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Making Hemp A Household Product | Avnish Pandya @ Bombay Hemp Company
319 Plays3 years ago
Cannabis is a controversial ingredient to base your buisness on, given the many stereotypes around it. However, that didn’t deter Avnish from going the extra mile to build an ethically and scientifically driven company that has been awarded The Social Innovation Leadership Award. Listen on to this masterclass on all things hemp.
Know about:-
- Indigenous uses of Cannabis
- The incident of ”wearing Cannabis”
- Process of launching Ayurvedic products
- Acquiring customers differently
Recommended
Transcript
Introduction and Zencastr Shoutout
00:00:00
Speaker
Before we start today's episode, I want to give a quick shoutout to Zencaster, which is a podcaster's best friend. Trust me when I tell you this, Zencaster is like a Shopify for podcasters. It's all you need to get up and running as a podcaster. And the best thing about Zencaster is that you get so much stuff for free.
00:00:18
Speaker
If you are planning to check out the platform, then please show your support for the founder thesis podcast by using this link zen.ai slash founder thesis. That's zen.ai slash founder thesis. Hi, guys, this is Avneesh here. I'm one of the co-founders and head of research and policy at Bombay HEMP Company.
Entrepreneurial Journey of Avneesh Pandya
00:00:41
Speaker
Take a minute.
00:00:50
Speaker
Some of the most interesting entrepreneurs are not people who have built billion dollar companies, but rather people who have taken unconventional decisions and had the courage to go the long haul, no matter how tough the path is. And there is probably no line of business that is as challenging as the one dealing in hemp products.
00:01:11
Speaker
Hemp, which is also known as cannabis, is a controversial ingredient to base your business on. There are so many stereotypes about it that most people would not recognize the opportunity to build a legal business in this space. And this is really what sets apart a group of seven college friends turned co-founders who are running the Bombay Hemp Company.
00:01:32
Speaker
Listen on to this masterclass on all things hemp in which Avneesh Pandya, who is one of the founders of the Bombay Hemp Company, talks to Akshay Dutt about their journey of building up India's leading hemp products company.
00:01:46
Speaker
So when we were in college, we were actually part of a community called Students in Free Enterprise, which is known as Enactus now. So we were working on solar rural electrification projects and that was a real exposure to Bharat.
00:02:02
Speaker
In India that we came from, the microcosm of India that we came from at that point of time really opened our eyes. When we were actually doing a project in Almora district, that's when we were seeing a lot of the common folks actually use cannabis for things which are unknown to most people.
00:02:23
Speaker
stuff like making the juntis or the footwear out of cannabis, tying the cattle out of it. And at the same time, the women using the seed oil in a certain way. So that was our exposure. The indigenous use is where we got exposed to it. This is like a you and yes, and like you guys were college men.
00:02:43
Speaker
Yemi, Yash, Jaman, Tolangang in college, right? So, of course, we knew that this plant is interesting because of whatever experiences we have had in these areas with it. And especially while talking to Beatnal, we realized what a non-issue it was and how it was used for subsistence as well as for their local application at that point of time.
00:03:10
Speaker
The funny part is we were coming back to Bombay via flights from Delhi and at Delhi we saw a bunch of hemp products at the body shop. So the body shop is one of the biggest retailers of cosmetic products and it so happened that the India store actually had a hemp product and it's difficult to miss it because that whole leaf is literally on the packaging and that was like another moment for us and we were like
00:03:39
Speaker
There is this bunch of so-called villagers who have this indigenous knowledge and there is this mega corporation that has kind of packaged it in a fancy way and has presented it to us. The opportunity we saw that was unique to us is that we are bang in the middle of these two worlds.
00:03:59
Speaker
We are not from the UK or America, but neither are we from the hills in Uttarakhand. We are back in the middle from a mortal city in India, which is not too far from India, not too far from the West. And there was an inspirational moment that also at that point of time, a lot was happening with Haldi. Haldi had suddenly become turmeric latte and the five rupees Haldi had become a $10 turmeric latte.
00:04:26
Speaker
Now, coming from a commerce background and with my father vegan advertising, the one thing I really understood was the power of perception, how things are perceived and what it can do to people. So, it was more of a perception battle that Huawei Hymn Company originated with as a hypothesis. It was not a business we never thought we were
00:04:51
Speaker
We never thought we're going to make it this far.
Navigating the Hemp Industry's Legal Landscape
00:04:53
Speaker
Frankly, we never had dreams of me building unicorns or, you know, 100 billion dollar startups. We had a simple question. We have this amazing land. We know what it can do and we know a thousand other people over it can do.
00:05:07
Speaker
But why and why is there no conversation around it? Why is there whatever little information is there about, you know, strawberries and stuff like that? So, there is a narrative issue with this. But of course, we were in college, you know, all this sounds great in college. Then came, you know, your final year.
00:05:26
Speaker
All of us ended up getting some of the other job to get some real life experience. This trip to Uttarakhand was when? Second year? In 2010. Yeah, second year of senior college, as we call it. Whenever you're in grade 14, that was when it happened. Okay. Okay. That's like first year of the DU system, it will be like first year. First year of the DU system. Yeah.
00:05:50
Speaker
So then we understood that there is a real world. We understand some aspects of it because we have the privilege of it, but the real world is a different animal. So we were good at knowing what we did not know, frankly, at that time.
00:06:07
Speaker
We said, okay, let's go out, get a real job. Few of us were in Deloitte, a few of them were in Group M, doing marketing gigs, consulting gigs. But 10 months into my job, I knew that this is what's up. Where did you join? I was at Deloitte in the US, India office in Hyderabad and then in Bombay. Like an analyst kind of a role? Like a consultant, an analyst. Yeah, yeah.
00:06:33
Speaker
straight get into Excel sheets, review processes, and then have a good boss, a bad boss, and manage the route. I was lucky because I got to work in Hyderabad and never lived out of Bombay. This was like, you know, somebody paying for a party, literally. That's how I perceived it, that, you know, somebody's going to pay me actually to have a good time in another city. So,
00:06:58
Speaker
I kind of fooled myself into it at that point of time, did that for 10 months. And within then I'd realized this is not what I wanted to do. I quit my job and then I got in touch with these guys, all of them, saying that, yeah, because you're gang, how many folks?
00:07:14
Speaker
This is the five other guys that I'm talking about. Yash, Yash, Chirag, Sumit, Delsa, Denjaan. I couldn't touch with them and I told them, see guys, I'm not having a great time at my job. And this is probably the only time in our life where we can take up something and fail miserably.
00:07:35
Speaker
So, you know, why not just give it a shot? Again, there is no big promises of business plans and returns and economics, etc., though we are commerce students. But we knew the question and the answers we're getting into are beyond commerce. They're about society. They're about larger things. Quit my job. I worked in a couple of startups in the middle of working through startup, understood what it takes to actually, you know, build something ground up.
00:08:03
Speaker
How long did you do that? Six months. I was getting paid. In fact, I was doing walking tours in Bombay with very, very rich people. I made more money through tips than I made through salary when I was at Deloitte. So then I understood the value of money and how it changes hands and what people pay for.
00:08:28
Speaker
Basically. And then I thought, okay, this is a great time to kind of jump into this whole cannabis conversation. Now we were not jumping into it line because of course we are relatively educated, not fancy MBAs or IITs, but we knew about how certain part of the whole world. So the first thing was, you had a family background of entrepreneurship.
00:08:53
Speaker
So first thing is to see as anybody or any big business today that needs to start in India, look at what our Western counterparts are doing.
00:09:03
Speaker
because they are literally a decade ahead of us and most of the things that we would talk about and maybe we are centuries ahead of them in certain other aspects. But as far as the real cause of the world is concerned, they're 10 years ahead. So look at what the US is doing. Look at what Canada is doing. Figure out where the tailwinds are with this thing.
00:09:24
Speaker
And we realized 2013 with what happened in California, Colorado, then the New York bill, and a whole bunch of other things. Legalization of medical marijuana. Exactly. Exactly. So what started with in Canada, then in Uruguay, then in Europe. So we then understood. And that was also the point of time when the governments were changing. We had a new government coming in, new way of looking at things, et cetera.
00:09:53
Speaker
So, our job was always to stage the larger narrative. We were not trying to build a company at that time. So, the larger narrative, first thing what we did is we wrote to the Director of Narcotic Control, who is the topmost revenue officer in this country, who has a say on the NDPS Act.
00:10:13
Speaker
Unfortunately, what is NDPSL? Narcotic Drugs and Psychotropic Substances Act under which cannabis is governed. Why is this director of Narcotics part of the revenue service? Because we are part of the archaic British system where the British actually considered all the intoxicants and narcotics as a source of revenue.
