How This Living Room Side Hustle Rapidly Expanded to a Multi-Million-Dollar Business
Free Book Preview Cannabis Capital
Cura Cannabis Solutions is one of the biggest cannabis brands in America. The company only manufactures cannabis oils and has managed to amass a 20 percent market share in Oregon, doubling its size every month between April and December of 2016 -- ending the year with 20 times the revenue it had in April. Over the first three quarters of 2017, monthly sales quadrupled as well, hitting $40 million by the end of the year and earning the company a $400 million valuation. Furthermore, the company posted sales of $18 million for the first quarter of 2018 which, according to the firm, is the largest revenue quarter in the history of legal cannabis sales.
So, what determined the success of this company that, unlike most others in the industry, has chosen to remain horizontal and focused on oils instead of pursuing vertical integration or expanding its portfolio to include products beyond the concentrates category?
The number-one factor that determined Cura Cannabis Solutions’ success was passion, President and Co-Founder Cameron Forni assures. “Find your strengths and partner up with someone who fills your gaps. It’s very rare to see venture capitalists fund a single-founder company.”
“The founders’ stories multiply. They don’t just add up; they create a multiplying, exponential effect, which is very visible in an investor’s mind,” he adds.
“Attracting the right people to your team requires you getting out there and actually doing what you want to do with your business,” Forni comments. “Business plans are important, but in cannabis, a business plan changes often and is always evolving every single day. So, by actually getting out there and doing it, and proving sales and proving that there is a demand and a need for your product [or service] on a very, very small level can change the entire way your company is looked at -- the entire perspective of investors.”
Cura’s story from the beginning
Everything started with Cameron Forni, a regular American with a B.S. in Business Administration, researching vaporization to help a friend and business partner who suffered from Barrett's esophagus. This meant that, while he wanted to medicate with cannabis, he could not smoke it. “We bought every vaporizer we could get our hands on and studied how they worked,” he remembers.
At one point, they found out that some of the components in the existing vape cartridges were carcinogenic -- or at least detrimental for people’s health -- so they decided to research the options. “We finally came across a design that had no hazardous components. So, we ordered a few hundred vape cartridges and started filling these up with oil from a producer we knew in my living room and selling them online,” Forni continues.
It took $44,000 dollars in cash and $66,000 in credit card debt to get the business going. The entrepreneurs were able to pay off the full credit card debt in less than three months.
“That’s a good piece of advice: start with your own money and your own credit card,” one of the members of Cura’s original team remembers.
“We were in an 800-square-foot apartment filling cartridges from 8 P.M. to two or three in the morning. The next day, we would go out and sell them to stores, explaining the differences in our product,” Forni voices.
“At the time, the market in Oregon was only medical, so you had to have every product tested, but labeling and other things were not as strict and as stringent as they are today. So, you could start a business with a medical card and a business license at the time.”
Perseverance took Forni’s venture (called Select Strains at the time) to a point where a highly educated guy with an M.S. in Industrial Engineering and a strong startup and management background, noticed it and got interested in getting involved.
“We were getting ready to raise money among friends and family when we came across Nitin, who had a product that competed with ours and a facility that was licensed for medical use. Proving my product was much more important than coming up with a business plan and a list of things that differentiated my product to show investors,” Forni says.
“From my perspective, you have to show a little proof of concept -- a little proof of success -- to get investors interested,” Forni adds. “Being able to show a purchase order from a big customer will make things a lot easier too.”
Cura’s exponential growth
But, how did Cura Cannabis Solutions grow from a living room company into a multi-million-dollar business?
The first thing that drove Cura’s growth was an extremely clear vision and mission, the co-founders reveal, pointing out how easy it is for everyone to understand these and suggesting we just pick this up from their website:
“Our mission is to be the leading provider of cannabis oil to both consumers and premium edible brands in legal US and international markets.”
The second thing Cura Cannabis Solutions really believes in is people, the co-founders assure.
A final element in Cura’s success was cautious expansion. "We were never going to expand beyond Oregon until we absolutely felt like we were hitting at all cylinders there," Forni says. “People want to do vertical integration; they want to do candy in Oregon but grow in California… That is a hard mission focus. If you want a retail store in Oregon, and you want a gummy company in Nevada, and you want a grow operation in California, I ask: who are you? What do you want to be when you grow up? How do you give a clear message to investors, customers and vendors?”
“While this might be a good income strategy, it is not a wealth creation strategy; it is not a company building strategy. That is why I’m tying all this together: your mission has to be clear, the people that you hire have to believe in that mission, and then, you should only grow, especially in a regulated industry like cannabis, at a speed that’s appropriate.”
Having hit a 50 percent market share for vape cartridges in Oregon, Forni and his partner decided the time had come to ramp up hiring and evaluate what getting into the California market would look like. This led Forni to move out to California to establish the business.
Within seven months, Cura has become the third largest cannabis company in California, so the partners decided to take that model and replicate it in Nevada.
“Do what you are doing really, really well and keep your promises and your customers happy. This is the way to expand,” Forni concludes. “If you are in the cannabis industry for the right reasons, you should be in it for the long run -- not just a couple of years.”