Building a Private Juggernaut: Efficiency at Every Step with Mario Naric

Building a Private Juggernaut: Efficiency at Every Step with Mario Naric

Bryan Fields: What's up guys, welcome back to another episode of The Dime. I'm Fields, with me as always is Kellan Finney, and this week we've got a very special guest, Mario Naric, CEO and founder of Motif Labs. Mario, thanks for taking the time — how are you doing today? Mario Naric: Thanks a lot guys, really appreciate it. I'm doing really well, excited to have you here. Kellan, how are you doing? Kellan Finney: I'm doing great, really excited to talk to Mario, really excited to talk Canada and extracts and how the Canadian market is doing these days. How are you doing, Bryan? Bryan Fields: Yeah, I'm excited. I think there's a lot of scaling that we're going to get into today, and some of the fun nitty-gritty, and it turns out that profitability is a key driver for what we are today but going forward — excited to get Mario's take on that. But before we dive into the fun topics, we've got a little East Coast/West Coast battle. I guess the way to describe it is: if you had to visit a city you hadn't visited enough, is there a city on the East or West Coast of the United States that you'd prefer? Mario Naric: Yeah, it's biased because I haven't spent a ton of time on the East Coast, but I'm choosing San Diego, I'm choosing Vancouver — it gives you the slow-down pace but not too slow. I actually just went to the East Coast of Canada and it's beautiful, but I'll go there maybe 10-15 years from now, when I've slowed down a bit. Bryan Fields: I love it, I love it. I tried to pull it out, but I guess there were no leading questions there. Bryan Fields: So Mario, let's dive into your background — how you got into the cannabis space and the origin of Motif. Mario Naric: Sure, I'll give you the high level and we can dig in. I'm a process engineer — I went to school for chemical engineering, worked in oil and gas out of school, and did a bit of management consulting as well. I was working at a refinery around the time I conceived this idea, around 2016. I saw legislation coming, saw everybody fixated on growing — I don't know anything about growing, never learned that — but I'm very comfortable with pumps, pipes, and metal. When I realized everything was becoming extract-based, a buddy and I went to Oregon and Washington back then, and they were already making all sorts of fun stuff. We realized the starting point of anything that isn't obviously flower was the extraction process, and that process is very much up our alley in terms of expertise — it's pretty much refining. You take oil and gas, we take the crude or trim nobody wants, and turn it into liquid gold. Instead of making jet fuel, now we're making vape fuel — same difference. We kicked it off as a B2B business, and zoom forward a few years, we're definitely more of a brand business that also participates in B2B. Kellan Finney: Were there a ton of similarities when you were getting started, were there surprises? Obviously your previous background brings advantages, but were there unknowns that surprised you, or differences between the two industries, or were they more similar than people realize? Mario Naric: Oh, the experience was very different. Fundamentally, the technologies for extracting cannabis have been around a long time, so none of them were foreign — CO2 extraction has been around for decades, decaffeination, extracting essential oils, distillation, which I was running. So the technologies are all kind of there, but it's a very different industry — couldn't be more different. Oil and gas is archaic, it's a dinosaur, you can't change anything, the equipment's been there a hundred years, and everything's a huge safety hazard. That's what killed my desire to stay — I'm about wanting new, fun, exciting things, and cannabis was the exact opposite. Put the technology aside, the industry couldn't be more opposite, and that's why I love it, that's why I made the jump. Bryan Fields: When you first decided to do extraction, there's CO2, hydrocarbons, ethanol — all utilized in other botanical industries like palm oil or coffee decaffeination. How did you settle on your approach, and did you play with all of them? Walk us through those first few days that led to choosing your current platform. Mario Naric: That brings me way back — those are the questions I was asked raising my first round: what's your IP, how are you making the oil. We actually started with CO2, for a couple reasons. Ethanol and hydrocarbon have a lot of safety hazards, so the building code becomes complex, expensive, and lengthy, and speed was what we needed — CO2 is a low-hazard technology, we didn't need to do crazy things to get it installed. Second, it had been around a long time — a lot of people bought brands that popped up because of cannabis, but we went to companies that had been making CO2 extractors for decades, and their technology was really good, highly automated, and relatively simple to get going. It was a great basis for us. Everybody was challenging us — 'distillate's a commodity, the industry hasn't even started and distillate's going to be 80% of the industry' — not yet. The people who doubled down on the niche shoestring side really struggled, because that market still isn't where it