00:10:32
Speaker
They used to tax all these things heavily. All your magua, your bhang, your bakja, charas, afim, everything was taxed. They used to make a shittun of money which paid for their work eventually. So, since then, it has continued. It's part of the DOR under the Ministry of Finance. We straight up wrote to him. Well, we spoke to a few lawyers. The lawyers said, you're wasting your time. You're never going to get a reply.
00:10:58
Speaker
You know, these guys. What was your question? The question to the lawyers was that we want to work in the cannabis field. We want to develop products that are made from the hemp fiber, hemp seeds. How can we do that? Not intoxicated. Not intoxicated. Industrial and medical. Industrial and medical, that was the objective. The recreational part is not part of our conversation at all.
00:11:23
Speaker
Because frankly, recreational cannabis, even though it's illegal in India, we all know what the enforceability of tax status is as we speak. The government also accepts it. There's no hiding that fact. It is illegal. That's what the law says. But what is happening on Iran? Completely two different things.
00:11:41
Speaker
Now that was a practical development. Bhag is supposed to be legal. Yes, correct. Because Bhag is not Ganja. What is illegal is Ganja. Ganja is the flowering and fruiting dots of the cannabis plant and Bhag is the leaves of the cannabis plant.
00:11:58
Speaker
So if you want to look at it in alcohol comparison, bhang would be like a 4-5% alcohol beer and banja would be like 30-40% of whiskey or vodka and that also would be like 60-70%.
00:12:16
Speaker
alcohol absent or a much more potent version of alcohol, that is. So we spoke to a bunch of, you know, some name lawyers, etc. The thing is, nobody's ever picked up the NDPS Act and really read it as far as cannabis is concerned. It was this blanket perception that everything that's going to do with it is bad.
00:12:36
Speaker
Now, that's what curiosity does. Curiosity allows you to sit and read and kind of spend time there. So, we were lucky. The first two, three letters we wrote, we got a call saying that the additional secretary of revenue wants to meet you.
00:12:54
Speaker
not the Director of Narcotic Control only. That's what these were extremely forward-thinking officers for their time and day. Luckily, our government has positions in place for these people to go outside of India and study and learn and have a grasp of another culture, allows them to think directly.
00:13:16
Speaker
And that was our faith. None of us had any political backing or as we call it in generic terms a jack. We didn't have any jacks. We just knew how to write letters and we knew how to present ourselves and talk about. Were they surprised to see like a bunch of 20 year olds? Absolutely.
00:13:36
Speaker
surprised and happy because imagine if i'm a 45 year old rich businessman going and talking about cannabis you would look at me with such maligned intent saying that this guy is here to just squeeze the system and try to make some money and send drugs
00:13:50
Speaker
But I'm 22 years old, I'm coming to you with this fresh idea, what possibly can I destroy? What can I do? What is in my power? So it was a non-threatening engagement for them, which allowed them to have a safe space to communicate. What most people in India do not realize is the sensitivity a government officer actually goes through when he's doing it.
00:14:13
Speaker
something at his level. He's accountable for way too many more things. It's very easy to be on-chair critic sitting and kissing every step everybody in the system makes. I'm not trying to rationalize everything that the government does, but it's more nuanced that work it to be. Yeah, it's not simple black and white. Correct, correct.
00:14:34
Speaker
And from there on, it started and the journey kind of led us to... So what happened in that meeting? Like, did they tell you that, yeah, go ahead, you can make non-intoxical
Growth and Investment with Ratan Tata
00:14:45
Speaker
products? In fact, they asked us a question, why isn't this already happening? So again, that's when we realized that even no one has actually done anything about this. There was never a consolidated movement, a question, or a narrative, anything. There was zero.
00:14:59
Speaker
Now, the point was at least we realized we are at zero, we are not at minus 10 with these guys, because minus 10 would be then being apprehensive even about these aspects. Then they said, OK, cultivation, manufacturing, and processing is a state subject. So states will figure out the regulatory processes. We cannot create that regulation following. So today, if Almeesh and Apture want to grow,
00:15:26
Speaker
The central government will not give us a license. We will have to go to the state now. That's when they introduced us to senior-level officers in Uttarakhand, and that's when the Uttarakhand conversation started. Now, whilst all of this, Uttarakhand was the first state to create a policy for cultivation of hemp and cannabis, specifically for industrial use in 2016-2017.
00:15:50
Speaker
That was because of the kind of groundwork that was put in place right from 2013-14 for that to start. Between 2014 and 2016, the central government helped us with getting a policy with Uttarakhand, with getting us research licenses in the backstay back in the region in Uttar Pradesh.
00:16:13
Speaker
So that means in those two, three years, we started, the first time in India, we legally cultivated cannabis, is studying what is Indian cannabis. Because we are in a position where we have an ocean of water, but not a drop of it, which we can drink. So we had the best genetics, the best land races in the world, but none of it was actually studied. So we brought on some of the best scientific research institutes in India, like the National Rotary Research Institute,
00:16:43
Speaker
the Indian Institute of Integrative Medicine. That's where, again, our positioning angle was caught on. Saying that, it's the government themselves, right? So that was, it wasn't a smooth ride. There were lots of kind of steps there, but when I look at it in retrospect,
00:17:11
Speaker
at least it was a stamp that they moved in that direction. And that is when we started realising.
00:17:41
Speaker
So 2013, you had this meeting and 2016 is when that law passed, which made it possible for you to commercially grow cannabis. So these three years, how are you like, how are you paying the bills? Like you had a looped in these research agencies. Was it?
00:17:59
Speaker
Did you pitch it to them as a research opportunity or was it a paid engagement? How were you paying the expenses for this three-year period? What was happening from a business perspective? There were five or six salaries to be paid, like all six of you.
00:18:16
Speaker
Correct. So, for the first three years, there were no salaries. Nobody got paid a single rupee. The company started with the total capital of 12 lakhs, 2 lakhs by each performer, 2 lakhs, 2 lakhs by each performer.
00:18:32
Speaker
Yeah, we all had done some jobs before. So we had that money, though that was the only money we had. But that was good enough to kind of get started. And that took us to a certain level. After that, because we were cannabis, we started getting a lot of media. We started having reporters write about us. So from 2013 till now, we would have made that probably more than 600, 700 articles, exclusives, and all of this.
00:19:02
Speaker
on media. So the media got a hold of it, saying that, damn, there's a cannabis company in this country. Is it even legal? There it started. So once the media narrative kind of picked out, we won a couple of grants. We won a couple of business competitions. That got us like 40, 50 lakhs of grant money. Why we won one of these grants list at Tata was actually present at one of these events. So my co-founder Jahan actually caught hold of him in a bathroom because we talked about
00:19:32
Speaker
That's the only possible place you're going to have privacy. And I'm hoping he is open to not being so private. But we got word of him there. We told him, you know, we are working on this hemp thing. He said, oh, hemp, isn't that what the British used to fight the Second World War in terms of building the Navy, build the sails and build the rope?
00:19:53
Speaker
And we're like, this is a guy. He knows this. He knows what hemp is. And it lit up his eyes in some way. So he said, I'll give you a meeting. I'm busy, but I will write to you. And he did write to us. He did give us that meeting. And now, luckily, luckily, or luckily, luckily in our case, his business guy wasn't there. Like, really, you know how it works, right? There is this big personality. And then there are these
00:20:22
Speaker
extremely sharp people gatekeepers. Exactly. So we didn't have any gatekeepers that day because the gatekeeper was busy gatekeeping something else. And we got direct one-on-one with him. And that's when he said, see, I like what you think about this. I like your vision. I'm going to support you. I'm going to put my name behind. What did you present as your vision to him that you will build a D2C brand around hemp products? Was that the vision?
00:20:49
Speaker
The vision to him was much larger. The vision to him was Bombay Hemp Company being what Indian tobacco company was, is what Bombay Hemp Company could be going into the future. Because we could be making cosmetic products, we could be making FMCG stuff, textile, lifestyle. We could do everything with this one. The Indian tobacco company started in the British era with a perspective
00:21:15
Speaker
of it being positioned from a tobacco thing, but then it will don't do a thousand other products that you know of today. And that's also part of the origins of our name. Who are we and what do we do? We are the Bombay hemp company. So you know where we're from and what we do in that case. So he really said that, you know, this is a massive mountain to climb, but at least you are smart enough to know what it will take to scale it one kind of step at a time.
00:21:43
Speaker
and he was the first investor in the company. He borrowed some money and he also gave us... How much did he put in? He invested close to 30 lakhs in the company but he gave the company a grant through the Tata Trust of close to 3 crore rupees.
00:22:01
Speaker
Wow. Okay. Like a research grant for you to research about cannabis. Exactly. He put us in touch with the Tata Memorial Centre, which is Asia's largest cancer and cancer research facility. Some of the top oncologists there.
