A business template for maintaining a robust circulation of resources. Using the Capital Institute's "Eight Regenerative Principles" as their foundation, the team at First Corp set out to create a sustainable business model for their hemp business. Co-Founder and CEO David Weir joins Dan Humiston to explain how they designed their business to support the farmers in their supply chain. He discusses how adding a new wave of investors through their current equity crowdfunding campaign on MicroVentures will provide them with the resources necessary to share the news about their brand and their philosophy. Produced by PodConX MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston David Weir - https://podconx.com/guests/david-weir First Corp - https://firstcrop.com/ Crowdfunding Campaign Page - https://invest.microventures.com/offerings/first-crop
A business template for maintaining a robust circulation of resources.
Using the Capital Institute's "Eight Regenerative Principles" as their foundation, the team at First Corp set out to create a sustainable business model for their hemp business. Co-Founder and CEO David Weir joins Dan Humiston to explain how they designed their business to support the farmers in their supply chain. He discusses how adding a new wave of investors through their current equity crowdfunding campaign on MicroVentures will provide them with the resources necessary to share the news about their brand and their philosophy.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
David Weir - https://podconx.com/guests/david-weir
First Corp - https://firstcrop.com/
Crowdfunding Campaign Page - https://invest.microventures.com/offerings/first-crop
CC First Crop
Dan Humiston:
[00:00:00] today on MJ bulls, raising cannabis capital. We are continuing or cannabis crowdfunding series with David Weir for first crop, David, welcome to the show.
David Weir: Hey, thanks for having me, Dan excited to be here.
Dan Humiston: Well, I'm glad you could stop by today. I've interviewed a lot of CBD companies, but never one that controls every step of the process, the way you do. Before we get into the, how can you tell us why it's so important for you to control your product from seed to sale?
David Weir: Yeah, sure. That's a, it's a great question. And I think it really boils down to what we've observed in the industry in the last couple of years. I mean, let's face it. The industry has been somewhat tainted with a lot of crappy products. There's been very low barriers to entry.
There's been a lot of money potentially to be made. It's attractive. A lot of people in the industry in a very short period of time. So whether it's your brother, your cousin, your next door neighbor, it's not that hard to produce a CBD product. And that's why they're, probably at the [00:01:00] peak was three or 4,000 brands.
And so we took a different approach which is really for the long haul. Our team comes out of the food business. We have a grounding in natural food products. And we decided that we wanted to be where the puck was going to be five years from now, not where it was when we started our company.
And so we built the business around what we call food grade standards, everything. Our GMP certification to being certified organic to our SLPs were built with the expectation that the regulatory bar, which really doesn't exist today is going to be established at some point. And we wanted to make sure that we were at ahead of the curve on the quality standards.
And that really has what has guided, our approach every step of the way in our ability to control our product from the seed that goes into ground all the way to that finished product that ends up on the shelf is a really important result of that dedication to quality.
Dan Humiston: Well, you, you definitely walk the walk [00:02:00] because I know within your core principles, you support regeneration and giving back. And to do this, you developed a model where you support farmers. Can you explain how that works?
David Weir: Yeah, so we really founded our business around the inspiration that that we took from. A group called the capital Institute. So a very long time friend of mine started capital Institute and really focused his energies around a career in finance where he identified the fact that we live on a planet that has finite resources.
But we have an economic model that requires perpetual growth and that obviously doesn't work. And so he took a long time looking at, what he would call healthy biological systems and try to apply his finance expertise to. Economic systems and business practices and is developed what he's defined as eight regenerative principles.
We took those principles from the capital Institute and we're putting them into effect in our [00:03:00] company every day. So things like. Empowering your partners in ways that help them be successful financial inclusion taking the people that help you be successful and giving them a slice of the pie so that they can benefit from some of the rewards of their efforts.
What we call a robust circulation of resources, not just financial, but also. Intellectual capital information, best practices. So when you look at our seed to shelf approach, we have what we call a regenerative system that is circular. So it starts with the seed that goes in the ground.
It goes to the expertise that we share with our farmers, the community of farmers that we're trying to create, the collaboration that we get amongst our farmers, the approach we take in the extraction process being certified, or again, Being CO2 extraction. All the way through to using recycled will glass and post consumer waste for all of our packaging.
And then the system all starts all [00:04:00] over again to reinforce this, we created a profit sharing program for our partners, which is very innovative so that they get the benefit of not just what they get paid for their car. But also some of the downstream profits as Well, And then we have a foundation where we share some of our profits with the foundation to make grants back into these rural communities, to help them fight some of the challenges that they're dealing with.
These.
Dan Humiston: Well, it's so important, especially we talked about it before we got on these rural communities, these small farmers they're struggling. And for them just to take a chance on hemp when they're already struggling is just something that a lot of them aren't capable of doing. And I know you provide them with forward contracts, so they actually know what they're going to make off their crops.
Is that how that works?