needs to be in Canada, and five years ago it was non-existent. So we thought: the data shows CO2 makes good distillate, distillate makes up 80% of the market, we're going to do that at scale at low cost, and go from there. Bryan Fields: One of the really difficult balances in an industry as challenging as cannabis is building a business that's sufficient and profitable today based on data, but with an eye for the future — because if you're too far ahead, you may not survive to when the industry catches up. Was the plan always: lock in CO2, then take it up a notch into hydrocarbon? Mario Naric: For us it's always been focus, execute, and once that's stabilized, add on. CO2 was diverse enough for us — when we started, nobody even had good flower that could make live resin vapes, so it was a moot point. You couldn't make a live vape, or if you wanted to, you'd pay 8 bucks a gram times six grams — nobody's paying $200 for a vape, so it just didn't work back then. It gave us a broad range because we toll-processed, made bulk distillate for people, and made some basic distillate products to start. Fast forward, we've been operating four years now — a long time in cannabis, though it doesn't sound long. We've been licensed four years, and now we have the capacity to make a ton and a half of distillate a month — about 1,500 kilos — it's clockwork, I barely think about that business unit anymore, it's automated and efficient. The industry is starting to open up — we have 22% of the vape market, and now, well, liquid diamonds are starting to really pop for us, but up until about three months ago, probably 95% of that was distillate. Now that we're getting into liquid diamonds, and live resin is becoming a viable category, Motif's going big into hydrocarbon to expand our capabilities and addressable market. The timing is right — we've never been first, but we tend to hit best when we focus, and that'll be the same strategy for hydrocarbon. Kellan Finney: You guys seem like a very data-driven organization. Was expanding the product portfolio into other solvent-based methods always on the roadmap to capture more of the market? And as the market matured, is that something you watched — consumer preferences changing — to then strategically insert higher-end products? Mario Naric: It's all of the above. It's the benefit of being private and nimble — my whole team's here, I'm the founder, still the CEO, and the first ten people who started this place with me are still here running it. We stay very tight on everything and never overinvest ahead of what the model says — what does a vape have to sell at, what are the inputs, does it make sense, can I get supply consistently, do I have the bandwidth? We've been ripping with CO2 for the last three years, and every time we wanted to allocate capex to hydrocarbon, the market wasn't there, the flower wasn't there, or we didn't have the bandwidth to do it well — it's a relatively dangerous technology, you have to really focus on it. So we saw leading indicators that this makes sense, our team is stable, we can install it, and we see a viable market. Our entry into hydrocarbon has actually been very different than you'd think. We always wanted to go into hydrocarbon, but even to this day the flower isn't quite consistent enough if you're not a grower yourself, so we spent the first 12 to 14 months perfecting a process that makes THCA crystals, which then turn into liquid diamonds at scale. You see all these Instagram videos of mason jars and vacuum ovens taking 40 days to turn into diamonds and sauce — looks cool, but it's inefficient. Until I can figure out something better, I'm not launching a mason-jar operation — it's crazy they literally call that 'jar tech.' When you open our extractor, we put cannabis in and out comes 99.9% pure THCA crystals, with a little post-processing. Nobody's going to keep up with us on diamonds, and that's created a base for us to expand hydrocarbon and start testing live resin. What we're focusing on with live resin is reciprocal partnerships with growers — to really own live resin you need great extraction paired with great flower, and those two things need to come together to win. So the hydrocarbon side is really a B2B opportunity to start on live resin, and then we'll introduce our own strains as we secure supply chain. Bryan Fields: Are there tools and technology from your previous life at Exxon Mobil and the refinery that you've applied here to hit these efficiency numbers, since we've heard from other extractors that their numbers aren't in that ballpark? Mario Naric: It's less tools, more engineering principles. When I started, I brought in two key ops leaders who worked with me at Exxon — one, Anna, is a highly technical engineer, the smartest engineer I know, and Lucy, a lab technician manager. That's in our DNA, and I've been trained as an engineer, so I want process efficiency at every step — how much am I losing milling, decarbing, in extraction, in winterization. We built models that tell us where we're losing product, and based on where you're losing the most, you zone in and understand why, then tackle that project. Early on, we retrofit our CO2 extractors to inject ethanol, which let us cut extraction time and double our capacity with about a $5,000 investment and two months of engineering. When