00:22:18
Speaker
Like for cannabis, for pain relief. Exactly, for palliative care, for chronic pain management and things like that. Then once we had Mr. Tata on board, we had a few other angel investors that kind of came together.
00:22:34
Speaker
Now, till then, we were only actually working with one part of the plant, which is the fiber. We were only developing fiber-based products, textile-based products, etc. Was it like in the lab or were you like, had you commercialized those products? We were selling the cannabis. A first sale of a cannabis product in India was post of August 2013. I still remember this.
00:22:58
Speaker
because we still haven't encached that 5,000 rupee check we got from within. I thought you were busy trying to figure out how to grow the crop and getting those regulatory approvals for growing the crop. Yeah, I mean, I had five forefounders also. So, I mean, we could walk in to government at the same time. A few of us were focusing on this. A few of us. So, there is like a team that is looking into the future and the team that is working today of where the world is at today, right? So, we always had the luxury.
00:23:28
Speaker
Now having these many pop-ups... Tell me about that thread, like the commercialization thread. Tell me about that. So first thing we realized is that let's start working with the hand-blown weavers in Uttarakhand. Because we already knew these people make hand-blown cloth. We need to break this hand-blown to cool designers in Bombay. They let do magic with this and we can create a big story. It was all about getting eyeballs right at that point of time. The cool you can even do this, that and...
00:23:55
Speaker
We're trying to always educate the 1% because they would actually get it and not malign it completely. So a few designers picked up that cloth. So these weavers in Uttarakhand were already using hemp. So you didn't need to worry about procuring the crop and all that. Exactly. You just had to buy the loom or whatever that cloth basically. Exactly.
00:24:18
Speaker
We were buying the hangul cloth for them. Though it was very unorganised, it wasn't a business level thing. You know where supply chains are fixed and you know everything. It was like a cottage industry. Exactly. It's in the house, there's somebody else. Correct. It's like if I make a chair at home, how big will my entire business be, man? And we'll only be that.
00:24:39
Speaker
But then we started understanding that China
Exploring Ayurvedic Hemp Products
00:24:43
Speaker
is actually one of the bigger cultivators of hemp, and then we started understanding the Chinese have actually reached machine-made hemp extents. So we started importing Chinese hemp fabrics and started trading in those fabrics.
00:24:57
Speaker
Because while we were developing this, we always understood that all our effort is worthless if there's no market at the end of this. We all know that there needs to be a market, even if I go and sell this idea to, let's say, the head of Dabur or the head of any major FMCG company in India.
00:25:13
Speaker
He's going to see who's buying this stuff, you know, who's interested. So we knew that we had to kind of keep that ball rolling to some level while we were figuring this stuff out. And till then, there was an option. These products were so essentially you were not yet doing a consumer product, but you were just procuring fabric and providing it to designers and designers were selling it as a hemp shirt or whatever they made out of that fabric.
00:25:43
Speaker
That's correct. Then this was till 2015-2016. Then in around 2016. Like the fabric business. Exactly. Then in around 2016, we launched our own clothing brand, our own lifestyle brand called B-Label. And that's when we started marketing these products direct to consumers. We were part of flea markets and we were part of these offline events. Basically everywhere you would think about sustainability or fashion, we were present.
00:26:11
Speaker
Because we had some resources to go out and present ourselves in a certain way. How did you build this piece of launching a label? It's easy to say we launched a label, but I'm sure there would have been a lot of hard work which would have gone around. Tell me about that.
00:26:29
Speaker
So we kind of, we figured out that there is one guy who's only going to look at this commercial angle and make sure he's going to bring us that revenue. So nobody, he was interested. Who was that? Chirag. Yeah. So Chirag was interested with it and Chirag kind of took out the baton. He was given a budget. He could go out and hire a designer.
00:26:52
Speaker
he could develop the brand. The point was, the point was not to have every go found a comment on that because, specifically, the point was to educate. Again, we were not running this to make 200 rupees gross margin on a 2000 rupee shirt. That was not the business we were getting into. Neither were we getting into the business of acquiring a consumer for 1200 rupees and him only buying two shirts from me. The point was, see, this was the only thing legally we could have out there.
00:27:22
Speaker
we were restricted by the opportunity from a regulatory perspective. This was like the Pixel phone of Google. They don't do that Pixel phone for really the revenue out of it, but as a showcase. So this was something like that. Your goal was to have this as a flagship or a showcase for people and this is what you can do from him.
00:27:47
Speaker
Exactly. Now, the biggest thing that came out of this is, there's an ex-member of parliament by the name of Tathagat Sabati. He figured out that there is a Dhanja company. He's from Orissa, so they just call it Dhanja. They don't have any pretense around it. He called it the Dhanja Company.
00:28:08
Speaker
If you actually translated, that's what it would mean. So he actually bought a health quarter and he voted in the parliament. And that day he tweeted in today, I'm very cannabis in the parliament.
00:28:21
Speaker
because he's from Odisha, and Odisha also has a major cannabis culture, breakdowns of local use, etc. So that kind of made a big statement. And that's when we started getting, you know, calls from certain types of people within the framework about asking us about who there is a member in my family who's very sick. I have heard about this CBD oil. Oh, I have heard about this hemp seed oil helping people with inflammation.
00:28:50
Speaker
So, that created a pull. That, okay, there were some people who wanted it, needed it, knew about it, but there was no safe space or platform to actually ask for it or anything. And that's when the first conversation regarding a health and wellness aspect started. That's when we actually became a business. That, okay, the biggest impact hemp is going to have on mankind is on mankind's health.
00:29:17
Speaker
the way, whether we're talking about stress, whether we're talking about sleep, whether we're talking about pain, or any kind of modern lifestyle disease that is going to come out, hemp is really going to help. And this wasn't only our conviction, but this is what we were seeing it does of real business in the past, as well as the mature markets. Like the medical marijuana industry.
00:29:40
Speaker
Correct. You had a lot of naysayers at the start, but then there were like old uncles and aunties using cannabis for their arthritis and for their sleep, etc. So, the narrative had changed. That's when we dive deep into Ayurveda.
00:29:58
Speaker
That was the first time we had some very good advisors. We have some very good advisors who said, now you have to marry your history with your system of medicine. You have reached that stage. And that system of medicine is Alveda. It already talks about more than 250 types of medicine you can make from Bhaa, Ganga, and Charas. And luckily, again, 2016-17 is when India's
00:30:27
Speaker
Ayurvedic book was on, you know, we had Patanjali at its peak and you know, Dakkati was outselling a lot of the other major competitive brands in our markets. So the investor sentiment, the public sentiment, everything was kind of in that direction. So that's when we started working to get an Ayurvedic license to make some of these products available as medicine.
00:30:50
Speaker
It took us a year. It took us a year. Then in 2018, we launched a bunch of products from hemp seed, hemp seed oil, hemp seed protein. After that, we launched products with BHANG. Again, like I said, easy to say we launched these products.
00:31:06
Speaker
What went behind it? How did you figure out the formulation? How did you figure out the supply? How did you figure out the manufacturing of it and whatever licenses you need for it and all of that? Tell me about those details. Those are the war stories that I'm interested in.
00:31:26
Speaker
Yeah, no, no, great, great, great. So when we figured out that, okay, Ayurveda already has a mention of BANG, that means that it should fall under some regulatory framework to manufacture. That's when we picked up another act called the Drugs and Cosmetics Act of India.
00:31:42
Speaker
which regulates the manufacture of all these different types of products. Cannabis arm is under scheduled need one of the drugs and cosmetics act. So it is a sensitive schedule where a theme is there, peridona flower is there and a whole bunch of other.
00:31:59
Speaker
toxic substances with therapeutic potential, as the acts that are there. So
Collaborations and Policy Development
00:32:05
Speaker
then we had to figure out what the best formulations with this would be. That's when again, luckily because we had the Tata Memorial Network, etc, we got hold of two very CIR Ayurvedic doctors, who actually the first few formulations, they did pro bono for us.
00:32:23
Speaker
They said this is what you are doing is actually service to Ayurveda. So whatever I have learnt in my past history, I will contribute.
00:32:32
Speaker
So that time, the bigger learning for me was that if you actually take up something challenging and you reach a certain level, people will come to help you. You help with arriving. It's just you have to just consistently be at it. So as most people would pay lakhs of rupees to do, we could do it at zero cost at that point of time. Now, okay, we have a formulation, but by arriving at the manufacturer,
00:32:58
Speaker
Then we started looking at where is Bhaang very famous. Bhaang ka bhi bhi yeh, bhaang ka peh, kansu mo thiyeh, ka pis ka kalchara lek ek essence hain. Haan mein padaat hai ki paharo mein bhi yeh levi, paharo mein koi bhi ji ji mak sachan kana bhuat, bhuat difficult hain. Tu feh raane dee ka ki utta bradesh mein bhaang bhi yeh, madhya bradesh mein bhaang bhi yeh,
00:33:24
Speaker
or Tabiyevne Madhya Pradesh Pothora or Detailedness Study here. So, Madhya, the Member of Parliament from Madhya Pradesh in 1983 was probably the only Member of Parliament who stood up and said, this ban that we are putting on cannabis is actually going to cost us big time. It is going to have repercussional effects where we will be moving towards western forms of intoxication. Because you were never able to eradicate intoxication.
