ben Larson and, as always, I'm joined today by Anne-Rae Grabstein. It's Thursday, april 10th 2025. And we just got back from the so Curious Conference in Chicago. We got a great show for you. Today we have a legend of the industry. If you've smoked out of a bong, you've probably used one of his products, but he's done a lot more since then 20 plus years in the industry with Dave Daly. We'll get to him in a little bit. But, anna Rae, you made it home. How was the travel?

AnnaRae Grabstein: 0:42

The travel was okay. But Chicago is a great city. I really enjoy the food and the culture and the people, but damn, does it have shitty weather. Oh my gosh. I've been really enjoying the spring in California the last two weeks or so and I felt like everything was sort of shifting, with the green hills and the sunshine. And then you go to Chicago and it is cold and windy and not fun to walk around.

Ben Larson: 1:12

We're not exaggerating. The lows in California are higher than the highs in Chicago, that's true, by at least 10 degrees. Yeah, and it was shocking. But yeah, I know, I went to a ball game at Wrigley on Monday night and I was telling my wife about it. I'm like, oh, it's my first time at Wrigley. And she's like you're going to go when it's 35 degrees out? I'm like, oh, I didn't think about that. And I literally I'm like, can I raid your scarf drawer? Because I don't own scarves, but I know she had some fairly neutral ones and so if you saw me in a scarf in Chicago, then it came need to bring a big warm coat. But Chicago was great.

AnnaRae Grabstein: 1:55

It was really a wonderful event. Hats off to Listen Ventures. I think that they did this incredible job of creating beautiful branding and identity around their event. That made it something that it made me want to go to it when I saw the promotional materials and how they were thinking about it. And then it really that brand carried through into the creativity with the way that they curated the content.

Ben Larson: 2:34

Yeah, yeah, I was not super excited to go because I was just like another conference. I eventually looked past that. I there was meetings that started popping up and opportunities that drew me to Chicago and I said, oh, you know I could be there and go, but I'm really glad I did. It didn't seem like they attracted everyone in the room and it actually inspired just a lot of thought, because it wasn't just a THC beverage conference. They were doing this non-alcoholic social beverage, which THC just happened to take the spotlight. But it really made me think about the future and what is like social drinking and how it doesn't necessarily have to include alcohol, and so I think it was really important for people in the room to think about that, like to really think about the consumer and think about the consumer perspective, and I'd say that that's what they did really well is like there was this persistent theme of feeling like the customer was sitting in the room, even though it was a B2B kind of conference.

AnnaRae Grabstein: 3:38

Yeah, within that I'll share that. They that listen, shared on stage some of the research that they did towards the end of 2024. And they, through a bunch of focus groups and surveys, they identified six active drinking occasions that they highlighted and they talked about the consumer's potential kind of resonating with these different occasions. And I have them here I can share. There's unwind, which is the transitioning to evening. There's the nightcap, aiding sleep and rest. There's three, the party trick, priming the social pump. Four, the zone in which is like immersing fully. And five, they call the bonfire, which is about stoking shared experiences. And then six, relief of treating yourself. And I just, I loved, I loved this centering on the consumer and the different behaviors and moments when they might choose to consume a beverage and thinking about what are the right beverages for all of these different moments. And you're right, it isn't just THC, it's all types of things. So I think that we're going to see an evolution of social spaces, thinking about beverages in different ways. That's definitely something that I've come away with.

Ben Larson: 5:02

Yeah, and, and and for our first time conference, the, the number of people and quality of the the attendees was was really high. And, um, you know, there's so much going on in the industry. Uh, I know, like Diana Eberlein was flying in from her hearing in Texas and landing and then jumping on stage, um, and just so much going on. It's like catching up with everyone. It was a really nice grounding point. Um, I know I woke up early in the morning on Tuesday and didn't get back to the hotel and was just like talking, talking, talking, basically until the late hours of the night.

AnnaRae Grabstein: 5:38

I at my voice was gone by the end of the night. Also ended up at Soho house with Kate Miller for miss grass.

Ben Larson: 5:42

She took me out.

AnnaRae Grabstein: 5:42

Thanks, kate, for picking up the bill. The night also, I ended up at Soho House with Kate Miller for Miss Grass. She took me out. Thanks, kate, for picking up the bill. I like that. So it was just overall a really good time, and fast and easy. So back in California, back getting busy doing all kinds of other things and if you're not on video y'all can't tell that ben is wearing a suit. Ben, why are you wearing a suit today?

Ben Larson: 6:07

I don't know, but it's sucking the soul out of my neck right now. Um, I'm. I'm leaving immediately after we hang up the phone, uh, to go up to sacramento, and we're having ncia's uh stakeholder summit, where there'll be representatives from the assembly, from the DCC and many others in the cannabis and hemp community. So important conversations to be had. California is an important state and we're in the middle of a legislative session, so, yeah, hopefully we have some productive conversations. I am always skeptical, though, when I spend time in Sacramento.

AnnaRae Grabstein: 6:46

Yeah Well, and we should do a couple quick little news updates. But then we're going to jump into our conversation with Dave. Last week we opined and what I thought was a rant, but I think it actually had some positive outcomes of content that came out of it about the trade war and that instability that we started metabolizing last week as Americans and as business owners has persisted. I think that, from my perspective, some of the comedians are our best filters for all of this, are our best filters for all of this. Jimmy Fallon said. His quote I wrote it down for us is yeah, trump was like I just saved the economy for me. You're welcome.

Ben Larson: 7:42

Yeah, it's crazy because since last week, I think we had quoted China being at a 25% tariff and what are they now at? Like a billion percent.

AnnaRae Grabstein: 7:51

It's 145% as of this recording, but 12 hours ago it was 125%. So it's really hard to plan, which is one of the central tenets of, I think, running a good business is clear planning. So this is tough for everybody.

