"Revolutionizing Cannabis Cone Manufacturing: From Shortage to 100 Million Cones a Month" Bryan Gerber, CEO of Hara Supply, joins Dan Humiston to discuss the success of his cone manufacturing business. In response to a cone shortage, Hara Supplies established facilities in India, earning various certifications and producing high-quality, clean-room cones. With remarkable growth, the company now manufactures around 100 million cones a month, capturing a significant market share and eyeing potential strategic partnerships in the future. Produced by PodConx
"Revolutionizing Cannabis Cone Manufacturing: From Shortage to 100 Million Cones a Month"
Bryan Gerber, CEO of Hara Supply, joins Dan Humiston to discuss the success of his cone manufacturing business. In response to a cone shortage, Hara Supplies established facilities in India, earning various certifications and producing high-quality, clean-room cones. With remarkable growth, the company now manufactures around 100 million cones a month, capturing a significant market share and eyeing potential strategic partnerships in the future.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Hara Supply - https://harasupply.com/
Bryan Gerber - https://www.linkedin.com/in/bryanmgerber/
Recorded on Squadcast - https://squadcast.fm/
[00:00:00]
Today on the MJ Bulls Raising Cannabis Capital Podcast, we are joined by Brian Gerber, the c e o of Hara Supplies. Brian, welcome back to the show.
Thanks, Dan. I appreciate you having me back on. Super excited to chat with you today.
Well, as I was just saying before we jumped on, I've, it's been great to have you on in the past and in the past we've always talked about , your company Humper, and we've never really had a chance to dig into. What you've done with cones and the impact that you've had on the industry , with the cone business.
And so today I really wanted to focus on Hara supplies, your cone company. And and I just thought, man, let's just jump right in and you tell us why do they often refer to you as the king of cones?
No, for sure. So, as I got into the industry in early 2015. Originally for the first three years was the Hemper business, and then our fourth year we kind of identified this interesting opportunity in the market where there was a pre-roll cone shortage. [00:01:00] And as, I don't know if your listeners know, but 99% of the cones produced in the market are all handmade.
So you need a labor arbitrage to actually produce these products. So there's only a couple countries. You can even do that in Indonesia, India. And possibly China. Really, those are kind of your limitations. And so we were already producing products in India for our other line of business. And basically one of my buddies in the industry Nick Kovich, he called me one day, said, Hey, I know you guys are making glass in India.
I've got millions of dollars in orders outstanding with other paper companies for cones. What can you guys do? We gotta get out of this, 20 week lead time world, right? And so I said, for a few million bucks, I'll go figure it out, right? And so I called rj, one of the partners, said, Hey, we got this really interesting opportunity.
I'm sending you back to [00:02:00] India. And he goes, okay, what do we got? And I said, you need to learn how to make cones. So RJ went back over to India and essentially learned the lay of the land from some local kind of more sweatshop manufacturers, and really understood the tooling involved, the setups, what type of facility we needed.
And then realized we wanted to make cones and clean rooms and what did that entail? And so we got. Our first facility set up in about six months. We went for all different types of certifications, so G M P, good manufacturing practices, I S O H A C C P F Ss C certified, gluten, halal, vegan. All of the certifications we could possibly get.
And we really wanted to produce cones in clean rooms because we wanted to just clean up all the kind of. Bad actors that had previously been in cone manufacturing that kind of screwed everyone over. So the moment we came to market and we said, Hey, we've got [00:03:00] perfect cones coming outta India, everyone said bullshit, right?
And so then we had to send samples and prove that we actually owned and operated the facilities. And then eventually once we got through the, first kind of, cleanup duty, then people started realizing, oh wow, okay, you are producing cones in India. They are good quality and you are a real company that can back this up.
So midway through 2018, we set up our first facility, started producing cones, and then kind of fast forwarding to today, we're now at about 14 manufacturing sites
Oh wow.
Yeah, with about 4,000 employees in India producing about a hundred million cones a month for the market.
Let's say that one more time. A hundred million cones for the market. That's correct. That is incredible. That incredible. Now are all your facilities in India?
so, greater like Noida, new Delhi area, and then Ger as well.
Okay, so you're, so just to give our, in our [00:04:00] listeners sort of a, a, a feel for the size of the industry, it at a hundred million cones, what percentage of the market does that constitute?
So we have very limited data besides what we're able to see in terms of like, Headset or import export records. And we believe the total addressable co-market is right around that two 300 million mark per month. And so if you kind of take that number, extrapolate it, we're looking at about a 30% market share.
That is incredible. That is in from zero to 30. 30% market share. In what? How many years have you been doing this?
19, 20, 21, 22, 23. So about four years now, making cones.
That, that is incr. That is incredible. Now, so let's talk about in the, the former setup, people were doing this by hand. So obviously it takes [00:05:00] more time, it's more expensive. You're able to bring the cost down because you can probably do it at scale. So that's one advantage to, the company , that's using your cones.