00:33:51
Speaker
and plus we have a cultural, religious, etc. So, because we realized that, you know, the historical political thought process in the state has always been through this. Also, it's a majority Hindu state. We started understanding the holidays of cannabis.
00:34:09
Speaker
before which we were only understanding the policy of canvas and those are two different things. And politics usually traps policy in a country like India. It's day drives, ultimate day drive, so it's a rule-based system, but we look at rules where we want to.
00:34:25
Speaker
Look at them. So that's when we got hold of this manufacturer, an MP. He was already manufacturing a bunch of Ayurvedic products. He already had a setup. We went to him and he said, there is an opportunity. He was a young guy who had started off early. He said, I will take this.
00:34:46
Speaker
And he said, that is such a major stamp of approval. See rooms that never opened, rooms that never opened, they opened up, people that never offered time, offered money. So it is everything we needed. We never needed this safari. We just needed access. And I think that's what companies need. They want access. They want to be in the right rooms.
00:35:16
Speaker
They are not saying that they are not a business business. They are saying that they are not a business business. They are saying that they are providing the right network. They need to do that.
00:35:25
Speaker
So we got a loan license on that manufacturing facility, worked very closely with the Madhya Pradesh FDA on this product and that's how we put the supply chain in place. What about the sourcing of Bhaan? Like how did you source the Bhaan? Bhaan we went to the excise department and the excise department actually every year has a quota system.
00:35:47
Speaker
So you have to apply for that quota and then you have to bid on that quota. So this is a legacy, this is a legacy business.
00:36:02
Speaker
There's like the liquor license distribution. Exactly. That business is again legacy. And it was rigged a long time ago. I'm not saying the current establishment has rigged it. It's been rigged a long time ago. So that we realized why we'll have to make friends with one of these Bhaang sellers, pay them a premium and buy the Bhaang.
00:36:20
Speaker
Because I am not going to do it. Like you are saying there is a...
00:36:41
Speaker
I will pay excise duty. I will require an excise license.
00:37:04
Speaker
The same, the same thing. But see, the policies were always there. It's just that nobody wanted to... But Bhaang is legal only in some states or all states? Like this is a state jurisdiction? Correct. Bhaang as an intoxicant is only legal in some states. But Bhaang as a medicinal product is legal in all 28, 29, how many of the states now we are at and union territories of India, all of that. But what we are selling, what we are selling,
00:37:34
Speaker
is a manufactured licensed product. We are not selling you bar. And it is not that the product only contains bar. It contains other Ayurvedic herbs and it's a mix and match of those things. Now, as far as you are consuming that product, you require prescription. So that's not an ODC product. That's a prescription product. But if you are using the product for external applications, you do not require any prescription. You can buy the product ODC.
00:38:03
Speaker
You need a prescription for that as an intoxicant.
00:38:18
Speaker
See, most people don't smoke bar, they consume bar. Because bar is such little THC that smoking it is going to give you a headache. It's not going to do anything, right? So people, rather than smoking, they consume it. And it's like consuming cannabis is way healthier because you're not going through any process of incarceration or smoking or anything. So these quota holders, they also have the right to grow it or no, they can buy it from farmers.
00:38:47
Speaker
No, no, they can only get, they can only buy it from the excise department. Who grows it? Was it a farming license? Nobody grows it. Nobody grows it. This is world of wild and feral bhang that is present in Uttar Pradesh, in Punjab.
00:39:05
Speaker
This is the legal channel. Contractors will connect all the bonds with the state. The state will also connect all the bonds with the state. The state will also connect all the bonds with the state.
00:39:44
Speaker
Okay, so you tied up with one of these quota holders in MP? Yes, yes.
00:39:51
Speaker
And then as i started manufacturing product etc i realized that i cannot be in this in this paradigm where somebody else controls me in terms of sub 9.
00:40:05
Speaker
whether it's the government, whether it's the total order, whoever that product might be. So we started working with different states to say,
00:40:25
Speaker
I am very proud to be part of this organization. I am very proud to be part of this organization. I am very proud to be part of this organization. I am very proud to be part of this organization.
00:40:40
Speaker
So that's when states like Himachar got interested and they got into the game and Himachar is like the elder brother to all the real states in India, you know, because it's relatively rich, it's relatively has a lot more infrastructure, manufacturing, etc.
00:40:57
Speaker
So, Jairav Thakur took it up, saying that I want to lose. So is Jairav, the Chief Minister. Okay, sorry, bye. He took it up as the Chief Minister and also what was happening at that point of time. I think we should spend a little bit on what the courts were doing whilst all of this was happening. So, there were two cases where the institutions have taken the government to port as far as cannabis is concerned. One is the Great Legalisation Movement.
00:41:27
Speaker
a GLM. And the second one was this lawyer, high court lawyer from Shimla. His case against the government was that you are connecting all this cannabis, you are eradicating it, but you are at the end of the day burning all that cannabis. So you work, carbon was sequestered in that land, you are actually releasing that carbon back into the atmosphere. So he put the environmental
00:41:57
Speaker
These are both like P.I.Ls. I just prefer not using the word against the government because I work with the government a lot. But that's a technical word, not P.I.L. It is, but it scares them a lot. Usually, a lot of institutions in India use it as a technique to also as a coercive technique to propagate something.
00:42:22
Speaker
So, in Himachan, the Harikot said, listen, you can't be burning this. First of all, you can't even eradicate this. You need to figure out how to monetize this. You are going in that direction where you should be going in that direction. Then we talk about what's happening with GLX, which means the state government told
00:42:42
Speaker
The High Court told the state government that now you will have to prepare a policy to regulate the cultivation and make sure farmers don't grow this illegal. You go after the people who grow this illegally. You basically create a smaller bracket of people to go after. Give people an opportunity to come out in the real world and do something. Because Adjut Chana is free to apply for a license. Exactly. Adjut Chana's page is quite least a chance to prove you are a slave company.
00:43:12
Speaker
The government got into the practical argument of this. This is when some international experts, we got in some guys who have already done this outside, kind of explain to them how the system works, what are the specifics we need to look at and how we cannot make the mistake of copy-basting international regulation in India.
00:43:36
Speaker
Because we need to Indianize these things. Thousands of issues are different. An Indian farmer is not like an Indian farmer. If you're a farmer in Canada, you're probably one of the richest people there. But it's exactly the opposite for us in India. So the Indian... What is GLM? GLM is the Current Legalization Movement.
00:43:54
Speaker
This was started back in the day as an NGO, as an activist-based organization, to kind of take the government head all that, you know, how can you criminalize the use of this plant in any form.
Scientific Backing and Clinical Trials
00:44:07
Speaker
So they had a larger question around right to life, right to choice, of course, right to medicine and things like that. So they took the government and played a PIL. The government was delaying, and this was the central government. So the central government
00:44:23
Speaker
actually came out on the 17th of January this year, clearly stating that the medical use of cannabis is not illegal, but regulated. The states are empowered to cultivate, process, and manufacture cannabis-based products. When there is low, it's not banned by any means. But the recreational use of it is not under the purview, the same purview as we are looking at.
00:44:53
Speaker
So we also know the courts are very willing to legalize the recreational use of this point of that public opinion has built to that level. But this is a no-brainer for the court, saying that by you cannot say everything is wrong, just allow them that way. So the central government was forced to come out with this constructive piece of communication.
00:45:14
Speaker
Now, whilst all of this was happening, we had the Sushant Singh Rajput, Rhea Chakravarti controversy happen. We had the Arit Khan controversy happen. So, the government also is in a tough position that, you know, I have taken a hard stance on some of these things as part of its recreational users' concern.
00:45:33
Speaker
But medical use is a separate basket, and I'm not treating these people in the same way. So that was the thin line that the government was also at that point of time. And what happened, which we shall see in Rajput's case, is that it created a biggest free marketing campaign for cannabis in India. It knows about what a bud is, what a bag is, what these new terminologies are.
00:46:01
Speaker
for the kids. There is what CBD, so in retrospect, more people are actually aware about this drug. The media, I was trying to look for the right word, the media is too short. No publicity is bad publicity, basically. Correct. Actually, in that case, the media could have dealt with it more sensitively. But that, we actually saw more and more people asking us about our products.
