'In the USA, this is a normal business': how a Ukrainian in California sells hemp products

Kiev Alexey Slivkin, whose status on Facebook has not changed for a long time Houston we have no problems, is developing an innovative business in California with partners.

Photo: Facebook of Alexey Slivkin

So the passage text about “enter into IT” could begin, if not for the mission announced on the Harmonycanna website. The company, which Slivkin organized together with an American partner, promises customers products containing cannabidiol to "achieve balance, harmony and peace of mind." Simply put, Lesha produces hemp oils, creams and tablets.

Freelance Interviewer MC Today Sergey Nabok asked Alexey about unusual business in the Ukrainian regions and about whether Ukraine could become a part of this industry.

How I ended up in the USA

I had no global plans for moving. But as soon as my wife and I learned in May 2015 that she was pregnant, in a week they decided that we were going to give birth to the States. I had to come to childbirth, and somehow we gradually came to the conclusion that living here is a cool occasion to try new things. And here I am in California.

General acquaintances recommended me to the guys who sold digital video advertising in the USA. They were just looking for representatives, offered me a try.

For almost two years I traded in the media market in the United States and Israel. Then global changes took place - the partners changed the conditions for the purchase of equipment, and the company ceased operations. I began to think about what to do, I was looking for a niche and realized that cannabis is a promising area. I met one of the industry veterans (Slivkin’s partner George Thunderman. - Ed.), He suggested that I fit into the project.

Photo: Facebook of Alexey Slivkin

How it works in the States, what were the difficulties

I still can’t say that I adapted to 100%.

Still, if you already have 30 and you don’t have a working draft with which you are going to another country, get ready, which can be difficult.

The Americans are the kings of networking, very cool entrepreneurs, they immediately feel where the money is, but, like everywhere else, there are chances to run into dishonorable ones. Here I had to go through almost everything from scratch, burn my mistakes. Unlike Ukraine, where it was clear how to reach out to a specific person, get the right information, recommendations.

Once a distributor came to us, made a very high-quality presentation, promised sales. The condition was prepayment for admission. This didn’t bother me much, because in Ukraine this is normal practice. We searched for available information about them and signed up. As a result, a month later they gave us five contacts and said, they say, contact and agree.

In my understanding, this is, as it were, the work of the distributor - to negotiate with the outlet and put the product on the shelf. Therefore, I was surprised: when we processed the base, it turned out that these were ordinary cold contacts. It is not yet possible to return the money - they have it on the stream, and they defended themselves. Of course, if I were in Ukraine, I would find through whom to find out how adequate they are and whether it is worth working with them. Now I understand that it is such a business for them to take money from people for admission. You can’t say that these are scammers.

There is no desire to sue them, the amount of about $ 10 thousand, ridiculous for the court, this is the calculation. There were different stories, but I do not have the thought to send everything and do something else. I have sold a lot of things in my life, but for the first time I really enjoy the process.

On the subject: Grass in the yard: everything about marijuana production in America

Americans work hard and productively. There are almost no all of these holidays, weekends, May, January. Sometimes it seems that you can take any senior account from here, bring it to Ukraine - and you can trust him to manage the agency. It amuses me when our “serious guys” say that now they will come and immediately defeat the lazy and stunned Americans who have not seen the world and think narrowly. Guys, this country is not just the leader in the world.

I like how retail sales, procurement specialists work here, and in general, how much easier it is to agree on cooperation here. Bayer is interested in replenishing the assortment and often contacts himself. Selling a trending product is, in principle, not difficult. People are not too lazy to show interest, take for a test period, check the response. And if everything went well - welcome to the shelf.

Photo: Facebook of Alexey Slivkin

Why did weed

In the US, this is a regular FMCG product. It is sold both online and offline.

Let's look at the terms first. “Grass” is very broad. Cannabis contains cannabinoids - useful substances for which it is valued. The most common and studied: THC and CBD.

In Russian, it is TGK and KBD. In order not to get confused: THC (tetrahydrocannabinol. - Approx. Ed.) - a psychoactive cannabinoid, it is used for recreational purposes (in other words, in the "weed" it is responsible for the effect known to lovers. - Approx. Ed.). Its more in cannabis sowing variety, marijuana. CBD - cannabidiol, not psychoactive. Actually, everyone is talking about him when it comes to medical cannabis.

Barbecue products with THC are sold in specialized dispensaries in various forms: marijuana, vapes, chocolates, sweets, gelatin bears. Sales of CBD products are not yet regulated in the United States, and you can buy them virtually anywhere. The main part of offline dispensary traffic is of interest to recreational cannabis, and they contain a small assortment of CBD products.