Ben Larson: 8:09

No question, he kind of failed at building physical walls, so now he's building financial ones.

AnnaRae Grabstein: 8:15

Yeah, and then one more story that I wanted to bring to the forefront is that yesterday the news hit about a whistleblower lawsuit targeting Metric and Metric.

Ben Larson: 8:28

And Metric for those that don't know holds the.

AnnaRae Grabstein: 8:30

Interesting timing. Yeah, metric holds the track and trace contracts with over 20 states for regulated legal cannabis, and this whistleblower is claiming that the company enabled a vast illegal marketplace by failing to flag suspicious distribution patterns in California, despite contractual obligations to do so. So I am excited to watch how this all unfolds. This is very interesting.

Ben Larson: 8:58

So the lawsuit's against Metric metric.

AnnaRae Grabstein: 9:09

Yes, it's claiming damages for being, for being terminated and, uh, because of bringing these issues to to the ceo, specifically, I think, um, who we've had on the show, michael yeah look, I mean and this will come out in discovery I don't think metrics the the negligent one here.

Ben Larson: 9:23

like burner distro is pretty much like common vernacular in California, and if the DCC hasn't caught on to that yet, then again, I don't think it's metric, that's the negligent one.

AnnaRae Grabstein: 9:34

Well, we'll see what the courts say. Shall we bring on our guest.

Ben Larson: 9:40

Yeah, before I get myself into trouble with Nicole before arriving in Sacramento. Yeah, before I get myself into trouble with Nicole before arriving in Sacramento.

AnnaRae Grabstein: 9:45

So today's guest is someone whose work you've probably smoked out of, even if you didn't realize it. Dave Daly is the founder of Grav Labs, one of the most iconic brands in cannabis accessories. He's known for creating the original Gravitron in his parents' basement, I think, or garage and shaping the modern glass game. He launched the company in 2004, bootstrapping it from his parents' garage, like I said, into a nationally recognized brand. That helped to define the paraphernalia category, and over the past 20 years, dave has scaled Grave, fought for legal reforms and, after stepping away from his CEO role, leads innovation and growth, including their recent launch into the THC beverage space. He also serves on the board of a public company and we're just so excited to finally have Dave on the show. Welcome to High Spirits.

Dave Daily: 10:36

Thanks for having me, guys.

Ben Larson: 10:37

Dude, good to see you and sitting in the hotbed of a lot of this legislative talk, Texas.

AnnaRae Grabstein: 10:44

So, dave, take us back. We said in the intro that you launched Grav in 2004, but can you tell us about how it all started? I think a lot of people would love to hear your founder story, and specifically when you knew that it was going to be more than a side hustle and turn it into a real company.

Dave Daily: 11:04

Yeah, that goes way back. I mean, when, when I first had this concept of, of making a bong. It was actually college. You know, the typical dorm story, um, where we were making our own gravity bongs and, um, I'll spare you all of the details, um, but I went to work for my dad's mortgage company at the, you know in 2003 and quickly realized, like, hey, I'm, I'm probably not, you know not into this longterm. It was actually right around this, like you know, the beginning of the loan crisis, and so we I was living with my parents and, you know, fortunately, they were very supportive and I said to them I want to try this, I want to try to make this gravity bong thing. And, and I went out to you know, this was my first exercise in design and I had to go out and figure out what a commercialized gravity bong would look like. Cause, at the time, I mean, everyone is smoking out of gravity bongs and everyone, if you're you know, you're kidding a dorm, you've made a gravity bong in your, you know, in your sink. And, and that was actually the initial pushback when I ultimately was able to bring a product to market, this gravity bong, it was like, oh, you can make those at home. And I was like, well, you can make any bong at home. And and so I mean, look, you know we can go deep into the founder stories We've talked about this before but, like you know, this idea of making an all glass gravity bong in 2004 was an opportunity for me to show up at the bong trade shows with something, with a product that was like truly differentiated right, like no one had ever made a commercially viable all glass gravity bong before, and so it was a license to get into every smoke shop in the country. At the time, there was maybe, you know, I would argue, 1500 real smoke shops in the country, you know. Sure, there was, like you know, there was also sex shops that sold bongs and like other things, other areas that you know we would try to like get into, but for the most part these were novelty stores and old school head shops, and, and so that was like 04 to 07.

Dave Daily: 13:11

I sat, you know I was in South Austin at a in like a shotgun shack warehouse, making gravity bones by myself, like cutting bottle. You know, the gravity bone for those that don't know what a gravity bung is is a uh I, my version of it was a wine bottle, um specifically designed a copy of the kindle jackson um chardonnay bottle and um. And then I used a vase that I found at michael's. That was just a cylinder vase. And then I had to design a way that the you know that the bowl goes in the top. That was just a cylinder vase, and then I had to design a way that the you know that the bowl goes in the top. That was a clean look, et cetera. I designed a box that made it look, you know, commercialized, and I'm doing this all by myself.

Dave Daily: 13:55

I had people that were helping me along the way. There were friends that contributed, of course, in helping me sell, but, like, for the most part, I'm up at the warehouse making, you know, cutting the bottoms off of bottles and you know, packaging them and um putting them boxes myself until two o'clock in the morning, you know, for three years, like oh four to oh seven. This is like my life and um. And then in in oh seven, you know kind of everything changed. I had like worked. I spent all this time trying to build this gravity bone company. That was, you know cause the gravity bung is still, to this day, the most efficient way to smoke flour.

Ben Larson: 14:32

Really quick before we get to the next phase. Did your father know what a gravity bong was? That's my first question. My second question is does Kendall Jackson know the importance that they've played in your story brand? Because they should.

