Transforming the CBD Gummy into an Everday Supplement: An Interview with Sunday Scaries Beau Schmitt

What were the first steps you had to take to start Sunday Scaries?

The first was brand concepting because, in early 2017, there weren’t too many CBD companies. I would say there were under 50 notable ones. It wasn’t the 3,000 plus that you have today. We really wanted to differentiate ourselves because we knew there was going to be an impasse in the CBD industry eventually where – just like any other industry – ingredient-based marketing was gonna be gone.

It ultimately comes down to these specific brands people really relate to on a personal level and that’s when we really developed our mission statement. What niche we were going to go after – which was targeting stress and anxiety and those nuances that impede people’s daily lives. So, focus on the brand, focus on our niche’s customer segment which was millennials 25 to 45 that are plagued with a really unique set of anxieties.

Then the next step was putting in the first order. We found our first manufacturer, built an e-commerce site, and then we started promoting on Instagram and Facebook. That’s really how it started and, honestly, it’s almost entirely the opposite of how you have to start [a CBD business] today.

What were some of the challenges you faced in these early steps?

When we started up in 2017, the challenges were on the educational side. It’s still a little bit today, but by and large, people are educated that CBD is not marijuana, it’s not illegal, it won’t get you high. But back then, CBD was not [as well known] and the educational aspect of CBD was a huge part of our growth strategy.

It was just telling people what it was. But that’s why we wanted to launch Sunday Scaries. The existing CBD brands really focused on the older boomer generation, very medically driven – like pharmaceutical-style brands – or they were in the cannabis world, like in dispensaries. So, we saw a large opportunity in bridging the gap of CBD to the general public and that was our first big challenge.

What should people avoid when starting a CBD business?

Make sure that the hemp is grown in the United States. There are numerous articles that estimate like 70%of hemp comes from China which is bad because the Chinese agricultural system plants hemp in between crop cycles. So, they plant it in between normal crops because hemp is really good at absorbing heavy metals and pesticides that are in the soil. If that hemp is transported to the United States, it’s obviously going to have those residual heavy metals and pesticides. So, I would make sure the hemp is sourced from a U.S. farm.

Then you want a really reliable manufacturer (lab) that’s extracting the CBD because a great thing that’s happening right now is testing, compliance, and control are really sizing up. That wasn’t around a year or two ago. Focusing on the quality is paramount because that transparency is necessary to really grow a CBD business.

I’ll add one more thing. From a marketing standpoint, it’s really about defining your customer niche. If you’re a CBD product for everybody and for every age, then you’re a CBD product for nobody. Right? If you’re a CBD product for bicyclists and you’re going to advertise in bicycling magazines and you have the perfect topical and ingestible for cyclists and that’s your niche – then I think that’s the most eligible way to come into the industry right now. Trying to create just an everyday CBD product is going to be met with a lot of resistance, in my opinion.

How much capital would one need to start a CBD business and where would this money go?

I would say $50,000 to $100,000. We launched [Sunday Scaries] on about a $30,000 budget back in 2017 and I would say the increase is a little bit. I mean, all you really need is a small marketing budget, an e-commerce site that can be done on Shopify, and your largest purchase is going to be a minimum order quantity from a contract manufacturer.

Obviously, being around for over 3 years, we have very defined manufacturers for our products with custom formulations. But if you’re just starting out, there are a lot of companies that do white-labeling products and you’ll just have to be able to meet their minimum order quantity threshold in order to get that product labeled and filled.

How do you go about marketing your CBD business?

We always focused on retention and our customer word-of-mouth is really what helps grow our business. We offer a 100 percent money-back guarantee and that breaks down a lot of barriers for customers if they’re worried about spending. CBD products are expensive – not so much comparatively if you were looking at turmeric, coconut oil, and other supplemental products on the market – but they are expensive. So, offering that guarantee to stand behind your product is definitely a paramount thing that we’ve done since the beginning.

On the marketing side, without divulging internal strategies, I would say finding that scalable channel is what’s most important. So, whether you can display through podcasts or connective TV or Facebook and Instagram or influencer marketing or affiliate. I’ll just go back to the bicycling example – if you can run display ads on a bicycling website and everything is marketed towards the bicycling crowd and that’s scalable for you, then that’s the best way to go.

The most important thing is finding a scalable channel where you’re putting a dollar in and getting more than a dollar out.

Since the industry is so unregulated, what actions does Sunday Scaries take in order to ensure customer safety and satisfaction?

We have an internal 3-step quality assurance system. We make sure that the sourcing is correct, we have our labs that test all of our raw products and we get a Certificate of Analysis (CoA). And then after our manufacturer formulates and completes the final product, that’s also tested by a third-party to make sure there are no additional heavy metals that can occur during the manufacturing process, that the amount of CBD is in the product as planned, and that there’s no THC in the product so there are no psychoactive effects for the customers.

Proper sourcing is in the 3-step assurance system which we created internally is quality sourcing in the U.S., CoAs on the raw product (the CBD distillate), and then CoAs for every batch on the finished product so that the customer is getting without a doubt what they’re paying for.

Have you noticed any trends when it comes to consumer behavior?

CBD gummies have been pretty consistent, especially for us. We specialize in CBD gummies and under the gummy category, we have special releases for the LGBTQ community, for Breast Cancer Awareness Month, for vegans – so, very definitive niches and we’re supporting causes related to those missions.

But gummies by and large are our top seller. And I think the reason for that is when you grow up and you start taking a new supplement, you start taking vitamin gummies, right? You start with a Flintstones† gummy. Gummies are just a non-threatening way to try something new. And it’s also delicious – you’re chewing on a gummy bear that’s specially infused. It’s really a fun and better way to take CBD if you’re new to CBD.

Do you think there’s anything consumers gravitate towards when it comes to a CBD business?

One is going to be trust. Does the company have reviews? Testimonials? A fast website? Customer service line? An address at the bottom? I mean, there are so many shady CBD companies out there that all it takes is going to a few websites to differentiate what a well-established, trusted CBD company looks like versus not.

Customers and people, in general, are pretty intuitive and intelligent when researching products. Especially with the proliferation of social media in the past 15 years.

Do you think there’s a market for other non-psychoactive cannabinoids, such as CBG and CBN?

I do. We do, as a company. It’s too soon to tell what implications those [cannabinoids] will have. The economy for scale isn’t there yet for them and we still have a lot of room to go with the FDA and the CBD market as it matures in the United States. [Sunday Scaries] just expanded to the United Kingdom last month which is going very well – so, there are other opportunities outside of the United States now in international markets that are also opening up to CBD.

If you were to offer one piece of advice to someone just starting in this industry, what would it be?

I would say to partner with someone with influence. A name can open up channels that are unique to themselves. So, if you’re starting a niche company and you want to do something with, let’s say, bicycling – find a cyclist that endorses it and run with that. Don’t go at it alone where the only thing backing your company is your resume.

What do you think the future outlook of the cannabinoid industry is?

I honestly think that the pharmaceutical world is scared by it because I think that CBD is going to have a much more substantial impact on the health and wellness industry. All the research is still in the process, so there are no definitive health claims that companies can make. But I think it’ll be a mainstay and all that will happen going forward is different products are going to come out in different niche ways to help with certain ailments.