Jaunty’s CEO Navigates Crisis to Cannabis Success: From Venezuelan Upheaval to CBD Market Domination
Nicolas Guarino, CEO of Jaunty, a New York-based cannabis brand, offers a compelling narrative of resilience and strategic adaptation in the volatile cannabis industry. Having personally navigated the economic and political turmoil of Venezuela under Chávez and the subsequent 99% collapse of the US CBD market, Guarino has leveraged his experiences to build Jaunty into a profitable enterprise, defying the industry’s tendency towards commoditization. His unique approach focusing on solventless products, a strong brand identity, and a consumer-centric strategy exemplifies a path to success in a market known for its inherent instability. This story reveals valuable insights into navigating the challenges of the cannabis industry, emphasizing the importance of adaptability, strong branding, and efficient cost management.
Key Takeaways:
- Jaunty CEO Nicolas Guarino overcame the 99% price crash in the US CBD market and his family’s experiences in crisis-ridden Venezuela to build a profitable cannabis brand.
- Guarino’s background in Venezuelan agriculture instilled valuable principles of hard work and resourcefulness, directly influencing Jaunty’s operational efficacy.
- Jaunty’s success stems from its strategic shift away from commoditized wholesale CBD to a consumer-centric brand focusing on high-quality, solventless products like Live Rosin Gummies and vapes.
- The company’s emphasis on efficiency, including a 4.8% distribution cost and investment in cost-effective extraction methods, underscores a path to profitability in a competitive market.
- Jaunty’s strong brand identity makes cannabis more accessible to a broader audience, particularly attracting nicotine vapers seeking alternatives.
Adiós Chávez! Building a Foundation in Adversity
Guarino’s upbringing on family farms in southeastern Venezuela provided the bedrock for his entrepreneurial spirit. He credits his experience working with water buffalo and navigating the challenges of agriculture with shaping his values and approach to business. “Our family has always been about getting our hands dirty,” Guarino shared in an exclusive interview with Benzinga Cannabis. “The values I learned back on the farm have been foundational in building Jaunty. It’s about understanding the land, the crop, and the entire process, which, in turn, influences our approach to quality cannabis production.“
This foundation in agriculture instilled a deep understanding of production, quality control, and the importance of resourcefulness—attributes that proved invaluable when navigating the complexities of the US cannabis market.
The CBD Market Crash and Escape from Commoditization
Jaunty’s initial foray into the CBD market in 2017 encountered the harsh reality of a rapidly saturating market. The near-total collapse of CBD oil prices by 99% by 2020, dropping to a mere $65 per kilo, significantly impacted Jaunty’s wholesale business model. “The CBD space became a game of scale,” Guarino explained. “The Farm Bill’s structure supports large-scale production but doesn’t leave much room for smaller, quality-focused brands. We were nearly bankrupt, but we couldn’t quit. We saw an opening when New York moved towards recreational legalization.”
New York’s decision to prioritize existing CBD operators for licensing provided a crucial lifeline. Guarino recognized the need to cultivate a distinctive brand, moving beyond mere wholesale production to create a product line that resonated with consumers on quality and consumer experience.
Building Jaunty: It’s the Brand, Not Just the Product
Initially considering partnerships with established brands like Old Pal, Guarino ultimately rejected co-branding and white-labeling, recognizing these strategies would trap Jaunty back in the very cycle of commoditization he was escaping. “White labeling is for big facilities, with massive automation,” he stated. “We don’t have that; we have exceptional extraction skills honed over years in CBD. So, we decided to focus on creating our brand rather than becoming just another supplier.”
This strategic shift shaped Jaunty’s identity and product lines, beginning with vapes and expanding to solventless Live Rosin Gummies. The company’s emphasis on brand development has proven critical for establishing a competitive position in a landscape demanding true differentiation.
The Family Behind the Brand: Leveraging Expertise and Trust
Jaunty’s success is deeply rooted in the family dynamic. Guarino brought his cousin, a seasoned logistics expert from Venezuela, to manage distribution. His cousin’s experience navigating the complexities of managing 75 poultry trucks in Venezuela under turbulent conditions proved invaluable. “With him overseeing our logistics, we are the only company in New York that guarantees delivery within 48 hours,” Guarino proudly declared. “It’s truly a blessing to have someone so experienced managing a crucial part of the business.” This logistical prowess contributes to Jaunty’s remarkably low 4.3% distribution cost, enhancing profitability without compromises on service quality.
Cost-Effective Strategies: Optimizing for Profitability
Jaunty’s commitment to cost-effective practices guided its investment decisions. The company’s adoption of butane extraction for specific products, while demanding a significant $500,000 investment in equipment, demonstrated a commitment to long-term optimization. “The full investment for our butane machine setup was around $500,000,” Guarino explained. “But with the right brand presence and strong distribution, we project a return on investment in four to five months.”
This decision, coupled with a focus on solventless products and outdoor-grown cannabis, allows Jaunty to produce high-quality products while minimizing costs, thereby strengthening the brand’s profitability within the competitive cannabis industry. Solventless extraction, in particular, proved to be a cost-effective strategy, minimizing the need for expensive extraction equipment.
A Consumer-Centric Identity: Demystifying Cannabis for a Broader Audience
Jaunty distinguishes itself from its competitors by prioritizing an accessible brand identity. Unlike many extract-focused brands that can cultivate an exclusive or elitist image, Jaunty embraces inclusivity. “Too many brands make consumers feel they aren’t in the know. Jaunty is here to open up cannabis, not gatekeep it,” Guarino emphasized.
The brand’s approachable nature, combined with a commitment to consumer education through clear product information and packaging, serves to demystify cannabis oil products, making them more inviting to a broader array of consumers, including those transitioning from nicotine vaping.
‘The Dab Crowd’: Breaking Down Barriers and Building Trust
Guarino identifies a common trend in extract-focused brands, noting, “Most extract-focused brands have a vibe like, ‘If you know, you know.’ If you’re not part of the dab crowd, you’re not cool enough.” Jaunty actively works to counter this exclusivity, fostering a more welcoming and inclusive brand positioning.
Jaunty’s commitment to customer education, which extends to utilizing QR code surveys on packaging, is instrumental in building trust and understanding, further supporting its consumer-centric approach. This allows the brand to directly gather consumer feedback, creating a pathway for continuous improvement and further enhancing Jaunty’s understanding of the market and customer needs.