Dave Daily: 14:47

No, definitely not, and I'm trying to be cognizant of not like telling you know this is. This story can go on for 30 minutes. So, like, please stop me and ask me any questions. So the the? The answer to your first question is not at the time, but my dad was always very I mean like, like you can't, I mean I guess you could tell this story in a way where your parents weren't supportive and you went off and was, you know, I defected from my family and we missed our debunking. But I actually think that anybody who has the amount of meaningful happiness in life that I feel like I've achieved has parents that have supported them along the way, and they were always very supportive. Did not know what a gravity bunk was, but, like the moment that I built one was like, oh my God, this is amazing. So, yeah, it was, it was really nice.

AnnaRae Grabstein: 15:35

So so talk about this. What happened in 2007? That that changed the trajectory of the company?

Ben Larson: 15:42

Yeah, because a gravity bunk sounds pretty niche Like. I remember my one and last experience with a gravity bong and it was mine was a 64 ounce Gatorade bottle, so it was just too much for my small lungs. But I imagine it's like it's interesting to hear that there was this pickup into all these smoke shops, so it's like, okay, clearly there's a market, but it still feels like a pretty niche product.

AnnaRae Grabstein: 16:07

Ben, you're just not a bong smoker, clearly.

Ben Larson: 16:10

I know, I know.

Dave Daily: 16:14

Well, we are talking about the height of bongs here, like we're, you know, 04 to 07, like you know, we will hopefully get there in this podcast, but like we're probably at the low point of bongs today, right, it during this podcast. But like we're probably at the low point of bongs today, right, like, from a, you know, people smoking out of bongs perspective. But the um, but at the time we're talking about, like this was the cool thing, like, if you were smoking flour, which is, like you know, something that you were, every single person in the country was doing illicitly, then you know, it was, uh, you know, it was a spectacle and you wanted to create a spectacle. And so part of creating a spectacle is smoking out of this apparatus. And everyone's like, what the hell did that guy just pull out of his closet, right? So, like, when you saw it on shelf at a head shop for 50 bucks, it was a pretty attractive purchase.

Dave Daily: 16:57

So, you know, and the flash forward to a seven year point is that, like, despite the fact that this was, you know, a success in each individual smoke shop, I ran out of money. It was like, you know, we, you know I was selling, I remember I was consistently about three hundred thousand dollars a year for those first three years of gravity bongs. And, granted, my overhead was low, but I was losing money. And so what happened was I realized like okay, I've hit a breaking point. I was actually taking out credit cards to pay off the other credit cards because they would send you checks to be like, hey, since you've just opened this credit card, you can write a check to like a vendor as an example, but I would just pay the other credit card off with the new credit card and just play the credit card game. It was a very dangerous game, of course, um, but fortunately I was able to crawl out of it, and what happened was seven was that I?

Dave Daily: 18:01

I made this one hitter? It was. It was actually a derivative of the gravity bong. The gravity Bong takes a bowl like a funnel bowl that goes in the top of the Gravity Bong, and I was making all of those myself.

Dave Daily: 18:09

And so when I was and I had taken the Gravity Bong to the High Times Cannabis Cup in Amsterdam in 06, and everyone's smoking after each other, it was literally like a small room of people that are showcasing their flower and allowing people to smoke out of bongs, the flower, and so you'd have people lined up to smoke out of that bong, one after each other. Disgusting, pre-covid days, Unbelievable. And although I never went back to that cannabis cup, I actually designed this product called the taster, which was just a one hitter that I. It was very simple, like straight clear glass pipe with a restriction in it that you could put a you know, basically two hits of flour in, and I call it a taster.

Dave Daily: 18:55

And I took it to a trade show and it, like you know there's a lot of details in here that I'll skip over but like that one product got me out of debt. I was able to like build all these taster machines that you know I had to be manned. But like, build a taste machine, hire a glass blower, build another one, rinse, wash, repeat, until you know, flash forward six months. I was like out of debt and I was onto like, oh, this is more than just a gravity bone company. I can make all of the products that are meaningful to head shops, including spoons and bubblers and bongs, and you know, and everything in between. And, um, you know, the. The fact is that like that's, that's, that's the last 20 years, or 17 years, in a nutshell, is just continuing to press that button.

Ben Larson: 19:42

That's amazing. Can we drill into that kind of first inflection point Just because I think as entrepreneurs we talk about the pivot so often or finding product market fit and just talk about that like vast difference of like going from pushing the boulder uphill running out of money to all of a sudden being like something, feeling like it was clicking and knowing that you had to lean into it?

Dave Daily: 20:07

well, I think, as founders, we get so committed to like our product and our vision and you do see these like you know, and you hear these stories of like people who you know, the, the famous apple story of, like you know, steve jobs cared about what was, you know, behind the machine as much as what you could see in the. You know, in the, the, the back, you know the, the back end of the machine as much as the front of the machine. It was all about like having a single vision that was like being laser focused and, um, I don't think it's that clean. I think that everyone wants to like paint these pretty pictures, especially on you know, podcasts like these, no offense, but like here's a wonderful story about how you can better your life.

Dave Daily: 20:42

And the fact is like it's not, it's never a straight line. And, like you know, if you, if you are so rigid that you can't, you know, pivot when the time is, when it's time to pivot, that's, that's explicitly when failures happen, and it certainly almost happened to me. I mean, I I would say that I'm like very quick to eat my young Um and um and over the, we've had moments, including right now, frankly, for me, which maybe we'll get into it or not where you have to make some hard decisions about what your business is and what it's going to become in the future, and that reinvention has to happen constantly. If you're not paying attention to it, I think that you will fall behind Constantly If you're not paying attention to it, I think that you will fall behind.

AnnaRae Grabstein: 21:25

Oh, there's so much there. Well, before we dive into that reinvention and how you see the world and where it's all going, give us the short version of after that 2007 scaling moment where you really leaned in and started to expand the product line. What was the upward trajectory for Grav? What were the ways that you were looking at the business? Was it number of units sold? Was it revenue? Number of customers that you were serving? What did that hockey stick look like in terms of the business?

