Like many of us, it takes time to discover what really gets us going every day. Whether in life or in business, the day-to-day challenges and grind can wear anyone down. But as my father always told me when I turned to him for advice, you need to get-up, put your pants on and begin each day with one foot in front of the other…always doing what you believe in!
Jon Cooper, CEO of ebbu, a cannabis biotechnology company with a compelling story, has faced more than his share of trial and tribulations throughout his career as an entrepreneur and faced extreme challenges when ebbu went through what could have been a fatal blow almost two years ago. He and his former co-founder, Dooma Wendschuh plowed through a ton of money and a very public and, some would say, nasty split as chronicled by Alex Halperin in an article that appeared on Pando. No surprise, but Cooper would not comment about his former co-founder.
ebbu is still alive and kicking and Cooper was open and transparent when he shared his story with CBE updating our readers on where the company is today.
After graduating in 1998 from the University of Colorado Boulder with a degree in Political Science, Jon worked with Andersen Consulting and a small start-up before moving on to join the global strategy team at Level 3 Communications at the beginning of the telecom & internet infrastructure roll-up years. Jon told me that early in his career he always had the ability to approach problems from a different direction and he enjoyed building things.
After leaving Level 3, the emerging entrepreneur made a detour to Hollywood where he worked for Ascendant Pictures for the next three years in business development before co-founding his first company, Skyway Systems, where he headed up product management and marketing working with his mentor, former SAIC Executive, Dr. Adam Drobot. SkyWay Systems, Inc. provides telemetry safety and security services using global positioning systems technology for the commercial consumer automotive and enterprise fleet markets in the United States.
At Skyway, Jon learned a key lesson about the supply chain and add-on product components and auto financing. The company’s onboard “Onstar System” for Ford wasn’t a must have item for consumers and didn’t market well at the dealerships that were making their profits off of add-ons sold to new car buyers at the financing stage of the purchase.
With the real estate and banking crisis in full bloom in 2008, Cooper co-founded Aventura Software where he headed up strategic initiatives and served on the board until 2010. Aventura created the nervous system for an enterprise system that allowed healthcare workers to access workstations and improve their workflow while ensuring security and compliance. It was here that Cooper decided that he would be the CEO at his next venture, ideally at a transformational company.
By 2013, with Colorado’s medical marijuana program fully active and recreational right around the corner, an opportunity presented itself when he was approached by Dooma Wendschuh, a friend he had met back in his Hollywood days, about starting a cannabis business. He told me his first reaction was, a solid “no fucking way” due to the reputational risk it posed, the stigma attached to cannabis and mostly because he just didn’t trust cannabis and the inconsistency of the product and its effects. Like many, including yours truly, he thought medical marijuana was a gimmick designed to facilitate legalization.
His previous years in marketing and product development roles had taught him that building a brand was all about gaining consumer trust. His wife, a former global marketing director for brands like Coors Light and Blue Moon, also reinforced his belief that without product consistency, especially with a consumer psychoactive product, there could be no trust and thus no brands. And when one looked at the current state of the industry, there was no control over the effect of cannabis from consumer to consumer and even less consistency with the variety of delivery systems and strains making their way into the channel in Colorado. And the epiphany that followed is what ebbu is all about today.
ebbu was founded in July of 2013 under the premise that they would, with science and eventually genetics, develop a variety of products that would deliver consistent feelings for anyone that consumed the products ebbu would ultimately formulate. Cooper was finally a CEO.
The company faced a variety of challenges out of the gate. Questions that came to mind included:
To tackle these issues, the company initially focused on pharmacology in 2014. Then, realizing the need to reinvent the plant in order to fulfil on the mission of the Company, Cooper quietly started a genetic editing division in 2015.
ebbu financed the company in 2014 by raising $2 million through the ArcView network and from other high net worth individuals. They raised another $10 million in 2015 and with the medical and recreational licenses that they had received in Colorado, began making extracts to help finance the operation. However, this approach created a dilemma for the company. Cooper told CBE that it boiled down to whether they would use the funds, and arguably more importantly, critical executive focus and time to market product that wasn’t aligned with the mission of creating repeatable, consistent formulations. While almost running out of cash, the conflict in competing missions led to its first major pivot in August of 2016.
Cooper and ebbu’s board decided to cease its extraction business. This was a tough decision as the company was making six-figures a month in revenue based on these products and was carried by over 150 dispensaries. It also meant that they needed to lay off a large portion of its staff. However, right around the time of the pivot, ebbu had developed a product that proved the original mission statement and concept that ebbu was founded upon. In September of 2016, they created a formulation that Cooper said was awesome. It created a high without the debilitation that comes with what most users would consider as being stoned. They launched this product in the market under the name of Genesis in December of 2016.
ebbu’s “Project Genesis” was born out of test results from its drug discovery lab. It focused on creating a formulation that would affect the brain’s CB1 receptor differently than the typical THC/CBD strains available to consumers at the time. According to Wired Magazine,
“ADD MARIJUANA TO humans, and you get some fairly predictable results: euphoria, hunger, introspection, anxiety, and a whole panoply of other effects. Also known as being high. Most of that complicated reaction is thanks to a single cellular structure known as cannabinoid receptor 1. Your body has CB1 receptors lacing the surfaces of cells in the brain, liver, lungs, fat, uterus, and sperm. And whenever your … friend smokes, dabs, or eats an edible, the tetrahydrocannabinol molecules therein bind to these sites, stimulating the cells to release a cornucopia of chemical signals.