you find those things, it's like — I don't need three million more dollars of equipment, I just need 50 grand of pumps and we're cranking out oil. We've been doing that every step of the way — it's wild how well thermodynamics actually works. I went to a bunch of labs early on and it was just people who loved cannabis feeling their way through it. I remember someone showing me distillation and saying, 'yeah, when it starts bubbling a lot, then I do this thing,' and I'm like, there's a science to all this — temperatures, pressures, flow, they're all related. Extraction is not an art form, it's very much science. Bryan Fields: That's the best explanation of the cannabis process I've heard, because we've talked to people who describe it as a feel thing, and when I asked what happens when they're sick, they said it doesn't go as well — which seems like a problem for a sustainable business. Mario Naric: There's a know-how, especially with live resin and picking cultivars that generate yield — that's a little more art. But even that's just: give me all your fresh rows and samples, I'll run them through a matrix, get my yields, do a sensory pass, these three yielded well and taste good, we'll run with those. It's all science. On the technology side we didn't overcomplicate it — people were buying huge washing machines with ultrasonics and whatever; the technology already exists, it's tried and true. We built some Excel spreadsheets, at the very least — it's all spreadsheets, man, but the whole team's committed to it. Bryan Fields: Take us through the sizing of what you were forecasting and how you selected your hydrocarbon capacity — that's a big jump from CO2. Mario Naric: We always pilot — walk before we run, prove the model, prove the technology. We started with one small hydrocarbon room, maybe 10 by 10 feet, and one relatively small extractor. On that we perfected the THCA process — six months ago we were making 20 kilos a month out of that little rig, and now that's up to 100 because we've perfected it. All the while we knew we needed more, so we had a second room phased in behind it. Now we've got two rooms, a set of equipment that lets us rapidly push more product through, so we'll be in the neighborhood of 300 to 400 kilos of THCA — whether diamonds or live resin, interchangeable. The decision was easy — it was only about 20% more cost than doubling it, and we have a lot of demand on the liquid diamond side, plus a lot of different outputs — even if none of that works, I can make crude and turn it into distillate, or throw in hemp and make CBD isolate. Extraction is a very diversified, de-risked business. We're selling a crazy amount of liquid diamonds, everybody wants a piece, and a lot of our LP grow partners want us to help them make live resin, so we're pretty well sold out — we just need to get them in and get going. Kellan Finney: When you're scaling with all this demand, and there's a global movement with Canada actively exporting, how do you choose the size to build to with current demand versus what happens if, say, the U.S. opens and demand goes 10x? Mario Naric: If you dissect what it takes to launch something, there's usually something relatively cheap that's relatively long lead time that you want to move forward with, and as you get closer you balance lead time against investment risk. We got a facility that was 20,000 square feet and had first refusal on another 20,000, so we solidified 40,000 square feet but only used 10,000. Over the first two years I thought it'd be a nightmare to fill 15,000 square feet, but 18 months later we were busting at the seams in 40,000. So we got another facility — 75,000 square feet, just got licensed. I don't need more than 15,000 of those square feet right now, but it takes a year to get licensed, so you're constantly moving parallel paths but leaving them flexible enough to pivot. A year ago I wouldn't have said I'd be rolling my own joints, but because I had the space, I got a couple of joint-rolling machines at 20 cents on the dollar after running into outsourcing risks, and now we're rolling about 30% of our own joints and moving that up. You remain nimble, but you have to model it — a lot of cash flow conversations, a lot of risk mitigation, but don't overcommit on a massive investment without enough market validation. Bryan Fields: I think it's important, especially in a hypergrowth market — do you think you've benefited from learning lessons from other companies in Canada who accelerated too fast, and understanding what not to do? Mario Naric: Absolutely. It's crazy to look back and understand how some of those decisions were made. There was a point where taking a photo of a piece of equipment nobody knew worked could pop your share price by $20 million. When I was raising my first round, my competitors at the time were MediPharm Labs and Valens, and they both had market caps of about $750 million — add a PhD to your scientific advisory board and suddenly it's $800 million. People kept investing in crazy things. We never had that luxury — we were later, never public, and our investors don't mess around — successful entrepreneurs, privately held, no room for outlandish bets and no reward for them. The reward was: get profitable, don't waste the money I just gave you on stupid stuff. We benefited from seeing