Dave Daily: 21:59

Very easy answer it was get more accounts as fast as possible. Easy answer it was like it was. It was get more more accounts as fast as possible. And cause? I just knew that. You know, I've had this metric my whole career. It was like okay, well, I know that each store sells about 12 gravity bungs a year a year, that's like like one per month per store.

Dave Daily: 22:19

And so it was like well, I've got. You know, the only metric that I can pay attention to is more store count, right, like and cause. It held true like everywhere, and I didn't have all the stores Like I was probably. I remember I had like 600 active stores. And you know, in in 07, when it was like, okay, how am I going to come out of this? And you know, because that became okay, if they're doing one gravity bone per month, how many of these taster racks can I sell them per month? And it was like, oh, they're moving two of those taster racks every month. Well, that's, that's triple the revenue of my you know, of my gravity bung sales. So now I can like just, you know, if I keep on adding more stores and more products, this becomes exponential.

Dave Daily: 22:59

And so it was something to really like hold on to and we still do that today. Like, we've got stores that are, you know that we kind of you know that are our example stores. I tell this to a lot of you know companies that I advise that like hey, pick, you know, pick some like geographical and psychographical stores that are representative of the stores that you want to sell into and you know, use those as your example stores, not necessarily to other people, although that works, but like, use it as your own model, like I think that you know so many times like, so stupid as this is to say, people just like go and try to sell everywhere all at once and don't have any idea what's actually happening in the stores that they're selling to, or you know, frankly, the customer feedback man, there's some, some great nuggets and they're the.

Ben Larson: 23:49

I love the idea of, of launching with a singular product that nearly guarantees you shelf space because it's unique, and then and then expanding from there. Um, you know, in the beverage category that I spend a lot of time in, you know we see people approaching it different ways, where they'll launch with a single SKU sometimes, but more times than not they're coming with a whole like offering of of. You know flavors, right, and you're trying to grab shelf space from the get um, and you're using that selection to kind of create more visibility for your brand. But, yeah, starting with a singular form factor, it's kind of like what Red Bull did. I guess you go into a gas station these days and there's probably 12 Red Bull flavors, but everyone knew Red Bull for that first singular flavor.

Dave Daily: 24:37

For a while. Yeah, you told me to bring some questions, so what we haven't talked about? Or maybe, ben, you and I talked about this a little bit, but when you know, I'm an ArcView guy. So, like, I started in ArcView in 2012, or really, I joined in 2012. My first meeting was 2013.

Ben Larson: 24:54

Yeah, the Troy Dayton and Steve D'Angelo days.

Dave Daily: 24:58

Of course, and I guess pointing back that you were also involved in ArcView. Did you pitch to ArcView? Did you actually raise money in ArcView?

Ben Larson: 25:06

No, I never raised money with ArcView. We had a friendly relationship because of when we launched Gateway and we were doing early stage companies, and so I was sending a lot of our companies over to ArcView, which some did raise money over to RQ, which some did raise money.

Dave Daily: 25:23

Yeah Well, I guess it's more of a patch into like, how, like did that? You know the original Vertosa, you know skew, so to speak. You know, was it always just you know emulsified THC, or did you have vision early on that, like you, would do these other things?

Ben Larson: 25:40

Yeah, I mean early on. I'm trying to now, I'm trying to think back. It was largely THC. We were in the regulated space, but more than anything, we knew that we needed to create a platform that allowed beverages to work and be stable and taste good, because that was not the status quo in the space. But we did believe that beverage was going to be a future. And so we came in with just the singular focus of like we're going to do one thing and we're going to do it really really well.

Ben Larson: 26:11

And people always asked us like are you going to launch your own beverage? And I'm like no, it's a distraction, we don't know beverage and it's competitive with our customer. And so, yeah, I mean, even today, we're very narrow in what we do in the supply chain. But it's kind of a feature at this point because it's relatively complicated. We found out I didn't know it was going to be so complicated when we launched, so what I thought we were going to do was probably different than what we ended up doing, because we just learned so much about the technology and how it plays into this like really complicated supply chain you both basically said that, that you started to do one thing and you ended up realizing how much more complicated it is, and I've had to pivot all through it, and that is so interesting to see both of you, through different journeys, come to that same conclusion.

Dave Daily: 27:00

I love it yeah, well it's actually interesting because, like my, my version of that is like, we are still like. You know that our feature is glass. Right like and that's that is the through line like even our you know this beverage that we're doing we, you know we, we are the only beverage company in market with a mini liquor bottle, glass mini liquor bottle format. To my knowledge, no one else is doing that, and for good reason. Right Like the you know it's. It's very complicated to manufacture, not not? I know that we're not at the part where I plug myself yet, but I you know, but but it's the.

Dave Daily: 27:38

you know the, the, the, the through line is is this glass thing? And's really hard to break away from that as a brand. Even at this past Candidate-a-Con, we were presenting our beverage. They gave us an opportunity to put it on the table with the other beverages and I overheard three or four people be like, isn't that the Bomb brand? And it's like, at the same time that I'm like, yes, they recognize this. I'm also like God, we're pigeonholed, right Like we're. You know what's the when we're typecasted, right Like an actor, right Like we can't get out of this. You know this actor?

Ben Larson: 28:20

Okay, we can't get out of this actor. Okay, so now that it's here, now that it's on the table, I want to talk about what led to the launch of this beverage. Right, because we're talking about bongs, we're talking about one-hitters. There's a lot, I know you guys, because of the menorah bong, but somehow you ended up in beverage which comes in glass, notably I. I had not thought about about that until just now, but it felt like there was like many different directions grab could go, and so I'm curious like, yeah, how did you make that decision to kind of go off onto something where people are gonna say isn't that the bong company?