David Weir: Yeah, that's correct. So we helped them transition to, commodity crops that they've been struggling to make a profit on and have been teaching them how to grow hemp. Everything from helping. Providing them [00:05:00] with subsidized seeds to lower the barrier to entry, we help them make decisions around seed genetics.
We teach them how to plant it, how to grow it, how to harvest it out of dry it. And then we buy it from them at the end of the year. And so It's a term key solution for them, gives them some certainty. A little bit of risk sharing along the way. And then through the profit sharing program, we have to the extent that we're successful in selling that finished product, then they get some benefit from that down the road, right.
Dan Humiston: It's a long play, but , it's a smart approach to doing this. I see that you launched 24 products in the second half of 2020, which is probably not the best time to get into the retail game. How'd that go?
David Weir: Well, it, wasn't obviously in the business plan to be launching our consumer products into the teeth of a pandemic. But based on the challenges, we have a very nimble team. We adapted, we did a couple of things we did manage to get all of our products rolled out last year, despite some supply chain [00:06:00] challenges on the packaging side and things that everybody was struggling with.
But in the third and fourth quarter, . As you mentioned, all of our CBD products, which are 15 CBD products launched, we also were nimble enough to actually create a whole new set of products that didn't even exist in our product pipeline, all still around hemp. So we created a line of foreplay performance, consumer have fabric masks for people who wanted a natural anti-microbial alternative to.
The lower quality Chinese masks that were coming in. , but at the same time, sticking with our, focus on hemp, as a source of material, we also created a CBD, enriched aroma therapy, hemp mask spray that goes on the inside of your mask. So for teachers and, retail, checkout clerks, and people who have to wear masks for long periods of time, It helps improve that mask wearing experience so that it's at least tolerable.
And those two products we also rolled out in the third And fourth quarter of [00:07:00] last year. So total actually about 31 product skews. We rolled out in a pretty short period of time under some pretty challenging circumstances.
Dan Humiston: And I saw they went pretty well.
David Weir: Yeah.
Were growing our line sales every month, without the benefit of having been in the market with a loyal customer base, we were starting from scratch, unlike, some other brands that were already out there. So we really focused on online sales, brick and mortar stores.
We're not, taking meetings. We're not doing their usual category resets. As we were rolling out our products, we're obviously focused , on our online sales, both through our website, as well as other online channels. And then at the end of the first quarter, we finally started to see some life in the retail sector.
Brick and mortar stores are opening. They're replenishing, their inventories are looking to bring in unique differentiated brands. And in the last 60 days we've gotten commitments on about 160 new stores. [00:08:00] So when we have a chance to get in front of a retailer, we do really well because we have fantastic products, high quality, great brand, and great packaging and a great story.
Dan Humiston: Well, you also have a great team. Clearly if you were able to launch your product line in the teeth of a pandemic that says a lot about your team, let's talk about the crowdfunding campaign that you're in the middle of right now. What do you intend to use the money for?
David Weir: Yeah.
So primarily sales and marketing number one, obviously we're looking to drive sales and that takes money. So we need some capital to be able to invest in. Both digital marketing as well as to support, our brick and mortar retail store partners with things like promotions and print collateral and things like that.
Second on the brick and mortar side success is great, but it also brings a requirement for additional financing. So the bigger retail chains typically, require you to provide some [00:09:00] type of free fill or a buy one, get one free on that initial order. And so there's an inventory financing, costs that also has to be born, as we grow our sales and we grow our retail footprint.
So, successes is bringing a requirement for additional funding. And that's one of the reasons why we decided to do crowdfunding. We chose crowdfunding as opposed to just going down the venture route, for example, Because we're really looking to try and build a community community of people.
Not only that can help us with financial support, but that really buy into the mission and buy into, our motivations for starting this company in the first place.
Dan Humiston: Yeah, that's just my favorite part about crowdfunding is that you have a whole community of zealots everybody's on your team. Everyone's rooting for your success. It's one of the great intangible benefits of running a crowd funding campaign.
And as I said we're really trying to build a community here and I would love it if we could scroll forward.
And, 10 years down the road, that our company is owned by lots of little investors who believe in our mission , and love our products. And and we've really built that kind of movement in that community. And given people the opportunity to own a share of a company that would be.
A capstone, success, I think for [00:11:00] our founding.
Dan Humiston: Oh, I think it would be such an honor to be running a company like that. And knowing that you made a lot of peoples happy and successful and we will we'll have all of first crops, crowdfunding information in the show notes so if you're interested and if you want to learn more about it, I recommend you go to the MicroVentures website.
They have some really great videos about the company on the MicroVentures website and take a look at it. If it makes sense. I think it's, this is going to be one of those good investments. You're going to be happy. You did David. I wish we had more time, but I'm really excited for you guys.
You're really onto something. Thanks for being on the show.
David Weir: Yeah, thanks for inviting me on and for sharing the word and the gospel. We appreciate it.