00:46:24
Speaker
that, hey, you have Stevie D. Owen. Is it different from what he was using? At least it created chapter. It created conversation.
00:46:33
Speaker
Now, because we had some reputation, some news houses put us on TV also, like India Today, etc. And like, go ahead and, you know, give your narrative. You are selling a vegan product in this country, you should have a platform to talk about this. Because there were five other news checkers yelling at the top of their voices around whatever fixated, parroting that was expected from them. Let's just rewind back to 2017. So, 2017 you launched that range, right? Correct, the seed range.
00:47:02
Speaker
a seed range of products we launch, which is the hemp seed, hemp seed powder. Those are all like nutraceutical products. Like how you have flat seed. Tell me about each of these again. Like hemp seed is what? Like it's a digestive, like source of fiber or what?
00:47:18
Speaker
Yeah, so let how you would eat flaxseed, quinoa seed, or even cus-cus, which is opium seed. These are all very nutritious seeds. So hemp is also in the same superfood category. It contains omega-369 in an essential ratio. So it's not just about having omegas, but having them in the right ratios. It's one of the few vegetable sources that provides you the ideal ratio beyond what people use in fish or liver oil.
00:47:46
Speaker
I told you so, that's 32% protein, the seed. 30% YF volume at weight. And most of this protein is digestible protein. It is not albumin protein. So a lot of the protein that we consume is albumin protein and it takes much longer to do that. That's the problem with whey protein, soy protein and a lot of those. This is highly digested as well.
00:48:10
Speaker
The second product is a seed oil, which is basically an extract of the seed itself, a cold-breast extract that could be used in cosmetic use, hair care, skin care. It is very good in reducing skin inflammation and things like that. And this was already established category in the West. And the third is the hemp seed powder.
00:48:32
Speaker
which is like a protein powder. We blend the seed into a powder and create like a vegan protein powder out of it. So you extract the oil from the seed after the oil extraction, that is sold as a powder seed cake. So I have zero waste, I have zero waste, I use everything that I put into this, the system. And this you launched on the back of that MPD. Correct, that MPD, that right sex survival.
00:48:59
Speaker
So, what is that called? The leaf range, is it like? Canvas for the canna leaf range. Canna leaf range. These are the Ayurvedic products for which you got those two Ayurvedic doctors to formulate. Okay, so what are these products? Tell me about that.
00:49:17
Speaker
So the first product is an arthritis-paid product. It contains the renin leaf extract, which is the bang extract, and the hemp seed that is used as a topical product for local application for arthritis patients. How does it work?
00:49:34
Speaker
So the hemp seed oil, as I said, is very good at having the inflammation. The hemp leaf extract has CPD, THC and a whole bunch of other compounds that are very well known to reduce that inflammation also.
00:49:49
Speaker
And it has already been proven in a lot of trials in the West that these products are actually working. And the proof of the pudding is kind of in repeat customers, right? Like once you start selling a product like this, how many people are coming back? That's when we
00:50:04
Speaker
We started understanding that one is repeat customers, but second is to showcase our own clinical evidence of what we are able to do. Because Ayurveda is also there's a lot of quackery that goes on in Ayurveda. A lot of those companies have given it a bad name. So that should be again pulled on our positioning hat.
00:50:24
Speaker
and said, okay, let's take this to India's best Ayurvedic Institute. We took it to the National Institute of Ayurveda in Cenk, where two products have born through clinical trial and two are under going clinical trial. So to launch Ayurvedic products, what is the process? Say like a typical pharma process, there is animal testing, then human testing, and there's a whole lot of
00:50:50
Speaker
reports that need to be submitted and data currency and all that. But what is the process to launch Ayurvedic products like this arthritis oil that you launched? Very good question. Ayurvedic products actually have a different regulatory pathway because they are predominantly based on the authoritative texts. The authoritative texts include a bunch of books that are defined under the drugs and cosmetics ad.
00:51:14
Speaker
which is basically the encapsulated knowledge of 5000 years. There are 3-4 things are mentioned. The formulation, the ingredients and the indication. Once you have these three things in place, you do not require a clinical trial to be able to sell these products. Now, if I tell you like Wixky-Gully is also an Ayurvedic product.
00:51:41
Speaker
Eucalyptus oil or something like that. Exactly. Okanjali stamp karti is also, if you read the term, it says proprietary eye-witting medicine. That is the terminology we use. Yeah, that is absolutely eye-witting. That is the point of view. Ingredient formulation and indication. Is this ingredient in this formulation going to help this indication?
00:52:08
Speaker
So there is a thing called the AFI, the Ayurveda Formulary of India, which contains an detailed explanation of each and every herb that can possibly be used under Ayurveda. Along with the formulary, it is actually covered with all these other authoritative texts that I was telling you.
00:52:28
Speaker
the Atharma Veda, which actually where cannabis has been mentioned many of the types, since all the Vedas and Purans that speak about plant-based, animal-based and mineral-based medicine, all of that. The majority of these books are in Sanskrit, so that actually requires somebody with a medical background plus a Sanskrit background to interpret that.
00:52:50
Speaker
Once it's integrated, it's actually then put in a model format and then it's the paperwork goes to the licensing authority. Now the licensing authority can say by tomorrow, or at one time, topic safety test.
00:53:08
Speaker
Likit, I wear two meemka tail wachryo, yaffir castor oil wachryo. Both which made is very well known of this is and that is a G.R.A.S. category which is generally regarded as safe. Keywords
00:53:29
Speaker
If he is not happy with the safety study, he said no toxicity study. I want to see at what level is there toxicity in animals. So we have performed the animal toxicity studies. Then they study the serious adverse effects in animals.
00:53:44
Speaker
So these many rags actually started having diarrhea or these many rags started having fever. These were the adverse effects. These rags started behaving in a manner in which would cause anxiety. So we think this, so that's how they kind of test the safety.
00:54:06
Speaker
But we thought we were going to want to do that. We want to put it into real humans that are actually suffering from this indication and create a spectacle out of that. Because the proof is in the UCA. Somebody is hand-related with eczema and after four weeks, a clean hand. That is the proof in a peer-reviewed journal. That's our question about science. That's our question about science.
00:54:32
Speaker
So we also know that there is a lot of audience which actually wants their roof or behind some of these things. Trust building is needed. Especially with this car. I'm not selling you onion oil or any others. I'm already right, which should be like cheddar tea. This requires a trust building. What else was in the leaf range? What you told me was that arthritis pain relief
00:54:58
Speaker
Second one is a muslin leaf oil. Now the muslin leaf oil also has the hemp leaf extract, but it has a bunch of other oils, essential oils also, which are actually supposed to be very good for your musculoskeletal-based issues. So we positioned that as a workout recovery.
Hemp and Cannabis Explained
00:55:16
Speaker
So what was spoken in Ayurveda was like, oh, it helps musculoskeletal bit, but the modern-day translation of it is like to sell it as a workout recovery or muslin recovery product. That is the second product.
00:55:28
Speaker
The third product that we have is a stress management product. Now, this is the consumption product. This means, for example, if Akshay is not being able to sleep, you know, is having stressful days, bring a lot of work, he can get it, actually, to arrive with the doctors, speak to them, and get a prescription for the stress management product.
00:55:46
Speaker
This contains or have brief extract. This contains jacuzzi, tagal, and a whole bunch of other anti-stress hubs that could be used to kind of put the patient at ease. This is a lifestyle disease product, as we call it, where people who are going through this digital saturation, et cetera. Like sleep issues. So this would have CBD, THC. Correct. This has all the compounds. All the compounds that are present naturally in the plant.
00:56:16
Speaker
But just help you understand what is CBD, THC, what is the difference between them? And even what is the difference between cannabis and hemp? Great question. We probably would have started with this one. CBD and DHC are phytochemical entities of the cannabis plant. CBD stands... Now what do you mean by phytochemical?
00:56:37
Speaker
Like a chemical, meaning a chemical compound that is found in that plant, specifically. So you would find, like you find caffeine in coffee, right? That's the active substance, as we call the active substance. You have something very similar with healthy. It's called curcumin. So the curcumin level of healthy determines how potent the healthy is.
00:56:58
Speaker
So, this is used to determine the activity of the potent substance. So, Delta 9GHC is tetrahydrocannabinoid, that is a psychoactive or we would call it some version of hallucinating effects under a non-regulatory dose. So, if you have a very high dose, there is a high chance you can
00:57:20
Speaker
you can get a certain level of hallucination at where one gets hallucinated with canvas, but that's the word that's usually used in
00:57:30
Speaker
in paraphrasing this. And CBD is cannabidiol. It is a non-psychoactive but therapeutic aspect of the cannabis plant. Now, one thing it is important for us to know that in science, there is no good or bad insight. There is an effect. The effect is upon who it is desired for. For example, if there is a cancer patient who is not able to sleep and not able to eat,
00:57:56
Speaker
Cannabis is great for that because it induces hunger, it induces sleep, it will improve their power movements, etc. So it improves quality of life. But for somebody who does not have this imbalance, it may be a side effect.