the rise and fall of things before we got licensed, and from not being public — frustrating, because if we had this business three years ago with those metrics, we'd be worth billions, bigger than Apple, based on hype. We also saw how the B2B market was unfolding as we got licensed, which is why we pivoted quickly to private labeling — we went B2B, then white-labeling, brought some U.S. brands and legacy market brands to the legal market, and that's how we stayed profitable and grew, since B2B alone didn't quite work at the beginning. That ultimately got us to our own brands, which has been a super fun transition personally and professionally. Bryan Fields: I'm curious about that transition — your skill set seemed to be extraction, and branding/customer sales is a completely different beast. Did you bring in other people, or was this always the plan? When did you realize brands would be a key piece of the puzzle? Mario Naric: Early on, when I started this, I was the chief operating officer — I designed the process, got the license, and the board made me CEO almost three years ago now. Pretty early I knew we needed our own products and brands. I saw what everyone was pitching for white label deals and thought, are their ideas better than ours? Maybe not. We saw what the LPs wanted, what our brand partners wanted, and realized we could find our own place in this. The biggest challenge was convincing the board we weren't going to cannibalize our other business units. As I explored it, I realized I had good ideas, and a couple of my people did too. We started with a CBD-forward brand, back when nobody was focusing on it, to prove the concept without being competitive with anybody — we showed we could make good money on a CBD brand and got listings quickly. Then we came up with the brand I'd always wanted to launch, which became Boxhot — fun, outrageous, loud, hit it hard. Once that brand business started developing, we built a proper team — I have an in-house group of designers, a creative director, Amanda, who joined two and a half years ago, just as ADD as I am, and if you get us in a room long enough we'll have enough ideas to last five years, but she brings them to life. I've got a marketing team, a sales team, all in-house now, with a bunch of people from CPG backgrounds. Kellan Finney: What was the itch that made you realize you had to take this step — was it a feeling, was it part of the profitability equation of giving up too much margin? Mario Naric: It was realizing I really enjoy designing products. I was sitting on calls with LPs and it ended up being me inventing the products for them, and them saying 'yeah, sounds good, we'll get one of those' instead of them bringing ideas to us. I realized we actually had the good ideas — I didn't know I was good at that. Through pitching and winning business, I fell in love with it. What wasn't fun was not controlling your own destiny — having a revenue stream fully in your control versus the B2B business, which back then was frustrating, piecemeal, comes and goes. I wanted something I could forecast and count on, and the margin is higher if you do it right. So it was everything — interest, control, economics, enterprise value. A manufacturer can only ever reach a certain enterprise value; brands are ultimately what succeed. Distillate is a commodity, but a well put together vape that tastes good in nice hardware is not a commodity. It's just been an awesome evolution. Kellan Finney: Do you think your brands will expand first, or will you expand manufacturing into another location first? Mario Naric: We already have a second facility, and we have several brands now. Boxhot is our top brand — we have the number one vape market share, and top three in infused pre-rolls. We have Debunk, focused on high-tech premium products like liquid diamonds, and Rizzler, a closed-loop, fun, vibrant, next-gen consumer play. We have a very broad portfolio — we're the sixth largest LP in Canada by market share, number one in vape by a mile, about 21% last month versus the next highest around 10%. Our brands are driving us forward, but so is bulk B2B — a lot of people, we have no problem making stuff for others. We're not going to have 90% of the vape market, but presumably we could have 90% of the oil that goes into the vape market, so we look at that too. What drove our new facility in London was shipping about 600,000 to 650,000 units a month, so we needed more warehousing and packaging room. Bryan Fields: Do you want to control manufacturing for all your brands moving forward, or would you consider white-labeling with a trusted partner to expand into the U.S. with low capital expenditure? Mario Naric: Within Canada, we're going to control what we do, and increasingly we are — we're taking more control over infused pre-rolls, which we used to outsource a lot, and some of our infusion. Part of our success has been the control to take margin and avoid surprises — or at least when there's a surprise, you can get to the bottom of it because you can walk in and find the solution. For the U.S., it'll have to be a different approach — we don't have the balance sheet to buy manufacturing facilities, so it would have to be a strategic alignment with a bigger U.S. MSO, a bigger cannabis company, or a bigger tobacco company. We're already looking at