Nicolas Guarino, CEO of Jaunty, knows a thing or two about survival. Having weathered the economic and political turmoil of Venezuela under Chavez, he then faced the daunting challenge of a 99% CBD market crash in the USA. His story offers valuable lessons for cannabis investors seeking stability in an industry known for its intense price pressure and shrinking profit margins.
Guarino’s journey began in southeastern Venezuela, where he grew up working with water buffalo on family farms. This experience instilled in him a strong work ethic and a deep connection to agriculture. He brought these values with him to New York when he went to college, where he eventually entered the cannabis industry.
From CBD Crash to THC Opportunity
Jaunty, launched in 2017, initially focused on producing and supplying high-quality CBD oil for manufacturers across the US. However, the market quickly became saturated, leading to a drastic price compression. By 2020, the price of CBD oil had plummeted to a mere $65 per kilo, a 99% drop from its peak. This devastating price decline threatened to bankrupt Jaunty.
But Guarino saw a silver lining. New York’s move towards recreational cannabis legalization presented an opportunity. He realized that to thrive in the THC market, Jaunty needed to create a distinct brand, rather than relying solely on wholesale production.
Building a Brand, Not Just a Product
Guarino initially considered partnering with established brands like Old Pal, but ultimately decided against it. He recognized that such arrangements would pull Jaunty back into the commoditized market he had just escaped. Instead, he decided to focus on building a brand that emphasized quality and effects.
This decision led to the creation of Jaunty’s product lines, starting with vapes and expanding to solventless Live Rosin Gummies. By prioritizing brand identity, Jaunty has managed to differentiate itself in a market where standing out is crucial.
A Family Affair with a Focus on Efficiency
Jaunty’s operations are more than just a business; they’re a family affair. Guarino brought in his cousin from Venezuela, a seasoned logistics expert, to run Jaunty’s distribution. His cousin’s experience managing 75 poultry trucks across Venezuela in challenging conditions proved invaluable. This expertise has helped Jaunty achieve an impressive 4.3% distribution cost relative to sales, ensuring profitability without compromising service quality.
Cost-Effective Strategies for Growth
Jaunty’s approach to innovation is calculated and efficient. They invested in butane extraction for specific products, projecting a return on investment within four to five months. The company emphasizes solventless products, a trend towards purer, more natural cannabis experiences.
By focusing on outdoor-grown cannabis, Jaunty keeps costs low while maintaining high quality.
A Consumer-Centric Approach
Jaunty strives to create an accessible brand for cannabis users, particularly those interested in oil-based products and those transitioning from flower or nicotine vaping to cannabis oils. They prioritize consumer education, explaining oil types, effects, and product benefits in their packaging and interactions.
Instead of adopting an exclusive or elitist image, Jaunty embraces a welcoming and approachable approach. This inclusivity makes cannabis feel less intimidating and more accessible to new users.
Guarino’s story demonstrates that resilience is a valuable asset in the cannabis industry. By adapting to market changes, prioritizing brand identity, and focusing on efficiency and consumer education, Jaunty has found success amidst volatility. His journey offers valuable lessons for entrepreneurs and investors seeking to navigate the complexities of the cannabis market.