For a long time, scientists thought CB1 receptors worked like lock and key with THC and its chemical cousins—one size fits one. However, new research shows that CB1 receptors are actually quite malleable, stretching to fit a wider range of molecules. That could be useful knowledge as researchers try to synthesize chemicals that mimic the desirable effects of cannabis (such as pain relief) without the side effects (such as anxiety, weight gain, addiction, or federal prosecution).”
The result of Genesis has been, according to Cooper, a formulation that creates proof of concept, a clean crisp high, not the typical feeling of being stoned, not the body high that many experience when ingesting cannabis.
Armed with this proof of concept, as the company entered 2017, Cooper had begun the process of getting the Dooma-less ebbu back on track. The plan focused on:
Initially, the new strategy required tough measures but immediately drew investor attention with the IP focused revenue model. Cooper continued to change out its staff, completed its first licensing deals, did sale-leasebacks on the equipment to shore up its cashflow, and went out to raise capital confident that ebbu’s vision of where the cannabis market was headed.
With board confidence and support, by September of 2017, ebbu had significant scientific results to back up their hypothesis. And with access to capital for cannabis industry start-ups and existing firms loosening up (partially thanks to investments made by mainstream companies like Constellation’s initial investment in Canopy Growth) ebbu has been able to raise another $12 million since the break-up in 2016.
Based on shifting market conditions and its R&D and IP success, the company completed its transformation in Q1 of 2018 when it gave up its marijuana licenses and stopped producing products. Ebbu was now purely a licensing/IP play.
90% of the revenue that ebbu will be generating for the next couple of years will be coming from genetics IP. ebbu believes that re-inventing the plant and the compounds that it produces is by far the place for ebbu to be in the short-term. They are pursuing opportunities in 14 countries and in all legal states as we speak.
Imagine producing a plant that only creates CBC, or CBD with no THC. Or Imagine being able to increase the economics of the plant by a multiple of 2-10x’s by increasing the trichome count, thus significantly reducing the costs to produce formulations or clinically tried Pharma medications. These are the types of plants that ebbu plans to commercially launch of the next 6 to 24 months.
Since graduating from college back in 1998, Jon Cooper has experienced more than his fair share of ups and downs as has the company he founded in 2013. What started as an idea is now generating revenue and opportunities world-wide from existing licensees and promises to generate interest from the likes of beverage manufacturers, pharmaceutical companies and other industries interested in the IP that ebbu is building one day at a time and one foot after the other. My father would be proud of Jon Cooper’s tenacity, stick-to-itiveness, and the conviction that has kept ebbu alive to fight another day. CBE likes the story and plans on keeping a close eye on Cooper and ebbu as the industry continues to grow, pivot and adjust. And as the saying goes, “You Can’t Keep a Good Man Down”.[/one_half]
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ebbu’s Jon Cooper’s Best Practices/Lessons Learned:
Cannabis Business Executive Background Information
Company Name: ebbu
Year Founded: 2013
Ownership structure/operating entities: LLC
Jon Cooper, CEO
Chief Financial Officer: Andrew “Mo” Septimus
Chief Science Officer: Dr. Brian Reid
Head of Genetics: Rob Roscow
Chief Innovations Officer: Dr. Andrew Chadeayne
Headquarters: Evergreen, CO
Industry Segment/Category: Biotech; Research & Development
Current Markets/States Served: As a licensing company, the company can work anywhere globally
Number of Locations: 2 (R&D/Production in Evergreen) (Genetics/Cultivation in Denver)
Current Number of employees: 30 Full Time Employees
Market Strategy/Goal: ebbu’s goal is to become the household name technology brand of the cannabis industry (ex: Intel Inside / Gore-Tex)
2016 Revenues: Not Available
2017 Revenues: Not Available
2018 Projected Revenue: Not Available
Company Revenue Mix: licensing and royalty; processing for hemp and bulk sales
Expansion Plans: 5-10 international markets over the next 24 months. Licensing into rec legal states over that same time period
Financing strategy: License out our unique patent-pending cannabis technologies to both marijuana and hemp businesses.
Rob Meagher, CBE’s Founder, President and Editor-in-Chief is a 30 year veteran of the media world. His career has spanned from stints representing the Washington Post, USA Weekend, Reader’s Digest, Financial World & Corporate Finance to the technology world where he worked at International Data Group and Ziff Davis where he was part of the launch team for The Web Magazine, Yahoo Internet Life, Smart Business and Expedia Travels before starting his own marketing and Publisher’s Representative Firm. He also ran all print and online media sales and marketing for the Society for Human Resource Management before partnering with Forbes and then Fortune to create Special Sections covering a variety of topics. Rob, who started CBE Press in 2014, can be contacted at [email protected]
Great article Rob, best of luck to you Jon.
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