international bulk — we'll probably have our first international export of THCA in the next six weeks. Taking brands to other markets is a different beast that would need a strong strategic partner to do in a big way, but we've got a great portfolio of brands and good technology and IP, so finding the right partner is something we're circling around. Bryan Fields: There's a trust aspect from the consumer standpoint behind every product, and also the complexity of producing it — one aspect you mentioned is supply chain, and how low-grade product inputs make it very difficult to get high-grade product out. Mario Naric: In Canada, if you hit a certain clog rate on a vape, they'll shut your listings down at the provincial level, so it's a big task. White label has been tricky — our white label business has contracted a lot because it's a tricky business. A lot of big U.S. brand names came up to Canada and none of them have really done anything substantial or with longevity, and a lot of bigger LPs tried to go asset-light, which worked in some cases, but in others the people they bet on went under. We've kept trying new things by outsourcing and then strategically de-risking as we prove a product category is viable, increasing our margins. Going to the U.S. is a whole different, expensive story, but we've got the brands and the tech — throw us in any lab and we'll make it better in a month, easy. Bryan Fields: Any specific labs you're speaking to? Mario Naric: Not worth mentioning yet, it's still high level. People reach out and we entertain the conversations, but we haven't gotten deep, mostly because we still have a lot of headroom in Canada — we need somebody to really get integrated with us to take what we have outside these borders. Bryan Fields: Have you considered expanding into cultivation? Mario Naric: No, not at all. I have a theory about maybe buying an outdoor grow to secure high-yield, low-cost supply for extraction-grade material, and we monitor the oversupply environment in Canada, which is so vast we have a lot of runway there. But the idea that we could ever grow good craft flower is just ridiculous — it couldn't be more different from what we do. We have no ambitions to enter flower. We're heavy in infused pre-rolls, and now that we can roll our own and buy so much cannabis, we could presumably get into pretty good non-infused pre-rolls too. We like engineering things — I don't want my product quality dictated by the sun, I want to see the data. Growers know how to grow, and we love partnering with them. Kellan Finney: Are there differences between the U.S. and Canada that most listeners, likely in the U.S., are unfamiliar with, either operationally or from a consumer-facing standpoint? Mario Naric: There are so many differences, and every state is its own universe too. Broadly, there are a lot of barriers to entry in Canada, which are hard if you're new but very good once you've established scale. I can't just sell to a retailer — I have to convince the government distributor that I'm a good supplier, consistent, hitting Health Canada's quality specs, keeping them in stock — and that relationship is built over roughly 20 product calls with each province over the last four years; we know these people personally, which is a huge advantage. Marketing is very stringent, and the bigger you get, the less you can push boundaries — competitors will complain, Health Canada will tell you to back off, and that's fine, it's a level playing field. You have to win on the ground, with your reps at the store level, convincing the people who own and work in the stores. I can't just throw up billboards and hype people up. And on quality, Canada started very stringent, which I think has been good — we've all cracked the code on Health Canada's cGMP, which is not an easy thing to crack, so we operate at a higher degree of batch records and quality than places where there was no federal oversight. A lot of U.S. operators will find it hard to change habits built under looser rules once stricter legislation comes in. Bryan Fields: I agree — it's going to be a heck of a journey for operators used to doing things a certain way once cGMP-style guidelines apply. Mario Naric: You have to live in that environment to learn how to optimize. Nothing was as simple as we thought — even how we cleaned equipment early on killed our utilization by like 75%, and through interpreting the regs and changing how we operate, we learned how to meet cGMP without shutting down the lab every other day. If we hadn't figured that out, we'd be running at maybe 30% of output. I think Canada's good operators are best prepared to take on global legalization from a regulatory standpoint, maybe not from a marketing standpoint — you'd want that U.S. marketing muscle behind it — but on manufacturing and navigating regs, we're miles ahead of a lot of them. Kellan Finney: Any upcoming international news you want to share? Mario Naric: We didn't even have the bandwidth to think about it, it's kind of fallen in our lap a couple times and then became a strategy. There's a lot of noise about international markets historically focused on flower, which we don't participate in, but on the THCA side and THC-free isolates like CBN and CBG, there seems to be a big path to getting product out internationally. We've got a