Played: July 24, 2021
Listen now to a snippet of “Cannabis CEO Sees Billions in Accessories” from CannaInsider. Hemper is working to become a leading manufacturer in smoking accessories.
Updated Date: Jan 25, 2022
Publish Date: Dec 08, 2020
So you kind of had it. That epiphany that, you know you've talked about, which is, if you control the price, you could never be kicked out of the market. Can you just talk about your ideas around that? Totally. So, um, this is a really big concept, and especially when you're dealing with commoditized products, you really need to take into consideration. Right? So most of the things that are being bought in the packaging realm let's just take last jars, for example. Right? So I could have a customer come to me and say, Hey, you know, Brian, you guys do great on our cones. What can you do in glass jars? And I say, Look, you know, Joey, you know I can go get these glass jars for you and probably save you some money. And, you know, I'm thinking Okay. Cool. You know, we already have this customer. This is gonna be an easy layup, But on the back end, he's price quoting out 10 other glass factories or packaging companies. So my competition goes through the roof, right? I need to be I'm making maybe 10% to really make this deal happen, right? While you know, some of the other packaging companies are willing to even go essentially break even or negative margin at times we've seen in the space, right? So I can't. I don't own the glass factory, so I can't control the price, right? I don't. I know my floor right, But with cones, my floors, whatever. I wanted to be a right. So I control the price where if the market deems, you know, the new price of cones gonna be three cents or whatever it is, then I know that I'm gonna be able to back up and figure out my overhead in my operating costs. How Thio get down to that. Right. But for companies, you know that are purchasing capacity, which is pretty much everyone in the industry other than us purchasing capacity, they won't be able to maneuver like we can, because we control the facilities. We control the price, right, so we can never be squeezed. But, you know, our other competitors, they are always going to get squeezed because, you know, they're just bullying their facilities. Right? So they're saying, Hey, guys, I want £20 million a month. You gotta give me this pressure from going somewhere else. Well, there really isn't anywhere else to go. That's the whole thing. And most of the companies that you know are in the market don't want to deal with manufacturing. They don't have manufacturing backgrounds, and they don't. They wouldn't even know what to do with the facility like this. Right? So I think that's where the epiphany moment was, Where it was like, you know, Hey, guys, Like, if we own and operate the facility and we control the price, no matter what happens in the market will never get squeezed out. Yeah, but our competitors will, right? Right. Allows you to sleep at night. Better any any, actually. And then you have this kind of philosophy now about how you can't be squeezed out if you control the market. Are you bringing that to any of the other products where you're gonna start being the manufacturer besides cones? Yes, we are diving into a ton of different stuff right now. Obviously, with you know, co vid there's been a ton of opportunities, um, you know, in the industry and we're actually right now, you know, finishing out a capital raise right now because We're kind of tired of all the opportunities. You know, we're passing on due to, you know, cash constraints and all that, and we do run a pretty lean operation. Still, So I think that you'll be seeing over the next 12, 24 months, we're gonna be getting into a ton of new stuff. That's gonna be very exciting.