Peter Barsoom: How 1906's has crafted Microdosing Cannabinoids with Targeted Effects

Peter Barsoom: How 1906's has crafted Microdosing Cannabinoids with Targeted Effects

Peter Barsoom: What constitutes a really good experience — of energy, or of arousal, and so on and so forth. And then we had a team of pharmacologists, ethnobotanists, flavor scientists, and natural product chemists all working together to solve the problem of how do we make an edible give you a specific effect. Bryan Fields: What's up guys, welcome back to another episode of The Dime. I'm Bryan Fields, and with me as always is Kellen Finy. This week we've got a very special guest, Peter Barsoom, CEO and co-founder of 1906. Peter, thanks for taking the time. How are you doing today? Peter Barsoom: Very nice to meet you, Bryan and Kellen. I am here in the Hudson Valley of New York. It's great to chat today. Bryan Fields: That's great. Kellen, just another New Yorker, in case you missed that part. Kellen, how are you doing? Kellen Finy: I'm doing really well. Excited to hold the West Coast down, but more excited to talk to Peter. I think 1906 has some strong ties to Colorado, so gotta love that. Just really excited to talk to Peter. How are you doing today, Bryan? Bryan Fields: I'm excited. I'm excited to talk about some of my favorite products in the industry — kind of the origin story and how Peter made the transition from the financial industry to the cannabis industry. So Peter, for our listeners, can you give a background about yourself and how you got into the cannabis industry? Peter Barsoom: My background — I spent 20-plus years in finance on Wall Street in New York. I quit in 2014, and my co-founder and I started 1906 for three reasons. One, we both love smoking flower, and the problem, unfortunately, is that there are times and places where you can't smoke flower. Back in 2015, less so today, edibles suck if you're a flower smoker. You have no idea how it's going to make you feel, it takes way too much time to hit you, it's often not made with good-quality ingredients, and it doesn't taste good. So compared to a really beautiful joint, edibles were a really big step down. The first reason we started the company is for people like us who love cannabis, who love flower, but in the times and places where they can't smoke flower, they shouldn't have to step down so far. People deserve to have the best possible cannabis experience regardless of how they consume. That was the original genesis behind starting the company. Bryan Fields: We'll have to start with the first conversation you had this idea — you have this vision for cannabis, you decide you're going to leave the finance world to explore the cannabis space. What was the experience at that time with making these products? Take us through those early experimental days. Peter Barsoom: To be honest, I quit before I knew what I was going to do next. I didn't quit to do cannabis — I quit and then explored different opportunities. In January 2015 we flew out to Colorado to assess the market. We expected — what was amazing was just going into a legal store and buying cannabis. So much selection, so much choice — not just what my dealer is bringing over in his backpack on a Thursday evening. What was interesting is that from the beginning this was a very challenging market to get into, and it still is today. The government and society don't make it easy to be an entrepreneur in this market. If I had an idea for a beverage without cannabis, I could go to a lab, they'd formulate for me, find a third-party provider for small batches, then a contract manufacturer to scale. It's easier to be an entrepreneur there. Here you have to start from scratch everywhere. I remember early on we couldn't find space to rent because we were a cannabis company, so we ended up having to buy a building — why am I buying a building before I even have a business running? But that's what you had to do. Then you had to spend all this money outfitting the building because of regulatory specifications, then wait for approval and your license before you could even open. We started in 2015, but our first sale wasn't until late November 2016. It took almost two years to get up and running, and we were working on this full-time the whole way — paying salaries, spending a lot of money. Bryan Fields: Why'd you pick Colorado instead of Washington? Peter Barsoom: I didn't want to live in the Pacific Northwest — I'm from New York, I'd already lived in London for a while. Seattle's beautiful for three months of the year. The other reason was that Colorado is a hub for tourists, so our goal was always to start in Colorado and then expand — and it's much better to build a base of consumers out of Colorado than out of Washington. Bryan Fields: What was the first product that you made? Was it a targeted compound originally — did you have the same focus? Take us through those concepts and what was the first one you released. Peter Barsoom: We were trying to solve three problems: I don't know when it's going to hit me, how is this going to make me feel, and it's got to taste great — because we started with chocolates, and the pills came later. Each of those is a significant problem in its own right. Edibles taste much better now than they did back then, but flavor was a big issue, so we spent a lot of time on that. Our chief