Dave Daily: 29:00

well, I mean, it's easy to say that like, oh, you guys decided to go from bongs to beverage, and it's the title of the podcast. So like I'm not going to like shut it down, but you know Eric. So we don't see Eric, but he's the magic that makes this podcast happen. I'm just going to plug Eric in case you guys don't. And you know, prior to this, eric's like oh, I remember when you guys did this pre-filled glass joint in California and I was like, yeah, that was a wild failure. We lost a lot of money trying to do that.

Dave Daily: 29:31

And for those uneducated, we tried to become a flower brand in California via like hey, we know that people are already smoking out of glass. Let's make a pre-filled glass thing and put it in market. And we found some partners. Turns out the partners were bad, which, again, like it might've been the reason for failure, but like I think that the bigger reason was that they you know it just was very hard to explain the product and the butlers didn't know how to, et cetera, and it was more expensive than just a regular pre-roll. It was not important what the product was, but like we did try other things, and we've tried a lot of things. I mean like I've got more failures, failed products under my belt than successful ones.

Ben Larson: 30:13

And I love the room at your facility where you have, like, the graveyard of all the different products.

Dave Daily: 30:19

It's really great, it's a big graveyard of all the different products. It's really great Graveyard. Yeah, we'll we'll, we'll flash, do a picture of that and post Anyway. So I the the the story on the beverage is is really one of like reading the writing on the walls. I mean, you know, I, I, I was at, I was at BizCon in 2023 and I always try to meet up with Josh Rosen there. Josh Rosen is a dear friend of mine. I met him at Arcview. He's the reason why I joined the Board of Forefront. He put me on the Board of Forefront and how.

Dave Daily: 30:57

I know Jerry, who was on the previous podcast, I guess two podcasts ago. It was on the previous podcast, I guess two podcasts ago, and Josh was at the time the CEO of Vireo, and so he's in Minnesota and he's like, hey, this thing is happening with beverage in Minnesota. And specifically, he was like, hey, this category is taking up to 20% of spirit sale I guess I don't know how to categorize it. Take, you know, beer and restaurant sales of of beverage is like up to 20 percent of of that of revenue in these um, in these venues, and that's something that you can't like, not pay attention to. And so he was like, hey, you need to go make bong water. And he thought that that was clever. Like hey, put this bong, sell it and sell the water in a bong shaped bottle. Like that's brilliant. And so I actually tried to do that. We, we like, we went all the way down the rabbit hole of designing a bottle that looks like a bong. I should have shown.

AnnaRae Grabstein: 32:00

Not brilliant. Nobody wants to drink bong water should have.

Dave Daily: 32:05

I should have. Nobody wants to drink bong water, that's right. Fortunately we didn't do that, um, but but we made the bong, we made the actual, like you know is a bottle.

Dave Daily: 32:11

Um, so the you know, we I came back from that in 2023 and, starting in 2024, I'd also known Ian Dominguez. I'd met him a couple of times and he was like, hey, you should come to this Canada data con and um, and so I, um, I learned a lot about it then and so we started the journey in 2024 to design the beverage and, um, if you know, if I had known now what I knew, then I could have brought this to this beverage to market in three months, and instead it took us 12 months because, um, this is hard to navigate. I mean, like you, you guys are both in it, but like and you know the cast of characters but like, it is really hard to design a liquid from the ground up. And hard because, like anybody can make a I'm not talking shit here Like anybody can make a flavor fizzy water.

Dave Daily: 33:03

There's a, there's a good ecosystem of things to do. Where you want to make a fizzy, you know a fizzy water in a can. You know that is. You know there are some incumbents that have done a phenomenal job. If you want to jump into that space, it's relatively easy. How to differentiate is very hard and um, and we're still questioning whether ours is differentiated enough.

Ben Larson: 33:26

I will give you a little bit of plug, just because, Anne-Marie, I don't think you've had the chance to try it yet. I have it right here actually. Oh, crack it open.

AnnaRae Grabstein: 33:38

I've been saving this one. I had two and I've drank one and I'm saving it for later.

Ben Larson: 33:43

I'm not going to open it All right, great, oh, that's right. They were all out on the table at Canada, no, but the amazing thing that happened when I tried it for the first time was, like it was that moment where I'm like this is how you marry the form factor with the craft, which has been a big disconnect for a lot of folks, right, it's just like. It's like oh yeah, we're, we can put the plant in everything and create the experience. And, like you said, dave, a lot of times it's about creating a normalized flavor. But when you make the plant the central piece of it, it all of a sudden kind of creates this synchronicity between the form factor and the craft of growing the plant. So I just huge kudos there. I remember just like sniffing it and tasting it while we, you know, while we conversed over it, and it was kind of like a beautiful moment for me as a as a beverage enthusiast.

Dave Daily: 34:34

Thank you. Thank you so much.

AnnaRae Grabstein: 34:37

Talk about the the process, too, of launching this beverage and how you are seeing the space. You mentioned that you started grov in um in texas. You're still there. The company is based there. We've been talking a lot about texas because texas has been a very um vibrant and thriving hemp derived market and now there's a bunch of legislative stuff going on there that we can touch on. But is it? It was part of it also that you saw this massive opportunity in your backyard and so you decided to launch in Texas first, or how have you been thinking about the actual launch process of this beverage?

Dave Daily: 35:20

Well, you're asking two things the launch plus why you know the. The launch plus why you know the. The why, what? Why we love this is because we fundamentally believe in this form factor. I mean, this has been, you know, if you ask anybody in cannabis beverage, you know, or any functional beverage for that matter, like this is a category that has been a category of sales since like the beginning of humanity. Right, and you know it's, and it is a much more palatable consumption method than smoking or vaping or even eating a gummy. Right, like this, you know, and it's, and it's in its infancy. So it feels like this is like a moment and, you know, we certainly wanted to capitalize on that moment.