, probably better pricing, probably better quality. probably better lead time. , would that see, say those would be your like three strengths?
Yeah, you pretty much hit on the nail, 'cause of scale. We get, the economy's there and we're able to offer better pricing to our customers. Our lead times are the fastest in the industry and , all the cons are completely guaranteed. If you've got issues with something, a sticker wraps coming off.
A cone got bent, we'll replace it. , a lot of the international companies that are trying to sell cones into the states are more like, we screwed up. We'll try better next time. And we're like, that's unacceptable. We'll replace it. Give us the count. Right.
And in terms of lead times, we're currently at about four weeks for production orders when most of our competitors are at 10 plus still at this point. And like I said, [00:06:00] it it, it's not only we're creating that infrastructure for these cannabis companies, it's really whether those middlemen or those smaller entities can even scale with your business, right?
If you look at a lot of the data out there that's available, there's brands that in certain states are just like exploding out of nowhere, and you're like, who are they? And those companies can go from 900,000 to a million cones a month to needing two or 3 million cones a month. Right. And so as a brand owner or an M S O executive, you gotta be really be betting on the suppliers and vendors you're using, whether they're even gonna be able to scale with your business, right?
Everybody's hoping that that next product launch is their Coca-Cola, right? And if it hits and your supplier can't meet that demand, you're kind of shit outta luck.
Yeah. Yeah, that's a really good point because , you're putting all your eggs in one basket, so to speak, and if, and if you get the, the sales orders, there's nothing worse than not being able to fill a sale [00:07:00] order. I mean, , that just keeps you up at night. Now you mentioned earlier , in your certification process , I heard you say you have vegan certification.
What is that about?
so a lot of the big vanity brands out in California, Have constantly been asking us about different marketing or things that they could use on their packaging or in their marketing. And so a few of those things would be like gluten-free and vegan and halal. And so we basically, and a lot of these certifications, it's actually interesting.
For example, like Israel can only work with us because we're G M P certified, right? And there's certain other countries like in the Middle East that say, oh, your cones are halal. This is fantastic. Right? And so certain things, and then when you go to the California brands, we're like, we're vegan and gluten-free.
And they go, unbelievable. This is great. We can use that in our marketing on our packaging. That's amazing. So , it's a lot of the. TER [00:08:00] ones, the Halal vegan, gluten-free ones have been requests. The other ones G M P I S O H A C. C P F S C, those were complete necessities to be making cones in clean rooms.
Well, it makes a lot of sense. It makes a lot of sense. And like you said, your your, your ideas come from your customers. They're not like coming off the top of your head. Whatever you guys need. We'll do the, you know the name of this show, and I ask you this every time.
The name of this show, ISRA MJ Bulls raising Cannabis Capital. And every time I say, Brian, is it time we're gonna start raising some money? , and I always get the same answer. Not right now, Dan, , but I gotta ask again. Will there ever be an opportunity for people to invest in your company?
So as of right now, we are not raising
Shocker, shocker.
We're, we're very blessed to be able to call ourselves cashflow positive to say we've got positive ebitda. We're self-funding every project in every lane and channel that we're in. And so it's a really awesome feeling. I think here in the [00:09:00] next, 12 months, I say we will try to kind of lock down a strategic.
Partner that could possibly, maybe replace our, original VC partners. And while the original VC partners are awesome and they still continue to help us, every week, every day, I think for some, myself and some of the other co-founders, we just wanna hyper accelerate this business.
We've got great foundation, we've got great people here, and it's really just about building, growing faster. Right, opening more doors, more channels quicker, better, faster, stronger. So I think you'll see soon here that we probably will end up getting married to some big tobacco guy or something and hopefully, get a little payday wealth event.
But yeah, it's kind of in the unknown phase right now.
Well, I'll tell you what, if I was a. Potential customer that gives me even more confidence in working with you. So that [00:10:00] might be the fourth pillar that you could sell, is that you financially we're pretty stable and we don't, you don't have to worry about us needing a round of financing to cover your next order.
So that's a, I guess that's. Probably good. I know my listeners are probably discouraged because they would love this as a great opportunity, but you keep doing it. , the staying alive is the key right now, and you're more than doing that. So, but if you're a company that's looking for a new supplier of your cones I, I don't think you can make a mistake working with Brian and his team and I'll have all the information in the show notes.
Click the link. Follow through and like you said, you're, you have a solid team that's to, to work with, with a lot of years under their belt. And tons of production. Brian, I met in the, promise me you'll be back in the winter if there is an opportunity with investors. 'cause I'd love to , do a whole show on that one.
Totally. No, I will for sure.
All right. Well, thanks for, thanks for doing this.
yeah, of course. Thanks, Dan. Appreciate you having me on.