Apothecarry Brands CEO Whitney Beatty bet her home and high-paying job that consumers would want luxury cannabis storage.
What got you into the cannabis industry?
I had a 15-year career working in entertainment–but a couple of things changed my trajectory. First, I was diagnosed with anxiety. It was a life-altering experience for me, I went from sitting at my desk, with shortness of breath and heart palpitations, to racing myself to the emergency room, pretty sure that I was going to die of a heart attack.
Thankfully, I was able to find a CBD THC regimen that worked for me. I was able to get off of all the other drugs my doctor had put me on. I was able to do the research on the plant and learn how misinformed I was.
But I realized that, although I now love the plant, I detested the stigma. I detested how people avoided talking about it. And I realized that while I kept my wine in a wine fridge, I kept liquor in a bar, I kept cigars in humidors–I was still keeping my high-quality cannabis in a shoebox under my bed. Which is inappropriate, not only for safety and freshness reasons but because it perpetuated the stigma I was trying to erase. What other medication do you store in a shoebox?
After meeting so many like-minded cannabis users, who lamented about a lack of good storage system, worried about securing buds away from kids and pets and who were tired of searching around for their stash to discover it dried out from plastic baggies and non-airtight dispensary jars, Apothecarry was born.
What were your biggest challenges in launching your company?
The key to being able to be a successful entrepreneur is not necessarily to know everything but to be able to gain access to the people you need to fill your knowledge gaps. In an industry that’s changing as quickly as the cannabis space that can prove to be very difficult. There is not long track records, case studies, and standard operating procedures. The rules change on an everyday basis and a lot of people don’t like to share information to keep their competitive advantage. So you have to innovate and be nimble.
Raising money is also a huge challenge in any circumstance, and even more so in the cannabis space, where investors are leery of putting money into a space that is still federally illegal. And keep in mind, I own a company that doesn’t even touch the plant. I sell a box—a locking storage box! Not to mention the fact that over the last five years only .02 percent of capital raises across ALL startups were closed by an African-American female founder. So I knew there was an uphill road in front of me.
Finally, I had to prove there was space in cannabis for a luxury consumer–and that these new higher-end consumers would be prevalent in the newly legal market.
How have you overcome these obstacles?
One of the ways I was successful in that was by joining the canopy business accelerator in San Diego. It gave me access not only to a cohort of entrepreneurs who were dealing with the same issues as myself, I was able to mastermind with and share resources together on how to solve banking issues, compliance issues, etc to accelerate all of our companies, but I was given access to mentorship from across all areas of business and the cannabis space, which gave me a much broader view of market trends and where the industry was moving.
In regards to raising money, it was a mix of preparation, due diligence, and being able to develop traction. It was incredibly frustrating for a while. I was able to win the ArcView groups 2017 Los Angeles Pitch prize for $50,000 which was a great start. But the longer I found myself raising the flatter my sales became. I realized that I needed to take the money I had in hand put it to work so I could prove to future investors they if they gave me the money I would do what I said that I would. And that worked. I was able to take that small amount of money and my next month was 500 percent better than the month before. Before long I was able to close a $250,000 seed round.
And in regards to my MVP, I took every penny from my friends and family who believed in me and put it into buying 100 cases. At that point, I was a single mom who had quit her job and sold her home to get the company off the ground. I couldn’t even afford to advertise. I just put them on our website and hope for the best–and in six weeks they were sold out at our $259 price point that everyone had told me was impossible.
Then I went back to all those first 100 customers and I sent them a survey to find out exactly what they liked about the case, and more importantly what they didn’t like and how they suggest I improve. Then I used that knowledge to iterate on the case again, and again, and again, in order to improve our customer satisfaction.
As a woman in cannabis, do you feel that you are at an advantage or a disadvantage (or both) and why?
It’s a mixed bag. I can’t tell you how many times I’ve had someone with no knowledge of the cannabis space mansplain my business to me. Or tell me it’s impossible for me to make money. Or tell me that I need to bring on a male CEO who would better connect with investors.
As a woman of color, it’s often like a double whammy. I tend to be so materially different a person than the investors that I’m pitching to that I need to be at 110 percent in order to get that same consideration. It can be frustrating. But at the same time, I’d like to think that those are the things that light the fire in me that I need to keep going.
On the positive side, I think females add enormous value to the industry. We tend to look a little bit more holistically at the lifestyle of cannabis consumers. A lot of the higher end items that you see that take cannabis out of that counterculture and into mainstream culture have been spearheaded by women. A lot of education that I see happening in the space now has been spearheaded by women. I’m also a single mother and I tell people all the time if you want your investment managed right — have a single mother do it. I keep a close eye on our dollars and cents. We have a really low burn rate. I take the money invested in me personally. I don’t take it lightly.
What trait do you rely on most when making business decisions and why is this useful for you?
I trust my gut. I’m lucky to have a few people close to me that I can run things past when I need to talk through them. And I do. But ultimately I have to think of things like: Do I trust this person? Do I want to be in business with this person on a long-term basis? Are our needs and goals aligned? What is the worst-case scenario? Then you pick a direction and you keep moving. Second-guessing yourself will get you nowhere.