Welcome the King Of Cones Amazon's refusal to allow smoking products to be sold on an automatic recurring basis created an opportunity that this college senior capitalized on. Bryan Gerber the co-founder and CEO of Hemper gamble to skip grad school and start his online smoking subscription business has really paid off. He joins Dan Humiston to talk about using their subscription service to launch their own products and their expansion into manufacturing pre-roll cones. Produced by PodConX MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Bryan Gerber - https://podconx.com/guests/bryan-gerber Hemper - https://www.hemper.co/
Welcome the King Of Cones
Amazon's refusal to allow smoking products to be sold on an automatic recurring basis created an opportunity that this college senior capitalized on. Bryan Gerber the co-founder and CEO of Hemper gamble to skip grad school and start his online smoking subscription business has really paid off. He joins Dan Humiston to talk about using their subscription service to launch their own products and their expansion into manufacturing pre-roll cones.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Bryan Gerber - https://podconx.com/guests/bryan-gerber
Hemper - https://www.hemper.co/
Dan Humiston: [00:00:00] Today at MJ bulls, we are joined by Brian Gerber, the CEO of hamper, Brian, welcome to the show.
Thanks, Dan. Appreciate you having me on.
Oh, this is going to be fun. I, I am so intrigued by the hamper in a box experience. I've been researching your website, going through everything. You give people an opportunity to try different products, experience different brands, all different categories, and they never have to leave their house.
I'm like, this is one of those ideas , it's like a, why didn't I think of that idea? do you remember the moment that you came up with this idea, or what inspired you to come up with this idea?
Bryan Gerber: Totally. So I was in my last year at George Washington university in DC, and I was like every other college kid trying to figure out what my next move was. Applying to jobs was one idea?
or going to grad school was another. And I guess I had a third one, which was, I'm going to start an online subscription service for paraphernalia products.
And basically. [00:01:00] In my last semester of school, I was building the Shopify website as opposed to studying for my finals. I was so gung ho on this, I basically was just purchasing a lot of these products for myself off Amazon and the replenishment aspect, because it's a little bit more restricted products.
Amazon wasn't allowing you to do subscription-based for any of these types of products. And I was like they're all replenishable, it's just like toilet paper. I can't get it in quick enough. And so I started thinking like, Birchbox style for smoking accessories and, , I wasn't really into like paraphernalia or products like that.
I didn't have a bong my whole life. I didn't have grinders. I, I didn't really have anything. It was just kind of rolling papers and filter tips, super simple. When I first came up with the concept for hamper box, it was basically a discreet. Convenient economy, price, product that ended up being more of [00:02:00] a discovery outlet for consumers.
I graduated college May 18th, 2015. We launched June 1st, 2015. Yes.
And so we had like 30 subscribers our first month, nothing crazy. And basically I was just curating a box of 10 products that I would like to receive. As a customer. So I convinced 30 people to sign up.
They got their box, they loved it. And then we just kinda kept moving forward. And then about six months into it, I launched a guest curated concept where we would bring in a celebrity. And we pilot tested this with popular YouTubers at first, brought them in. They picked the items for a month
and so that concept, we launched August, 2015 with a small YouTuber named Jane DRO. And we catapulted from 300 subscribers in June, July to over 1500 August boxes. So the snowball [00:03:00] effect started happening really quickly. We went from processing, five, 10,000 a month to over 50, to a hundred thousand.
Within first six months. So I was like, okay, that hit, that worked. , and at this point, I majored in accounting and information systems, so I had a great. Starting idea of how business should be run, but obviously digital marketing and running ads and restricted space and, influencers and all this stuff was just kind of on the job learning.
Right. so, we just worked with larger influencers. And one thing about the cannabis community is that it really doesn't discriminate, Professional skateboarders there's comedians, there's musicians there's, bankers, everybody partakes, so we just started going down the gamut of people who we thought really were on brand with us and, that were in the community.
And so we started working with larger YouTube burgers larger musicians and just doing bigger collaborations. And then , towards the end of the first year I was like, Okay.
. We have 2,500 subscribers. growing like [00:04:00] wildfire, what's next?
How do we keep this box fresh? And I started doing a ton of research . And everything led back to product development, new stuff all the time. . And so early 2016, we started developing our own smoking accessories And introducing them through the subscription box, kind of like our own Trojan horse marketing outlet.
Right. And a lot of times with a lot of these smoking gadgets, you have mold fees and a lot of startup costs. So it's difficult to really do a bunch of stuff at one time. Luckily for us, we already had the customer base and it was already basically pre-sold right. So we would develop. Product a we'd make 5,000 units.
