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Bootstrapping a $100K/mo Cannabis Company

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Founders: Degelis "Dege" Tufts & Kymberly "KymB" Byrne
Founders of: TribeTokes
Monthly revenue: $130K

In September of 2019 the vaping industry was in crisis. Dozens of people were hospitalized after using black market cannabis vaping products — Dank Vapes in particular. Then in October, the FDA warned people against them.

This led to the so-called "clean vaping” movement of cannabis vapes with only two ingredients: pure full spectrum oil and natural plant terpenes. TribeTokes, a luxury CBD company founded by Degelis Tufts and Kymberly Byrne, emerged as one of the leaders in this space. As of today, TribeTokes is doing $100K average monthly revenue, and what began as a wholesale business has evolved into a popular DTC brand.

How was the business initially started?

The business was initially started with doing a trade show in New York with all of our prototypes on the table. We discovered the wholesale buyers were mainly interested in two things: a vape battery that looked like a car key (you press a button to flip the cartridge out), and vape cartridges. Interestingly, these two products from day one are still our best sellers today. I invested about $10k into inventory for these items, sold them to the stores we had met at the trade show, and used the profits to buy more. At the time I was co-working solo out of Soho House, and my boyfriend (now my husband and our COO) also worked for himself and was helping me where needed.

I had met my manufacturing partners on a networking trip to California, they really helped me develop prototypes in a cost efficient way and are still partners in our business. They believed in us and our mission to create healthier cannabis products. Your relationships in the supply chain are so important, because some companies will require 10,000 unit minimums to create anything customized, which just makes it impossible to get started cost effectively.

What was the initial launch of the business like? How did it perform compared to expectations?

The initial launch of the business was more wholesale heavy (we are now ~70% DTC) and very experimental as we were exploring where the gaps were in the cannabis industry, specifically on the east coast. We realized people were very interested in vaping but were sketched out by chemicals or fillers in vape pens, and there was demand for all natural, plant-based vapes. We then carried this plant-based mentality into launching topicals and gummies as well.

What marketing channels were prioritized? Which acquisition channels are working best?

We reinvest about 25% of our monthly sales back into advertising and marketing at this stage.

In a world where cannabis companies are blocked from FB and Instagram ads, earned media is king! Press has been an important driver for us. SEO is another form of "earned traffic" and is about 40% of e-comm sales. I have been working on this myself, so it doesn't "cost" us anything except for a lot of my time :) I learned SEO through watching Neil Patel Youtube videos (he's amazing). Our email list is also hugely important. We make our emails as humorous as possible and try not to spam people, and when we have a new product drop it's a big sales driver.

The budget breakdown overall is about: 50% Content and Display Ads (CPC), 20% Press, 20% Affiliate, 5% tradeshows, 5% email. This is including the cost of our agency partners for these channels.

What were the circumstances that led to bootstrapping vs. getting funding?

Part of it was practical, and part of it was psychological.

I had raised money for a past startup and felt like I was then pressured to spend it. I was more likely to purchase more inventory than I needed (note: when a factory gives you an MOQ, it's usually not actually true), use overpriced agencies, and less likely to teach myself how to do things (I now do our website, product photography, packaging design and sourcing, SEO, email content - it sounds like a lot but I'm really fast now :) and it serves as a creative outlet for me.

I also didn't want to answer to anyone for a while - I was in a very free stage of my life when I started the brand. Fortunately I also found a business partner (my co-founder, Kym Byrnes, who joined in 2018) who was on the same page. We both had side hustles for a while to get TribeTokes off the ground, but were happy with our lives and our freedom. I say "was" because now that the business is a certain size we can't exactly work from the Caribbean whenever we want 😂 and I now have a 9 month old baby. But I was in a great life stage to bootstrap in 2017.

How did you meet your manufacturing partners?

We met them through mutual friends in the cannabis industry in California.

Current monthly revenue?

$130k/month

Have there been inflection points in its growth or has it been relatively steady? Anything that caused a particular dip?

COVID was a major inflection point for our e-commerce business. Many people were stressed at home and ordering online, seeking something to ease their anxiety, and our online sales doubled in about a month. One thing that had caused a dip in sales at one point was migrating the website to a different e-commerce platform, about 18 months ago. This caused some indexing and 404 issues which we’ve since resolved/recovered the lost traffic. This is a common issue during website migration, so I’m happy we did it earlier on.

  1. 4

    Congrats on the success!

    Just to be clear though from a fin nerd like me, you say MRR (monthly recurring revenue) but I'm not seeing any subscription based products on your website, thus it isn't really accurate to refer to this as MRR, rather it's just your Average Monthly Revenue.

    MRR is a term and metric reserved for recurring revenue only. :)

    1. 3

      Just made that change! cheers.

  2. 1

    Congratulations on your milestone. This is great.

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