Photo: Facebook of Alexey Slivkin

The sale of products containing THC is clearly regulated by the state, and the threshold for entering this business is quite high. The cost of opening a dispensary ranges from $ 150 thousand to $ 2 million. This includes basic expenses of about $ 250 thousand per year for staff, $ 100 thousand per year for rent and $ 50 thousand for repairs.

Legalization, the absence of strict rules and growing demand create a low cost of entry into the business, this makes it possible to develop entrepreneurship.

It is difficult to calculate the exact number of brands on the market, but, according to my estimates, there are about 4-5 thousand. There are companies whose turnover is estimated at hundreds of millions of dollars a year: Charlotte's Web, Cura cannabis, NuLeaf CBD. Basically, these are vertically integrated structures with a full production cycle, from growing plants to own distribution of finished products to retail outlets.

The U.S. CBD product sales market is expected to exceed $ 20 billion by 2024 year. This is 20 times larger than today. There is reason to believe that there is enough market for everyone and it is too early to talk about fierce competition.

On the subject: One time consuming cannabis many years ago could rob an immigrant of a green card

Who are the competitors, which brands are heard

CBD is a global trend. Google's CBD Gummie query was third in popularity in the 2018 year in the Food category, according to Google Trends. And Vogue magazine included CBD in the list of the main trends of the same year in the Welness category.

Against this background, the assortment of products with CBD is growing, they are inventing new ways of delivering substances to the body. You can hardly surprise anyone with drops or cream, and recently the startup Ignite cbd, owned by the popular influencer Den Bilzerian, rolled out toothpicks containing CBD. There are ten toothpicks in the package for $ 30 - such things.

What niches are not yet occupied

First of all, related to food: drinks, snacks. They can already be found on shelves in the grocery store. National retailers Whole Foods, Sprouts, Ralphs actively sell drinks containing CBD.

The industry is developing in the direction of beauty and skin care, this can be seen in the assortment and rearrangements in the market. Former L'Oréal senior manager, Product and Innovation Executive Director Sam Cheu, is moving to a similar position at Global Cannabinoids. He will be responsible for innovations in skin and hair care products, in cosmetics containing CBD.

Photo: Facebook of Alexey Slivkin

Could Ukraine join this business?

Ukraine is an agrarian country with cheap labor; accordingly, the cost of cannabis production will be low.

It is important to understand that this is just a business - with its players, products, technologies. But he works according to general rules, and there are no tricks in him that would lead to leaders in a short time. This was possible earlier, in illegal conditions - then you could count on excess profits due to risk.

Now these are ordinary products that are sold in civilized retail, advertised through standard channels. Here, ordinary people work, not Pablo Escobar. Recently, former marketing director of Beats by dr. Dre has led marketing at Cura Partners (Select CBD).

The other day, a Leafly report came out (the most popular resource on cannabis. - Ed.). The number of direct and indirect jobs created as a result of legalization increased to 300 thousand last year. Of all the states where marijuana received the green light, Washington earned the most in taxes last year — about $ 319 million. California — $ 300 million.

But, nevertheless, it is still promising, the market is growing. In 2017, the cannabis market in the United States amounted to $ 8,5 billion, and already in 2018 - $ 11 billion, in 2022 they predict $ 23 billion.

What works in this industry and what doesn't

My partner in the "grass" industry for 12 years. Under the Harmonycanna brand - from December 2018 of the year.

I had experience in Ukraine in launching the TM "Home Grinochki" in Ukraine. I have been selling advertising services for a long time and I knew where to buy cheaply, which is quite expensive here: design, marketing work, printing. I managed to save money on the launch, and now we spend several times less compared to competitors.

We thought that online sales would be cheaper than organizing a full-fledged offline sales department. Concentrated on the development of ecommerce.

And I decided to check the response offline and put the product in dozens of outlets. We receive repeated applications, and this is the amount that I can manage personally. I plan to scale soon.

Now the company is conditionally divided into two areas: production in San Diego and the Internet marketing department in Ukraine. In the United States, four people are constantly employed in manufacturing, including a partner in charge of manufacturing. Sometimes we attract additional hourly employees. Three people are now working in Ukraine, we plan to strengthen the Ukrainian office in the near future.

Read also on ForumDaily:

Grass in the yard: everything about marijuana production in America

What cannabidiol treats (CBD), and why everyone talks about it

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.