00:58:11
Speaker
So for somebody it is a desired effect and for somebody it is a side effect. Hence we require the dog in the middle to figure out for whom is it a desired effect. Is this person with my inclusion criteria qualifying for this product in summary?
00:58:26
Speaker
So CBD is therapeutic, non-psychoactive, THC is therapeutic and psychoactive. Got it. So CBD is what makes you relaxed and THC is what gives you a high, like in layman's life. It's actually more nuanced than that. All the cannabinoids together give you the overall effect.
00:58:45
Speaker
The overall effect of hunger is for the underage effect, right? If Akshay walks into a group alone, it's only that much impact. But if Akshay is walking in with one of his friends behind him,
00:58:58
Speaker
DORAD has a different effect. So the sites also has the collaborative chemistry as we call it. The things come together and they work by the principle under which are the functions. And what is the difference between cannabis and hemp? So hemp is actually a generic term used for cannabis that is predominantly fiber based.
00:59:17
Speaker
So the industrial application of cannabis is usually known as hemp. Hemp is actually also used for things like Kenaf, things like jute. Any fiber-based crop, which is a bust fiber crop, is known as hemp. But it has become general term that, okay, the industrial version of cannabis is called hemp. So it's just a terminology difference. The plant is cannabis. There is only one plant, it's the cannabis plant. Us as humans, we need some way to differentiate and distinguish.
00:59:47
Speaker
yeah it's just a branding basically like hemp is like safe branding exactly yeah so we were talking about the product rate so you said the consumable product so that has CBD THC all of that and then we have a paid management product
01:00:10
Speaker
paid management product we were going through chronic diseases, neuropathic diseases, et cetera, and we were looking at orientative and substitute treatments. That is also consumption product, and that contains 15 to 20% of the extract. A stress management contains 5 to 10% of the extract, and then we have a
01:00:33
Speaker
higher potency version of the pain management product also, which is actually for people and patients who require a very high dose. They're not going to work with a smaller dose. So like cancer patients. Exactly. AIDS patients, people with wasting syndrome, diabetic neuropathy, stuff where your body is using its ability very, very quickly.
01:00:56
Speaker
So this actually enables them to stabilize their homeostasis to some level. What is homeostasis? It's basically the balance of all your internal organs. So when we talk about organ failure, as a person's condition deteriorates, that means their homeostasis is imbalanced and they are going one by one, you're going to see essential living organs kind of give up. So this leaf fridge, when did you launch this? This was in 2018.
01:01:26
Speaker
One year after 20, yeah. That's when I would say Bonego was conceptualized as a business. That's when we had a business plan. That's when we had a go-to-market strategy, a consumer-based supply chain in place, a bunch of investors in the company. So it was all at that point of time it culminated.
01:01:48
Speaker
Are the supply chain side like, so you finally got the license to farm? Like you told me that you were approaching? No, we are in the final stages. We are in the final stages. We got checked on 31st of January, actually had passed a cabinet note on this. We are waiting for the designated notification. In fact, all of the stuff I'm talking to you is public information. So, you know, people can also look up as they kind of hear the podcast.
01:02:17
Speaker
So in 31st January is when the Cabinet came out and said that we have created this policy. Now, of course, visiting and etc. takes its own time and then it's a political call or will they release it because they also have election up and coming in the state as we speak.
01:02:35
Speaker
So that is not done yet. The whole sub-19 is not in place. That is basically like a license system where government will start giving out licenses to farmers who want to grow hemp crop. So then you can directly tie up with farmers instead of going through the quota holder. Absolutely. The quota holders can continue doing their business the way they are doing. Their objective is I become the quota holder.
01:03:02
Speaker
Then I started giving to other companies because I am able to control as well. Some of the big boys in India are also looking at this. Dr. Eddy's has already bought out a German medical cannabis company. Beardo, which was bought out by Maripu has actually launched a whole range.
01:03:21
Speaker
of him who based cosmetic products for me as well. Then we have Nika that has launched a range and internal range with... How are these people sourcing? They are again going with the quota. They are working with us. Oh, they work. Yeah. See the point is, be there and you have the interface to the real business world.
01:03:41
Speaker
These guys don't want to work with all these people. They want a manufactured product that is licensed. I am in the business of selling product. I am not in the business of making things that way. They are cleared for the agenda. So you give me this, I give you this. So that's a good opportunity for us to kind of...
01:03:59
Speaker
bring the weight players, really kind of have my mother or your mother. You know, people who would never be enthroned about using these products use them. Then as the conversation started, our retail network gradually started growing.
01:04:16
Speaker
So one quick question on this B2B business. So in this case, you are taking care of everything like from sourcing to manufacturing, formulation, regulatory approval, and they are essentially doing the packaging, branding and sales. So what happens is like
01:04:35
Speaker
A lot of these brands would also have their own manufacturers, third-party manufacturers, licensed manufacturers. So they would say, I just need this ingredient from you. Can you get this ingredient over? Now because it's a unique ingredient, because it's got unique positions, we also sometimes end up getting real estate on the packaging, which where it says hemp powered by Oeko. It will say hemp powered by Oeko.
01:05:00
Speaker
So there are a whole bunch of products where we don't think we are going to enter. We are not going to enter the pet market, but we work with a company called Wiggles that makes pet products. So those products are empowered by Wiggles. There's another brand. Like what is the use case in pets for pet products? Exactly. You think it's good for humans?
01:05:24
Speaker
muscle, the dogs have anxiety. But of course, the one thing that changes is dosage. Yeah, obviously. Well, because it's relatively smaller animals, so the dosage is that. So going back to 2018, when you actually became a business, you know, so what kind of revenues did you see in 2018 from these like, like you had essentially the fabric line was still on then or you had discontinued it?
01:05:49
Speaker
We had stopped actually by then we were transitioning out of our direct to consumer fashion business because it's a bloodbath for the lack of a better term. It was a very expensive way to garner attention. And now we had a much better substitute to actually make money and garner attention. So hence we decided to kind of move out from that business and focus everything on human health and fitness.
01:06:30
Speaker
And from there, from then on, I think we've grown more than 250% every year.
Marketing and Brand Building Challenges
01:06:38
Speaker
Even during COVID, we could not drastically increase our revenues, but we could actually house the bond that the company was going through.
01:06:41
Speaker
And in the first year, I think we would have clocked in close to 1.5 CR by just a little bit.
01:06:48
Speaker
Let's go year by year. So in 1819, you did one and a half crore. You had the leaf range and the seed range. So in 1920, you did two and a half to three rows in revenue. And product range, businesses, what was the evolution there?
01:07:06
Speaker
We were focusing only on getting some of these things out because we didn't want to get into the deep SKU game at that point of time. And also that time we were gearing up for our next fund raise. So we had to keep that in mind also. So not all done is blazed immediately.
01:07:24
Speaker
Okay. And what was your distribution channel? Was it like through e-commerce? It was predominantly digital. 90% of our business that time came from digital channels. It was a one-of-moment-hop store that called us and said, okay, I want to display a product.
01:07:41
Speaker
We are not working into any modern trade or, you know, overnight trade that way. But these payment management products, how are you selling those? Those we are selling online through prescriptions and we have a doctor marketing network also. So we have more than a hundred doctors all over India that have gone through the process of learning about cannabis as a medicine and are now prescribing these products regularly to their payment.
01:08:06
Speaker
Actually, the doctor is the... That is like a direct-to-consumer, like there's no marketplace, et cetera, that you're directly... Yes, that's completely offline. That is the most valuable asset that Oiko is building today. We want, of course, the brand that it's building, but the asset-wise, it is the engagement and the focus of these 100 document who are prescribing and who give repeat business.
01:08:30
Speaker
So that is where you figure out your unit economics, you understand how you can scale your business, be in a safe environment, have too much liability, and make sure the customer, which is the most important part of this whole chain, is actually benefiting from the process. So if I, as a customer, want that paid relief medicine, then what do I have to do? Do I have to fill a form on your website? Go on www.boigbelives.com. You will have to first hit a phone. You will have to schedule a meeting with the doctor.
01:08:57
Speaker
You'll have a choice to either schedule the meeting in person depending upon where you are or virtually. Because of COVID, 99% of these meetings are virtual. Then you get a call with the doctor. The doctor already can see whatever history questions that he had asked you.
01:09:16
Speaker
And then he will try to assess the fact that, is your prakriti in the right place, which is the overall combination of your water, kefapita, through that. That's where the Ayurvedic doctor usually looks at before they prescribe any sort of medicine.
