Kiva Confections Targets East Coast Push

The company launches in New York in June.

The cannabis edibles company Kiva Confections was founded in 2010 by Kristi and Scott Palmer and was lucky enough to start at a time in the industry when small brands were welcomed, but with increased legalization, this is no longer the case. Kiva was born in a kitchen, a concept that is foreign nowadays due to the intense regulations required for cannabis brands. People are pushed out of the industry due to challenging laws and extremely high taxes.

While some brands have hit this ceiling and folded, Kiva has managed to push through the barriers that so many other brands can’t due to their innovative and quality products.

Frustrated by the inconsistent, low-quality edibles available at the time, a young couple began making chocolate bars out of their Bay Area, California home kitchen. Today, their award-winning Kiva chocolate bars, Camino gummies, Petra mints, Terra bites, and Lost Farm chews and gummies are sought-after. Kiva has also managed to set up shop in 10 states and despite the problems with the New York market is even looking to expand there. Green Market Report recently spoke with Co-founder Kristi Palmer about the company’s plans to expand in the Empire state.

(This interview was edited for clarity and brevity.)

Green Market Report Executive Editor Debra Borchardt:

Is Kiva looking at going into New York and how have you explored that?

Kristi:

We’re definitely looking, we have a relationship signed and we’re commercializing product there. A few of the key team members from Kiva, were out there helping our new partner get their formulations locked in and get the product made. In fact, I got to test some of it yesterday. The texture’s really great, the color, the appearance, they’re getting it down really well. There’s just a kind of general excitement about this partner and their capabilities and their expertise. So yeah, we’re making it happen.

GMR:

I’m curious, when you went to find that partner, was it first the base product first I’ve got to find a chocolatier who is up to my standards, or was it, I have to find someone who has a cannabis license for edibles that I can teach them how to do Kiva?

Kristi:

For sure the second, because chocolate, and in particular New York, we’re going to launch with gummy, actually. So chocolate will follow a little later on. And that’s primarily because gummy is by far the most popular product format. So that’s why we start there and we can teach someone who has the desire to manufacture, if they have manufacturing background or chops or they’ve hired somebody on their team and that’s the direction that they want their business to go in, then amazing. Then they’re very trainable. And the equipment that we use and the processes that we use, they’re not rocket science. They just take a little time and some resources to master. So definitely we look for a cannabis license and a group focused like that, first and foremost.

GMR:

That’s interesting because it is kind of that chicken or egg kind of thing. It’s like, which way do you go first? So when do you think you’ll have your gummies hitting shelves?

Kristi:

So launch date is set for June 12th as of now.

GMR:

Oh, soon.

Kristi:

I know. Really soon, which sounds really, really soon. But that’s what we’re tracking for. So I like to tell people by the end of the year, but I think we’re on schedule for a mid-June lunch.

GMR:

Do you know where you’re launching?

Kristi:

In terms of what stores?

GMR:

Yeah.

Kristi:

I don’t, I don’t know if we have a particular… I doubt that we have a particular store that we’re starting with, rather probably trying to target them equally. That’s generally our preferred method of going to market.

GMR:

We’ve been fascinated on our side with the whole process by what an outsider has to go through because the New York market is so wonky and so truly screwed up that somebody who’s been in existence for some time, is arguably successful. So you know a few things. You’ve seen a few things and trying to go from one part of your business where you’ve been just rocking and rolling to all of a sudden this crazy town.

Kristi:

Yeah, crazy town.

GMR:

I’m sure it had to have been hard to navigate.

Kristi:

Yeah, it is. And let’s see-

GMR:

Because technically there are no true rules and regulations – just guidance.

Kristi:

There are certainly some that we are aiming to follow and there are your foundational rules. Like if you have a license or you’re a licensed business, you can only work with another licensed business. There are some of those that are foundational, and then there are others that are wonky like when will retailers be licensed and up and running, or when will delivery be up and running? Stuff That is certainly a challenge, but it’s sort of all stuff that if you’re on your toes, if you are resourced, then you have a slight leg up that has nothing to do with your… That doesn’t mean you’re going to be guaranteed to be successful by any stretch of the imagination. But New York will be probably the 14th market that we’ve ever entered.

We’re only in 10 now. We’ve done this a few times is the point I’m trying to make and we’ve seen a market that is wholly unregulated or unlicensed, move into a licensed regime. And so there are definitely some pitfalls that you can fall into as you’re going through that transition. I like to think that we have a bit of experience now, but also eyes wide open. You got to go in being completely humble and curious, or if you think what you’re doing, you definitely don’t, and you have to be open to being adaptable.

