Jaunty’s Path to Profit Amidst CBD Market Turbulence

CEO Nicolas Guarino’s Journey from Venezuela to a Thriving Cannabis Brand

Does the CBD market feel stagnant, with constant price drops and fewer profits? This situation has created significant challenges for cannabis investors, who are seeing returns dwindle rapidly.

Jaunty‘s CEO Nicolas Guarino understands hardship well. Before dealing with the drastic 99% decline in the CBD market, he survived the economic turmoil in Venezuela during Chávez’s regime. Today, amidst a cannabis industry filled with repetitive products, Guarino has transformed Jaunty into a profitable business by focusing on solventless products and developing a relatable brand. His approach highlights how resilience and adaptability are essential across various markets.

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Roots and Resilience

Guarino’s background is steeped in agriculture. He grew up managing water buffalo on his family’s farms in southeastern Venezuela. After moving to New York for his studies, he carried with him a deep work ethic and strong family values. These experiences laid the groundwork for his journey into the cannabis industry.

“Our family has always believed in hard work,” Guarino shared in an interview with Benzinga Cannabis. “The lessons from the farm have profoundly influenced how we run Jaunty. It’s all about understanding the land and the plants, which enables us to produce quality cannabis.”

Courtesy of Jaunty

Coping with the CBD Collapse

Guarino launched Jaunty in 2017 as a supplier of premium CBD oil to manufacturers across the U.S. However, the burgeoning market soon faced oversaturation and price drops. By 2020, the price of CBD oil plummeted to just $65 per kilo, marking a staggering 99% decrease from earlier highs and putting Jaunty’s business model under severe strain.

“The CBD industry became about large-scale operations,” Guarino noted. “The Farm Bill favored mass production, leaving little room for smaller, quality-driven brands. We were on the brink of bankruptcy, but we refused to give up. We identified an opportunity with New York’s move toward legalizing recreational cannabis.”

New York’s decision to grant licenses to existing CBD operators offered a chance for growth. Guarino recognized the need for Jaunty to build a distinct brand in the THC market rather than relying solely on wholesale production. “It became clear we needed a brand that prioritized quality and customer perception,” he added.

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Creating a Unique Brand Presence

As THC legalization gained momentum in New York, Guarino considered collaborating with established brands like Old Pal. However, he quickly realized that co-branding could drag Jaunty back into the oversaturated market he sought to escape.

“White labeling is typically for big operations with extensive automation,” he explained. “We don’t have that; we possess advanced extraction skills from our CBD experience. Consequently, we turned our focus to building our brand rather than remaining just a supplier.”

Courtesy of Jaunty

This strategic pivot led to Jaunty launching product lines such as vapes and solventless Live Rosin Gummies, thereby establishing a strong brand identity that sets them apart in a crowded marketplace.

A Family Affair

For Guarino, Jaunty extends beyond a business; it’s a family venture. He enlisted his cousin from Venezuela, who has extensive logistics experience, to handle Jaunty’s distribution. His cousin previously managed a fleet of 75 poultry trucks in Venezuela, a skill set crucial for Jaunty’s operations.

“With him at the helm of our logistics, we’re the only company in New York that offers delivery within 48 hours,” Guarino stated. “Having his expertise overseeing this important part of the business has been a true asset.” This efficient logistics system resulted in a low distribution cost of just 4.3% of sales, boosting Jaunty’s profitability.

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Innovative and Cost-Effective Strategies

Guarino’s choice to invest in butane extraction for select products highlights Jaunty’s strategic innovation. “The total setup for our butane extraction was approximately $500,000,” he stated. “However, with strong branding and distribution, we anticipate a return within four to five months.”

Solventless products have become a focal point for Jaunty, mirroring a broader industry trend towards more natural cannabis products. Guarino explains that solventless extraction is not only cost-effective but resonates well with consumers due to its purity.

Courtesy of Jaunty

“This method significantly reduces our initial expenses while still allowing for high-quality output,” he said. Furthermore, focusing on outdoor-grown cannabis helps keep production costs down without compromising quality.

Welcoming Cannabis for All

Jaunty endeavors to develop a brand that caters to cannabis consumers interested in oils, especially those transitioning from traditional flower or nicotine vaping. Unlike several extract-centric brands that appear elitist, Jaunty aims to create an inviting atmosphere for newcomers.

“Many brands can make consumers feel excluded. Jaunty aims to simplify cannabis, making it accessible for everyone,” Guarino remarked.

This welcoming approach resonates particularly with former nicotine vapers curious about cannabis, as Jaunty offers an easy entry point into the market.

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Educating the Consumer Base

Guarino believes that most extract-focused brands often cultivate an exclusive culture amongst users. He explains, “They have an attitude of ‘if you know, you know.’ If you’re not in the dab crowd, you’re not cool enough.” In contrast, Jaunty strives to demystify cannabis and make it approachable.

The company prioritizes consumer education, providing information about oil types, effects, and product benefits right on the packaging. Guarino noted, “We seize every chance to educate, clarifying oil types and why a consumer might opt for one product over another.”

As Jaunty continues expanding, they emphasize gaining insights into their consumers, even incorporating QR code surveys on product packaging to gather direct feedback.

Courtesy of Jaunty

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