How did they start their business?
I was in the construction business with my family before venturing into the legal cannabis industry. The Great Recession of 2008 wrecked the housing market and as a result, our construction business went under. My brothers and I turned to the burgeoning legal cannabis industry in our home state of Colorado. We applied for one of the first cannabis business licenses in Boulder and used it to open a dispensary selling other brands, but soon realized that something was missing in the edibles market: cannabis-infused beverages. Drinking and smoking are historically two of the most popular social activities for adults, so we launched Keef Brands in 2010 with Keef Cola, the first line of cannabis-infused soda. We’re so proud to have created a cannabis-infused beverage that tastes great and blends all the best parts of drinking — the fun, social, and celebratory experiences — with the magic and joy of cannabis. We started by infusing soda in my kitchen and now Keef Brands products are available at more than 800 retail locations across the United States including in Colorado, California, Michigan, Arizona and Nevada, as well as in Puerto Rico and Jamaica. And we are looking forward to further expansion in the years to come!
What 3 advice tips they can share with their startup journey?
- The importance of company culture: From the beginning, ensure that your startup is set up to maintain an environment where employees can thrive and remain engaged. Encourage an open line of communication with your partners and hires, plus remember that work-life balance is key.
- Be well-versed government regulations: This is especially important in the cannabis industry, but also for everything from f&b to pharmaceuticals. Be prepared to understand each state’s complex and evolving regulatory environment in order to remain compliant, maintain your company’s workflow and continue to innovate. Keef Brands had setbacks in our early years due to bureaucratic red tape and stipulations, but we’ve had a lot of practice and these learning experiences have allowed us to now plan our expansions extremely meticulously.
- Stay driven by passion and curiosity, but be smart: There is a lot of opportunity, especially as the cannabis beverage category grows, but focus on mastering one thing at a time. Don’t expand or start new projects too early, before your company is truly equipped to handle everything that comes with growth and change.
They can also share a bit of their business and how did they improve or grow their startup business.
Strategic partnerships are key, especially as we’ve expanded as a multi-state operator and continue to diversify our product portfolio. For instance, we partnered with CannaCraft in summer 2019 to launch our award-winning line Keef Cola in California and we look forward to introducing our additional infused beverages to the Golden State. These include Keef Sparkling, the world’s first zero-calorie, zero sugar cannabis-infused sparkling water; Keef Life, which has less than 50 calories per bottle; and flavoured Keef Shots.
And then there’s cannabis-infused beer, which we’ve also been involved in. We worked with Ceria Brewing Company to help launch Colorado’s first THC infused craft beer and have collaborated with CannaCraft and Lagunitas, to bottle Hi-Fi Hops in Colorado.
What Marketing methods did work?
It’s crucial to have a strong social media presence and great visuals to convey your brand’s message and mission. Another worthwhile marketing method is connecting with consumers and industry contemporaries directly at events and conferences.
What were the challenges they met during the process?
In terms of product development, each line of cannabis beverages that we offer definitely brought its own challenges, including with regards to packaging, labelling and remaining compliant with each state’s distinct regulations. That said, the most difficult element of making a cannabis beverage is always the emulsification, as oil and water do not like to mix on their own. Over the past decade, we have experimented with numerous methods, from cold water hashing to sonic emulsification and beyond. As far as the individual lines, making our emulsion taste good at 100 mg in a 4 oz bottle was probably the most challenging product next to keeping the sparkling water light and calorie-free. But in due time, we found and implemented the solutions that work best.
But overall, as a company, one of our biggest challenges has been outrageously high taxes due to 280E, which licensed cannabis businesses are subjected to because cannabis is still classified as a schedule 1 drug at the federal level. 280E, which we as an industry continue to advocate against, make it extremely difficult for businesses to maintain.
How did they manage to cope up with the challenges?
I remember why I got into the business in the first place: a passion for the social consumption of cannabis. We at Keef Brands believe that the best way to enjoy cannabis is also the easiest way to enjoy cannabis. Cannabis-infused drinks like Keef Cola are a new way to experience the simple pleasure of a good drink with friends. Drinking is social, mainstream, and celebratory, so those consuming cannabis beverages can stay part of the party (rather than stepping outside to smoke), join in the toasts, keep the conversation going and share in the moments that make for great times.
I also cope by working with industry groups such as the American Trade Association for Cannabis and Hemp, and the Cannabis Trade Federation, to advocate for improvements, including access to banking and of course, federal legalization. We travel to Washington, D.C. and connect with politicians directly to educate them about our promising industry and the legal changes that need to be made.
Who inspired them in their journey?
My brother, Scot Knutson. He is a retired decorated Marine and is the VP of New Business Development of Keef Brands. He served as an Explosive Ordnance Disposal technician in Iraq and Afghanistan before being honourably discharged after becoming disabled in the line of duty. Along with being a key player on the Keef Brands team, he is a medical cannabis advocate and also works with veterans in our home state of Colorado who are interested in joining the burgeoning cannabis market and helps them to get jobs.
How much did they spend during the startup phase?
We raised and contributed just under $1m during our first two years of operation. That said, we started the business on little more than $50k from ourselves and close family members.
Erik Knutson is Co-Founder and Chief Executive Officer of Keef Brands, a pioneering line of cannabis-infused beverages, edibles, concentrates, vapes and oils. Knutson has a decade of experience operating a wide variety of enterprises within the legal cannabis markets. He co-founded Keef Brands in 2010 in Boulder, CO, as one of the first companies to infuse soda with cannabis. Keef is a pioneering developer, producer, and distributor of award-winning cannabis-infused beverages, edibles, concentrates, oils, and more. Keef is available at over 800 retail locations across the U.S., including California, Colorado, Arizona, Michigan and Nevada, as well as in Puerto Rico and Jamaica. In addition, Knutson holds several leadership positions in the industry, serving as Co-Founder and President of the American Trade Association for Cannabis and Hemp (ATACH), founding board member of the Cannabis Trade Federation (CTF). Erik is also the co-founder of the Denver Packaging Company (DPAC) the manufacturer and distributor of Keef products in Colorado.
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