Cannabis Edibles and Drink Review first spoke with Matt McGinn, Co-Founder of Spacestation and CEO of Fly Beverage in January of 2020. We are thrilled that Matt sat down with us again recently.
CEDR: It’s been over a year since we last spoke. Can you please share what’s happened in terms of products and company growth?
Matt: It’s been a meteoric rise. Uncle Arnie’s is the flagship brand and it’s taking off. I’d say it’s probably the best-selling drink in the space by velocity rate, not the largest drink brand in the space, but is quickly gobbling up market share. We are seeing a 20-30% revenue increase month after month. We’ve opened up 163 Licensed Retails since we last spoke for Uncle Arnies and Nectr Seltzer Water.
CEDR: So that translates into you driving a lot of repeat business I would assume, and that the folks in the dispensaries are doing a good job of telling your story?
Matt: Yes. The price per mg is really where we set ourselves apart. I mean, Nectr is $2 wholesale, so it’s retailing between $4-$6 pretax. Arnie’s is five dollars wholesale and it’s retailing at $10. Dispensaries are trying to compete with each other, and they want to carry the best-priced products. That’s good news for the legal market, and disturbing news to those still in the traditional market. We want to drive the pricing down for cannabis in the legal market to squeeze the traditional market.
CEDR: How have competitors adapted to what you all are doing?
Matt: We have disrupted the edible market by having the most affordable 100mg edible in the market. We expect several brands to go out of business in 2021 and 2022. We expect our competitors to drive their pricing down to be competitive with us. It will be tough to compete with Fly Beverage, as we own our supply chain.
CEDR: You have plans to distribute products other than your own?
Matt: Hardcar is basically building the foundation for beverage-specific cannabis distribution. That’s really going to help the space because right now, distribution is the main pain-point, whereas it used to be manufacturing 2018-2020. Getting the product from A to B to C is super challenging in this space because nobody has distribution-like storage for beverages or proper beverage DSD vehicles.
CEDR: Is it more difficult to get a dispensary to carry a refrigerated product because of the space that the refrigeration requires?
Matt: Yes, absolutely. We’re working out solutions for that specific problem. If they don’t want to put it in a fridge, then we’ll give them something else to put it in, like a kiosk, a display case or a point of sale system such as you would see in a liquor or grocery store. I’m actively opening up those opportunities. We’re working on cooler programs with accounts as well.
CEDR: You’re moving into edibles?
Matt: We’re launching our gummy line. It’s going to shake up the game. Our gummies are half the price of most gummies in the market. A 100mg pack will sell for approximately $10. Nano-emulsified Gummies, half the price of the other Nano-product out there. 20-30 min onset, Cherry Cola and Pineapple Orange Blitz 100mg (5 20mg gummies per pack)
CEDR: Anything that you can share about how consumer behavior has changed for beverages?
Matt: I was looking at some data yesterday and it seems there has been a dramatic increase in revenue across the beverage sector since Covid started. People are buying more than they ever have and this translates to the category growing it’s market share. We’ve seen strong month-over-month growth for Arnies, and Nectr since April 2021.
CEDR: Any additional new products (besides gummies) that you have in the works?
Matt: Several new, non-drinks are in the pipeline!
We’re also expanding our brands into Massachusetts, Maine, Oregon, and a few other states (are on the horizon).
CEDR: Really appreciate the update Matt and look forward to a progress report in the coming months!