path into Ireland and are exploring paths into Australia. It's strange — in some instances you don't need GMP through the whole value chain, in others you do, so we're even looking at building a small GMP room focused on a subset of products so we can export. It's becoming a bigger part of what we talk about every week — if I can sell a kilo of something for $10,000 and crack that code, it'll be a nice bump. Bryan Fields: How much do you enjoy reading the regulations and figuring out the most efficient way to get product where it needs to go? Mario Naric: The international regulatory stuff I leave to my head of regulatory, it's deep and heavy and I don't have time. What I like is finding opportunities in product design — that's how we came up with the 1.2 gram vape, which took us to number one. Everybody was making one-gram vapes at 85% potency, about 850 milligrams of THC, but the regs allow up to a thousand milligrams, so nobody was doing a bigger vape — we did that with Boxhot and made it a differentiator. That's the fun stuff — cracking the code on what the consumer wants that nobody's made yet, and owning a market. We launched two-gram vapes in Canada at 50% THC and have 99.8% of the two-gram vape market right now. It's awesome creating a category like that. Bryan Fields: A lot of advanced math going on over there. Mario Naric: Gets the job done — it's that spreadsheet, man. The whole team's committed to it — transparency to the financials is the big thing for us, we aren't rewarded for market share without profit, and even our comp structure is based on EBITDA, all set up to drive profitability and growth. I have my investor group to thank for that — they're very disciplined serial entrepreneurs, pretty much all of them. Kellan Finney: Is this the first business you've started and run, or were there other businesses growing up, like a lemonade stand, that hinted this would be your path? Mario Naric: I didn't know I was entrepreneurial until I started working and realized I hate not being able to do what I want, I hate red tape. I got a taste of entrepreneurship when a buddy and I bought two income properties right out of school, and did really well — I spent maybe 10 hours on it and made twice my salary, and thought, this is fun. I didn't really start exploring being an entrepreneur until my early twenties, but I've always been tolerant of risk — it felt riskier to stay an engineer than to leave and join something as crazy as cannabis becoming legalized. This is the first real venture though — zero to a hundred real quick — I did not expect my first venture to be 300 people in a highly regulated environment making vapes for a whole country. Bryan Fields: What's the most expensive lesson you've ever learned? Mario Naric: You learn them every day, every hour sometimes. Early on there's this imposter syndrome thing — you put people, companies, or things on a pedestal, thinking if they're doing this, what do I know. But the reality is, if you're questioning it, you've got to trust your instincts. The compounding effect of not having that confidence early on is costly — you have to gain that confidence quickly. Now I'm very confident in my decisions, I don't worry about what anybody else is doing unless they're strategically attacking me. Early on you think, well, this LP is worth a billion dollars, they must know what's going on — you have to get over that as an entrepreneur quickly, because I've since seen companies with a billion dollars of market cap go bankrupt. Kellan Finney: Are there any challenges or opportunities you'd want a fellow entrepreneur building a product to know about — something you're facing regularly that you'd want someone to reach out to you about? Mario Naric: We're starting to insource this and build it ourselves with our sales and finance team, but six months ago, if somebody came to me with a solution that amalgamated a bunch of data sets — it's all about data, and in Canada it's fragmented, coming from big retailers, provinces, some website scrubbing — there's a huge opportunity for someone who understands the sources and can amalgamate them into insight reports for companies. If you'd come to us six months ago, we'd have hired you, and even now as the sixth biggest LP, I'd hire you to accelerate what I'm trying to do. You have to understand every move you make — it's not worth visiting all 3,000 stores, you need to know which 20% of stores move 80% of vape volume, how you're indexing there, and why. It's a huge competitive advantage if you can harness that instead of needing 800 territory managers when 15 talking to the right stores at the right frequency would do. Bryan Fields: What question do you wish more people asked you? Mario Naric: I don't know, people ask me a lot of questions — 'how are you' is a good one. I'm good most of the time, but sometimes I'm really not, sometimes it's just how many things are going to punch me in the face today, spread the punches out, I can take a lot, but sometimes it gets heavy. The beauty of being an entrepreneur is you hit those low points so often you dissociate from them and know it's just for now. Find the thing that breaks that spiral — for me it's a bike ride, a hot tub session, and a beer, and I'm good as new, like I was just tripping out for a second, and it's fine, let's keep moving