GMR:

Have you had to change your packaging for New York?

Kristi:

Yes. So every state requires some kind of adjustment. At the very kind of basics, the warning symbol always changes in every state. I love that they call it a universal symbol, and it’s like, well, it’s not that universal if it changes in every state. That’s one thing is every single label at the very minimum has to have its own symbol. Then the back panel label, generally, they always have to have the manufacturer’s name or website. So that is always different state by state, because we may teach our manufacturers, but it’s not our operation, so it’s not our name on that back panel. Those are two things that are constantly, always different. Then bigger stuff like dosing requirements may be different. We’ve got some high-potency products in Oklahoma, for example, that we don’t offer that are not even allowed in the California market. So that’s not just a different package, but a completely different product, a different formulation, different ingredients, all of that.

GMR:

And can you tell me what is your best-selling product, what is your big winner?

Kristi:

The big winner is our Camino Sleep, our Midnight Blueberry. You’ve said how loyal people are to edibles and for sleep people will go into a dispensary, see that they are out or don’t carry the Camino Sleep line then they will drive. They’ll leave the store and they’ll check at the next one, and they’ll check at the next one. They will go to great lengths to find their sleep item in particular. So yeah, that’s our bestseller. That’s, I think, still the number one reason that people turn to cannabis. We recently did a study too, where we interviewed, I think it was like 400 participants, I believe and amongst all the different types of methods that people use for sleep like prescription pills, melatonin, – cannabis people feel are the most effective. So of all those other methods, cannabis can most consistently do the trick for people. So that’s our best seller. And people get pretty loyal to that item.

GMR:

I think the Camino products seem to have a nice shelf life. I know some other gummies get gooey, like melty, weird, and. I think for me personally, I like the chocolate at night before I go to bed, to your point, the go-to-bed thing. And it’s just kind of a nice treat at the end of the day. I’m curious, is there any kind of flavor profiles that seem to be jumping out as well as far as trends?

Kristi:

Let’s see. The dark berries for sleep are, I would say probably the most prevalent. So Wild has an elderberry, that’s their sleep line. And you see that in mass market or traditional market products as well. So your melatonin gummies tend to be those dark berry or dark fruit flavors. So that’s definitely a flavor trend. For us, we’re always looking for really kind of edgy new flavors. We did a really fun kind of stunt product in California. It was a collaboration, well, not a collaboration, but a commemorative line for The Big Lebowski. We did a White Russian. So we always kind of try to push the bounds a little bit. It’s a little unexpected. The White Russian, typically we do fruit flavors, but this is a vanilla, milky kind of flavor. So yeah, it’s fun to explore and see what people will latch onto and what might catch some steam.

GMR:

So it sounds like your big focus right now is New York. What else are you guys leaning into right now?

Kristi:

New Jersey is another state that’s really interesting.

GMR:

When you’re going into these states, I just can’t imagine what you go through when you go into the… And as you’ve said, you’ve gone into several, so New York is such a weird situation. So let’s jump to Jersey, which is a more, let’s say, a traditional model where you have the biggest MSOs, they have several stores. Are you going to work with them?

Kristi:

I think we found that for Kiva for where the landscape is right now, and like you said, each state is totally different, so it’s hard to make a blanket statement about everything. But what we have found to work pretty well for us is to find a medium-sized partner who is maybe a smaller-sized MSO if they even have operations in another state. That’s been working well for us because some of the bigger MSOs have their own brands that they’re working on. This is a popular kind of model that we’re seeing lately is companies, MSOs are testing out like, will people drive two hours to get a brand? I’m not sure if the bigger MSOs are even that interested in bringing a brand like Kiva, depending on what their strategy is. A lot of the time they want to push their own brands. So we start to get a little uncomfortable working with an MSO like that, because – even if they do want to promote Kiva, you may only ever get to be their second-best brand because they’ve got another interest. So medium-sized MSOs seem to be pretty good for us.

We have found that the folks that are attracted to Kiva products are kind of the first movers, the first mover consumers, or the trendsetter consumers, they tend to have a slightly more sophisticated pallet, and they just appreciate a higher quality chocolate. That’s what they’re buying at Whole Foods or at the grocery store. So you kind of have to make it on par or better.

GMR:

Okay. It sounds like you’re really kind of, your focus right now is the Northeast or the East Coast?

Kristi:

Yes, East Coast in terms of geographical expansion. And then, let’s see, kind of internally emerging cannabinoids is still super interesting. So like the THCV, CBG, THCA. So we’re doing a lot of tinkering and experimentation with different cannabinoids as well.

GMR:

Well, we will keep our eyes open for that. Thank you for your time.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


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