And literally within one month they'd be gone and we get all this feedback from all of our subscribers. They loved it, they did it and we tweak it, whatever we had to do. And then we would go to our distribution and retail partners and say, Hey guys, look, we just developed this product. First month we sold 5,000 units.
They love it. Look at the customer, feedback you should put into your retail stores and distributors started eating this model up [00:05:00] because we were using a data driven approach. As opposed to, Hey, I have this cool stoner idea, please send my product. It was just different. They weren't used to this approach.
. And so we've developed over 300 different products over the last seven years and the way I looked at it was there's all these pocket markets, right? So there's glass, there's cleaning their storage. There's preparation goes like rolling filter tips, lighters, replenishable things,
odor limiting products. And so we just started. Duplicating and innovating each one of these categories and then releasing it through the subscription box, getting that feedback and then driving the retail distribution front. So now we're in thousands of retail outlets. We're actually branching this year into convenience.
So we're, we're approaching, companies like family dollar dollar general, the seven Eleven's of the world. And so we're developing products. Now cannabis apparatus is in seven 11 and what that looks like. Kind of pioneering another lane, with the tobacco flavor [00:06:00] bands that are coming there's going to be a huge need for shelf space because 60% of the tobacco shelf is going to get obliterated over the next 24 months.
So we're developing new products, not just through the subscription service, but outside now and, tackling all those different pocket markets. And so we just really, us being the consumer, we understand what everyone's looking for. So we just developed those products in mind. These are things we're using,
Dan Humiston: or you're selling.
Bryan Gerber: And selling.
And so, for us, our goal was to be the first smoking accessories company In Walmart. It's clean, they're functional products. They make sense. There's not weed leaves every there where there's not Rosta colors everywhere you're not embarrassed by these products.
. If your girlfriend, mother, grandmother saw them on the coffee table, it's all good.
That's what I thought was just fascinating is that they don't even know they need it and you put it in. And you're like, oh, I love this. That's so cool. Can I jump in? I, I, we, I wanna, I wanna make sure that I don't [00:07:00] miss this part of it, , , but
you said, that your goal is to be in Walmart. Now, Walmart is going to require you to have not tractor trailer loads, but train, load. In order to, in order to supply Walmart. So if that's the goal, are you going to be able to fund that internally or will you have to raise money to get there?
Yeah. So we've raised a couple of rounds so far. We did our seed and series a in 2018. We've only raised about 13 total so far. And.
Dan Humiston: total million
Bryan Gerber: Correct?
Dan Humiston: only.
Bryan Gerber: Yes. And we do have plans for potentially raising more. We've been talking with a bunch of PE firms lately that are, looking at us more of like a platform play, kind of like a chewy.com but for all paraphernalia stuff.
And so a lot of people have been taking interest in us. And I dunno if you're familiar with our other side of our business. [00:08:00] Not involved with Hemper, but in 2018 we actually started a pre-rolled cone factory. And so we we're selling a lot of bongs to a lot of the packaging companies when their business model was directed dispensary and not grow or processor.
So like guys like marijuana packaging and Kush bottles and stuff like that. And once they shifted away from that dispensary model to the grower processor, they got rid of glass. And actually, because we're manufacturing a lot of our own glass in India. There's always been this pre-roll cone shortage in the market and they asked us if we could potentially figure this out for them.
And so, RJ went over to India. Basically we figured out the lay of the land took us about six months and within six months we had our first cone facility set up and we went back to Kush bottles and basically walked out with a half a million dollar purchase order and kind of fast forwarding to this day.[00:09:00]
We are now actually the largest pre-roll co-manufacturer in the world. We're producing over 70 million empty pre-rolled cones per month for the market. Most of our clients are all of the big MSOE, all the Canadian LPs, a lot of the big vanity brands out in California. And. Goal is to hit about 150 million cones a month right now.
But just to give you some perspective on order right now, we have over 450 million cones with POS and deposits in hand. And so this kind of segwayed into our other business, which we call horror supply, which came in as a service based entity to alleviate supply chain problems for the largest cannabis companies in the world.
And we're doing just.
Dan Humiston: Man. I can't believe the growth that you've had over seven years. It is such a cool story. I'm so glad you had an opportunity to share it , with our listeners, I have [00:10:00] all of. Information in the show notes and information about hamper.
So if you wanted to go on and check out their site to become one of their 30,000 subscribers, , . This is a great American success story. That's what we need more of these. And it's all done in, in cannabis, hemp world. And just great to have ya. I gotta wrap this show up, but I really appreciate you being on the show with us today, Brian.
Bryan Gerber: Thanks, Dan. I really appreciate you having me.