operating officer and first employee, Aaron Holler, was the head chocolatier at Theo Chocolate — a master of flavor. Then we needed to solve how do we make it fast-acting — there was no such thing as a fast-acting edible at the time — and how do we make it a specific effect. We looked at the main reasons people use cannabis: energy, focus, sex and arousal, relaxation and anxiety, mood enhancement, and sleep. We outlined those six effects, then asked what constitutes a really good experience of energy, or arousal, and so on. We had a team of pharmacologists, ethnobotanists, flavor scientists, and natural product chemists working together to solve that. When you smoke, terpenes modulate the behavior of the cannabinoids — that's the entourage effect, that's why Blue Dream affects you differently than Trainwreck Kush. But terpenes only work when smoked as a volatile organic compound — if you eat a terpene, it does nothing for you. So to create that entourage effect in an edible, we relied on other dietary supplements and plant medicines. We have thousands of years of history with plant medicine, and a real body of scientific research on the performance and safety of things like caffeine and ashwagandha. That's where we spent the rest of the R&D time — formulating for fast action and specific effect, which meant lots and lots of trials. We ran R&D tests almost every two weeks with people coming in to try our products and give feedback. That's what allowed us to dial it in. Kellen Finy: For each category, did you guys try a couple of ingredients and settle on one, or how did that process work? Peter Barsoom: This was before we were selling — we spent a year and a half just making it and giving it to friends to try, and trying it ourselves constantly. At the time we were working on sleep — which became Midnight — energy, which became Go, what was called High Love at the time, and Chill for anxiety. We worked on those four experiences simultaneously. Bryan Fields: That has to be so challenging, given all the components and how the human body interacts with it. Are you asking people to sit with you for an hour, or take it home and report back? Peter Barsoom: We knew caffeine needed to be a core component of the energy formula because caffeine is the central nervous system stimulant known to man — that's why 8 billion people drink coffee. But coffee has negative side effects — jitters, crashing, accelerated heart rate. So we asked how do we make a better energy experience than Monster or Red Bull. We tested other stimulants, like theanine, in different doses via capsules, since formulating everything directly into a chocolate would take too much time. People would try different combinations and dosages and share a log with us. Once we liked the formulation, we'd put it into the chocolate to get the flavor right, then put it into market and see what happened there too. Early on, one of our products had an ingredient called yohimbe, a nice energy stimulant, but some people were getting headaches from it. Even though it's totally safe, we took it out. That process of trial, error, and feedback is a core part of who we are as a company. Bryan Fields: Did you ever have an issue where a formulation that worked well in capsule form lost its targeted effect once transferred into the chocolate? Peter Barsoom: No, we never found that to be an issue. But I'll give you an example: we initially launched Bliss with 5-HTP, a wonderful supplement that boosts serotonin and makes you happy. Feedback from testers was very positive, and we put it into market — but after a couple of weeks we realized some budtenders were getting upset stomachs from it, because it was negatively interacting with SSRIs. We had a population of people on SSRIs for depression experiencing GI negativity, so after that first batch we removed 5-HTP from our products. Bryan Fields: It's incredible — you're starting a company as an entrepreneur while simultaneously running five or six mini clinical trials on the side. That's really impressive. Peter Barsoom: Thanks. Some people would say crazy. Bryan Fields: One of the things that fascinates me most is that your products aren't high-dose. In 2014 to 2016, most products on the market were heavier-dose products. You took a different approach, identifying a need for targeted, lower-dose products. That must have been an additional hurdle. Peter Barsoom: Many people thought we were crazy. I remember people saying, these are stoners, the only thing they want is high potency for as cheap as possible — they don't care about flavor, effect, or packaging, just give me my 10-milligram gummy. Early on we decided we would not do a 10-milligram product. It was a tough sell, because we were the only 5-milligram product on the market in Colorado, and the constant question was when are you going to make a 10-milligram product. We knew what would happen if we introduced one — dispensary buyers would stop buying the 5-milligram product and we'd just become another run-of-the-mill brand instead of a low-dose brand. Bryan Fields: Can you give us an overall picture of the 1906 brand portfolio and the different products? Peter Barsoom: There were three reasons we started the company. The first was for people like ourselves who love smoking flower. The second was for people like my mom and my father-in-law, who don't know how to spell THC