In the second part of our interview, Herbl founder and CEO Mike Beaudry discusses growing pains in the California market, the developing consumer landscape for cannabis, the future potential of cannabis beverages, and evolution of the industry over the past few years. 

SNDC: What challenges still remain in the California market?

Beaudry: The speed of retail opening. There are now about 1,000 cannabis retail doors in California. That’s not even remotely at a point where there’s ease of accessibility for consumers to go to a retail shop and buy cannabis. For instance, Fresno opened its first two doors last month, a retailer called Embarc and a retailer called Artist Tree. There are 500,000 people in Fresno, the fifth-largest city in California, and it was just a few weeks ago that it opened up the first two dispensaries, four years after adult-use legislation in California.

SNDC: Do you think the next generation of cannabis CPG products will help convert people to the legal market?

Beaudry: The predominant customer in cannabis is who you would expect: the folks who consume most frequently. That consumer is a 21- to 35-year-old male/female mix. That seems to index the highest in use. I think one of the mistakes or misses the industry’s had, frankly since I got into it, is this whole thing about the canna-curious. They’re going to convert a soccer mom over to cannabis. I think the answer is yes, in terms of now she might eat an edible for sleep. She might have a sleep gummy. She’s participating. And she’s part of the industry, but she’s not going to ring any registers up anytime soon. Folks who are ringing the registers up are the folks for whom it’s a lifestyle. That is our target customer, and I think brands that focus there have done the best.

SNDC: What’s your take on cannabis beverages?

Beaudry: Today, flower, vapes, edibles, and concentrates are really the business. Other categories are pretty fractional. I do think beverage is going to be a really big category and I’ve felt that since I got here. Beverage is going to be massive, but it’s going to take a minute because it’s a different format. A super user, an avid consumer of cannabis, will supplement with a beverage, but that’s not going to be what they do exclusively. The beverage category is growing at the highest percentage, but it’s still a pretty tiny category in the big picture. But that said, there’ll be a future where, in my opinion, at a liquor store, at a concert, in any event, a civic center, there’s going to be a cannabis beverage right next to the light beer.

SNDC: How has the industry evolved during your time in it?

Beaudry: I’ve done a lot of things in my career. What I’ve really never done is be at the very beginning of something. It comes with all kinds of struggles and pain, but it’s also super interesting. When we go into our warehouse, it looks pretty much like a typical distribution warehouse. But four short years ago that was not the case in cannabis. People were putting things in different size boxes and different case counts, and stuff that you would never even think of would be a problem. They’d ship us finished goods in trash bags. Today, if I brought you to one of my warehouses, you’d say okay, looks like it could be a mini Southern Glazer’s Wine & Spirits. Watching the evolution of the industry as it matures has been pretty cool, and we have a front row seat.

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