Boveda has been committed to protecting your passions for over 25 years with its unique two-way humidity control packets. Cannabis and cigar aficionados alike trust that the world’s most iconic little brown packet will control humidity and keep valuable smokables in premium condition.
Sean Knutsen, President and CEO of Boveda, spoke to Cannabis Now’s founder and CEO, Eugenio Garcia, about the company’s surprise place in the legacy cannabis market and its plans to help cannabis consumers save their terps.
Cannabis Now: How did you get into the business?
Sean Knutsen: Six of us got together and formed the company in 1997— last July, we celebrated our 25th anniversary, which is pretty amazing. I’ve been CEO since the beginning.
Wow, congratulations. That’s amazing. And you’ve stood the test of time, as they say.
Those early days were tough, as anybody who started a business understands.
One of the founding team members, David, was involved in the cigar boom during the Nineties; he was a woodworker who made humidors. In fact, he was the guy that brought the six founding members together—two of whom recently retired from General Mills. Tim Swail (Executive VP, Marketing) and I were friends from college. Tim and I met David through our love for cigars and wanted one of his humidors. Long story short, we built a friendship. One day, he showed us a product that would control humidity inside containers. It was remarkable.
David had a hard time controlling the humidity inside wooden humidors. A close friend of his family, Dr. Saari, was a senior chemist who had recently retired from General Mills. He was a multi-award-winning patent holder and worked in the Betty Crocker division, among other areas, including food preservation. Dr. Saari had the idea to take the technology used to control humidity in the lab at General Mills and make it portable for packaging applications. Until then, it wasn’t possible because the materials that could hold the liquid solution but still allow water vapor to pass through—the film, the membranes and so forth—didn’t exist.
The technology David showed us, which wasn’t named at that point, controlled humidity levels inside containers. Different solutions of salt and water have inherent characteristics to regulate different humidity levels. We knew the technology transcended the cigar market. Tim and I saw an opportunity to go into business together with David. He also brought in Dr. Saari, who had invented the technology, who then brought a colleague of his from General Mills, Robert Esse, who had also recently retired. Those two were on the science side, developing and patenting the technology.
When did you decide to move into the cannabis market?
We’ve known cannabis benefited from moisture management since 1997 but didn’t expect cannabis to ever come to fruition for us as an application. We knew it was a great opportunity but didn’t think we would ever participate because it was illegal.
Then, in 2006, we got a call from a home grower who was passionate about cannabis—and I remember receiving the phone call— who had gone into a cigar store and seen one of our products to control the humidity and he had a lightbulb moment. He thought, “My goodness, where was this when we would import cannabis off the shores of California illegally from the Far East and Central America and Mexico?”
They bought cannabis by weight, so if the weed dried out, they would lose hundreds of thousands of dollars. And now here’s our product in a bag that can control humidity. So, he started buying Boveda in cigar stores for his cannabis. But his operation got shut down and he spent five years in the clink. Eventually, he got out and became an advocate for the herbal medicine concept, legitimizing it for medicinal purposes. So Boveda has been serving cannabis users since 2007.
So, inadvertently, Boveda was part of the legacy market before cannabis was even legal.
I think it was in 2015 when I remember reading about a plane that had to make an emergency landing. And when it landed, these guys were busted because they were illegally transporting cannabis across state lines—turkey bags filled with weed were in the back of their plane. I saw a picture of this plane and in every one of those bags, there’s a Boveda.
Another time, someone on our team was watching the reality show “Cops.” A cop pulled over some guy and they were going through his glove box and he had this stash bag. And then the cop took out a Boveda packet and said, “What is this thing?” And the guy goes, “Oh, that’s my Boveda for my weed.”
What percentage of Boveda’s business is cannabis?
It’s very significant—just over roughly 50 percent.
What are some of your most significant challenges?
The biggest challenge in this strategy is how to reach customers. Social media platforms, Google AdWords, Amazon—you name it. If you’re advertising tobacco and especially cannabis, you’ll get shut down. So, we must figure out a way to meet customers directly around those obstacles.
Does education play a significant role in your sales proposal to customers? What’s cutting through?
We now have many other tools at our disposal to help grow a brand that we didn’t have early on. But the most important thing by far is word of mouth. Just like any industry in any market—guitars, cigars, cannabis or anything else—people who use the product need to spread the word. In the early days, when we first launched our company and then in 2004, when we launched desktop humidors, we didn’t have any advertising budget and didn’t have social media the way we know it today. The brand grew phenomenally; for 18 consecutive years, the average compound growth is over 33%, which is remarkable growth. Reaching customers is like building blocks: You reach one, you reach to four, then eight, then 16, then 32. And it multiplies. It takes a while before you reach 50 million plus customers, but word of mouth is the most important way to reach them.
Is the cannabis customer much different from the cigar customer?
That’s a great question. There are some differences in the market and how you reach them. A lot of it has to do with when customers experience the product. There was an explicit need for Boveda with cigars because you don’t buy a cigar outside of a humidor and everybody knows that. The common thing is that we improve the customer’s experience with both cigars and cannabis.
Who do you turn to keep your true north when it comes to cannabis? Do you have a cannabis evangelist or a cannabis guru in your company?
A considerable percentage of the population smokes cannabis and we have people here that smoke cannabis. So, the answer is yes. But we also have outside people and resources that we’re really connected with and have built relationships with over the years who are great resources. We have resources on the consumer side but on the technical side, too, including labs that test cannabis. A lot of the companies that we work with carry out tests on our behalf and all of that data helps from the scientific side. But we also have it from passionate people, just like people in the cigar market who are passionate about cigars, just like we do in the music industry, where we have musicians who are passionate about instruments. It’s not one person necessarily—it’s always a team effort.
Why should people use Boveda as part of their complimentary cannabis experience?
One reason we love to be in packaging for cannabis companies is that it’s often the first entry point of exposure to the consumer that humidity control matters. If we just added humidity—and didn’t control humidity to the precision that we do—we would be bad for cannabis, with the risk of mold and microbial growth. What our technology does so wonderfully is raise the moisture and manage it inside the container to the perfect moisture level to put the flower in so the trichomes stay healthy. If the trichomes are healthy, the THC doesn’t degrade and the terpenes don’t evaporate, giving a better consumer experience.
There’s a growing movement for companies to have a better work environment. Boveda is often nominated as one of the best places to work. As the CEO, how is that reflective of the company culture?
That’s an excellent question. It doesn’t matter if it’s a cannabis company; companies are the same. We’re all here to work towards a vision that we have. As CEO, you need to have a clear direction of where the company is heading, so people’s work has a purpose—people don’t like to be in a workplace where they don’t know if their work has meaning. Also, you must live and abide by your values and how you behave as an individual and a company. These are foundational things, but you have to live them and communicate them regularly.
The other thing is that company culture reflects the people. We take a lot of time hiring the right people—it’s our most critical decision. It doesn’t matter how good your vision is or how good your product technology is. It’s not about foosball in your office. It’s none of those things. The game is business; that is the game, that’s the sport. And it’s fun. When you have fun with that as the objective, your wins aren’t on the foosball table in the break room; it’s sales and the customer’s experience.
What are Boveda’s goals for 2023?
Up to this point, we’ve spent a lot of our time focusing on the backend storage and packaging for businesses. One of the shifts we’re making is focusing on the consumer and their experience with Boveda. Our goal for 2023 is to cater to the needs and the experience of the cannabis consumer and the benefits they get from Boveda: confidence, trust and passion for the product.