Dave Daily: 36:01

We, you know, for the record, though, like grab, we see ourselves as a cannabis brand. So, like you know this, this is an entry for us and, you know, frankly, it's an entry because we're in texas and it's a very limited, you know, market. I mean, yeah, you could get into, you know we, technically, we could, you know, exploit the loophole of of him, for I'm putting this in quotes because I don't want to be cast as a, you know, bad actor. But, like you know, we don't have a regulatory framework. We prefer not to exist and design products outside of a more rigid regulatory framework. So we don't make flour products, we don't make vapes, we don't make gummies.

Dave Daily: 36:36

Um, I mean, we arguably could and should, and that is certainly not something that we're not going to do, but the you know this, this beverage has been an opportunity for us to showcase kind of our vision of what, of what a can, of, what a grav consumable product would look like. I mean, we heavily identify with the smoker. Like you know, we're smoker, we're a bong company, and so we made a beverage for people that like to smoke bongs. So if you probably aren't a bong person, you probably won't like a full spectrum liquid that tastes and feels like you just smoked weed.

AnnaRae Grabstein: 37:14

Well, let's double click on that a little bit. In that a lot of the THC beverage focus has been on traditional Bev-Alk channels liquor stores primarily convenience stores. You have a very existing and large customer base of smoke shops and dispensaries as well, but have you been thinking that that's where this product should live? Is it the smoke shop, or are you thinking about those other channels as well?

Dave Daily: 37:44

well, right now we are you know, I would you know we're 98 distributing this through smoke and vape channels.

Dave Daily: 37:50

Um, that's, that's been a. I mean it's, it's a great category for us, primarily because we are already very well, um, merchandised in those channels so we can, like, show up in our own sets in these channels and it's, it's a very easy sell-in for us. That being said, we are in enough liquor stores to tell you outright, you know, a big surprise there's three X the velocity in liquor stores that there is in smoke and vape channel. Now, you know, we can live pretty comfortably for a relatively long time in Smoke and Vape and be okay. So, like, it gives us a little bit of an advantage that we don't have to immediately light up all these distributors. But we're at a point now where, from capacity perspective, where you know we are like looking towards getting you know, signing more distribution deals, which is, you know, you know now the humbling part, which is like, oh hey, by the way, we have no idea how to set up and sign distribution deals with liquor distributors. This is like new territory for us. So, um, that's been really tricky.

Ben Larson: 38:55

I don't know if we're ready to jump to this, but, like I, I'm starting to think about your perspective, knowing smoke and vapes jumping into this beverage category. But then NRA also mentioned that. Or you also mentioned that you're on the board of a public MSO and I'm curious as to how your perspective has brought value to that board, or what you think that that unique perspective does for for the board of a company like that well, for the most majority of my tenure on this public board, which is forefront public.

Dave Daily: 39:28

You know, public knowledge that this is, uh, you know, forefront ventures, um, and we have operations in massachusetts and illinois and washington and a failed experiment in california wonderfully failed experiment in california and the. You know, the easy answer on this is simply like product marketing, I mean, that's, that's been where I have. You know, um, that's the majority of my focus on. You know, even within graph, product innovation anyway, talked about it, you know, in the introduction. Thank you for that instruction. Even within Grab, product innovation, anaray talked about it in the introduction. Thank you for that introduction.

Dave Daily: 40:06

And so I've been. You know, I've felt valuable there. I mean, my wife always asks me like do you feel like you brought value to that board meeting? And I do. It's the surprise and I would say this, like you know, as a humble brag here is like when you get on a board of a public company, it's like it feels like, oh man, I have really made it like. I am like on the board of a public company. I'm like what? And for the record, I'm like way out over my skis here. I don't. I'm like who am I to be on the board of a public company.

Dave Daily: 40:34

But you know, yet again it's one of those scenarios where like, oh, like, no one's that smart, no one really knows what they're talking about here, right, like, and you know, you get on this board and the board nobody on the board knows product Like, these are all financial people, like, that's all these guys know about.

Dave Daily: 40:53

And so the moment that we start going, you know bring in management and we start talking about which cues are moving, why they're moving, where they're moving is the part where I get to really drill in and you know, understand, like, hey, why, if you know, if pre-rolls are a disproportionate point of sales, like how should we think about wholesale Like there's? You know that the, the business of the business, is where I was able to to, surprisingly, you know, add value because these boards typically don't have an entrepreneurial lens and and I've been the only independent on this board and you know that boards are typically consistent of, like people who have invested in the company. You know, yes, you see, like Apple and Disney that have these like, you know, ceos who've been in other companies, that's not like these small. You know, every cannabis brand or MSO is a relatively small board of insiders.

AnnaRae Grabstein: 41:45

I love that you have brought this up, because I think that, first of all, just having independent board members is so incredibly important and I think that it was very smart of Forefront to invite you to be on the board.

AnnaRae Grabstein: 42:05

Kudos to them, especially because where you came from in the smoke shop channel really was the only place that people were interacting in an out-of-the-closet way with the cannabis consumer prior to legalization, and so your insight through that lens and the way that you understood the consumer as all these new states were turning on, I think, was fundamentally different than the way that a lot of people were coming into the market. So I think that's really cool and you did touch on it, this evolution of focusing on innovation. But what we didn't touch on is you actually, as the founder and former CEO of Grav, deciding to no longer be the CEO of a company that you started, and, because we are really interested in leadership and people's journeys, I would love to talk about that and when you started to see past being the CEO of a company that you started, what that was like for you.