and just want something simple to help with pain, anxiety, sleep, or energy — why does cannabis have to be such a confusing mess? We wanted to make cannabis simple, easy to understand, safe, effective, and accessible. In 2020 we launched our line of Drops — pills — which now make up about 95% of our business. They're sugar-free, vegan, gluten-free, no calories, pure medicine — the healthiest way to consume cannabis. They come in six experiences: Go for energy — think of it as your cannabis speedball; Genius for focus, great as an Adderall or Ritalin alternative, popular among gamers and seniors worried about cognitive decline; Bliss for mood enhancement, nature's antidepressant; Love, our equal-opportunity aphrodisiac for men and women; Chill for relaxation and anxiety, the number-one chill pill; and soon we're introducing a new fast-acting sleep product with CBN and RSO. Finally, Boost is straight fast-acting THC at a great value, a way to enhance your 1906 experience or take on its own. Bryan Fields: Are all those products available with the same formulation in all the states you're currently in? Did you run into issues with certain states not allowing certain ingredients? Peter Barsoom: Oh yeah, for sure. Pennsylvania doesn't allow the other dietary supplements and plant medicines, so there we just have our Boost product plus an RSO product and a rosin product. Then you've got dosage differences — in Michigan and Pennsylvania we can do 30-milligram doses for people with higher tolerance; everywhere else it's two-and-a-half and five milligrams. New Jersey doesn't allow chocolates, New York does — you're navigating that constantly. Bryan Fields: One of my favorite moments was at the House of Puff party, when you gave me some Bliss. I brought it to friends who were hesitant about edibles, and all they said was, "I don't feel so high, but I can't stop smiling." That's exactly the point. Peter Barsoom: Thank you for saying that. That was a big thing for my co-founder and me — this is not marketing fluff. We don't have a product called "Creativity," for example, because it's very hard to gauge exactly what that means. We wanted to be true to the name. When people use cannabis, it's not one effect — that's the beauty of the plant, it's been used to manage pain, manage anxiety, be creative, give energy. We're just making edibles feel more like cannabis flower, in a new way — we call this cannabis 3.0. Bryan Fields: Is there a certain product newer consumers gravitate toward, and does popularity vary state by state? Peter Barsoom: There's some variance. The East Coast, New York especially, is much more of an energy market — you see this even in flower, with New York leaning sativa-dominant, while out west it's more indica. But in every market, Chill and Sleep are the two biggest drivers of sales volume — a lot of people have trouble sleeping and managing anxiety everywhere. Kellen Finy: Are there products on the roadmap to diversify, like the Go brand offering multiple caffeine dosage options? Have you explored expanding the product portfolio that way? Peter Barsoom: Yes, absolutely. We're taking the company in a few directions. One is expanding distribution access — next month we're launching a direct-to-consumer e-commerce platform, giving people in states without ready access to 1906 access to cannabis. The second direction is expanding into other categories where people use cannabis, with a big focus next on women's health — cannabis has long been used around menstrual periods and menopause, and there's been little to no innovation from the medical field in that space since Motrin, really. We think there's a valuable role for cannabis and other plant medicines to play there. Bryan Fields: Are there other areas commonly requested of you for these need-based solutions? Peter Barsoom: Pain is the next one. Pain is very complicated, so I can't tell you exactly when we'll have something, but we're working on it. Beyond women's health and pain, everything else is much more niche. What I'd like to do is look at different form factors — some people don't like pills, some may want a liquid format. I don't want a proliferation of 15 different effects, though, because that gets dilutive — what's really the difference between this and that. It's good to keep it clear: a single name tells you the story. Bryan Fields: Is there a product you thought would absolutely smash but never picked up steam? Peter Barsoom: We make peanut butter cups in Colorado — they're the bomb, even better than Reese's. We make our own peanut butter with mesquite flour, our own special blend, tastes great — and it just never took off in Colorado, which is a challenging market in general. I want to bring the peanut butter cups to New York because I think they'd take off. We also launched a product a year or so ago called Bump, now called Boost — we learned a lot from that, had to make a few mea culpas around the name. We're constantly innovating, making mistakes, and trying not to make the same ones twice. Bryan Fields: Continuing on 1906 — I'm curious if the name has historical implications. Peter Barsoom: Yes, that's the third reason we started the company. 