forward. Just go away for ten hours, the world's not ending, it's just vapes, chill out. Kellan Finney: Dream dinner — three people, dead or alive? Mario Naric: I want Anthony Kiedis, I love the Red Hot Chili Peppers, definitely want him there. I'd go with a good comedian, Sebastian Maniscalco. And then maybe a good scientist, like Einstein, so we could have a really deep conversation about what cannabis even is with those guys. Bryan Fields: When you got started in the cannabis space, what did you get right, and what did you get wrong? Mario Naric: I think what I got right was being open-minded, and being a big proponent of avoiding sunk cost fallacy — just because you said you'd do something before doesn't mean doubling down is the answer. If you said you're going to make edibles, and then you see you shouldn't make a hundred-million-dollar investment in edibles, don't do it, change your mind. Being okay to pivot, being okay to be wrong — if you're not finding you were wrong every three months, you're not thinking about things enough. Probably the biggest thing I got wrong is you have to always hedge your bets — when things take off, don't take your eye off the other elements of your business. You might hit something big once in a while, but immediately you have to go into hedging it, because it's not going to last. I've learned that lesson a couple of times, and it's a tough one to really understand early on. Bryan Fields: Prediction time — as consumption methods and products evolve, how is Motif Labs planning to stay ahead of these trends? Mario Naric: One thing we do well is innovate — it's everything coming together. Data is key, but data only tells you what's there and what's not; you need the intuition you build through exposure. We have a huge team — I'm out in stores a lot, my creative director is out in stores all the time, the people responsible for what we make go to trade shows, go to the U.S., talk to customers and retailers. You pair data with intuition and pick the right technologies. We saw liquid diamonds — potency drives sales, people want something that isn't distillate — and decided to focus on THCA when a lot of people were chasing THCV or THCP, things too far in the future. Our philosophy has always been R&D with the purpose of commercializing at scale, not R&D to chase a patent that might make us billionaires twenty years from now. Kellan Finney: My opinion has always been that the majority of mainstream adoption will come from form factors other than smokeable flower — liquid diamonds that go in a vape cart can also go into drinks, edibles, mints, sprays, topicals, any form factor a consumer could imagine. I think Motif will be well positioned to create and supply those form factors as the industry moves forward, especially as society reconsiders whether smoking is great for you. Mario Naric: Yeah, for sure — on the vape side, what we can put into it has largely been figured out; you can't get much more potent than liquid diamond. So now it's the delivery mechanisms — I've always been a big hardware guy, there's a lot of room for differentiation and innovation in hardware and tech, but it has to stay well priced while elevating how it looks, feels, or functions. I'm still shocked — where's the CBD and protein powder combo, why hasn't that taken off, where's the nice mixture of CBN in a nighttime sleepy tea? These things have barely scratched the surface, and as the aging population turns over and we're able to sell non-THC products through other outlets, I think the market's going to blow up for those. I'm waiting for the day Health Canada allows non-THC products into Natural Health Products — the second you can put a smoothie mix in a grocery store, it's a whole different world. We know how to make things water soluble, how to mix and fill powders, we have it all — it's just a matter of timing. We're still waiting on inhalable technology, like an asthma-inhaler-style compressed format; we launched one with a partner using inhalable tech, but instead of a puffer they made it a spray, and we weren't even allowed to flavor it in Canada — it's just regs and timing. People I thought were my quote-unquote stoner friends still barely know what's going on — we're still in the early innings of what people believe cannabis to be, and I firmly believe a huge portion of sales is still coming from people who've always been heavy into it, way less from new adopters than we think. There's a long way to go, but young people entering adulthood have totally different preferences, and it's going to change pretty fast. Bryan Fields: I love it, I think that's a perfect way to end, and I think you hit the nail on the head. Mario, for our listeners who want to get in touch, learn more about Motif, and purchase some products, where can they find you? Mario Naric: You can only purchase products through regulated retailers in Canada, so come up, or find us in about 95% of stores. Our website is motiflabs.com, and I'm on social — reach out, check out our brands, check out what we're doing, and feel free to reach out if you want to collaborate, whether that's taking our tech south of the border, out in Europe, we're open to combos. Bryan Fields: Love it, we'll leave it all in the show notes. Thanks for taking the time, this was a lot of fun. Mario Naric: Thanks so much, guys.