Dave Daily: 43:01

What it was like. Well, you know, I'm sure that this becomes something that you, that founders, make a decision about and, specifically, you know, a hundred percent owner founders, you know, make decisions about for a lot of different reasons. You know, for me it was pretty opportunistic. I, I was going through some changes in my life and, um, just so happens that my best friend since I was five years old was going through changes in his life, you know, from a career perspective, and came to me in confidence and looking for a company to to scale, and, um, and I at the time was, like you know, this is 20, uh, 2019. At the time, you know, I'm 15 years into this company and, um, I just we, we'd actually just received an offer to an LOI from a public company to get purchased, and so I had gone through this existential moment of like, should I sell to the public company? Should I keep this private? Like, what should I do? And you know I was talking to anyone and everyone who would listen and ultimately decided not to, and you know, for grace, you know, grateful that it didn't happen because the company that was made the offer went to zero, which is a whole other conversation we can talk about. Oh, that one I don't know if I'm at liberty to like talk about it, one I don't know if I'm at liberty to like talk about it. So, but point is is that you know, you know I I saw brandon in this moment and was like you know, and this, I'm gonna simplify it but like I was like, oh, what a better way to you know, there couldn't be a better way to live my life than to like share this company that I've built with, like my best friend and business partner and, like you know, someone who I call brother. I mean our children call each other uncle.

Dave Daily: 44:46

So, like, far before we ever made this decision, and and you know, but you go into this recognizing that there's a massive amount of risk to it, right, especially, and I'm sure there's a lot of leaders and founders that you know, that you talk to, that, you know to that have made the decision to go into business with a friend, and that's very dangerous because you could lose the friendship. If you're willing to lose the friendship, then, like sure, go for it. Or you know that that friendship is always going to be the thing that comes first. So what I would advise people is to, you know, first start with like um 30 years of friendship and then decide but now you know it's the.

Dave Daily: 45:31

To answer your question, like how I made the decision was what's much more about like circumstances in my life and recognizing that, like you know who I want to be and how I want to live my life, and and and frankly you know my, my wife now had asked me a long time ago, like what's your succession plan? And like I think that's not something that people think about a lot, especially like people who are running these businesses completely on their own, and, um, I wanted to make sure that, like, if you know, I got hit by a bus that, like my family, would be taken care of and that certainly would have happened if I hadn't brought Brandon on as a partner.

Ben Larson: 46:06

Man, succession planning and every aspect of your business and life. It's just so critically important. We talk about a lot this, a lot in the Vistage group I'm a part of. But, dave, I want to drill in a little bit more into the relationship with Brandon. So, like the premise of, yeah, 30 year friendship, uncle, you know that is that's a good motivator as to oh yeah, this will work. But since then, since 2019, I'm sure there's been ups and downs within the company. And how do you make sure that you maintain that relationship in those times? Like, what are, what are some of the specific advice that you would give? Cause I know a couple others in the industry where you know they have a similar relationship and I've already raised it to them as like a third party, like kind of a red flags, like really make sure you guys understand what your decision-making matrix is like in the future. Yeah, how have you maintained their friendship throughout making hard decisions in the business?

Dave Daily: 47:05

Well, the easy answer is that the friendship comes first, and you know we, you know now I say that but like, obviously there's. You know, we don't always agree and the the the point of like, disagree. There's an art of disagreement, right, like you know, and I think that there's.

Dave Daily: 47:23

We're in a moment right now where, like you know, the we, we recently did a round of layoffs and you know it's not something that you know I want to go into but the, the, the people who are still with us at the company right now we're, we're in a moment where the mantra is like, hey, you're either in camp, like, hey, this is so hard and I'm not sure how I'm going to get through it, or we'll figure this out. And in these moments, we can only have people, we can only have we'll figure this out people. Right, and that's that's how Brandon and I've always operated. It's like, hey, you can bring me anything and everything, the hardest things in the world, and we've been through the hardest things in the world together already, and so we just are always operating as a we'll figure this out.

Dave Daily: 48:04

Moment I get to bring the dumbest ideas to him and he can, you know, shut him down, tell me, that's the dumbest idea I've ever heard. And I can't get upset about it. And I need to tell him that, like, hey, you know you're, you know the way that you're running this company isn't sustainable and you know you're going to have to make some hard decisions about people and processes that are going to, you know, send, send us in a path that, like, could be a downward spiral and he has to be okay with that and I have to support him. And so, like the, the also, I mean we didn't get into it, but like you know the structure of the deal and knowing, like you know, yes, it's like oh yeah, sure, it's just because we're friends.

Dave Daily: 48:45

Well, we spent a long time, you know, six months of like working on the deal to make sure that this, this contract between us was airtight, right, and that that is a backbone of of like. What we know is like hey, we're married, it's truly a marriage and in every sense, in fact, it's probably more onerous than a marriage, right? Like? Um, unfortunately, I've been through a divorce and I know that that, that that divorce was much easier than it would ever be to break up with Brandon.

Ben Larson: 49:19

Yeah, NRA. Uh, Dave's reminding me that I have some homework to do for our marriage me that I have some homework to do for our marriage.

AnnaRae Grabstein: 49:30

Yes, I often tell people no handshake agreements, but it's harder said than done, so why don't you share a little bit about anything that was unique or that you figured out as part of that for other founders to learn from, as they're thinking about bringing people in an executive levels or partnering with someone? What are some of the unique things that you did in that agreement between?

Dave Daily: 49:49

the two of you. I give Brandon a lot of credit because I don't think that I had. I came into this idea of a contract the way that he did, and I now I've come fully on into his camp on this, which is the actually the antithesis of a contract. Right, like, everything about our contract makes it very, very hard to litigate. You know, the the foundation of our contract is actually that if, in the case of a fundamental disagreement, we each have to get an arbitrator, and if those arbitrators can't agree, then they have to get an arbitrator. So, like there's there's no world where this is where we're, like, really even allowed to sue each other. It's like, you know, we just it's, it's a forced agreement and, um, and we take this.