1906 is the year the Wiley Act passed, which effectively started the prohibition of cannabis. Our mission is to bring cannabis back to its pre-prohibition status, where it was widely accepted as part of the medical pharmacopeia and treated as normal — and to remind everybody of the 100-plus years of the racist War on Drugs. Our name is a reminder of where we've been, where we've come from, and the work we still need to do. Bryan Fields: What's the most expensive lesson you've ever learned? Peter Barsoom: We pursued a license in New Jersey back in 2018. Going after these limited-license states is challenging and very expensive. We did well and should have won, but for a variety of reasons we didn't — we lost by a few points, they selected the top two in the north, and we were next in line. We sued the state of New Jersey, and won — the courts agreed our scores were not reflective of what they should have been — and it's been a four-plus-year legal battle since. Bryan Fields: I remember watching a podcast you were on around 2016, when growth-at-all-costs was the big topic and everyone was looking west to California, Oregon, and Washington. You went against the grain and focused east of the Rockies. Walk us through that mentality. Peter Barsoom: When we first started, we thought the progression would be westward — Colorado, then California. Personally, I didn't want to live in California — I don't like the traffic. We also realized California isn't one market; success in San Diego means nothing for how you'll do in Sacramento, Los Angeles, San Bernardino, San Francisco, or Oakland. It's a myth that California is one big market you can just walk into and do well in. Meanwhile, we saw more and more push for legalization from voters and consumers on the East Coast, and we felt like we were much more of an East Coast brand — I live in New York, we live in New York. It worked out — this is where we should be. Bryan Fields: Dream smoking session, three people dead or alive? Peter Barsoom: I'd say Barack Obama, Elon Musk, John Lennon. Solid three. Bryan Fields: When you got started in the cannabis space, what did you get right, and what did you get wrong? Peter Barsoom: What we got right was the initial conviction about what consumers want — low-dose, controlled-dose products that deliver a specific effect and are fast-acting. We modeled that after ourselves. What we got wrong is underestimating how hard it is to make money in cannabis. I came from finance — if making money were my primary ambition, I would have stayed there. For those who got into cannabis purely for that reason, many have been severely disappointed. Even for those of us who didn't, the lack of capital and regulatory constraints make it very challenging to make money. Bryan Fields: Before we do predictions, if you could sum up your experience in one main takeaway to pass on to the next generation, what would it be? Peter Barsoom: Have conviction, and stick to it — because there are so many challenges in this industry that if you don't have that conviction to withstand them, don't bother going in. We need people who believe in their products, believe in their company, and believe in the mission of what they're doing. That's what creates a robust industry. Bryan Fields: Prediction time, Peter — which cannabinoid or targeted effect do you predict will become a daily staple for society? Peter Barsoom: Sleep will be first. Number two will be a broad range — it won't be one effect, but microdosing is the wave of the future. Pharmacological interventions in mental health have largely failed over the last 50 years — more people are anxious and depressed than ever, and more people are on anxiety and antidepressant medication. If a drug is truly successful, it should wipe out the disease, but instead we're seeing an increase in mental health disorders. I think pharma has failed us there, which is why so many people are open to microdosing mushrooms, LSD, or other substances. Cannabis has an important role to play because it's the only legal microdosing substance out there — I see the future of mental health as microdosing. Kellen Finy: My guess is going to be a wild card — I think it's going to be a formulation that treats homeostasis and allows humans to re-enter it. Sleep is part of your homeostasis, cannabis impacts sleep; hunger, the munchies, is also part of homeostasis; and mental health is really the regulation of neurochemicals in your brain. I think we're going to learn that the endocannabinoid system plays a huge part in homeostasis, which ties to sleep, hunger, depression, and anxiety — one big package deal. Bryan Fields: I'll take Chill/relaxation, since per the podcast rules I have to pick one that hasn't been chosen. With increased anxiety and everyone glued to their phones and working from home, it's really hard for people to disconnect. Something like 1906's Chill can help people relax and reset their day, which I think is missing right now — a lot of people lean toward alcohol for that, and I'd expect that to change as the next generation takes over, since they're already showing fewer alcohol triggers. Bryan Fields: Peter, for listeners who want to get in touch, learn more about 1906, and buy it online, where can they find you? Peter Barsoom: Our Instagram is 1906newmex — sorry, it's 1906newmex — and our website is 1906new.com. Bryan Fields: Awesome, we'll link it all in the show notes. Thanks for taking the time, this was a lot of fun. Thanks, Peter. Peter Barsoom: Thank you, guys. Great to chat with you. Love the conversation.