01:09:31
Speaker
Now, if let's say your picture is very high, then the doctor might not prescribe you any cannabis medicine. He might only prescribe you some other alternative products in Ayurveda. But if he takes like, okay, you have or you've fallen the criteria, then he issues the prescription, you get the prescription, you upload it on our website. And we do this random sampling and checking of this prescription.
01:09:59
Speaker
Because first, I knew all the doctors that were prescribing my products, but today, I don't know all the doctors that are prescribing my products. I have new doctors outside the ecosystem for prescribing it. But again, this is a self-regulated move. We want to regulate this very, very clearly. I do want this product to be part of an engineering college's youth fest, where kids are abusing this product.
01:10:24
Speaker
are legitimate fears with this. So controlling that way, building a secure channel and a trustworthy channel. I think eventually, someday, we will be known only because we were trusted with this sensitive topic. And that's a larger win the way we are looking at progressing towards. Okay. And so in 1920, you said you were also focused on a fund raise. So did you raise funds?
01:10:52
Speaker
Correct. Correct. So that time we got a syndicate of investors. We got funds from the promoter of a listed cannabis company, Canada, who had already scaled a company worth $300 million.
01:11:07
Speaker
lucky person of indian origin second generation canadian as it in as one could be from that perspective but what the market really what the market once he was in we had the promoters of the vijon group one of the promoters vijon is uh men's gromit right yeah say we correct correct yeah
01:11:27
Speaker
Predominantly tier to tier 3 market about the future with this and the third group was the Mohan Meekan brook, the guys who make old monk and a bunch of old monk beverages. Yeah, so we realized like this industry needs lions. It cannot have deer, so was flicker at the sound of anything.
01:11:49
Speaker
But it's a regulated space and it's a sensitive space. If you ask, how much did you raise from these angels or these investors? Two and a half million dollars. Okay. And this was in like 2020. Yeah, 2020, 2021. Yeah. This was during the COVID time. I know everything was undocumented and formalized and all of that. And yeah. So from there to here, 2021, what was that year like?
01:12:18
Speaker
2021 we were close to four and a half I think four and a half year and this year we are looking to close at I think seven and a half eight yeah
01:12:31
Speaker
Now there is one big difference between a cannabis company and any other D2C company. I cannot promote my product on Instagram and Facebook, the way other companies can. Even like a cream, like if you have a hemp body butter cream, you can't promote that.
01:12:49
Speaker
The moment it has the word hemp cannabis, CBD, the hemp weed, it already does drive multiple combinations. They have these social guidelines, right? All these networking platforms. Until the Americans don't federally legalize it, they're not going to take the risk of, you know, promoting this.
01:13:10
Speaker
Now, whether it's for medical news, cannabis is still cannabis and they are not going to see what is being used. So, they are okay not having that revenue. So, which means we cannot actually buy customers. We have to win customers. Which means it's a very different way of doing business in today's world of hyper growth and you know, burning a shit-time of money.
01:13:32
Speaker
I mean, I would love to do that. I mean, I would love to grow very, very fast, but this kind of puts us down in reality and slaps us in the face that this is our real businesses. You have a real problem only if you have a real solution will it stay. Otherwise you can pay like 20 other companies that got to a certain revenue mark. And after that, without marketing dollar, they are not able to sustain the business.
01:13:57
Speaker
Because the cost opportunity for a customer in India to jump options is so easy. You can jump all too many places. So that is the nuanced difference that your cannabis companies, that's why cannabis come there 20, 30 other companies now. It is not only Bob Baim. Every now it's a serious industry. We are having a hemp and cannabis association of India that is officially going to that.
01:14:24
Speaker
So, it's from the voice club with spectrum of men's table, kind of a thing, you know. He's graduated from the startup mentality to an enterprise mentality, while taking some of these regulatory aspects kind of head on, all from there.
01:14:40
Speaker
So how do you acquire customers? I think the biggest way for us to acquire customers is PR. We do a lot of now paid, owned, and earned. We have five to six different channels that we own in terms of weather.
01:14:55
Speaker
It's our own Instagram page that we organically go the following or whether it's certain level of influencer marketing that we're doing in the digital space. And eventually, it does also about building the ground retail network.
01:15:12
Speaker
So, 2018-19, we were present in maybe three stores in India. Today, I would say we are present in more than 350 stores in India of all different sizes. Some of them would be like name chains, like Nobel plus chemists, etc. And some of them like Nature Soul, which is there in Delhi also. So, places like that, you go to any of these organic
01:15:38
Speaker
stores or shops and you ask for a hemp product 9 out of 10 times, it will be ours. So then we also understood that see India shops online, but Bharat is still shopping in Aflac, you know, we're still going out and buying our bread and milk. Like a Dankston goes out and buys the bread and milk from his shopkeeper while you and me are using Zepto or Dazzle or one of these things.
01:16:06
Speaker
So that was also a big learning because we were born in that decade. I was born in 1990. So I believe that was probably the only generation that has, it is growing. He has not seen the internet, but by the time this break was developed, had complete access to internet. So we are in a different position of privilege. India is at a different level. So the point is to now get on the ground.
01:16:31
Speaker
And the next six months are exciting because we are launching nine new products, products under menstrual pain, migraine, sexual health. Tell me about these products. For each of these, what is the product like? Correct. So for menstrual pain, we have a combination product because we've realized that modern day menstrual pain is also resulting into PCOS and PCOD, which are much more worse forms of menstrual pain itself. What are these?
01:17:01
Speaker
They're basically like an ovarian cyst. An ovarian cyst is being formed because of the menstruation cycle, either fluctuating or just some women are biologically predisposed. Maybe a lot of it is also related to lifestyle.
01:17:18
Speaker
So we have a consumption-based product as well as we have an application-based product for the lower back and the lower abdomen area, where usually the spasm is that the cramps happen. The consumption-based product will have a low dose of arm, which actually gives that sensation of relative numbness. Whereas the application product gives that immediate kind of relief because it has Kapoor, Menthol, and a bunch of other hubs as well.
01:17:56
Speaker
So that will be a consumable product again.
01:18:07
Speaker
But we are not selling it. So the menstrual one also has application. So we have menstrual, we have a package. We believe there aren't too many companies that are actually targeting a real solution for that. Women are still using diabetes, drophins, and the tramadols, and whatever the regular, you know, anti-inflammatory drugs are. And in some cases, they're also using like steroidal drugs to get your house all that way.
01:18:36
Speaker
So we believe it's an unaddressed market, the products. So the one good thing about cannabis is that somebody who's used a cannabis product, nine out of 10 times is it because he sees the effect. What's the product in that case? So current repeat purchase rate on our own platforms would be close to 45, 45% repeat mention. And going ahead, the point after that. This sexual wellness product, so that will also have like CBD THC in
Future Health Products and Market Strategy
01:19:04
Speaker
it.
01:19:04
Speaker
That will have harm, that will also have Ashwagandha and it will have Ashwagandha during the prescription for this one. Yes, you will need a prescription. So some of these products we are actually launching because we are hearing back from the doctor saying that, you know, I thought these are the issues I am facing.
01:19:24
Speaker
Now, once I have a good enough number of doctors telling me that, then I'm like, okay, there is a need for this. So now I also have an input machine that comes to me, right, in terms of what to make. Some of it is reactionary, some of it is proactive, and we have an eczema cream, a cream that is specifically for eczema and skin deformity. That is one of the products. One is for digestive health. That is going to have a bunch of other herbs and other combinations along with palm in it.
01:20:09
Speaker
at the same time. So when you say offline is the focus for you. So by offline, you mean pharmacy chains, because a lot of these are prescription products. So offline focus would be pharmacies, as opposed to say, like beauty stores, like those would not really be there. With my other OTC products, I will also go into other health and wellness stores, supplement stores, etc. But on prescription products, I will stick to the pharmacy chain.
01:20:13
Speaker
These are all prescription products like none of them are.
01:20:37
Speaker
And also, Pharmacy Chain Network will be built around where the focus of the doctor populace is, right? Because that's where patients are, the doctor is. So currently, I have four markets that account for 80% of my business. Bombay, LA, Bangalore, and Goa. 80% of my orders, business prescriptions, everything is coming only from these four locations. There's a big reason. One is the price point. It is at a certain price point. And that's where my focus is.
01:21:05
Speaker
My focus is to first meet India's avocado generation. After that, we will get to the actual Senator Vinayak generation. That's a nice term. You're selling in the avocado belt.
01:21:21
Speaker
Got it. Okay. And what is your contribution by channel? Like how much currently comes from online? How much comes from pharmacy chains? How much comes from general retail? So as last month was the first month when we did more offline sales than online sales. Before that, before that, it used to be 75, 70 to 75% online, 20, 25% offline.