Dave Daily: 50:31

We, you know, we've actually begun to take this approach in all aspects of the way that we do business, which is, like you know, when we enter contracts which we prefer just not to enter into, right, like, that's not to say that we don't enter. You know that that I recommend no contract between founders, but I, but I do, you know, like, if I could avoid a distribution contract, I would right Like and as an example, but these things are often unavoidable. And so, therefore, the way that we approach these contracts is to cut the litigation opportunities off at any at any point. You know, as an example, like venue, right. Like everybody wants to be able to litigate in their home state, we always insist on, you know, delaware. Or like Alabama, right. Like if you got a Florida company, a Texas company, let's pick Alabama. So, like it's going to be really hard to go, we each have to find lawyers in Alabama.

Ben Larson: 51:21

If we want to start to like get litigated. I've never heard this. This is awesome. It's like I don't want to fly to Alabama. Let's just settle it.

Dave Daily: 51:28

Right, exactly, and it, it, it works like no one, no one wants to do that. And so, like you know, it's uh, it's just tiny stuff like that. That, like, uh, you know I'm getting off track of of of Brandon, but, um, but we, we approached the, you know, our, our agreement with that in mind and you know, and also a big piece of it for me, which won't be the same for everyone else, was that like I wanted to get to 50% ownership. I know it's like crazy, like okay, you're going to give half the company to somebody, but like you know the way that we approached it.

Dave Daily: 52:01

Now again back to Brandon, he was like hey, let's, hey, let's go get valuations for the company right now. And he came to me and said what would you sell the company for right now If someone wrote you a check? I came up with my number and then we got valuations and we took the top number and the bottom number that we got and said, okay, this is our spectrum of valuation. If you want me to join at the low number, then, like you, keep 95%. I keep 5% of anything above that number when we sell. If you want to keep the high number, then everything above. That high number is 50-50. And you know the LDR, I chose the high number and it gets him to 50% ownership of the company and what that also does.

Dave Daily: 52:51

And we're experiencing this right now. We're like, hey, we're 50-50 now. It's been five years ago. The best thing is it was a vesting period to make sure that he didn't just leave me high and dry. And now that we are 50-50 and we're making decisions on a 50, 50 basis, it is like it's actually incredible peace of mind for me, because I know that we are incentivized exactly equally. And a lot of times you have like, you know, it's like the board back to the board conversation. You want to have five people, an odd number of people, on the board, so you have a tiebreaker. Well, again, like, if we disagree, then you know we know this, we know the drill, and so we just have to come to an agreement. And we've never not come to an agreement. You know, sounds easy.

AnnaRae Grabstein: 53:35

Yeah, it's nice when the incentives are aligned, which is what you're experiencing within that structure. It's misaligned. Incentives at the board level can make things really complicated. Misaligned incentives at the board level can make things really complicated. Jeez, this time has flown. I kind of can't believe it. I don't want to end this conversation without getting a quick hot take from you, dave, about the trade war, because I know that a lot of your manufacturing of your products does happen overseas, so I'd love it if you could just give us your perspective on that quickly for our listeners who are navigating these same questions themselves.

Dave Daily: 54:09

Well, I would be remiss not to say that you should try to cheat however way you can. I mean, we're all being cheated, in my opinion, out of our. I mean, if you're making products and you're experiencing it, everyone's going to experience this. So, like you know, we happen to be making the majority of our products in China. We're obviously relatively limited via the beverage that we're making, but everything, even little stuff like the packaging of our beverage, has been made in China, and now we're going to need to onshore that. But it's not as simple as like OK, we're just going to call a domestic company and get it for the same price that they were selling it for last month. No, the domestic company is going to raise their prices also.

Dave Daily: 54:56

So what my concern about this entire trade war is going to be is that it's going to have a trickle effect across the entire economy and all prices are going to rise, and you can't just pick out China and be like okay, everyone else can supply the rest of the world. It doesn't work like that. We actually used this tool during the last trade war, where we would reroute our containers through Vietnam, which did not have such a restrictive tariff, and we'd save 30, 50 grand on a container just by sending it to Vietnam. First take off the Made in China stickers, put on Made in Vietnam stickers and send it to America. It's like it's such it creates operational headaches and everyone is going to cheat. So I mean, look we, just we hope that they go away. That's the answer.

Ben Larson: 55:45

Wow, dave, thanks for giving the addendum to our discussion last week. It's funny. We've been fighting inflation so hard and now we're talking about everything getting inflated again just because of the cost of goods. That's going to be an interesting time period. Really appreciate you coming on the show. It's time for us to move to our last call. This is your opportunity to plug whatever it is that you want to give a shout out to call to action, cannabis related or not. Dave Daly should be the last call.

Dave Daily: 56:17

I guess is going to be to please get onto gravcom and try our beverage. We made a full spectrum cannabis beverage that tastes and feels like you smoked weed and we really would appreciate everyone to try the grav cannabis spirit. That's my plug. Thank you for letting me advertise on your show.

AnnaRae Grabstein: 56:47

Do it, do it. It's delicious. I highly recommend it. That's my plug. Thank you for letting me advertise on your show. Do it Do it.

Dave Daily: 56:53

It's delicious. I highly recommend it. Also, thank you for having me. This is absolutely awesome. You guys are the best and it's been so nice to get to know you even outside of this podcast. You know previously and I'm excited to stay in touch with you guys.

Ben Larson: 57:01

Amazing. Dave Daly from Grab. All right, thank you, sir. We'll catch up soon. Thank you so much. All right, everyone. Thank you. Thank you for engaging and asking questions and comments while we record this live on LinkedIn Live. Thank you for listening and rating and reviewing and sharing all the things with our podcast that is available on Apple, itunes and Spotify and everywhere else you listen to your podcasts. Special thank you to our producer, eric Rossetti Dave called him out on the podcast, he really is the magic behind the scenes and, of course, our teams at Virtosa and Wolfmeyer. Please like, subscribe. Like I said, do all the things wherever you want to listen to us, but most importantly, folks stay curious, stay informed and keep your spirits high until next time. That's the show.