01:21:47
Speaker
But I think this is because the new chain has just been onboarded and they are doing some promotions, store promotions and stuff like that. So maybe that's why the spike is there. And in online, your own website or marketplaces, which is bigger?
01:22:03
Speaker
Our own website. Our own website from that 70% would account for like 60% of your overall revenue. So we are revamping our website. We are building a digital clinic. Hopefully that a clinic that you would see in a metaverse or something futuristic where you can go and interact with a doctor and have an experience. Okay, something different. People need stories. So we've got to give them stories.
01:22:27
Speaker
And what are your top selling products? Top selling number of selling product is arthritis pain. Second is hemp seed oil. And third is stress management. By value, my actual top selling product is pain management. But by volume, it's D3.
01:22:44
Speaker
So I guess the path forward for you, I think, you know, where you can have the most bang for the buck would be doctor onboarding, right? Because one doctor, you onboard, and then there's a whole ripple effect of onboarding one doctor in terms of the patients, the pharmacy, the awareness, and like, that would be where your focus would be going forward.
01:23:05
Speaker
Yeah, I just hope not all my competitors are listening to this podcast as we speak, but I think it's right that the focus is on winning the practitioners establishing that trust because what that does is also is that it gives the regulator a clear path way to look at this.
01:23:24
Speaker
saying that he might shadow here the break is a horror so even in the future if they want to expand the scope of something you know move with another direction they can these things count this is where history counts for how things happened and what was etched in stony rock hence the focus will be there
01:23:45
Speaker
The focus would also be on being a lot more present in different types of places. For example, we do different types of educational events for corporates. So we were invited at a point of time by McKinsey to speak to a bunch of their consultants on how to think different. That gives us a positioning with a brand like that, and then they put us on their website.
01:24:13
Speaker
So if it's to kind of associate, associate, associate with great quality people, you have something that's working, it will scale. But for us, the objective is not to build a unicorn. Our objective is to build a cockroach. We want to be able to see who might survive and be there.
01:24:33
Speaker
If there is no point of being a unicorn that is not going to survive, then it's not a unicorn, it's not a dinosaur in the making. Just because it's big doesn't mean it's going to be there all day. So, and I personally don't have my last two bits. I personally believe
01:24:52
Speaker
that the venture capital system is very, very skewed, is actually not valuing value, but is valuing valuation at this stage. And we are just blindly chasing global trends in industries without actually figuring out what our localized solutions are. And I see that as a problem because frankly, I'm losing money on these IPOs that I had invested in, these tech company IPOs, right?
01:25:20
Speaker
Every single day, it's a problem. And that's market telekaryotic, right? Market never lies. And the Indian stock market would never
Vision for the Future and Industry Collaboration
01:25:30
Speaker
lie. It will show you what you are worth, what you are doing. So our objective is, let's say five years from now, if I have three people walk up to me and say, you know, there's this guy called Boiko and my uncle who had cancer, he actually was, you know, he had a peaceful day.
01:25:47
Speaker
He felt well, oh my god, he's now able to walk because she uses this arthritis product. I think that is an unnatural joy. And if we reach that stage, we might make some money also in the deep process. So you would essentially look at your competitor as someone like say a Kapiva rather than someone like a Beardo. Absolutely.
01:26:07
Speaker
Absolutely double and then i will be the business then for the core business double is a quarter of the company but makes money on fmc today when the score is there was other competitors.
01:26:23
Speaker
Those that could also be our collaborators, that's the ecosystem that we're a part of. And see, frankly, the cannabis industry is too small to call anyone a competitor. Everyone is working towards one big goal. Eventually there'll be a big market, then we'll have market share and everything. So the kind of doctors you try to onboard are Ayurvedic practitioners or even like the Allopathic, the GPs and all of that.
01:26:49
Speaker
So, I would say 90% of the doctors that currently prescribe products are Ayurvedic, Siddha and Unani professionals. They are alternative medicine practicing professionals. Now, I think they might get pissed off if I use the word alternative for them because they believe the modern practitioners in India are the alternative practitioners.
01:27:09
Speaker
10% of the foreign practitioners who do prescriber products are modern practitioners who've gone and done some continued medical education. They have seen this happen in the U.S. because if, let's say, only a doctor has a doctor's respect, right? If you are my doctor-friend sitting in the U.S. and telling me about this, then I'll be like, oh, you know what? I am something like this in my country. I should try it on my patients.
01:27:33
Speaker
You know, Sam is already doing it. Why should I not try it? And then you ask the right questions so that curiosity is being built. But frankly, I believe where it's going to really scale is with the Ayurvedic doctors who are going to really push it because it falls under that bracket. Yeah, there it's not a heart cell. Whereas for the allopathic doctors, it will be more of a heart cell. But that is also bigger unlock, right? Like if you manage to get allopathic doctors on board,
01:28:02
Speaker
Correct. Now there, that's not what clinical trials we are doing. They need to be actually published in clear and viewed journals. Because most of the new age, allopathic doctors, all of them in fact, they ask for studies, they ask for reports, they ask everything. Ayurvedic doctors, different world.
01:28:22
Speaker
It's a different world. They operate. The science is unique. So you can compare the two worlds, though it could have application info. So does your website have a lot of content and answering questions? Absolutely. Hundreds of FAQs, hundreds of reviews of our products. You can go on third-party websites and have a look. I would suggest you
01:28:49
Speaker
Have a read. Just build your own opinion. I think that's the best thing I can tell you. I will definitely give a blow on my internet. So my last thing that I want to understand from you is how does a company with six co-founders work?
Internal Dynamics and Leadership at Bombay Hemp Company
01:29:06
Speaker
Very, very good question. So do you know, exactly you always thought about this.
01:29:11
Speaker
No, I'll answer your question with a question, right? There's an Akbar bibbal, Stony and once Akbar asked bibbal, I want a green horse. Well said, okay, let me figure it out. Then bibbal said, Akbar, he told Akbar that I have a green horse, would you go to find me the eighth day of the week? Then I will find you the green.
01:29:34
Speaker
The scale of the challenge at which we started, the unknowingness of what we were walking into, the lack of planning, the naivety with which we got into it, could not have been done without these many people.
01:29:51
Speaker
I don't think so. I could have created this company with one other person, two other people, or just two people starting them. See, because it was all about starting a company, right? It was about starting a conversation. It was about starting a movement in a limited space, kind of a thing. And I, that would need
01:30:11
Speaker
that will need good quality human capital. Good quality human capital either comes with a lot of money, which none of us had to pay, and the other way to get that human capital is through offering them something right from the start. It makes your journey worthwhile, and I'll end it on saying that the last time we had a company that was successful with six co-founders, that company's name is Infosys. But how does the work get split between the six of you?
01:30:39
Speaker
Everyone has an example. You told me you look after policy and research. Yes, we have a chief legal officer who is Delzad. So, though I also look at policy and research, but we have a separate lawyer. Delzad is a full-fledged lawyer. He is the chief legal and poisoning officer of the company. He is the one along with me who hustles with the government. Yash's chief marketing officer, he looks at everything that's got to do with sales and communication. That's the more acquisition.
01:31:17
Speaker
How did you decide that Chirag should be CEO? Because you all have equal stake, right?
01:31:23
Speaker
Every two years we have, actually every year technically the board votes on who the CEO should be. If you believe you're voting us, you can nominate yourself, but it's on the basis of votes. And now we don't have only us. We have shareholders. We have other people. We are answerable, which means that you, it's a democratic process. So the GoFundMe, it sounds tricky, like voting system.
01:31:49
Speaker
It is very tricky to decide who is the CEO. They could be that bad feeling somebody didn't get what said. Correct. The trick is knowing for what decision to build consensus and for what decision to block. And you will never keep everyone happy.
01:32:08
Speaker
if you are keeping everyone happy that is what a person unhappy and that's you so that is see like and I don't should be very frank right how many companies even make it to five years how many companies even make it to nine years now if a company has made it to nine years with six co-founders one thing at least has to be clear that this is a mission delivered organization
Closing Remarks and Podcasting Insights
01:32:51
Speaker
Before we end the episode, I want to share a bit about my journey as a podcaster.
01:32:56
Speaker
I started podcasting in 2020 and in the last two years I've had the opportunity to interview more than 250 founders who are shaping India's future across sectors.
01:33:07
Speaker
If you also want to speak to the best minds in your field and build an enviable network, then you must consider becoming a podcaster. And the first step to becoming a podcaster starts with Zencaster, which takes care of all the nuts and bolts of podcasting, from remote recording to editing to distribution and finally monetization.
01:33:28
Speaker
If you are planning to check out the platform, then please show your support for the founder thesis podcast by using this link zen.ai founder thesis. That's zen.ai founder thesis.